Document:

Name                                       Dated           Signatory
---------------------------------------    ------------    ---------------
The Isosceles Fund Limited                 Dec  2, 1997    Water Blum Gentilomo
Otato Limited Partnership *                Dec  5, 1997    Eva Forbes
Thomson Kernaghan & Co. Ltd.               Nov 26, 1997    Mark Valentine

*    This document has been filed

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                          REGISTRATION RIGHTS AGREEMENT

         THIS  REGISTRATION  RIGHTS  AGREEMENT,  dated as of December  5,  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 E T H:

         WHEREAS,   upon  the  terms  and  subject  to  the  conditions  of  the
Subscription  Agreement,  dated as of December    5,  1997,  between the Initial
Investor and the Company (the "Subscription Agreement"),  the Company has agreed
to issue and sell to the  Initial  Investor  8%  Convertible  Debentures  of the
Company (the "Debentures"),  which will be convertible into shares of the common
stock,  $.01 par value (the "Common  Stock"),  of the Company  (the  "Conversion
Shares") upon the terms and subject to the conditions of such Debentures; and

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

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

         I. Definitions.

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

         (i) "Closing  Date" means the date funds are received by the Company or
its designated attorney pursuant to the Subscription Agreement.

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

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

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Statement by the United States Securities and Exchange Commission (the "SEC").

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

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

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

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

         2. REGISTRATION.

         (a) MANDATORY REGISTRATION. The Company shall prepare and file with the
SEC,  no later than  thirty  (30)  calendar  days  after the  Closing  Date,  an
amendment  to  the  Form  S-1  Registration  Statement,  or a  new  Registration
Statement  if required,  covering a sufficient  number of shares of Common Stock
for the Initial  Investors into which is not more than  $3,800,000 of Debentures
in the total  offering would be  convertible.  In the event the amendment is not
filed within  thirty (30)  calendar  days after the Closing  Date,  then in such
event the Company shall pay the Investor 2% of the face amount of each Debenture
for each 30 day period, or portion thereof,  after 30 days following the Closing
Date that the Registration  Statement is not filed. The Investor is also granted
additional  Piggyback  registration  rights on any other Registration  Statement
filings made by the Company.  Such  Registration  Statement shall state that, in
accordance with the Securities Act, it also covers such indeterminate  number of
additional  shares of Common  Stock as may become  issuable to prevent  dilution
resulting from Stock splits, or stock  dividends).  If at any time the number of
shares of Common Stock into which the  Debenture  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 S- 1 to register the shares of Common Stock into
which the Debenture may be converted that exceed the aggregate  number of shares
of Common Stock already  registered.  The above damages shall continue until the
obligation  is fulfilled  and shall be paid within 5 business days after each 30
day period,  or portion  thereof,  until the  Registration  Statement  is filed.
Failure of the  Company to make  payment  within  said 5 business  days shall be
considered a default.

         The Company acknowledges that its failure to file with the SEC, said

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Registration  Statement  no later than thirty  (30) days after the Closing  Date
will cause the  Initial  Investor  to suffer  damages in an amount  that will be
difficult to ascertain. Accordingly, the parties agree that it is appropriate to
include in this  Agreement  a  provision  for  liquidated  damages.  The parties
acknowledge  and agree that the liquidated  damages  provision set forth in this
section  represents  the parties' good faith effort to qualify such damages and,
as such,  agree  that  the  form  and  amount  of such  liquidated  damages  are
reasonable and will not constitute a penalty.  The payment of liquidated damages
shall not relieve the Company from its  obligations to register the Common Stock
and  deliver  the Common  Stock  pursuant  to the terms of this  Agreement,  the
Subscription Agreement and the Debenture.

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

         (c) PAYMENT BY THE COMPANY. If the Registration  Statement covering the
Registrable  Securities  required to be filed by the Company pursuant to Section
2(a) hereof is not  declared  effective  by February  20,  1998,  (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. The above damages shall
continue until the obligation is fulfilled and shall be paid within 5

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business  days  after  each  30  day  period,  or  portion  thereof,  until  the
Registration  Statement is filed.  Failure of the Company to make payment within
said 5 business days shall be considered a default.

         The Company  acknowledges  that its failure to file with the SEC,  said
Registration  Statement  no later than thirty  (30) days after the Closing  Date
will cause the  Initial  Investor  to suffer  damages in an amount  that will be
difficult to ascertain. Accordingly, the parties agree that it is appropriate to
include in this  Agreement  a  provision  for  liquidated  damages.  The parties
acknowledge  and agree that the liquidated  damages  provision set forth in this
section  represents  the parties' good faith effort to qualify such damages and,
as such,  agree  that  the  form  and  amount  of such  liquidated  damages  are
reasonable and will not constitute a penalty.  The payment of liquidated damages
shall not relieve the Company from its  obligations to register the Common Stock
and  deliver  the Common  Stock  pursuant  to the terms of this  Agreement,  the
Subscription Agreement and the Debenture.

         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, an amendment to the Form S-1 Registration  Statement, or a new
Registration Statement if required,  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 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;

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         (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

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

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

         (g) Use its commercially reasonable efforts, if eligible, either to (i)
cause all the Registrable Securities covered by the Registration Statement to be
listed  on a  national  securities  exchange  and on  each  additional  national
securities  exchange on which  securities  of the same class or series issued by
the  Company  are  then  listed,  if any,  if the  listing  of such  Registrable
Securities is then permitted  under the rules of such  exchange,  or (ii) secure
designation  of all  the  Registrable  Securities  covered  by the  Registration
Statement as a National  Association of Securities Dealers Automated  Quotations
System ("NASDAQ") "Small  Capitalization"  within the meaning of Rule 11Aa2-1 of
the SEC under the  Securities  Exchange Act of 1934,  as amended (the  "Exchange
Act"),  and the quotation of the Registrable  Securities on the 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

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are included in such Registration/statement) an appropriate instruction and
opinion of such counsel; and

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

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

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

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

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

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

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

         (a) To the extent permitted by law, the Company will indemnify and hold
harmless each Investor who holds such Registrable Securities,  the directors, if
any, of such Investor,  the officers, if any, of such Investor,  each person, if
any, who controls any Investor  within the meaning of the  Securities Act or the
Exchange  Act (each,  an  "Indemnified  Person"),  against any  losses,  claims,
damages,  liabilities  or expenses  (joint or several)  incurred  (collectively,
"Claims") to which any of them may become subject under the Securities  Act, the
Exchange Act or  otherwise,  insofar as such Claims (or actions or  proceedings,
whether  commenced or threatened,  in respect thereof) arise out of or are based
upon  any  of  the  following   statements,   omissions  or  violations  of  the
Registration   Statement  or  any  post-effective   amendment  thereof,  or  any
prospectus  included  therein:  (i)  any  untrue  statement  or  alleged  untrue
statement  of a material  fact  contained in the  Registration  Statement or any
post-effective  amendment thereof or any prospectus  included  therein:  (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

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or  supplement  thereto,  if such  prospectus  was timely made  available by the
Company  pursuant to Section 3(b) hereof;  (ii) with respect to any  preliminary
prospectus,  inure  to the  benefit  of any such  person  from  whom the  person
asserting  any such Claim  purchased  the  Registrable  Securities  that are the
subject thereof (or to the benefit of any person controlling such person) if the
untrue  statement  or omission of material  fact  contained  in the  preliminary
prospectus was corrected in the prospectus, as then amended or supplemented,  if
such  prospectus  was timely made  available by the Company  pursuant to Section
3(b)  hereof;  (iii) be available to the extent such Claim is based on a failure
of the  Investor  to  deliver  or  cause to be  delivered  the  prospectus  made
available by the Company;  or (iv) apply to amounts  paid in  settlement  of any
Claim if such  settlement is effected  without the prior written  consent of the
Company,  which consent shall not be unreasonably  withheld.  Each Investor will
indemnify the Company,  its officers,  directors and agents (including  Counsel)
against  any claims  arising out of or based upon a  Violation  which  occurs in
reliance upon and in  conformity  with  information  furnished in writing to the
Company, by or on behalf of such Investor,  expressly for use in connection with
the preparation of the Registration  Statement,  subject to such limitations and
conditions as are applicable to the  Indemnification  provided by the Company to
this Section 6. Such indemnity shall remain in full force and effect  regardless
of any  investigation  made by or on behalf of the Indemnified  Person and shall
survive the transfer of the Registrable  Securities by the Investors pursuant to
Section 9.

         (b) Promptly  after  receipt by an  Indemnified  Person or  Indemnified
Party  under  this  Section  6 of  notice  of the  commencement  of  any  action
(including any  governmental  action),  such  Indemnified  Person or Indemnified
Party  shall,  if a  Claim  in  respect  thereof  is  to  be  made  against  any
indemnifying  party under this  Section 6, deliver to the  indemnifying  party a
written notice of the commencement thereof and the indemnifying party shall have
the right to  participate  in,  and,  to the  extent the  indemnifying  party so
desires,  jointly with any other indemnifying party similarly noticed, to assume
control  of the  defense  thereof  with  counsel  mutually  satisfactory  to the
indemnifying  party and the Indemnified  Person or the Indemnified Party, as the
case may be; provided,  however, that an Indemnified Person or Indemnified Party
shall  have the right to retain its own  counsel  with the  reasonable  fees and
expenses to be paid by the indemnifying  party, if, in the reasonable opinion of
counsel retained by the indemnifying  party, the  representation by such counsel
of the Indemnified  Person or Indemnified Party and the indemnifying party would
be inappropriate  due to actual or potential  differing  interests  between such
Indemnified  Person or Indemnified Party and any other party represented by such
counsel in such  proceeding.  In such event,  the Company shall pay for only one
separate legal counsel for the  Investors;  such legal counsel shall be selected
by the Investors  holding a majority in interest of the  Registrable  Securities
included in the Registration  Statement to which the Claim relates.  The failure
to deliver written notice to the indemnifying  party within a reasonable time of
the commencement of

                                       9

<PAGE>   10

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 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

                                       10

<PAGE>   11

agrees in writing with the  transferee or assignee to assign such rights,  and a
copy of such  agreement  is furnished  to the Company  within a reasonable  time
after such  assignment,  (b) the Company is, within a reasonable time after such
transfer  or  assignment,  furnished  with  written  notice  of (i) the name and
address of such  transferee or assignee and (ii) the securities  with respect to
which  such  registration   rights  are  being  transferred  or  assigned,   (c)
immediately  following  such transfer or assignment  the further  disposition of
such securities by the transferee or assignee is restricted under the Securities
Act and  applicable  state  securities  laws,  and (d) at or before the time the
Company received the written notice  contemplated by clause (b) of this sentence
the transferee or assignee agrees in writing with the Company to be bound by all
of the  provisions  contained  herein.  In the  event of any  delay in filing or
effectiveness of the Registration Statement as a result of such assignment,  the
Company  shall not be liable for any damages  arising  from such  delay,  or the
payments set forth in Section 2(c) hereof.

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

         11. MISCELLANEOUS.

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

         (b) Notices  required or  permitted to be given  hereunder  shall be in
writing and shall be deemed to be sufficiently  given when personally  delivered
(by  hand,  by  courier,  by  telephone  line  facsimile  transmission,  receipt
confirmed,  or other means) or sent by certified mail, return receipt requested,
properly  addressed and with proper postage pre-paid (i) if to the Company,  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

                                       11

<PAGE>   12

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 the  interpreted in accordance
with the laws of the State of  Delaware.  Each of the  parties  consents  to the
jurisdiction  of the  state and  federal  courts  of the  State of  Delaware  in
connection with any dispute  arising under this Agreement and hereby waives,  to
the maximum  extent  permitted by law, any  objection,  including  any objection
based on forum non  coveniens,  to the bringing of any such  proceeding  in such
jurisdictions.  A facsimile transmission of this signed Agreement shall be legal
and binding on all parties  hereto.  This Agreement may be signed in one or more
counterparts,  each of which shall be deemed an  original.  The headings of this
Agreement are for convenience of reference and shall not form part of, or affect
the interpretation of, this Agreement.  If any provision of this Agreement shall
be  invalid  or   unenforceable   in  any   jurisdiction,   such  invalidity  or
unenforceability  shall  not  effect  the  validity  or  enforceability  of  the
remainder of this Agreement or the validity or  enforceability of this Agreement
in any other  jurisdiction.  This Agreement may be amended only by an instrument
in writing  signed by the party to be charged with  enforcement.  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.

                                       12

<PAGE>   13

                  (REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)

                                       13

<PAGE>   14

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

                               SWISSRAY INTERNATIONAL, INC.

                           By:/s/ Ruedi G. Laupper

                             Name: Ruedi G. Laupper

                          Title: Chairman and President

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

                           By: /s/ Forbes
                           Name:Ms Eva forbes

                           Title:Authorizaed signature

                                       14<TABLE>
<CAPTION>

Name                                       Dated           Amount       Maturity Date      Deb. No.
---------------------------------------    ------------    ------       ---------------    -----------
<S>                                        <C>             <C>          <C>                <C>      <C>
The Isosceles Fund Limited *               Dec  2, 1997    $  583,630   Dec  2, 1999       DEC-1997-RLV-2
Otato Limited Partnership                  Dec  5, 1997    $  583,630   Dec  5, 1999       DEC-1997-RLV-3
Thomson Kernaghan & Co. Ltd.               Nov 26, 1997    $  583,630   Nov 26, 1999       DEC-1997-RLV-1

*    This document has been filed
</TABLE>

<PAGE>

                                                                   Exhibit 10.16

                                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                                  December 2 ,1999

                                                           December 2 ,1997

$583,630
Number     DEC-1997-RLV-2

          FOR  VALUE  RECEIVED,   SWISSRAY  INTERNATIONAL,   INC.,  a  New  York
          corporation (the  "Company"),  hereby promises to pay to The ISOSCELES
          FUND  LIMITED or  registered  assigns  (the  "Holder") on November 24,
          1999,  (the  "Maturity  Date"),  the principal  amount of Five Hundred
          Eighty-three  Six Hundred Thirty Dollars  ($583,000)  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 Eight  Percent  (8.0%)  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

1

<PAGE>   2

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 75% 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  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 two years from the date of  issuance at which time all
Debentures  outstanding will be  automatically  converted based upon the formula
set forth in Section  3.2. The closing  shall be deemed to have  occurred on the
date the funds are received by the Company or its Counsel (the "Closing Date").

Article 2. Method of Payment

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

Article 3.  Conversion

         Section 3.1. Conversion Privilege

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

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

                                       2

<PAGE>

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

         Section 3.2. Conversion Procedure.

         (a) Debentures.  Upon receipt by the Company or its designated attorney
of a  facsimile  or original of Holder's  signed  Notice of  Conversion  and the
original  Debenture  to be  converted  in whole or in part,  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. Twenty-five percent (25%) of the face amount
of this  Debenture may be converted at the earlier of the effective  date of the
Registration  Statement or March 21, 1998. Such conversion  shall be effectuated
by surrendering to the Company, or its attorney,  this Debenture to be converted
together with a facsimile or original of the signed  Notice of Conversion  which
evidences Holder's intention to convert the Debenture  indicated.  An additional
twenty-five  percent (25%) of the face amount of the  Debentures,  fifty percent
(50%)  cumulatively,  may be  converted  after the  earlier of 30 days after the
effective  date of the  Registration  Statement or April 20, 1998. An additional
twenty-five  percent  (25%),  seventy-five  percent (75%)  cumulatively,  may be
converted  after  the  earlier  of 60  days  after  the  effective  date  of the
Registration Statement or May 20, 1998. An additional twenty-five percent (25%),
one hundred percent (100%)  cumulatively,  may be converted after the earlier of
90 days after the effective date of the Registration Statement or June 19, 1998.
The date on which the Notice of  Conversion  is  effective  ("Conversion  Date")
shall be deemed to be the date on which the Holder has  delivered to the Company
or its  designated  attorney a facsimile  or  original  of the signed  Notice of
Conversion, as long as the original Debenture(s) to be converted are received by
the Company or its designated attorney within 5 business days thereafter. Unless
otherwise  notified  by the  Company  in writing  via  facsimile  the  Company's
designated  attorney is Gary B. Wolff,  Esq., 474 Third Avenue,  25th Floor, New
York, New York 10017, (P) 212-644-6446, (F) 212-644-6498.

         (c) Common  Stock to be Issued  Without  Restrictive  Legend.  Upon the
conversion of any  Debentures and upon receipt by the Company or its attorney of

                                       3

<PAGE>

a facsimile or original of Holder'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 Holder (or its nominee) and in such denominations to be specified at
conversion  representing the number of shares of Common Stock issuable upon such
conversion,  as applicable.  Seller  warrants that no  instructions,  other than
these  instructions,  have been given or will be given to the transfer agent and
that the Common Stock shall  otherwise be freely  transferable  on the books and
records of Seller, except as may be set forth herein.

         (d) (i) Conversion Rate.  Holder is entitled,  at its option to convert
twenty-five  percent  (25%) of the face amount of this  Debenture,  plus accrued
interest, at the earlier of the effective date of the Registration  Statement or
March 21, 1998,  at 75% 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").  Holder is  entitled,  at its  option to  convert an
additional  twenty-five percent (25%), fifty percent (50%) cumulatively,  of the
face amount of this Debenture,  plus accrued  interest at the earlier of 30 days
after the effective date of the Registration Statement or April 20, 1998, at 75%
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. Holder is entitled,
at its option, to convert an additional twenty-five percent (25%),  seventy-five
percent (75%) cumulatively,  of the face amount of this Debenture,  plus accrued
interest at the earlier of 60 days after the effective date of the  Registration
Statement or May 20,  1998,  at 75% 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.  Holder is entitled,  at its option,  to convert an additional
twenty-five percent (25%), one hundred percent (100%) cumulatively,  of the face
amount of this Debenture,  plus accrued interest at the earlier of 90 days after
the effective date of the Registration Statement or June 19, 1998, at 75% 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 down,  as the case may be, to
the nearest whole share.

         (ii) Redemption Terms. The Company reserves the right, at its sole
option, to call a mandatory redemption of any percentage of the balance on the

                                       4

<PAGE>

Debentures  during the two  hundred ten (210) day period  following  the Closing
Date.  In the event the Company  exercises  such right of  redemption  up to and
including  the two hundred tenth (130th) day following the Closing Date it shall
pay the Holder,  in U.S.  currency One Hundred Thirty Percent (130%) of the face
amount of the Debentures redeemed.  Mandatory redemption by the Company shall be
effected by the Company  notifying  the Holder by facsimile at the number listed
in the Subscription  Agreement of the Company's  intention to exercise its right
of  mandatory  redemption.  The  Company  shall  state in such notice the dollar
amount of the  Debentures  it intends to redeem,  the amount that it will pay to
effectuate  such  redemption  and the date by which the Holder must  deliver the
Debentures  to Joseph B. LaRocco,  Escrow Agent  (including  the Escrow  Agent's
address)  unless the  Company is  already in receipt of those  Debentures  to be
redeemed. The date by which the Debentures must be delivered to the Escrow Agent
shall not be later than 10 business days following the date the Company notifies
the Holder by facsimile of the redemption.  The Company shall give the Holder at
least 2 business day's notice of the above information. On or before the date by
which the Holder is to deliver the original  Debentures to the Escrow Agent, the
Company  shall wire to the Escrow Agent that amount  necessary to pay the Holder
to effectuate the mandatory  redemption.  Once the Escrow Agent is in receipt of
the original  Debentures  and those funds  necessary to effectuate the mandatory
conversion  he shall wire those  funds to the Holder and  deliver to the Company
the original Debentures via overnight courier.  The Holder shall not be entitled
to send a Conversion  Notice to the Company with respect to the Debentures being
redeemed during such period.

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

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

                                       5

<PAGE>

under the  governing  law and such  excess  shall be  returned  with  reasonable
promptness by the Holder to the Company.

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

(g) Within five (5) business days after receipt of the documentation referred to
above in Section 3.2(b),  the Company shall deliver a certificate,  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  delivery of this original
Debenture, then in such event the Company shall pay to Holder an amount, in cash
in accordance with the following  schedule,  wherein "No. Business Days Late" is
defined as the number of  business  days  beyond  the 8 business  days  delivery
period.

                                  Late Payment for Each
                                   $10,000 of Debenture

No. Business Days Late            Amount Being Converted

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

         1                                 $100
         2                                 $200
         3                                 $300
         4                                 $400
         5                                 $500
         6                                 $600
         7                                 $700
         8                                 $800

                                       6

<PAGE>

               9                           $900
               10                          $1,000
(greater than) 10                          $1,000 + $200 for each
                                           Business Day Beyond 10

         The Company  acknowledges  that its failure to deliver the Common Stock
within 8 business days after the Conversion Date will cause the Holder to suffer
damages in an amount  that will be  difficult  to  ascertain.  Accordingly,  the
parties agree that it is  appropriate  to include in this  Debenture a provision
for liquidated  damages.  The parties  acknowledge and agree that the liquidated
damages  provision set forth in this section  represents the parties' good faith
effort to qualify such  damages and, as such,  agree that the form and amount of
such  liquidated  damages are reasonable and will not constitute a penalty.  The
payment of liquidated damages shall not relieve the Company from its obligations
to deliver the Common Stock pursuant to the terms of this Debenture.

         To the extent that the failure of the Company to issue the Common Stock
pursuant to this Section 3.2(g) is due to the  unavailability  of authorized but
unissued shares of Common Stock, the provisions of this Section 3.2(g) shall not
apply but instead the  provisions  of Section  3.2(h) shall  apply.  The Company
shall make any  payments  incurred  under  this  Section  3.2(g) in  immediately
available  funds within five (5) business days from the Conversion Date if late.
Nothing  herein shall limit a Holder's  right to pursue actual damages or cancel
the  conversion  for the Company's  failure to issue and deliver Common Stock to
the Holder within 8 business days after the Conversion Date.

            (h) The Company  shall at all times  reserve and have  available all
Common Stock  necessary to meet  conversion of the  Debentures by all Holders of
the entire amount of Debentures then outstanding. If, at any time Holder submits
a Notice of Conversion and the Company does not have  sufficient  authorized but
unissued  shares of Common Stock  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

                                       7

<PAGE>

Default  (with the  original  delivered  by overnight or two day courier) of its
election to either nullify or confirm the Notice of Conversion.

         The  Company  agrees to pay to all  Holders of  outstanding  Debentures
payments for a Conversion Default  ("Conversion Default Payments") in the amount
of  (N/365)  x (.24) x the  initial  issuance  price of the  outstanding  and/or
tendered but not converted  Debentures  held by each Holder where N = the number
of days from the Conversion Default Date to the date (the "Authorization  Date")
that the Company  authorizes  a  sufficient  number of shares of Common Stock to
effect  conversion  of all remaining  Debentures.  The Company shall send notice
("Authorization   Notice")  to  each  Holder  of  outstanding   Debentures  that
additional shares of Common Stock have been authorized,  the Authorization  Date
and the amount of Holder's  accrued  Conversion  Default  Payments.  The accrued
Conversion  Default  shall be paid in cash or shall be  convertible  into Common
Stock at the Conversion Rate, at the Holder's option, payable as follows: (i) in
the event Holder  elects to take such payment in cash,  cash  payments  shall be
made to such Holder of outstanding  Debentures by the fifth day of the following
calendar  month,  or (ii) in the event  Holder  elects to take such  payment  in
stock,  the Holder may convert  such  payment  amount  into Common  Stock at the
conversion  rate set forth in section  4(d) at anytime  after the 5th day of the
calendar  month  following  the  month in which  the  Authorization  Notice  was
received, until the expiration of the mandatory 24 month conversion period.

         The company  acknowledges  that its  failure to  maintain a  sufficient
number of  authorized  but  unissued  shares of Common Stock to effect in full a
conversion  of the  Debentures  will  cause the  Holder to suffer  damages in an
amount that will be difficult to ascertain.  Accordingly, the parties agree that
it is  appropriate  to include in this  Agreement  a  provision  for  liquidated
damages. The parties acknowledge and agree that the liquidated damages provision
set forth in this section  represents the parties' good faith effort to quantify
such  damages  and, as such,  agree that the form and amount of such  liquidated
damages  are  reasonable  and will not  constitute  a  penalty.  The  payment of
liquidated damages shall not relieve the Company from its obligations to deliver
the Common Stock pursuant to the terms of this Agreement.

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

                                       8

<PAGE>

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.

         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 November 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

                                       9

<PAGE>

exemption from the Act.

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

Article 4. Mergers

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

         The Company  will mail to the Holder  hereof at its address as shown on
the  Register a copy of any annual,  quarterly  or current  report that it files
with the  Securities and Exchange  Commission  promptly after the filing thereof
and a copy of any annual,  quarterly or other report or proxy  statement that it
gives to its shareholders generally at the time such report or statement is sent
to shareholders. Article 6. Defaults and Remedies

         Section 6.1. Events of Default. An "Event of Default" occurs if (a) the
Company does not make the payment of the  principal of this  Debenture  when the
same becomes due and payable at maturity, upon redemption or otherwise,  (b) the
Company does not make a payment, other than a payment of principal, for a period
of 5 business days  thereafter,  (c) the Company fails to comply with any of its
other agreements in this Debenture and such failure continues for the period and
after the notice  specified  below,  (d) the  Company  pursuant to or within the
meaning  of any  Bankruptcy  Law  (as  hereinafter  defined):  (i)  commences  a
voluntary  case; (ii) consents to the entry of an order for relief against it in
an  involuntary  case;  (iii)  consents to the  appointment  of a Custodian  (as
hereinafter  defined) of it or for all or  substantially  all of its property or
(iv) makes a general  assignment for the benefit of its creditors or (v) a court
of competent jurisdiction enters an order or decree

                                       10

<PAGE>

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  $3,800,000
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 attorney,  shall
maintain a register of the holders of the Debentures  (the  "Register")  showing
their  names and  addresses  and the serial  numbers  and  principal  amounts of
Debentures  issued to or  transferred  of record by them from time to time.  The
Register may be maintained in electronic,  magnetic or other  computerized form.
The Company may treat the person  named as the Holder of this  Debenture  in the
Register as the sole owner of this  Debenture.  The Holder of this  Debenture is
the  person  exclusively  entitled  to  receive  payments  of  interest  on this
Debenture, receive notifications with respect to this Debenture, convert it into
Common Stock and otherwise exercise all of the rights and powers as the absolute
owner hereof.

         Section 7.3. Registration of Transfer.  Transfers of this Debenture may
be registered on the books of the Company  maintained for such purpose  pursuant
to Section 7.2 above (i.e.,  the Register).  Transfers  shall be registered when
this  Debenture  is  presented  to the Company  with a request to  register  the
transfer

                                       11

<PAGE>

hereof and the Debenture is duly endorsed by the appropriate person,  reasonable
assurances are given that the  endorsements  are genuine and effective,  and the
Company has received evidence  satisfactory to it that such transfer is rightful
and in compliance  with all  applicable  laws,  including tax laws and state and
federal  securities laws. When this Debenture is presented for transfer and duly
transferred hereunder, it shall be canceled and a new Debenture showing the name
of the  transferee as the record holder  thereof shall be issued in lieu hereof.
When this  Debenture is  presented  to the Company with a reasonable  request to
exchange it for an equal principal amount of Debentures of other  denominations,
the Company shall make such  exchange and shall cancel this  Debenture and issue
in lieu  thereof  Debentures  having  a total  principal  amount  equal  to this
Debenture in such denominations as agreed to by the Company and Holder.

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

Article 8. Notices

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

Article 9. Time

         Where this Debenture authorizes or requires the payment of money or the
performance  of a condition  or  obligation  on a Saturday or Sunday or a public
holiday,  or authorizes or requires the payment of money or the performance of a
condition or obligation within, before or after a period of time computed from a
certain date, and such period of time ends on a Saturday or a Sunday or a public
holiday,  such payment may be made or condition or  obligation  performed on the
next  succeeding  business day, and if the period ends at a specified hour, such
payment may be made or condition  performed,  at or before the same hour of such
next succeeding business day, with the same force and effect as if made or

                                       12
<PAGE>

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 Delaware  applicable to agreements that are negotiated,
executed, delivered and performed solely in the State of Delaware.

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  Delaware.  The  Company  hereby  expressly  and
irrevocably  submits to the  jurisdiction of the state and federal courts of the
State of Delaware 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  Delaware.  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

                                       13

<PAGE>

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 Delaware and the parties hereby
irrevocably  submit to the  non-exclusive  jurisdiction  of such  courts for the
purpose of any such action or proceeding.

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

                                       SWISSRAY INTERNATIONAL, INC.

                                       By     /s/ Ruedi G. Laupper

                                       Name:  Ruedi G. Laupper
                                       Title: Chairman and President

                                       14

<PAGE>

                                    Exhibit A

                              NOTICE OF CONVERSION

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

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

Date of Conversion__________________________________________

Applicable Conversion Price_________________________________

Number of Shares Issuable upon this conversion______________

Signature___________________________________________________
                  [Name]

Address_____________________________________________________

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

Phone______________________   Fax___________________________

                                       15

<PAGE>

                             Assignment of Debenture

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

                   (name, address and SSN or EIN of assignee)

                                                              Dollars ($       )

                                                              -------
(principal amount of Debenture, $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
                                             of face of Debenture)

Signature Guaranteed:

                                       16

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