Document:

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

Banque Frank S.A *                         Aug 15, 1997    Fabio Pellanda
Cefeo Investments Ltd.                     Aug 12, 1997    J.M. Duffey
Deere Park Capital Management, Inc.,       Aug 12, 1997    Douglas Gerrard
     A Nominee
Elara Ltd.                                 Aug 14, 1997    Geoffrey Tirman
Otato Limited Partnership                  Aug 13, 1997    Eva Forbes
Thomson Kernaghan & Co. Ltd.               Aug  1, 1997    Mark Valentine

*    This document has been filed.
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                                                                    Exhibit 10.7

                          REGISTRATION RIGHTS AGREEMENT

         THIS  REGISTRATION  RIGHTS  AGREEMENT,  dated as of August  15,   1997,
("this  Agreement") is made by and between  SWISSRAY  INTERNATIONAL,  INC. a New
York  corporation  (the  "Company"),  and the person named on the signature page
hereto (the "Initial Investor").

                               W I T N E S S ET H:

         WHEREAS,   upon  the  terms  and  subject  to  the  conditions  of  the
Subscription  Agreement,  dated as of  August  15,  1997,  between  the  Initial
Investor and the Company (the "Subscription Agreement"),  the Company has agreed
to issue and sell to the  Initial  Investor  6%  Convertible  Debentures  of the
Company (the "Debentures"),  which will be convertible into shares of the common
stock,  $.0l par value (the "Common  Stock"),  of the Company  (the  "Conversion
Shares") upon the terms and subject to the conditions of such Debentures; and

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

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

         1. DEFINITIONS.

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

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

                  (ii) "Register,"  "Registered," and "Registration"  refer to a
         registration effected by preparing and filing a Registration  Statement
         or  Statements in compliance  with the  Securities  Act and pursuant to
         Rule 415 under the  Securities  Act or any successor rule providing for
         offering  securities  on a  continuous  basis  ("Rule  415"),  and  the
         declaration or ordering of effectiveness of such Registration Statement
         by the United States Securities and Exchange Commission (the "SEC").

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

<PAGE>

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

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

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

         2. REGISTRATION.

                  (a) MANDATORY REGISTRATION. The Company shall prepare and file
with the SEC,  no later  than  thirty  (30)  days  after  the  Closing  Date,  a
Registration  Statement on Form SB-2  covering a sufficient  number of shares of
Common Stock for the Initial  Investors (or any other available form), but in no
event less than  5,000,000  shares of Common Stock into which the  $5,000,000 of
Debentures  in the  total  offering  would  be  convertible.  Such  Registration
Statement  shall state that,  in  accordance  with the  Securities  Act, it also
covers such  indeterminate  number of  additional  shares of Common Stock as may
become  issuable  to prevent  dilution  resulting  from Stock  splits,  or stock
dividends).  If at any time the number of shares of Common  Stock into which the
Debenture  may be  converted  exceeds the  aggregate  number of shares of Common
Stock then  registered,  the Company shall,  within ten (10) business days after
receipt of written notice from any Investor,  either (i) amend the  Registration
Statement  filed by the Company  pursuant  to the  preceding  sentence,  if such
Registration  Statement has not been declared effective by the SEC at that time,
to  register  all  shares of  Common  Stock  into  which  the  Debenture  may be
converted, or (ii) if such Registration Statement has been declared effective by
the SEC at that time, file with the SEC an additional  Registration Statement on
Form SB-2 to register the shares of Common Stock into which the Debenture may be
converted  that exceed the  aggregate  number of shares of Common Stock  already
registered.

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

                                       -2-

<PAGE>

their Registrable  Securities and the fees and expenses of such legal counsel so
selected by the Investors.

                  (c)  PAYMENT BY THE  COMPANY.  If the  Registration  Statement
covering the Registrable Securities required to be filed by the Company pursuant
to Section  2(a)  hereof is not  declared  effective  by  November  3, 1997 (the
"Initial Date"),  then the Company will make payments to the Initial Investor in
such amounts and at such times as shall be  determined  pursuant to this Section
2(c).  The amount to be paid by the  Company to the  Initial  Investor  shall be
determined as of each  Computation  Date, as defined below in this Section 2(c),
and such amount shall be equal to two (2%) percent of the purchase price paid by
the Initial Investor for the Debenture  pursuant to the  Subscription  Agreement
for the period from the Initial Date to the first Computation Date, and two (2%)
percent of the purchase price for each Computation Date thereafter,  to the date
the  Registration  Statement  is declared  effective  by the SEC (the  "Periodic
Amount").  The full Periodic  Amount shall be paid by the Company in immediately
available  funds  within  five  business  days  after  each  Computation   Date.
Notwithstanding  the foregoing,  the amounts payable by the Company  pursuant to
this provision shall not be payable to the extent any delay in the effectiveness
of the  Registration  Statement occurs because of an act of, or a failure to act
or to act timely by the Initial Investor or its counsel.

         As used in this  Section  2(c),  the  following  terms  shall  have the
following meanings:

         "Computation  Date"  means the date which is the earlier of (a) 35 days
after the Company is notified by the SEC that the Registration  Statement may be
declared  effective or (b) one hundred  twenty (120) days after the Closing Date
and, if the Registration  Statement required to be filed by the Company pursuant
to Section 2(a) has not therefore been declared  effective by the SEC, each date
which is thirty  (30) days  after  the  previous  Computation  Date  until  such
Registration Statement is so declared effective.

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

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

                                       -3-

<PAGE>

fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances in which they were
made, not misleading;

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

                  (c) Furnish to each Investor whose Registrable  Securities are
included in the Registration  Statement and its legal counsel  identified to the
Company, (i) promptly after the same is prepared and publicly distributed, filed
with the SEC,  or  received  by the  Company,  one (1) copy of the  Registration
Statement,  each  preliminary  prospectus and prospectus,  and each amendment or
supplement thereto, and (ii) such number of copies of a prospectus,  including a
preliminary  prospectus,  and all  amendments and  supplements  thereto and such
other documents,  as such Investor may reasonably request in order to facilitate
the disposition of the Registrable Securities owned by such Investor;

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

                  (e) As promptly as  practicable  after  becoming aware of such
event,  notify each  Investor of the happening of any event of which the Company
has knowledge,  as a result of which the prospectus included in the Registration
Statement, as then in effect, includes any

                                       -4-

<PAGE>

untrue  statement of a material  fact or omits to state a material fact required
to be stated  therein or necessary to make the statements  therein,  in light of
the circumstances under which they were made, not misleading,  and uses its best
efforts  promptly  to prepare a  supplement  or  amendment  to the  Registration
Statement  or other  appropriate  filing  with the SEC to  correct  such  untrue
statement  or  omission,  and deliver a number of copies of such  supplement  or
amendment to each Investor as such Investor may reasonably request;

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

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

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

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

                                       -5-

<PAGE>

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

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

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

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

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

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

                                       -6-

<PAGE>

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

                  (a) To the extent permitted by law, the Company will indemnify
and hold  harmless  each  Investor who holds such  Registrable  Securities,  the
directors,  if any, of such  Investor,  the officers,  if any, of such Investor,
each  person,  if any,  who  controls  any  Investor  within the  meaning of the
Securities Act or the Exchange Act (each, an "Indemnified Person"),  against any
losses,  claims,  damages,  liabilities or expenses (joint or several)  incurred
(collectively,  "Claims")  to which  any of them may  become  subject  under the
Securities  Act,  the  Exchange  Act or  otherwise,  insofar as such  Claims (or
actions or proceedings,  whether  commenced or threatened,  in respect  thereof)
arise out of or are based upon any of the  following  statements,  omissions  or
violations  of  the  Registration  Statement  or  any  post-effective  amendment
thereof, or any prospectus included therein: (i) any untrue statement or alleged
untrue statement of a material fact contained in the  Registration  Statement or
any post-effective amendment thereof or any prospectus included therein: (i) any
untrue statement or alleged untrue statement of a material fact contained in the
Registration  Statement or any post-effective  amendment thereof or the omission
or alleged  omission  to state  therein a material  fact  required  to be stated
therein or necessary to make the  statements  therein not  misleading,  (ii) any
untrue statement or alleged untrue statement of a material fact contained in any
preliminary  prospectus if used prior to the effective date of such Registration
Statement, or contained in the final prospectus (as amended or supplemented,  if
the Company files any amendment  thereof or supplement  thereto with the SEC) or
the omission or alleged omission to state therein any material fact necessary to
make the statements made therein,  in light of the circumstances under which the
statements  therein were made,  not misleading or (iii) any violation or alleged
violation by the Company of the  Securities  Act,  the  Exchange  Act, any state
securities law or any rule or regulation  under the Securities Act, the Exchange
Act or any state  securities  law (the  matters  in the  foregoing  clauses  (i)
through (iii) being,  collectively,  "Violations").  The Company shall reimburse
the  Investors,  promptly as such expenses are incurred and are due and payable,
for any reasonable legal fees or other reasonable  expenses  incurred by them in
connection  with  investigating  or  defending  any such Claim.  Notwithstanding
anything  to  the  contrary  contained  herein,  the  indemnification  agreement
contained in this Section 6(a) shall not (i) apply to a Claim  arising out of or
based upon a Violation  which  occurs in reliance  upon and in  conformity  with
information  furnished  in  writing  to  the  Company  by or on  behalf  of  any
Indemnified  Person  expressly for use in connection with the preparation of the
Registration  Statement or any such amendment thereof or supplement  thereto, if
such  prospectus  was timely made  available by the Company  pursuant to Section
3(b)  hereof;  (ii) with  respect to any  preliminary  prospectus,  inure to the
benefit  of any such  person  from  whom the  person  asserting  any such  Claim
purchased the  Registrable  Securities  that are the subject  thereof (or to the
benefit of any person  controlling  such  person)  if the  untrue  statement  or
omission of material fact contained in the preliminary  prospectus was corrected
in the  prospectus,  as then amended or  supplemented,  if such  prospectus  was
timely made available by the Company  pursuant to Section 3(b) hereof;  (iii) be
available  to the extent  such Claim is based on a failure  of the  Investor  to
deliver or cause to be delivered the  prospectus  made available by the Company;
or (iv) apply to amounts paid in settlement of any

                                       -7-

<PAGE>

Claim if such  settlement is effected  without the prior written  consent of the
Company,  which consent shall not be unreasonably  withheld.  Each Investor will
indemnify the Company,  its officers,  directors and agents (including  Counsel)
against  any claims  arising out of or based upon a  Violation  which  occurs in
reliance upon and in  conformity  with  information  furnished in writing to the
Company, by or on behalf of such Investor,  expressly for use in connection with
the preparation of the Registration  Statement,  subject to such limitations and
conditions as are applicable to the  Indemnification  provided by the Company to
this Section 6. Such indemnity shall remain in full force and effect  regardless
of any  investigation  made by or on behalf of the Indemnified  Person and shall
survive the transfer of the Registrable  Securities by the Investors pursuant to
Section 9.

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

         7. CONTRIBUTION.  To the extent any  indemnification by an indemnifying
party is prohibited or limited by law, the indemnifying party agrees to make the
maximum contribution with respect to any amounts for which it would otherwise be
liable  under  Section  6 to the  fullest  extent  permitted  by law;  provided,
however,  that (a) no contribution shall be made under  circumstances  where the
maker would not have been liable for  indemnification  under the fault standards
set  forth in  Section  6; (b) no  seller of  Registrable  Securities  guilty or
fraudulent  misrepresentation  (within  the  meaning  of  Section  11(f)  of the
Securities Act) shall be entitled to

                                       -8-

<PAGE>

contribution  from any seller of  Registrable  Securities  who was not guilty of
such  fraudulent  misrepresentation;  and  (c)  contribution  by any  seller  of
Registrable  Securities shall be limited in amount to the net amount of proceeds
received by such seller from the sale of such Registrable Securities.

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

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

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

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

         9.  ASSIGNMENT  OF THE  REGISTRATION  RIGHTS.  The  rights  to have the
Company  register  Registrable  Securities  pursuant to this Agreement  shall be
automatically  assigned by the Investors to any transferee of in excess of fifty
(50%) percent or more of the  Registrable  Securities  (or all or any portion of
any Debenture of the Company which is convertible into such securities) only if:
(a) the  Investor  agrees in writing with the  transferee  or assignee to assign
such rights,  and a copy of such  agreement is furnished to the Company within a
reasonable time after such  assignment,  (b) the Company is, within a reasonable
time after such transfer or assignment, furnished with written notice of (i) the
name and address of such  transferee  or assignee and (ii) the  securities  with
respect to which such registration rights are being transferred or assigned, (c)
immediately  following  such transfer or assignment  the further  disposition of
such securities by the transferee or assignee is restricted under the Securities
Act and  applicable  state  securities  laws,  and (d) at or before the time the
Company received the written notice  contemplated by clause (b) of this sentence
the transferee or assignee agrees in writing with the Company to be bound by all
of the  provisions  contained  herein.  In the  event of any  delay in filing or
effectiveness of the Registration Statement as a result of such assignment,  the
Company  shall not be liable for any damages  arising  from such  delay,  or the
payments set forth in Section 2(c) hereof.

                                       -9-

<PAGE>

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

         11. MISCELLANEOUS.

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

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

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

                  (d) This  Agreement  shall be governed by and  interpreted  in
accordance with the laws of the State of New York. Each of the parties  consents
to the jurisdiction of the federal courts whose districts  encompass any part of
the City of New York or the state courts of the State of New York sitting in the
City of New York in connection with any dispute arising under this Agreement and
hereby waives, to the maximum extent permitted by law, any objection,  including
any  objection  based on  forum  non  conveniens,  to the  bringing  of any such
proceeding  in such  jurisdictions.  A  facsimile  transmission  of this  signed
Agreement shall be legal and binding on all parties  hereto.  This Agreement may
be  signed  in one or more  counterparts,  each of  which  shall  be  deemed  an
original.  The headings of this  Agreement are for  convenience of reference and
shall not form part of, or affect the interpretation of, this Agreement.  If any
provision  of  this  Agreement  shall  be  invalid  or   unenforceable   in  any
jurisdiction,  such invalidity or unenforceability shall not effect the validity
or enforceability of the remainder of this

                                      -10-

<PAGE>

Agreement  or the  validity or  enforceability  of this  Agreement  in any other
jurisdiction.  This  Agreement  may be amended only by an  instrument in writing
signed by the party to be charged with  enforcement.  This Agreement  supersedes
all prior agreements and understandings among the parties hereto with respect to
the subject matter hereof.

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

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

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

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

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

                  (REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)

                                      -11-

<PAGE>

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

                          SWISSRAY INTERNATIONAL, INC.

                                  By:_/s/ Ruedi G. Laupper

                             Name: Ruedi G. Laupper

                                     Title: President and Chairman of the Board
                                   Banque Franck S.A.
                                  ---------------------------------------------
                           (Name of Initial Investor)

                                  By: /s/ Fabio Pellanda
                                     Name:

                                     Title:Senior Vice-President

                                      -12-<TABLE>
<CAPTION>
Name                                       Dated           Amount         Maturity Date     Deb. No.
---------------------------------------    ------------    ----------     ---------------   ---------------
<S>                                        <C>             <C>            <C>               <C>

Banque Frank S.A *                         Aug 20, 1997    $  300,000     Aug 20, 2000      AUG-1997-103
Cefeo Investments Ltd.                     Aug 18, 1997    $1,000,000     Aug 18, 2000      AUG-1997-105
Deere Park Capital Management, Inc.,       Aug 18, 1997    $  500,000     Aug 18, 2000      AUG-1997-101
     A Nominee
Elara Ltd.                                 Aug 20, 1997    $  500,000     Aug 20, 2000      AUG-1997-102
Otato Limited Partnership                  Aug 18, 1997    $  250,000     Aug 18, 2000      AUG-1997-104
Thomson Kernaghan & Co. Ltd.               Aug 20, 1997    $2,450,000     Aug 20, 2000      AUG-1997-106

</TABLE>

*    This document has been filed.

<PAGE>

                                                                   Exhibit 10.8

                                FORM OF DEBENTURE

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

ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

CONVERTIBLE DEBENTURE DUE                                August  20, 2000
                                                         August  20, 1997

$300,000
Number

         FOR  VALUE  RECEIVED,   SWISSRAY   INTERNATIONAL,   INC.,  a  New  York
corporation  (the  "Company"),  hereby  promises to pay to Banque  Frank S.A. or
registered assigns (the "Holder") on August 20, 2000, (the "Maturity Date"), the
principal amount of Three Hundred  Thousand Dollars  ($300,000) U.S., and to pay
interest on the principal amount hereof,  in such amounts,  at such times and on
such terms and conditions as are specified herein.

ARTICLE 1. INTEREST

         The Company shall pay interest on the unpaid  principal  amount of this
Debenture (the "Debenture") at the rate of Six Percent (6.0%) per year,  payable
at the time of each conversion until the principal amount hereof is paid in full
or has been converted. Interest shall be computed on the basis of a 360 day year
of 12, 30 day months.  Each payment  shall be paid in cash or in freely  trading
Common Stock of the Company,  at the Company's  option. If paid in Common Stock,
the  number of shares of the  Company's  Common  Stock to be  received  shall be
determined by dividing the dollar amount of the interest by the then  applicable
Market Price as of the interest  payment date.  "Market Price" shall mean 80% of
the average of the 5 day closing bid prices,  as reported by Nasdaq, or whatever
primary  exchange the Company's Common Stock may be traded on, for the 5 trading
days immediately preceding the date of conversion. If the interest is to be paid
in cash,  the Company shall make such payment within 5 business days of the date
of conversion.  If the interest is to be paid in Common Stock, said Common Stock
shall be delivered

                                        1

<PAGE>   2

to the Holder, or per Holder's instructions,  within 8 business days of the date
of conversion.  The Debentures are subject to automatic conversion at the end of
three years from the date of issuance at which time all  Debentures  outstanding
will be automatically converted based upon the formula set forth in Section 3.2.
The closing  shall be deemed to have occurred on the date the funds are received
by the Company or its Counsel (the "Closing Date").

ARTICLE 2. METHOD OF PAYMENT

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

ARTICLE 3. CONVERSION

         Section 3.1. Conversion Privilege

         (a) The Holder of this Debenture  shall have the right,  at its option,
to convert it into shares of common  stock,  par value  $0.01 per share,  of the
Company  ("Common  Stock") at any time which is before the close of  business on
the Maturity Date,  except as set forth in Section  3.1(c) below.  The number of
shares of  Common  Stock  issuable  upon the  conversion  of this  Debenture  is
determined  pursuant to Section 3.2 and rounding the result of the nearest whole
share.

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

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

         Section 3.2. Conversion Procedure

         (a) Debentures.  Upon the Company's  receipt of a facsimile or original
of  Holder's  signed  Notice of  Conversion  and the  original  Debenture  to be
converted,  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, or portion thereof is convertible in accordance with the

                                        2

<PAGE>   3

provisions  regarding  conversion  set  forth  in  the  conversion  notice.  The
Company's  transfer  agent or attorney shall act as Registrar and shall maintain
an appropriate ledger containing the necessary  information with respect to each
Debenture.

         (b)  Conversion  Date.  Fifty  percent (50%) of the face amount of this
Debenture  may  be  converted  at  the  earlier  of the  effective  date  of the
Registration Statement or November 3, 1997. Such conversion shall be effectuated
by surrendering to the Company, or its attorney,  this Debenture to be converted
together with a facsimile or original of the signed  Notice of Conversion  which
evidences  Purchaser's   intention  to  convert  the  Debenture  indicated.   An
additional  fifty  percent  (50%) of the face  amount  of this  Debenture,  100%
cumulatively,  may be converted  thirty days after the earlier of the  effective
date of the  Registration  Statement or December 3, 1997.  The date on which the
Notice of Conversion is effective  ("Conversion Date") shall be deemed to be the
date on which the Holder has delivered to the Company 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 3
business days thereafter. As long as the Debentures to be converted are received
by the  Company  or its  designated  attorney  within 3  business  days after it
receives a facsimile or original of the signed Notice of Conversion, the Company
shall  deliver to the Holder,  or per the Holder's  instructions,  the shares of
Common Stock, without restrictive legend or stop transfer instructions, within 8
business days of receipt of the facsimile Conversion Notice.

         (c) Common  Stock to be Issued  Without  Restrictive  Legend.  Upon the
conversion of any  Debentures and upon receipt by the Company or its attorney of
a facsimile  or original of Holder's  signed  conversion  notice  Company  shall
instruct  Company's   transfer  agent  to  issue  Stock   Certificates   without
restrictive  legend or stop transfer  instructions in the name of Holder (or its
nominee) and in such  denominations  to be specified at conversion  representing
the  number of  shares  of  Common  Stock  issuable  upon  such  conversion,  as
applicable.   Company   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 Company.

         (d) Conversion  Rate.  Purchaser is entitled,  at its option to convert
fifty percent (50%) of the face amount of this Debenture, plus accrued interest,
at the earlier of the effective date of the  Registration  Statement or November
3, 1997, at 80% of the 5 day average  closing bid price,  as reported by Nasdaq,
or whatever  primary  exchange the Company's  Common Stock may be traded on, for
the 5 trading days  immediately  preceding the applicable  Conversion  Date (the
"Conversion  Price").  Purchaser  is  entitled,  at its  option  to  convert  an
additional  fifty  percent  (50%) of the face  amount  of this  Debenture  (100%
cumulatively),  plus accrued  interest,  at the earlier of 30 days following the
effective date of the Registration  Statement or December 3, 1997, at 80% of the
5 day average  closing bid price,  as  reported by Nasdaq,  or whatever  primary
exchange  the  Company's  Common  Stock may be traded on, for the 5 trading days
immediately  preceding the applicable  Conversion Date. 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

                                        3

<PAGE>   4

down, as the case may be, to the nearest whole share.

         The Debentures are subject to a mandatory,  36 month conversion feature
at the end of which all Debentures outstanding will be automatically  converted,
upon the terms set forth in this section ("Mandatory Conversion Date").

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

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

         (g) Within the time  period  referred to above in Section  3.2(b),  the
Company shall deliver a certificate, without stop transfer instructions, for the
number of shares of Common Stock issuable upon the  conversion.  It shall be the
Company's  responsibility  to take all  necessary  actions  and to bear all such
costs to issue the  Common  Stock as  provided  herein,  including  the cost for
delivery of an opinion letter to the transfer agent, if so required.  The person
in whose  name the  certificate  of Common  Stock is to be  registered  shall be
treated  as a  shareholder  of record on and after  the  conversion  date.  Upon
surrender of any Debentures  that are to be converted in part, the Company shall
issue to the  Holder a new  Debenture  equal to the  unconverted  amount,  if so
requested in writing by Holder.

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

<TABLE>

<CAPTION>

                                                                             Late Payment for Each
                                                                              $10,000 of Debenture

                  No. Business Days Late                                     Amount Being Converted

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

                             1                                                        $100
                             2                                                        $200
</TABLE>

                                        4

<PAGE>   5

<TABLE>

<CAPTION>

<S>                         <C>                                                      <C>

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

</TABLE>

         To the extent that the failure of the Company to issue the Common Stock
pursuant to this Section 3.2(g) is due to the  unavailability  of authorized but
unissued shares of Common Stock, the provisions of this Section 3.2(g) shall not
apply but instead the provisions of Section 3.2(h) shall apply.

         The Company shall pay any amounts incurred under this Section 3.2(g) in
immediately  available  funds  within  five (5)  business  days from the date of
issuance of the applicable  Common Stock.  Nothing herein shall limit a Holder's
right to pursue actual  damages for the  Company's  failure to issue and deliver
Common Stock to the Holder within 8 business days after the Conversion Date.

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

         The  Company  agrees to pay to all  Holders of  outstanding  Debentures
payments for a Conversion Default  ("Conversion Default Payments") in the amount
of  (N/365)  x (.24) x the  initial  issuance  price of the  outstanding  and/or
tendered but not converted  Debentures  held by each Holder where N = the number
of days from the Conversion Default Date to the date (the "Authorization  Date")
that the Company authorizes a sufficient number of shares of Common

                                        5

<PAGE>   6

Stock to effect conversion of all remaining  Debentures.  The Company shall send
notice  ("Authorization  Notice") to each Holder of outstanding  Debentures that
additional shares of Common Stock have been authorized,  the Authorization  Date
and the amount of Holder's  accrued  Conversion  Default  Payments.  The accrued
Conversion  Default  shall be paid in cash or shall be  convertible  into Common
Stock at the Conversion Rate, at the Holder's option, payable as follows: (i) in
the event Holder  elects to take such payment in cash,  cash  payments  shall be
made to such Holder of outstanding  Debentures by the fifth day of the following
calendar  month,  or (ii) in the event  Holder  elects to take such  payment  in
stock,  the Holder may convert  such  payment  amount  into Common  Stock at the
conversion rate set forth in Section 3.2(d) at any time after the 5th day of the
calendar  month  following  the  month in which  the  Authorization  Notice  was
received, until the expiration of the mandatory 36 month conversion period.

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

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

         (j) The  Holder  is  limited  in the  amount of this  Debenture  it may
convert and own.  Other than the Mandatory  Conversion  provisions  contained in
this Debenture  which are not limited by the following,  in no other event shall
the Holder be  entitled to convert  any amount of  Debentures  in excess of that
amount  upon  conversion  of which the sum of (1) the number of shares of Common
Stock  beneficially owned by the Holder and its affiliates (other than shares of
Common Stock which may be deemed beneficially owned through the ownership of the
unconverted  portion  of the  Debenture,  and (2) the number of shares of Common
Stock issuable upon the  conversion of the Debentures  with respect to which the
determination  of this  provision  is being  made,  would  result in  beneficial
ownership by the Holder and its affiliates of more than 4.9% of the  outstanding
shares of Common  Stock of the Company.  For  purposes of this  provision to the
immediately  preceding  sentence,  beneficial  ownership  shall be determined in
accordance  with  Section  13(d) of the  Securities  Exchange  Act of  1934,  as
amended,  and  Regulation  13 D-G  thereunder,  except as otherwise  provided in
clause (1) of such provision.

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

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

                                        6

<PAGE>   7

         Section 3.5.  Company to Reserve  Stock.  The Company shall reserve the
number of shares of Common  Stock  required  pursuant  to and upon the terms set
forth in Section 3(a) of the  Subscription  Agreement  dated August of 1997,  to
permit the conversion of this Debenture. All shares of Common Stock which may be
issued upon the conversion  hereof shall upon issuance be validly issued,  fully
paid and nonassessable  and free from all taxes,  liens and charges with respect
to the issuance thereof.

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

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

ARTICLE 4. MERGERS

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

ARTICLE 5. REPORTS

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

                                        7

<PAGE>   8

ARTICLE 6. DEFAULTS AND REMEDIES

     Section  6.1 Events of  Default.  An "Event of  Default"  occurs if (a) the
Company does not make the payment of the  principal of this  Debenture  when the
same becomes due and payable at maturity, upon redemption or otherwise,  (b) the
Company does not make a payment, other than a payment of principal, for a period
of 5 business days  thereafter,  (c) the Company fails to comply with any of its
other agreements in this Debenture and such failure continues for the period and
after the notice  specified  below,  (d) the  Company  pursuant to or within the
meaning  of any  Bankruptcy  Law  (as  hereinafter  defined):  (i)  commences  a
voluntary  case; (ii) consents to the entry of an order for relief against it in
an  involuntary  case;  (iii)  consents to the  appointment  of a Custodian  (as
hereinafter  defined) of it or for all or  substantially  all of its property or
(iv) makes a general  assignment for the benefit of its creditors or (v) a court
of competent  jurisdiction  enters an order or decree under any  Bankruptcy  Law
that: (A) is for relief against the Company in an involuntary case; (B) appoints
a Custodian  of the Company or for all or  substantially  all of its property or
(C) orders  the  liquidation  of the  Company,  and the order or decree  remains
unstayed and in effect for 60 days, (e) the Company's  Common Stock is no longer
listed on any recognized exchange including electronic over-the-counter bulletin
board. As used in this Section 6.1, the term  "Bankruptcy Law" means Title 11 of
the United  States  Code or any  similar  federal or state law for the relief of
debtors. The term "Custodian" means any receiver, trustee, assignee,  liquidator
or similar  official under any Bankruptcy  Law. A default under clause (c) above
is not an Event of Default  until the  holders of at least 25% of the  aggregate
principal  amount of the  Debentures  outstanding  notify  the  Company  of such
default and the Company does not cure it within five (5) business days after the
receipt of such  notice,  which must  specify  the  default,  demand  that it be
remedied and state that it is a "Notice of Default".

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

ARTICLE 7. REGISTERED DEBENTURES

     Section  7.1  Series.  This  Debenture  is  one  of a  numbered  series  of
Debentures  having an  aggregate  principal  amount of not more than  $5,000,000
which are  identical  except as to the  principal  amount  and date of  issuance
thereof and as to any  restriction  on the  transfer  thereof in order to comply
with  the  Securities  Act of 1933 and the  regulations  of the  Securities  and
Exchange  Commission  promulgated  thereunder.  Such  Debentures are referred to
herein collectively as the "Debentures". The Debentures shall be issued in whole
multiples of $5,000.

     Section 7.2 Record Ownership. The Company, or its attorneys, shall maintain
a register of the holders of the Debentures (the "Register") showing their names
and addresses and the serial numbers and principal  amounts of Debentures issued
to or transferred of record by them

                                       8

<PAGE>   9

from time to time.  The Register may be  maintained in  electronic,  magnetic or
other computerized form. The Company may treat the person named as the Holder of
this  Debenture  is the  person  exclusively  entitled  to receive  payments  of
interest  on  this  Debenture,   receive  notifications  with  respect  to  this
Debenture, convert it into Common Stock and otherwise exercise all of the rights
and powers as the absolute owner hereof.

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

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

ARTICLE 8. NOTICES

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

ARTICLE 9. TIME

         Where this Debenture authorizes or requires the payment of money or the
performance  of a condition  or  obligation  on a Saturday or Sunday or a public
holiday, or authorizes or requires

                                        9

<PAGE>   10

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

ARTICLE 10. WAIVERS

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

ARTICLE 11. RULES OF CONSTRUCTION

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

ARTICLE 12. GOVERNING LAW

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

ARTICLE 13. LITIGATION

         (a) Forum Selection and Consent to  Jurisdiction.  Any litigation based
thereon,  or arising out of, under, or in connection with, this agreement or any
course of conduct,  course of dealing,  statements  (whether oral or written) or
actions of the Company or Holder shall be brought and maintained  exclusively in
the courts of the state of New York or in the United States  District  Court for
the Southern  District of New York. The Company hereby expressly and irrevocably
submits  to the  jurisdiction  of the Courts of the state of New York and of the
United  States  District  Court for the  Southern  District  of New York for the
purpose of any such litigation

                                       10

<PAGE>   11

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 Borough of Manhattan,  City,  County and
State  of  New  York,  and  the  parties  hereby   irrevocably   submit  to  the
non-exclusive  jurisdiction of such courts for the purpose of any such action or
proceeding.

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

                          SWISSRAY INTERNATIONAL, INC.

                                  By /s/ Ruedi G. Laupper

                             Name: Ruedi G. Laupper

                                    Title:  President and Chairman of the Board

                                       11

<PAGE>   12

                                    EXHIBIT A

                              NOTICE OF CONVERSION

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

         The undersigned hereby irrevocably elects, as of _____________, 199_ to
convert  $______________  of the  Debentures  into  Shares of Common  Stock (the
"Shares")  of SWISSRAY  INTERNATIONAL,  INC.  (the  "Company")  according to the
conditions set forth in the Subscription Agreement dated August __, 1997.

Date of Conversion______________________________________________

Applicable Conversion Price_____________________________________

Number of Shares Issuable upon this conversion__________________

Signature_______________________________________________________
                  [Name]

Address_________________________________________________________

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

Phone_______________________   Fax______________________________

                                       12

<PAGE>   13

                             Assignment of Debenture

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

-------------------------------------------------------------------------------
                   (name, address and SSN or EIN of assignee)

                                                   Dollars  ($               )
-------------------------------------------------------------------------------
    (principal amount of Debenture, $10,000 or integral multiples of $10,000)

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

Date:_______________________    Signed:________________________________________
                                       (Signature must conform in all

                                        respects to name of Holder shown
                                        on face of Debenture)

Signature Guaranteed:

                                       13

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