WARRANT AGREEMENT

     WARRANT  AGREEMENT (this  "Agreement"),  dated as of September 29, 1997, by
and between Amnex, Inc., a corporation  incorporated under the laws of the State
of New York (the "Company"), and HSBC Securities,  Inc. (the "Initial Holder" or
"HSBC").

                              W I T N E S S E T H :

     WHEREAS,  the Company and HSBC are  parties to a Purchase  Agreement  dated
September 11, 1997 (the "Purchase Agreement");

     WHEREAS, as an inducement to HSBC to enter into the Purchase Agreement, the
Company  has  agreed  to  issue  to  HSBC  Warrants  (as  hereinafter   defined)
exercisable,  in accordance with the terms and conditions thereof, for shares of
Common Stock (as hereinafter defined) of the Company;

     WHEREAS, the Company has authorized the issuance of the Warrants; and

     WHEREAS,  HSBC now desires to subscribe for, and the Company now desires to
issue the Warrants to HSBC upon the terms and conditions set forth herein;

     NOW, THEREFORE, in consideration of the premises set forth herein and other
good and valuable  consideration the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

     Section 1. Definitions.


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     1.01 Definitions. As used herein:

     "Affiliate"  shall mean, with respect to any Person,  any other Person that
directly  or  indirectly  controls,  or is  under  common  control  with,  or is
controlled by, such Person.  As used in this definition,  "control"  (including,
with their  correlative  meanings,  the terms  "controlled by" and "under common
control with"),  as used with respect to any Person,  shall mean the possession,
directly  or  indirectly,  of power to  direct  or cause  the  direction  of the
management and policies of such Person (whether through  ownership of securities
or partnership or other ownership  interests,  contract or otherwise),  provided
that, in any event, any Person which owns, directly or indirectly, more than 10%
of the securities  having ordinary voting power for the election of directors or
other

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governing  body of a corporation  or more than 10% of the  partnership  or other
ownership interests of any Person (other than as a limited partner of such other
Person)  will  be  deemed  to  control  such   corporation   or  other   Person.
Notwithstanding  the  foregoing,  neither  the  Initial  Holder  nor  any of its
Affiliates shall be deemed to be an Affiliate of the Company.

     "Business  Day"  shall mean any day other  than a  Saturday,  Sunday or any
other day on which banking  institutions in the State of New York are authorized
or obligated by law or executive order to close.

     "Common Stock" shall mean the Company's  authorized Common Stock, par value
$0.001 per share, as constituted on the date hereof.

     "Commission"  shall mean the  Securities  and  Exchange  Commission  or any
successor entity.

     "Deferral  Period"  shall have the  meaning  set forth in the  Registration
Rights Agreement.

     "Demand Registration" shall have the meaning provided in Section 5.01(a).

     "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.

     "Exercise Price" shall have the meaning set forth in the Warrant.

     "Final Offering  Memorandum" shall mean the Company's  Offering  Memorandum
dated September 11, 1997, as amended by the Supplement dated September 25, 1997,
relating to the Notes.

     "GAAP" shall mean accounting  principles  generally  accepted in the United
States from time to time.

     "Galesi Warrants" shall have the meaning provided in Section 3.05.

     "Holder" shall mean the Initial Holder and each other holder of any Warrant
or Warrant Share that is a direct or indirect  transferee of the Initial  Holder
or any other Holder as

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permitted hereunder unless, with respect to any such Warrant Share, such Warrant
Share is acquired in a public distribution pursuant to an effective registration
statement  under the  Securities  Act or pursuant to a  transaction  exempt from
registration  under the Securities Act, if securities  sold in such  transaction
may be resold without registration under the Securities Act.

     "Holder Expenses" shall have the meaning specified in Section 5.05.

     "Notes"  shall  mean  $15,000,000  principal  amount of 8 1/2%  Convertible
Subordinated  Notes of the  Company  Due 2002 (plus an option to  purchase up to
$8,000,000  additional principal amount of such Notes to cover  over-allotments)
to be issued and sold by the Company to the Initial Holder for resale as set out
in the Final Offering Memorandum.

     "Optional  Notes"  shall mean the Notes  issued  upon the  exercise  of the
Over-allotment Option, if any.

     "Over-allotment  Option"  shall  mean  HSBC's  option  to  purchase  up  to
$8,000,000 additional principal amount of the Notes to cover over-allotments.

     "Person"  shall mean an  individual,  a  corporation,  a limited  liability
company, a company, a voluntary  association,  a general partnership,  a limited
partnership,  a trust,  an  unincorporated  organization  or a government or any
agency, instrumentality or political subdivision thereof.

     "Piggy-Back Registration" shall have the meaning provided in Section 5.02.

     "Purchase  Agreement" shall mean the purchase agreement dated September 11,
1997  between the Company and the Initial  Holder  relating to the  offering and
sale of the Notes.

     "Registrable  Securities"  shall mean any Warrant  Shares  until (i) one or
more  registration  statements  covering  any such  Warrant  Shares  has  become
effective  under  the  Securities  Act and all such  Warrant  Shares  have  been
disposed of pursuant to such effective registration statement, (ii) such Warrant
Shares are sold under circumstances in which all of the applicable conditions of
Rule 144 (or any similar  provisions then in force) under the Securities Act are
met,  (iii) such Warrant  Shares may be sold  pursuant to Rule 144(k),  (iv) the
Company has delivered a new  certificate or other evidence of ownership for such
Warrant Shares not bearing any legend relating

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to  restrictions  on  transfer  and such  Warrant  Shares may be resold  without
registration  under the  Securities Act or (v) such Warrant Shares are no longer
outstanding.

     "Registration Expenses" shall have the meaning provided in Section 5.05.

     "Registration Period" shall have the meaning provided in Section 5.04(a).

     "Registration  Rights Agreement" shall have the meaning provided in Section
5.02.

     "Required  Holders"  shall mean the holders of more than 50% of all Warrant
Shares (assuming the full exercise of all outstanding Warrants).

     "Securities Act" shall mean the Securities Act of 1933, as amended.

     "shares of Common Stock" shall have the meaning  provided in Section 4.1(b)
of the Warrants.

     "Shelf  Registration" shall mean (i) a registration  statement filed on any
appropriate  form under Rule 415  promulgated  under the  Securities  Act or any
successor  rule  or  regulation  or  (ii)  an  amendment  or  supplement  to any
then-effective shelf registration.

     "Suspension   Period"   shall  have  the   meaning   provided   in  Section
5.01(b)(iii).

     "Warrant" shall mean an outstanding  Warrant  substantially  in the form of
Exhibit A hereto  issued in  accordance  with this  Agreement and any Warrant or
Warrants issued upon transfer thereof or in substitution therefor.

     "Warrant  Share" shall mean a share of Common Stock issued or issuable upon
exercise of a Warrant. For purposes of this Agreement,  a Warrant Share shall be
deemed to be  "outstanding"  from and after the date hereof until the redemption
or  cancellation  of such Warrant Share (or, if the related Warrant has not been
exercised,  the  expiration,  repurchase or cancellation of such Warrant) by the
Company;  provided,  however,  that for purposes of the  definition of "Required
Holders", Warrant Shares shall not be deemed to be outstanding if they have been
sold pursuant to an effective registration statement.


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     1.02  Accounting  Terms  and  Determinations.  Unless  otherwise  specified
herein,   all   accounting   terms  used  herein  shall  be   interpreted,   all
determinations  with respect to accounting  matters hereunder shall be made, and
all financial  statements and certificates  and reports as to financial  matters
required to be delivered hereunder shall be prepared, in accordance with GAAP.

     Section 2. Terms and Conditions of Issuance of Warrants.

     2.01 Issuance of the Warrants.  In  consideration of the premises and other
good and  valuable  consideration,  the  Company  hereby  agrees to issue to the
Initial  Holder  (i) on the date  hereof one or more  Warrants  to  purchase  an
aggregate of 161,615  shares of Common Stock and (ii) on the date of the closing
of the exercise of the  Over-allotment  Option,  if any, one or more warrants to
purchase an  additional  number of shares of Common Stock that shall be equal to
3% of the total number of shares of Common  Stock into which the Optional  Notes
are convertible (in each case as may be adjusted as provided in the Warrants).

     Section 3.  Representations  and  Warranties  of the  Company.  The Company
represents and warrants to each Holder as follows:

     3.01  Authorization.  The Company has all necessary  power and authority to
execute,  deliver and  perform  its  obligations  under this  Agreement  and the
Warrants  and to  issue  and  deliver  the  Warrants  and  Warrant  Shares;  the
execution,  delivery and  performance  by the Company of this  Agreement and the
Warrants  have  been  duly  authorized  by all  necessary  action;  each of this
Agreement  and the Warrants has been duly  executed and delivered by the Company
and  constitutes  the  legal,  valid  and  binding  obligation  of  the  Company
enforceable in accordance  with its terms,  subject,  as to  enforceability,  to
applicable  bankruptcy,   insolvency,  fraudulent  conveyance,   reorganization,
moratorium  and similar laws  relating to  creditors'  rights  generally  and to
general equitable principles.

     3.02  Reservation;  Valid Issuances.  The Warrant Shares have been duly and
validly  reserved for issuance upon the exercise of the Warrants.  The Warrants,
when issued and delivered  pursuant  hereto,  and the Warrant Shares when issued
and delivered  upon exercise of the Warrants in accordance  with their terms and
the payment of the applicable Exercise Price, will be validly issued, fully paid
and  non-assessable,  with no liability on the part of the holders thereof,  and
are not subject to any preemptive  rights,  rights of first refusal or rights of
first offer.


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     3.03 No Breach.  None of the  execution and delivery by the Company of this
Agreement  or the  Warrants,  the  consummation  of the  transactions  herein or
therein  contemplated,  including the issuance and delivery of the Warrants and,
upon the exercise of the Warrants,  the Warrant  Shares,  or compliance with the
terms and provisions  hereof or thereof will conflict with or result in a breach
of, or require any consent under, the Certificate of Incorporation or By-Laws of
the Company, or any applicable law or regulation, or any order, writ, injunction
or decree of any court or governmental authority or agency (although the Company
will need to comply with the applicable  provisions of the  Securities  Act, the
Exchange Act and state  securities  laws in connection  with the exercise by the
Holders of their rights under  Sections 5.01 and 5.02 hereof),  or any agreement
or  instrument  to which  the  Company  is a party or by which it is bound or to
which any of its properties or assets is subject,  or constitute a default under
any such  agreement or instrument or result in the creation or imposition of any
lien upon any of the revenues or assets of the Company  pursuant to the terms of
any such agreement or instrument.

     3.04 Approvals. No authorizations, approvals or consents of, and no filings
or registrations with, any governmental or regulatory authority or agency, which
have not  already  been  made or  obtained,  are  necessary  for the  execution,
delivery or performance  by the Company of this  Agreement or the Warrants,  the
consummation of the transactions contemplated herein and therein or the validity
or enforceability  hereof or thereof,  except for compliance by the Company with
the  applicable  provisions  of the  Securities  Act, the Exchange Act and state
securities  laws in connection  with the exercise by the Holders of their rights
under Sections 5.01 and 5.02 hereof.

     3.05 Capitalization.  The Company's authorized equity  capitalization is as
set forth in the Final  Offering  Memorandum;  the Common Stock  conforms in all
material  respects  to the  description  thereof  contained  under  the  heading
"Description of Capital Stock" in the Final Offering Memorandum.  As of the date
hereof,  except as set forth in the Final Offering  Memorandum under the heading
"Description of Capital Stock," there are no other outstanding shares of capital
stock of the Company and,  except as set forth therein and for (i) the Warrants,
(ii)  the  warrants  issued  to  Francesco   Galesi  and  the  Francesco  Galesi
Irrevocable  Grantor-Trust dated October 18, 1991 on January 7, 1997 and June 3,
1997,  respectively,  which entitle him and it to purchase  1,500,000  shares of
Common  Stock at an exercise  price of $3.03 per share  (subject to reduction in
certain  circumstances)  and 500,000 shares of Common Stock at an exercise price
of $2.3125 per share (plus 100,000  additional shares of Common Stock in case of
certain  defaults,  as described  in such  warrant),  respectively  (the "Galesi
Warrants"),   (iii)  other   warrants  for  the  purchase  of  an  aggregate  of
approximately  2,260,000  shares of  Common  Stock,  (iv)  options  to  purchase
approximately

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3,500,000  shares of Common Stock issued under the  Company's  1992 Stock Option
Plan (v) written  agreements  to issue an  aggregate  of  approximately  950,000
shares of  Common  Stock in effect on the date  hereof,  (vi)  promissory  notes
convertible into an aggregate of approximately  3,100,000 shares of Common Stock
and (vii) the Notes, there are no outstanding options or warrants to acquire, or
any securities convertible into, any shares of capital stock of the Company.

     3.06  Offer of  Warrants.  Except  to the  extent,  if any,  caused  by the
issuance of the Galesi  Warrants,  neither the Company nor any Person  acting on
its behalf has directly or  indirectly  offered the Warrants or any part thereof
or any similar  securities for sale to, or solicited any offer to buy any of the
same from, or otherwise  approached or negotiated in respect  thereof with,  any
Person other than the Initial Holder so as to cause the registration  provisions
of the  Securities  Act to apply to the offer and sale of the Warrants.  Neither
the  Company  nor any  Person  acting on its  behalf  has taken or will take any
action which would subject the offer and sale of the Warrants to the  provisions
of Section 5 of the Securities Act, or to the provisions of any state securities
law requiring  registration of securities,  notification of the issuance or sale
thereof  or  confirmation  of  the  availability  of  any  exemption  from  such
registration except pursuant to this Agreement.

     Section 4. Covenants.

     4.01 Notice of Merger.  Prior to the exercise of all of the  Warrants,  the
Company shall give each Holder at least 20 Business  Days' prior written  notice
before  it  agrees  to  any  merger,   acquisition,   consolidation  or  similar
transaction in which the Company shall not be the surviving corporation.

     4.02 Inspection.  The Company covenants and agrees that it will permit each
Holder and its  representatives to examine and make extracts and copies from the
books and records of the Company during normal business hours to the same extent
that any shareholder of the Company has the right to do so under the laws of the
State of New York.

     4.03 Information.  The Company covenants and agrees that it will deliver to
each  Holder such  financial  statements  and other  information  regarding  the
Company or any of its subsidiaries  that the Company is obligated to prepare and
deliver  to its  shareholders  generally,  in each  case at the same  time  such
financial  statements and other information are delivered to such  shareholders.
The Company hereby  acknowledges  and agrees that each Holder may share with any
of its  Affiliates  any  information  related  to  the  Company  and  any of its
subsidiaries (including,

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without   limitation,   any  non-public  customer   information   regarding  the
creditworthiness  of the Company and its  subsidiaries).  Each Holder  agrees to
treat,  and  to  cause  its  respective  Affiliates  to  treat,  any  non-public
information  received  from  the  Company  pursuant  to  this  Section  4.03  as
confidential.

     4.04  Rules  144 and  144A.  The  Company  covenants  that it will file any
reports  required to be filed by it under the Exchange Act and that it will take
such further action as the Initial Holder or the Required Holders may reasonably
request,  all to the extent  required from time to time to enable the Holders to
sell Registrable Securities without registration under the Securities Act within
the  limitation of the  exemptions  provided by (a) Rules 144 and 144A under the
Securities  Act,  as such  Rules may be  amended  from time to time,  or (b) any
similar or successor rules or regulations  hereafter  adopted by the Commission.
In particular,  while any Registrable Securities remain outstanding, the Company
will make  available,  upon  request,  to any  Holder the  information  required
pursuant to Rule  144(d)(4)  under the Securities Act during any period in which
the Company is not subject to Section 13 or 15(d) of the Exchange  Act. Upon the
request  of any  Holder,  the  Company  will  deliver  to such  Holder a written
statement as to whether it has complied with such requirements.

     Section 5. Registration Rights.

     5.01 Demand  Registrations.  (a) Demand  Registrations.  If (i) the Company
fails to timely  file the Shelf  Registration  required  under the  Registration
Rights  Agreement,  (ii) the Company fails to cause such Shelf  Registration  to
become  effective  within the 180-day time period set forth in the  Registration
Rights  Agreement,  (iii) the  number of  Deferral  Periods  exceeds  one in any
three-month  period or three in any twelve-month  period,  or (iv) the number of
days in a Deferral  Period  exceeds 30 days,  then on the date of such event the
Holders of the Warrants  shall have demand  registration  rights as set forth in
this Section 5.01. From and after such event, for so long as the Warrants or any
Registrable Securities are outstanding, the Holder may make a written request to
the Company for  registration  under the  Securities Act on Form S-1 or Form S-3
(or other similar  short-form if the Company then  qualifies for such short form
registration)   of  Registrable   Securities  for  public  offering  (a  "Demand
Registration"); provided, however, that the Holders shall have the right to only
one  Demand  Registration  of all or any part of their  Registrable  Securities.
Whenever  the Company  shall  receive a request for a Demand  Registration,  the
Company will promptly give written  notice of such  registration  request to all
Holders. All requests made pursuant to this Section

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5.01(a)  will  specify  the  number of shares of  Registrable  Securities  to be
registered and will also specify the intended methods of disposition thereof.

     (b)  Effective  Registration.  (i) A  registration  initiated  as a  Demand
Registration  shall not be deemed a Demand  Registration until such registration
has become effective and (except in the case of a Shelf  Registration) until the
Registrable  Securities  included in such  registration have actually been sold;
provided,  however, that a registration that does not become effective after the
Company has filed a registration statement with respect thereto solely by reason
of the refusal to proceed by the Holders  shall be deemed to have been  effected
by the Company unless the Holders shall have elected (without any obligation) to
pay, and in fact pay all  reasonable  Registration  Expenses in connection  with
such registration.

          (ii) The Company may delay the filing of a registration  statement for
     up to 90 days if at the time of a request for  registration  under  Section
     5.01(a)  above,  (i) the Company is a party to a transaction  involving the
     purchase,  sale,  conversion or issuance of securities of the Company, (ii)
     there is material  undisclosed  information  concerning  the Company or any
     subsidiary  of the  Company  which  cannot be  disclosed  for bona fide and
     significant  business  reasons,  which  reason  shall  be  provided  to the
     Holders,  in writing (iii) financial  statements required to be included or
     incorporated  in the  registration  statement have not been prepared or are
     otherwise not available or (iv) the Company  reasonably expects to promptly
     commence an offering of securities of the Company and the investment banker
     for the Company  shall  advise the  Company in writing  (with a copy to the
     Holders)  that, in its opinion,  the offering  contemplated  by the Company
     would be  materially  and  adversely  affected  by the sale of  Registrable
     Securities by the Holders. The Company shall promptly notify the Holders of
     any delay in such filing, the reasons for such delay and proposed length of
     such delay.

          (iii) The Company may suspend the  effectiveness  of any  registration
     statement filed pursuant to a Demand  Registration  or, without  suspending
     such  effectiveness,  instruct  the  Holders  that no sales of  Registrable
     Securities  included  in  such  registration   statement  may  be  made  (a
     "Suspension   Period")  (and  the  Holders  shall   forthwith   discontinue
     disposition  of any  such  Registrable  Securities)  if,  in the  Company's
     reasonable good faith  judgment,  the Company would be required to disclose
     any actions taken or proposed to be taken by the Company,  which disclosure
     would have a material  adverse  effect on the Company or on such actions by
     providing the Holders with written notice of such Suspension Period and the
     reasons  therefor.  The Company  shall use its best efforts to provide such
     notice as soon as reasonably practicable prior to the commencement of

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     a Suspension  Period;  provided that in any event the Company shall provide
     such notice no later than two Business  Days prior to the  commencement  of
     such Suspension Period. No more than one Suspension Period may be commenced
     in any three-month  period,  no more than three  Suspension  Periods may be
     commenced in any 12-month  period and no Suspension  Period shall exceed 30
     days.  The Company shall give prompt  written  notice to the Holders of the
     termination of any Suspension Period.

     (c)  No  Right  of  Company  or  Other   Person  to   Piggyback  on  Demand
Registrations.  Neither the Company nor any Person owning any of its  securities
(other than the  Holders)  shall have the right to include any of the  Company's
securities in a registration  statement initiated as a Demand Registration under
this Section 5.01,  unless (i) such securities are of the same class and type as
the Registrable Securities being registered and (ii) if such Demand Registration
is to be in the form of an underwritten offering, the Company or such Person, as
applicable,  agrees in writing to sell  their  securities  on the same terms and
conditions  as apply to the  Registrable  Securities  being sold.  If any Person
owning  any  securities  of  the  Company  (other  than  any  Holder)  registers
securities  of the  Company in a Demand  Registration  (in  accordance  with the
provisions of this Section 5.01(c)), such Person shall pay the fees and expenses
of counsel to such Person and its pro rata share of the Registration Expenses if
the Registration Expenses for such registration are not paid by the Company, for
any reason. The foregoing  provisions of this Section 5.01(c) are subject to the
rights of certain Persons as set forth under the caption "Description of Capital
Stock --  Registration  Rights" in the Final  Offering  Memorandum.  The Company
covenants  that it shall not grant any  registration  rights to any Person which
rights would, in the reasonable  judgment of the Initial Holder,  conflict or be
inconsistent  with the provisions of this Section  5.01(c),  and in the event of
such a  conflict  or  inconsistency,  the terms of this  Section  5.01(c)  shall
prevail.

     (d) Selection of  Underwriters  and Counsel,  Etc. If the Initial Holder or
any Affiliate of the Initial Holder so elects,  as the case may be, the offering
of such Registrable  Securities pursuant to such Demand Registration shall be in
the form of an  underwritten  offering.  If a Demand  Registration  involves  an
underwritten offering, the Initial Holder or such Affiliate thereof, as the case
may be, shall have the right to select (i) the investment  banker or bankers and
manager or  managers to  administer  the  offering  (who may include the Initial
Holder  and  one or  more  of  its  Affiliates);  provided,  however,  that  any
investment  bankers and  managers  other than the  Initial  Holder or one of its
Affiliates,  must be reasonably  satisfactory  to the Company,  and (ii) one law
firm as  counsel to  represent  the  Holders.  Any  Holder  participating  in an
underwritten  offering  pursuant to this Section 5.01 or Section 5.02 shall,  if
required by the managing underwriter or underwriters

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of such offering,  enter into an underwriting  agreement in a form customary for
underwritten offerings of the same general type as such offering.

     5.02  Piggy-Back  Registration.  If, at any time or from time to time while
any Warrants or Registrable Securities are outstanding,  the Company proposes to
file a registration statement with respect to any of its securities (whether for
its own or another's  account)  under the  Securities  Act  (including the Shelf
Registration to be filed by the Company in accordance with its obligations under
the  Registration  Rights Agreement dated September 29, 1997 between the Company
and the Initial  Holder (the  "Registration  Rights  Agreement"),  but excluding
registration  statements  on Form S-4,  S-8 or other  forms that do not  include
substantially  the  same  information  as would  be  required  in a form for the
general   registration  of  securities  or  that  would  not  be  available  for
registration of Registrable Securities),  the Company shall, as expeditiously as
possible,  give written notice to the Holders of the Company's intention to file
such  registration  statement.  If, within 20 days after receipt of such notice,
any Holder submits a written  request to the Company  specifying the Registrable
Securities  such Holder  proposes to sell or otherwise  dispose of (a "PiggyBack
Registration"),  the Company shall  include the number of shares of  Registrable
Securities specified in such Holder's request in such registration statement and
the Company shall use its best efforts to keep each such registration  statement
in  effect  and to  maintain  compliance  with  each  Federal  and state law and
regulation for the period  necessary for such Holder to effect the proposed sale
or other disposition.

     5.03 Reduction of Offering.  Notwithstanding  anything contained herein, if
the managing  underwriter or  underwriters  of an offering  described in Section
5.01 or 5.02 hereof  delivers a written  opinion to the Holders that the size of
the offering that the Holders,  the Company or any other Person  intends to make
or the kind or combination of securities  that the Holders,  the Company and any
other  Persons  intend to include in such  offering are such that the success of
the offering  would be  materially  and  adversely  affected by inclusion of the
Registrable  Securities  requested  to be  included,  then  the  amount  of  any
securities proposed to be offered shall be reduced or excluded from the offering
as follows:

          (i) in the case of a Demand Registration,  (x) all securities proposed
     to be included in such  offering by Persons other than the Holders shall be
     reduced or excluded  from such  offering on a pro rata basis (or on another
     basis agreed to by such other Persons) before any Registrable Securities of
     the  Holders are reduced or  excluded  from such  offering,  and (y) in the
     event that any  Registrable  Securities  of the Holders are  required to be
     reduced or excluded from such offering (which

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     will only be  required  after all  securities  of  Persons  other  than the
     Holders have been reduced or excluded as provided in immediately  preceding
     clause (x)), then the number of Registrable Securities of the Holders shall
     be reduced or excluded from such offering on a pro rata basis;

          (ii) in the case of a  Piggy-Back  Registration  initiated by a Person
     other than the Company, all securities (including  Registrable  Securities)
     to be included in such offering by the Company, the Holders and the holders
     of similar  "piggyback"  registration  rights  shall be reduced or excluded
     from such offering on a pro rata basis before any securities of the Persons
     initiating the Piggy-Back Registration are reduced or excluded; and

          (iii)  in the  case  of a  Piggy-Back  Registration  initiated  by the
     Company, all securities (including  Registrable  Securities) to be included
     in  such  offering  by  the  Holders  and  any  other  holders  of  similar
     "piggy-back"  registration  rights  shall be reduced or excluded  from such
     offering  on a pro rata basis  before any  securities  of the  Company  are
     reduced or excluded.

     The foregoing  provisions of this Section 5.03 are subject to the rights of
certain Persons as set forth under the caption  "Description of Capital Stock --
Registration Rights" in the Final Offering Memorandum.

     5.04 Registration  Procedures.  Whenever any Holder or Holders request that
any Registrable Securities be registered pursuant to this Section 5, the Company
will use its reasonable  best efforts to effect the  registration of the sale of
such   Registrable   Securities  in  accordance  with  the  intended  method  of
disposition  thereof as quickly as practicable,  and in connection with any such
request:

     (a) The Company will as expeditiously as possible prepare and file with the
Commission  a  registration  statement  on any form for which the  Company  then
qualifies or which counsel for the Company shall deem appropriate and which form
shall be available for the sale of the  Registrable  Securities to be registered
thereunder in accordance with the intended method of distribution  thereof,  and
use its reasonable  best efforts to cause such filed  registration  statement to
become and remain  effective for a period of not less than 180 days or until all
of such Registrable  Securities have been disposed of (if earlier) (such period,
the "Registration Period"); provided, however, that, if the Holders specify that
such  registration  shall be a Shelf  Registration,  the  Company  shall use its
reasonable best efforts to effect such

                                       13
                                  


<PAGE>

Shelf  Registration;  provided  further,  that,  in  the  case  of a  Piggy-Back
Registration,  if the Company shall furnish to the Holders a certificate  signed
by its  chief  executive  officer  stating  that in such  officer's  good  faith
judgment  it  would  be  significantly  disadvantageous  to the  Company  or its
shareholders  for such a registration  statement to be filed as expeditiously as
possible,  the Company shall have a period of not more than 60 days within which
to file such  registration  statement  measured  from the date of receipt of the
request in accordance with Section 5.02 hereof.

     (b) The  Company  will,  if  requested,  prior  to  filing  a  registration
statement or prospectus or any amendment or supplement  thereto,  furnish to the
Holders requesting  registration of Registrable Securities and each underwriter,
if any, of the Registrable  Securities  covered by such  registration  statement
copies of such  registration  statement as proposed to be filed,  and thereafter
furnish to the Holders  requesting  registration  of Registrable  Securities and
underwriter,  if any, such number of copies of such registration statement, each
amendment and supplement  thereto (in each case  including all exhibits  thereto
and documents  incorporated by reference  therein),  the prospectus  included in
such  registration  statement  (including each preliminary  prospectus) and such
other documents as the Holders requesting registration of Registrable Securities
or underwriter may reasonably  request in order to facilitate the disposition of
the Registrable Securities owned by such Holders.

     (c) After the  filing  of the  registration  statement,  the  Company  will
promptly  notify  the  Holders  of any stop order  issued or  threatened  by the
Commission and take all reasonable actions required to prevent the entry of such
stop order or to remove it if entered.

     (d) The Company  will use its  reasonable  best  efforts to (i) register or
qualify the Registrable  Securities under such other securities or blue sky laws
of  such   jurisdictions  in  the  United  States  as  the  Holders   requesting
registration  of  Registrable  Securities  reasonably (in light of such Holders'
intended  plan  of  distribution)   request  and  (ii)  cause  such  Registrable
Securities to be registered with or approved by such other governmental agencies
or  authorities  as may be necessary by virtue of the business and operations of
the  Company  and do any and all other  acts and things  that may be  reasonably
necessary or advisable to enable the Holders to consummate  the  disposition  of
the Registrable  Securities owned by the Holders;  provided,  however,  that the
Company  will not be  required to (A)  qualify  generally  to do business in any
jurisdiction where it would not otherwise be required to qualify but for

                                       14
                                


<PAGE>


this paragraph (d), (B) subject itself to taxation in any such  jurisdiction  or
(C) consent to general service of process in any such jurisdiction.

     (e) The Company will  immediately  notify the  Holders,  at any time when a
prospectus  relating  thereto is required to be delivered  under the  Securities
Act, of the occurrence of an event  requiring the preparation of a supplement or
amendment to such prospectus so that, as thereafter  delivered to the purchasers
of such  Registrable  Securities,  such  prospectus  will not  contain an untrue
statement of a material  fact or omit to state any material  fact required to be
stated  therein or necessary to make the  statements  therein not misleading and
promptly make available to the Holders any such supplement or amendment.

     (f)  The  Company  will  enter  into  customary  agreements  (including  an
underwriting  agreement  in customary  form) and take such other  actions as are
reasonably  required in order to expedite or facilitate the  disposition of such
Registrable Securities.

     (g)  The  Company  will  make  available  for  inspection  by  the  Holders
requesting registration of Registrable Securities, any underwriter participating
in any  disposition  pursuant to such  registration  statement and any attorney,
accountant  or  other  professional  retained  by such  Holders  or  underwriter
(collectively,  the  "Inspectors"),  all financial and other records,  pertinent
corporate documents and properties of the Company (collectively,  the "Records")
as shall be reasonably  necessary to enable them to exercise their due diligence
responsibility,  and cause the  Company's  officers,  directors and employees to
supply all information reasonably requested by any Inspectors in connection with
such  registration  statement.  Records  which the Company  determines,  in good
faith, to be confidential  and which it notifies the Inspectors are confidential
shall not be  disclosed  by the  Inspectors  unless (i) the  disclosure  of such
Records is  necessary  to avoid or correct a  misstatement  or  omission in such
registration  statement or (ii) the release of such Records is ordered  pursuant
to a subpoena  or other  order from a court of  competent  jurisdiction.  In the
event that an Inspector or any of its  representatives  is requested or required
(by oral  questions,  interrogatories,  requests for  information  or documents,
subpoena,  or similar process) to disclose any of the  confidential  information
contained   in  the   Records,   it  is  agreed  that  such   Inspector  or  its
representative,  as the case may be, will provide the Company with prompt notice
of such request(s) so that the Company may seek an appropriate  protective order
or  other   appropriate   remedy   and/or   waive   such   Inspector's   or  its
representative's  compliance  with  this  provision.  In  the  event  that  such
protective order or other remedy is not obtained,

                                       15
                                    



<PAGE>


or  that  the  Company  grants  a  waiver  hereunder,   such  Inspector  or  its
representative  may  furnish  that  portion of the  Records  which it is legally
compelled to disclose.  Each Holder agrees that information  obtained by it as a
result of such inspections shall be deemed confidential and shall not be used by
it as the basis for any market  transactions in the securities of the Company or
its Affiliates unless and until such is made generally available to the public.

     (h) The  Company  will  furnish  to each  underwriter,  if  any,  a  signed
counterpart,  addressed  to such  underwriter,  of (i) an opinion or opinions of
counsel to the Company  and (ii) a comfort  letter or comfort  letters  from the
Company's  independent public  accountants,  each in customary form and covering
such matters of the type customarily  covered by opinions or comfort letters, as
the case may be, as the managing underwriter therefor reasonably requests.

     (i) The  Company  will  otherwise  use its best  efforts to comply with all
applicable  rules and regulations of the  Commission,  and make available to the
Holders,  as soon as reasonably  practicable,  an earnings  statement covering a
period of 12 months,  beginning  within three months after the effective date of
the  registration   statement,   which  earnings  statement  shall  satisfy  the
provisions of Section 11(a) of the Securities Act.

     (j) The Company will (at its own expense) use its best efforts to cause all
such  Registrable  Securities to be listed on each securities  exchange on which
similar securities issued by the Company are then listed.

     The Company may require the Holders requesting  registration of Registrable
Securities  to  promptly  furnish  in writing to the  Company  such  information
regarding the distribution of the Registrable Securities as the Company may from
time to time  reasonably  request and such other  information  as may be legally
required in connection with such registration.

     The Holders agree that,  upon receipt of any notice from the Company of the
happening of any event of the kind  described  in Section  5.04(e)  hereof,  the
Holders will forthwith  discontinue  disposition of any  Registrable  Securities
registered  pursuant to this  Section 5 pursuant to the  registration  statement
covering such Registrable Securities until the Holders' receipt of the copies of
the supplemented or amended  prospectus  contemplated by Section 5.04(e) hereof,
and, if so directed by the Company,  the Holders will deliver to the Company all
copies, other than

                                       16
                                     


<PAGE>


permanent  file  copies  then in such  Holders'  possession,  of the most recent
prospectus  covering such Registrable  Securities at the time of receipt of such
notice.  In the event the Company  shall give such  notice,  the  Company  shall
extend the period during which such  registration  statement shall be maintained
effective  (including the Registration  Period) by the number of days during the
period from and including  the date of the giving of notice  pursuant to Section
5.04(e) hereof to the date when the Company shall make available to the Holder a
prospectus  supplemented or amended to conform with the  requirements of Section
5.04(e) hereof.

     5.05 Registration  Expenses. In connection with any registration  statement
required to be filed hereunder, the Company shall pay the following registration
expenses   incurred  in  connection   with  the   registration   hereunder  (the
"Registration  Expenses"):  (i) all  registration and filing fees, (ii) fees and
expenses of compliance with  securities or blue sky laws  (including  reasonable
fees and disbursements of counsel in connection with blue sky  qualifications of
the Registrable  Securities),  (iii) printing  expenses,  (iv) internal expenses
(including,  without  limitation,  all salaries and expenses of its officers and
employees  performing  legal or  accounting  duties),  (v) the fees and expenses
incurred in connection with the listing of the Registrable Securities, (vi) fees
and disbursements of counsel for the Company and customary fees and expenses for
independent  certified public accountants retained by the Company (including the
expenses  of any  comfort  letters  or costs  associated  with the  delivery  by
independent  certified public accountants of a comfort letter or comfort letters
requested  pursuant to Section 5.04(h)  hereof),  (vii) the fees and expenses of
any  special   experts   retained  by  the  Company  in  connection   with  such
registration,  and (viii) reasonable fees and expenses of one law firm acting as
counsel  for the  Holders.  The  Company  shall  have no  obligation  to pay any
underwriting  fees,  discounts  or  commissions  attributable  to  the  sale  of
Registrable Securities,  or any out-of-pocket expenses of Holders (other than as
provided in clause  (viii)  above)  selling  Registrable  Securities  under this
Section 5 (or the  agents who manage its  account)  (collectively,  the  "Holder
Expenses").

     5.06  Indemnification  and  Contribution.   (a)  In  connection  with  each
registration  statement  relating to the disposition of Registrable  Securities,
the  Company  shall  indemnify  and  hold  harmless  each of the  Holders,  each
underwriter  of  Registrable  Securities,  each  partner,  officer,  director or
employee of each of the Holders or any such underwriter and each Person, if any,
who controls  (within the meaning of either the  Securities  Act or the Exchange
Act) any of the Holders or any such  underwriter  against  all  losses,  claims,
damages or  liabilities,  joint or several,  to which any of the  Holders,  such
underwriter  or any such Person may be subject  arising out of or based upon (A)
any untrue statement or alleged untrue statement of a material fact contained in
such registration

                                       17
                                    


<PAGE>


statement or the  prospectus  included  therein (or any  supplement or amendment
thereto) or a preliminary prospectus, or (B) any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements  therein not misleading,  and the Company shall reimburse each of
the Holders and each of such other  Persons  for any  reasonable  legal or other
expenses  incurred in connection with the  investigation or defense thereof (any
such reimbursement to be made as such expenses are incurred); provided, however,
that the Company shall not be liable in any such instance to the extent that any
such loss,  claim,  damage or  liability  arises out of or is based upon (A) any
untrue statement or omission or alleged untrue statement or omission made in any
such registration statement, preliminary prospectus, or prospectus (or amendment
or supplement) in reliance upon and in conformity with  information  relating to
any Person referred to above who would be indemnified by the Company pursuant to
this  Section  5.06(a)  furnished  in  writing  to the  Company  by such  Person
expressly  for use  therein,  (B) use of a Shelf  Registration  Statement or the
related  Prospectus during a period when a stop order has been issued in respect
of such  Shelf  Registration  or any  proceedings  for that  purpose  have  been
initiated or use of a Prospectus  when use of such  Prospectus has been deferred
by the Company; provided further, in each case, that the Company delivered prior
notice,  and the Holders have  received such prior  notice,  in accordance  with
Section 7.02 hereof of such stop order, initiation of proceedings or deferral or
(C) if the Holder fails to deliver a Prospectus or the then current  Prospectus.
This indemnity  agreement will be in addition to any liability which the Company
may otherwise have.

     (b) In connection  with each  registration  relating to the  disposition of
Registrable Securities,  each Holder shall severally indemnify the Company, each
director of the Company,  each officer of the Company who signs the registration
statement and any Person who controls the Company  (within the meaning of either
the Securities Act or the Exchange Act) to the same extent as the indemnity from
the  Company  provided  in  Section  5.06(a)  hereof,  but only with  respect to
information  relating to such Holder furnished in writing to the Company by such
Holder  expressly  for  use  in any  such  registration  statement,  preliminary
prospectus or prospectus (or amendment or supplement).  The maximum liability of
any Holder under this Section  5.06(b) shall be limited to the aggregate  amount
of all sales  proceeds  actually  received  by such Holder upon the sale of such
Holder's Registrable Securities in connection with such registration.

     (c) In case any proceeding (including any governmental investigation) shall
be instituted  involving any Person in respect of which  indemnity may be sought
pursuant  to  subsections  (a) or (b) of this  Section  5.06,  such  Person (the
"indemnified  party")  shall  promptly  notify  the  Person  against  whom  such
indemnity may be sought (the "indemnifying party") in writing and the

                                       18
                                     


<PAGE>


indemnifying party shall assume the defense thereof, including the employment of
counsel  reasonably  satisfactory to the indemnified party, and shall assume the
payment of all fees and  disbursements  related to such proceeding.  In any such
proceeding,  any  indemnified  party  shall  have the  right to  retain  its own
counsel,  but the fees and expenses of such  counsel  shall be at the expense of
such indemnified  party unless (x) the indemnifying  party and indemnified party
shall have  mutually  agreed to the  retention of such counsel at the expense of
the  indemnifying  party  or  (y)  the  named  parties  to any  such  proceeding
(including any impleaded  parties) include both the  indemnifying  party and the
indemnified  party and  representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them. It
is understood  that the  indemnifying  party shall not, in  connection  with any
proceeding or related  proceedings in the same  jurisdiction,  be liable for the
reasonable  fees and expenses of more than one separate law firm (in addition to
any reasonably  necessary  local  counsel) at any time for all such  indemnified
parties,  and that all such fees and expenses  shall be  reimbursed  as they are
incurred. In the case of any such separate law firm for the indemnified parties,
such law firm shall be designated  in writing by the  indemnified  parties.  The
indemnifying  party  shall not be liable for any  settlement  of any  proceeding
effected  without its  written  consent but if settled  with such  consent,  the
indemnifying  party agrees to indemnify the  indemnified  party from and against
any loss or liability by reason of such settlement. No indemnifying party shall,
without  the  prior  written  consent  of  the  indemnified  party,  effect  any
settlement  of any  pending  or  threatened  proceeding  in respect of which any
indemnified  party is or could have been a party and  indemnity  could have been
sought hereunder by such indemnified party,  unless such settlement  includes an
unconditional  release of such indemnified  party from all liability arising out
of such proceeding.

     (d) If the indemnification provided for in this Section 5.06 is unavailable
to the  indemnified  parties  in  respect  of any  losses,  claims,  damages  or
liabilities  referred to herein,  then each such indemnifying  party, in lieu of
indemnifying  such  indemnified  party,  shall  contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages or
liabilities as between the Company on the one hand and the respective  Holder on
the other, in such proportion as is appropriate to reflect the relative fault of
the Company on the one hand and such Holder on the other in connection  with the
statements  or  omissions  which  resulted in such  losses,  claims,  damages or
liabilities,  as  well  as any  other  relevant  equitable  considerations.  The
relative  fault of the Company on the one hand and of the  respective  Holder on
the other shall be determined  by reference to, among other things,  whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by such

                                       19
                                     


<PAGE>


party, and the parties'  relative intent,  knowledge,  access to information and
opportunity to correct or prevent such statement or omission.

     The Company and each Holder  agree that it would not be just and  equitable
if  contribution  pursuant to this Section  5.06(d) were  determined by pro rata
allocation or by any other method of  allocation  which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
The amount  paid or payable by an  indemnified  party as a result of the losses,
claims,  damages  or  liabilities  referred  to  in  the  immediately  preceding
paragraph  shall be deemed to  include,  subject  to the  limitations  set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in  connection  with  investigating  or  defending  any such  action  or  claim.
Notwithstanding  the  provisions  of this  Section  5.06(d),  no Holder shall be
required to contribute  any amount in excess of the amount of all sales proceeds
actually  received  by such Holder  upon the sale of such  Holder's  Registrable
Securities in connection with such registration.  No Person guilty of fraudulent
misrepresentation  (within the meaning of Section 11(f) of the  Securities  Act)
shall be  entitled  to  contribution  from any Person who was not guilty of such
fraudulent misrepresentation.

     5.07 Participation in Underwritten Registrations. No Person may participate
in any underwritten registration hereunder unless such Person (a) agrees to sell
such Person's securities on the basis provided in any underwriting  arrangements
approved  by the Company and the Holders  and (b)  completes  and  executes  all
questionnaires,  powers of attorney,  indemnities,  underwriting  agreements and
other  documents  reasonably  required  under  the  terms  of such  underwriting
arrangements and these registration rights.

     5.08 Holdback  Agreement.  (a) The Company and its Affiliates  agree not to
effect any public sale or  distribution  of any  Registrable  Securities  or any
securities similar to the Registrable Securities,  or any securities convertible
into or exchangeable or exercisable  for  Registrable  Securities  during the 14
days prior to, and during the Registration Period of any registration  statement
(other than the Shelf Registration  Statement) filed pursuant to Section 5.01 or
5.02 of this Agreement with respect to an  underwritten  public  offering of any
such securities (except as part of such registration statement where the Holders
consents)  or  the   commencement  of  a  public   distribution  of  Registrable
Securities; provided, however, that the provisions of this Section 5.08(a) shall
not prevent (x) the conversion or exchange of any  securities  pursuant to their
terms into or for other securities or (y) the issuance of securities pursuant to
the Company's employee benefit plans.

                                       20
                                    


<PAGE>


     (b) To the extent not inconsistent  with applicable law, each Holder agrees
not to effect any public sale or distribution  of the issue being  registered or
any similar  security of the  Company,  or any  securities  convertible  into or
exchangeable or exercisable for such securities, during the 14 days prior to and
during the Registration  Period of any such registration  statement with respect
to an underwritten public offering of any such securities (except in any case as
part of such registration), if and to the extent requested by the Company in the
case of a non-underwritten  public offering or if and to the extent requested by
the managing  underwriter or underwriters in the case of an underwritten  public
offering.

     5.09 Specific Enforcement.  The Company and each of the Holders acknowledge
that remedies at law for the enforcement of this Section 5 may be inadequate and
intend that this Section 5 shall be specifically  enforceable in accordance with
Section 7.04 hereof.

     Section 6. Compliance with the Securities Act.

     6.01  Representations and Warranties.  Each Holder by its acceptance of the
Warrants represents and warrants as of the date hereof and as of the date of any
exercise of the Warrants held by such Holder as follows:

          (a) Such Holder is  acquiring  the  Warrants  and the related  Warrant
     Shares for its own account and not as nominee or agent for any other Person
     and not for offer or sale in any manner that would be in  violation  of the
     securities  laws of the  United  States of  America  or any state  thereof,
     without prejudice,  however, to its right at all times to sell or otherwise
     dispose  of all or any part of said  Warrants  or  Warrant  Shares  under a
     registration  under the Securities Act or any applicable  state  securities
     laws or under an exemption from such registration  available under such Act
     or any applicable state securities laws.

          (b) Such  Holder is an  "accredited  investor"  within the  meaning of
     Regulation D promulgated under the Securities Act.

     6.02  Transfer  Restriction.  No Holder will sell,  transfer  or  otherwise
dispose of any  Warrant  or Warrant  Share  other than to an  Affiliate  of such
Holder,  an employee of such Holder or one of its Affiliates or in a transaction
that complies with the registration  requirements of Section 5 of the Securities
Act or pursuant to an  exemption  (including,  without  limitation,  sales under
Rules

                                       21
                                    


<PAGE>


144 and 144A  promulgated  under the Securities Act) therefrom.  Notwithstanding
the  foregoing  sentence,  in accordance  with an agreement  between the Initial
Purchaser and Rauscher  Pierce & Clark ("RPC")  whereby RPC has agreed to act as
the  international  sales agent in  connection  with the sale of the Notes,  the
Initial Holder may transfer to RPC, in one or more transactions, up to 66.67% of
the  Warrants to be issued to the Initial  Holder in  connection  with the Notes
sold by RPC.  Upon any such  transfer to RPC, RPC shall be deemed to be a Holder
for all purposes hereunder.

     6.03  Legend.   Each  Warrant  or   certificate   or  instrument  (if  any)
representing  the Warrant  Shares issued upon exercise of the Warrants (and each
Warrant or certificate or instrument  (if any)  representing  the Warrant Shares
issued to  transferees  of such Warrant or  certificate or instrument (if any)),
unless  at such  time as the same is no longer  required  under  the  applicable
requirements of the Securities Act, shall bear the following legend:

                    "THE   SECURITIES   REPRESENTED   BY  THIS   CERTIFICATE  OR
               INSTRUMENT HAVE NOT BEEN  REGISTERED  UNDER THE SECURITIES ACT OF
               1933, AS AMENDED (THE "ACT"). SUCH SECURITIES MAY NOT BE OFFERED,
               SOLD OR OTHERWISE  TRANSFERRED IN THE ABSENCE OF  REGISTRATION OR
               AN EXEMPTION FROM REGISTRATION UNDER THE ACT."

     Section 7. Miscellaneous.

     7.01 Expenses.  The Company agrees to pay all fees and disbursements of the
Initial Holder  (including  the reasonable  fees and expenses of its counsel) in
connection  with the purchase and sale of the Warrants as  contemplated  by this
Agreement or any amendments hereto and the fees and disbursements of the Initial
Holder (including the reasonable fees and expenses of its counsel) in connection
with the negotiation,  execution, delivery and enforcement of this Agreement and
the Warrants or any waiver or consent  hereunder or  thereunder or any amendment
hereof or thereof; provided,  however, that the sum of the Company's obligations
to pay  such  fees  hereunder  and the  out-of-pocket  expenses  of the  Initial
Purchaser as provided in Section 5(p) of the Purchase Agreement shall not exceed
$375,000. In addition, the Company agrees to pay any and all stamp, transfer and
other similar taxes payable or determined to be payable by the Initial Holder in
connection  with the execution and delivery of this  Agreement,  any Warrants or
the  issuance  or  transfer  of the  Warrants  (other  than  any  such  taxes in
connection with a transfer of the Warrants to another Holder).

                                       22
                                     



<PAGE>


     7.02  Notices.  All notices and other  communications  provided  for herein
(including,  without  limitation,  any  modifications of, or waivers or consents
under,  this Agreement) shall be given or made by telex,  telegraph,  facsimile,
cable or other  writing  and  telexed,  faxed,  telegraphed,  cabled,  mailed or
delivered to the intended recipient at the "Address for Notices" specified below
its name on the  signature  pages  hereof;  or, as to any  party,  at such other
address as shall be designated by such party in a notice to the Company given in
accordance  with this Section 7.02. All such  communications  shall be deemed to
have been duly given when  transmitted  by telex or facsimile,  delivered to the
telegraph or cable office or  personally  delivered  or, in the case of a mailed
notice, upon receipt, in each case given or addressed as aforesaid.

     7.03 Exclusion.  This Agreement and the Warrants shall be binding upon, and
inure solely to the benefit of the Company and the Holders,  and no other Person
shall  acquire  or have any right  under or by virtue of this  Agreement  or the
Warrants  (other than any such Person to whom such Holders have  transferred  an
interest in the Warrants pursuant to the terms thereof and hereof).

     7.04 Specific Performance.  The Company acknowledges and agrees that in the
event of any  breach of this  Agreement  or the  Warrants  by the  Company,  the
Holders  would be  irreparably  harmed and could not be made  whole by  monetary
damages.  The Company  accordingly agrees (i) to waive the defense in any action
for specific  performance that a remedy at law would be adequate,  and (ii) that
the  Holders,  in addition to any other  remedy to which they may be entitled at
law or in equity,  shall be  entitled  to compel  specific  performance  of this
Agreement or the Warrants in any action instituted in the United States District
Court for the Southern  District of New York,  or, in the event such Court would
not have  jurisdiction for such action, in any court of the United States or any
state thereof having subject matter jurisdiction for such action.

     7.05  Holder  Not a  Shareholder.  Prior  to  the  exercise  of  any of its
Warrants,  no Holder shall, except as specifically  provided herein, be entitled
to any of the rights of, or be deemed to be, a shareholder in the Company.

     7.06 No Waivers. No failure or delay by any party in exercising any rights,
power or privilege  hereunder or under the  Warrants  shall  operate as a waiver
thereof nor shall any single or partial  exercise  thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies provided herein shall be cumulative and not exclusive of
any rights or remedies provided by law.

                                       23
                                    


<PAGE>


     7.07  Amendments  and  Waivers.  Any  provision  of this  Agreement  or the
Warrants  may be amended or waived if, but only if, such  amendment or waiver is
in writing and signed by the Company,  the Required Holders and, until such time
as the Initial Holder (or any Affiliate thereof) no longer holds any Warrants or
Warrant Shares, the Initial Holder (or such Affiliates).

     7.08  GOVERNING  LAW. THIS  AGREEMENT AND THE WARRANTS SHALL BE GOVERNED BY
AND  CONSTRUED  IN  ACCORDANCE  WITH THE LAWS OF THE STATE OF NEW YORK,  WITHOUT
GIVING  EFFECT  TO THE  CHOICE  OF  LAW OR  CONFLICT  OF LAW  PRINCIPLES  OF ANY
JURISDICTION WHICH WOULD CAUSE THE APPLICATION OF THE DOMESTIC  SUBSTANTIVE LAWS
OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK.

     7.09   Counterparts.   This   Agreement  may  be  signed  in  two  or  more
counterparts, each of which shall be an original, with the same effect as if the
signatories thereto and hereto were upon the same instrument.

                                       ***


                                       24
                                 



<PAGE>


     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be
duly executed and delivered as of the day and year first above  written.

                                              AMNEX, INC.

                                              By

                                              Name:
                                              Title:
                                              
                                              Address for Notices:

                                              100 West Lucerne Circle
                                              Orlando, Florida 32801
                                              Telephone: (407) 246-1234
                                              Telecopier: (407) 481-2560
                                              Attention: Amy Gross, Esq.

                                              With a copy to:

                                              Certilman Balin Adler & Hyman, LLP
                                              90 Merrick Avenue
                                              East Meadow, New York 11554
                                              Telephone: (516) 296-7000
                                              Telecopier: (516) 296-7111
                                              Attention: Fred Skolnik, Esq.
                                       
                                              HSBC SECURITIES, INC.

                                              By

                                              Name:
                                              Title:
                                              Address for Notices:

                                              140 Broadway, 5th Floor
                                              New York, New York 10005
                                              Telephone No. : (212) 658-5100
                                              Telecopier No. : (212) 658-4859
                                              Attention: Guy Longobardo

                                       25
 


<PAGE>

                                              With a copy to:


                                              Cleary, Gottlieb, Steen & Hamilton
                                              One Liberty Plaza, 42nd Floor
                                              New York, New York 10006
                                              Telephone: (212) 225-2000
                                              Telecopier: (212) 225-3999
                                              Attention: James Munsell, Esq.


                                       26
                                     


<PAGE>

                                                                       EXHIBIT A

                                 FORM OF WARRANT



     THE SECURITIES  REPRESENTED BY THIS CERTIFICATE OR INSTRUMENT HAVE NOT BEEN
REGISTERED  UNDER THE  SECURITIES  ACT OF 1933,  AS AMENDED  (THE  "ACT").  SUCH
SECURITIES MAY NOT BE OFFERED,  SOLD OR OTHERWISE  TRANSFERRED IN THE ABSENCE OF
SUCH REGISTRATION OR AN EXEMPTION FROM REGISTRATION UNDER THE ACT.


                                   AMNEX, INC.


                          Common Stock Purchase Warrant

 Representing Right To Purchase _________ shares of Common Stock of Amnex, Inc.
              (as such number may be adjusted as provided herein).

                                     No. R-_


     FOR VALUE RECEIVED,  AMNEX,  INC, a New York  corporation  (the "Company"),
hereby  certifies  that  _________________,   or  its  registered  assigns  (the
"Holder"),  is entitled,  subject to the provisions of this Warrant, to purchase
from the Company,  at any time or from time to time during the  Exercise  Period
(as hereinafter  defined),  up to a total of _________ shares (as such number of
shares  may be  adjusted  pursuant  to  Section 2 and/or 4 below,  the  "Warrant
Shares") of Common Stock (as hereinafter defined), at $2.7844 per share (as such
price may be adjusted  pursuant to Section 2 or 4 below, the "Exercise  Price").
This Warrant is issued to the Holder  (together  with such other Warrants as may
be issued in exchange,  transfer or replacement of this Warrant, the "Warrants")
and entitles the Holder to purchase the Warrant Shares (as hereinafter defined).

     Section 1.1. Certain  Definitions.  Terms defined in the Warrant  Agreement
(as hereinafter  defined) and not otherwise defined herein have, as used herein,
the respective meanings

                                        1
                                     



<PAGE>



provided for therein.  The following  additional terms, as used herein, have the
following respective meanings:

     "Commission"  shall mean the  Securities  and  Exchange  Commission  or any
successor entity.

     "Common Stock" shall mean the Company's authorized Common Stock, $0.001 par
value, per share, as constituted on the date hereof.

     "Conversion Price" shall have the meaning set forth in the Indenture.

     "Current Market Price" shall have the meaning set forth in Section 4.1(h).

     "Daily Market Price" shall have the meaning set forth in Section 4.1(j).

     "Date of Issuance" shall have the meaning set forth in Section 8.

     "Excess Payment" shall have the meaning set forth in Section 4.1(i).

     "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.

     "Exercise  Period"  shall mean the period of time from  September  29, 1997
until 5:00 P.M., local time in The City of New York, on September 25, 2002.

     "Exercise Price" shall have the meaning set forth in the preamble.

     "Indenture"  shall mean the  Indenture,  dated as of September 29, 1997, by
and between Amnex,  Inc. and Marine Midland Bank, as trustee,  pursuant to which
the Notes are issued.

     "Notes" shall mean $15,000,000  aggregate principal amount of the Company's
8 1/2% Convertible Subordinated Notes Due 2002 (plus an option to purchase up to
an  additional  $8,000,000  aggregate  principal  amount of such  Notes to cover
over-allotments).

     "Trading  Day"  shall  mean (A) if the  applicable  security  is  listed or
admitted  for  trading  on the New  York  Stock  Exchange  or  another  national
securities exchange, a day on which the

                                        2
                                    


<PAGE>


New York Stock Exchange or such other national  securities  exchange is open for
business, (B) if the applicable security is quoted on The Nasdaq National Market
or Nasdaq Stock  Market's  Small Cap Market,  as the case may be, a day on which
trades may be made thereon or (C) if the  applicable  security is not so listed,
admitted  for trading or quoted,  any day other than a  Saturday,  Sunday or any
other day on which banking  institutions in the State of New York are authorized
or obligated by law or executive order to close.

     "Warrant Agreement" shall mean the Warrant Agreement, dated as of September
25, 1997,  between the Company and the Initial Holder,  as such agreement may be
modified, amended and supplemented and in effect from time to time.

     Section  1.2.  Other  Definitions.  Capitalized  terms used but not defined
herein shall have the meaning set forth in the Indenture.

     Section 2. Exercise of Warrant;  Cancellations of Warrant. This Warrant may
be exercised in whole or in part,  at any time or from time to time,  during the
Exercise Period, by presentation and surrender of this Warrant to the Company at
its principal  office at the address set forth on the signature  page hereof (or
at such other address as the Company may after the date hereof notify the Holder
in writing),  or at the office of its transfer agent or warrant  agent,  if any,
with the Purchase Form annexed  hereto duly executed and  accompanied  by proper
payment  either  (at the  option of the  Holder)  in cash or check  equal to the
Exercise Price for the Warrant Shares for which this Warrant is being exercised.

     Upon  receipt  by the  Company  of this  Warrant  and such  Purchase  Form,
together with the Exercise  Price for the Warrant  Shares for which this Warrant
is being exercised, the Holder shall be deemed to be the holder of record of the
number of Warrant Shares specified in such Purchase Form,  notwithstanding  that
the transfer books of the Company shall then be closed or that  certificates (if
any) representing the Warrant Shares shall not then be actually delivered to the
Holder.  The Company  shall pay any and all  documentary  stamp or similar issue
taxes  payable in respect of the issue of the Warrant  Shares.  If this  Warrant
should be  exercised in part only,  the Company  shall,  upon  surrender of this
Warrant,  execute and deliver a new Warrant  evidencing the rights of the Holder
thereof to purchase the balance of the Warrant Shares issuable hereunder.

     Section 3. Exchange, Transfer,  Assignment or Loss of Warrant. This Warrant
is  exchangeable  at the option  of,  and  without  cost to,  the  Holder,  upon
presentation and surrender of this

                                        3
                                     



<PAGE>


Warrant to the Company for other Warrants of different denominations,  entitling
the Holder to purchase in the aggregate the same number of Warrant  Shares.  The
Holder of this Warrant shall be entitled,  without  obtaining the consent of the
Company,  to transfer or assign its interest in (and rights  under) this Warrant
in whole or in part to any  Person or  Persons,  subject  to the  provisions  of
Section 6 of the  Warrant  Agreement.  Upon  surrender  of this  Warrant  to the
Company,  with the  Assignment  Form  annexed  hereto  duly  executed  and funds
sufficient to pay any transfer tax, the Company shall,  without charge,  execute
and deliver a new Warrant or Warrants in the name of the  assignee or  assignees
named in such  instrument of assignment  and, if the Holder's entire interest is
not being assigned,  in the name of the Holder,  and this Warrant shall promptly
be canceled.  This Warrant may be divided or combined  with other  Warrants that
carry the same rights  upon  presentation  hereof at the office of the  Company,
together with a written notice  specifying the names and  denominations in which
new Warrants are to be issued and signed by the Holder  hereof.  Upon receipt by
the Company of evidence  satisfactory to it of the loss,  theft,  destruction or
mutilation of this Warrant,  and (in the case of loss,  theft or destruction) of
reasonably satisfactory indemnification,  and upon surrender and cancellation of
this Warrant, if mutilated,  the Company shall execute and deliver a new Warrant
of like tenor and date.

     Section 4.1. Adjustment of Number of Warrant Shares and Exercise Price. The
number of  Warrant  Shares  purchasable  pursuant  hereto  shall be  subject  to
adjustment  from time to time on and after the Date of Issuance  as  hereinafter
provided in this Section 4.1.

     (a) In case the Company  shall at any time after the Date of  Issuance  (i)
declare or pay a dividend in shares of Common Stock, (ii) make a distribution in
shares of Common Stock,  (iii) subdivide its outstanding shares of Common Stock,
(iv) combine its  outstanding  shares of Common  Stock into a smaller  number of
shares of Common  Stock or (v) issue any  shares of its  capital  stock or other
assets in a  reclassification  or  reorganization of the Common Stock (including
any such  reclassification in connection with a consolidation or merger in which
the Company is the  continuing  entity),  the  securities  purchasable  pursuant
hereto shall be adjusted to the number of Warrant Shares and amount of any other
securities,  cash or other  property of the Company  which the Holder would have
owned or have been  entitled to receive after the happening of any of the events
described  above,  had this  Warrant  been  exercised  immediately  prior to the
happening of such event or any record date with respect  thereto.  An adjustment
made pursuant to this paragraph (a) shall become effective immediately after the
effective  date of such event,  retroactive to the record date, if any, for such
event.  Any Warrant Shares  purchasable as a result of such adjustment shall not
be issued prior to the effective date of such event.

                                        4
                                    



<PAGE>



     (b) For the purpose of this  Section  4.1 and Section 4.2 hereof,  the term
"shares of Common  Stock" shall mean (i) the classes of stock  designated as the
Common Stock of the Company as of the date hereof, (ii) any other class of stock
resulting from successive changes or reclassifications of such shares consisting
solely of changes in par  value,  or from par value to no par value,  or from no
par value to par value, or (iii) any other capital stock of the Company which is
not by its terms  restricted in amount or timing to the entitlement to dividends
or in the distribution of assets upon the voluntary or involuntary  liquidation,
dissolution  or winding up of the Company.  In theevent  that at any time,  as a
result of an  adjustment  made  pursuant to this  Section  4.1, the Holder shall
become  entitled to receive any  securities  of the Company other than shares of
Common Stock,  thereafter the number of such other securities so receivable upon
exercise of this Warrant shall be subject to  adjustment  from time to time in a
manner and on terms as nearly  equivalent as practicable to the provisions  with
respect to the Warrant Shares contained in this Section 4.

     (c) In case the Company shall issue rights or warrants to substantially all
holders of Common Stock entitling them (for a period  commencing no earlier than
the record date for the  determination  of holders of Common  Stock  entitled to
receive  such rights or warrants  and  expiring not more than 45 days after such
record date) to subscribe for or purchase  shares of Common Stock (or securities
convertible into Common Stock) at a price per share less than the Current Market
Price per share of Common Stock on such record date  (determined  as provided in
paragraph (h) below), the number of Warrant Shares  purchasable  pursuant hereto
shall be  adjusted  so that the same shall  equal the  number of Warrant  Shares
determined by multiplying the number of Warrant Shares  purchasable  immediately
prior to such  record  date by a fraction  the  numerator  of which shall be the
number of shares of Common Stock outstanding on such record date plus the number
of  additional  shares of Common  Stock  offered (or into which the  convertible
securities so offered are convertible) and the denominator of which shall be the
number of shares of Common Stock outstanding on such record date plus the number
of shares of Common  Stock  which the  aggregate  offering  price of the offered
shares of Common Stock (or the  aggregate  conversion  price of the  convertible
securities  so  offered)  would  purchase at such  Current  Market  Price.  Such
adjustment shall become effective immediately after such record date.

     (d) In case the Company  shall  distribute  to all holders of Common  Stock
shares of any class of Capital  Stock of the Company  other than  Common  Stock,
evidences of  indebtedness  or other assets  (other than cash  dividends  out of
current or retained earnings),  or shall distribute to substantially all holders
of Common Stock rights or warrants to subscribe for securities (other than

                                        5
                                     



<PAGE>

those securities referred to in paragraph (c) above), then in each such case the
number of Warrant Shares  purchasable  pursuant hereto shall be adjusted so that
the same shall equal the number of Warrant Shares  determined by multiplying the
number  of  Warrant  Shares  purchasable  immediately  prior to the date of such
distribution  by a fraction the  numerator of which shall be the Current  Market
Price per share of Common Stock on the record date mentioned  below  (determined
as provided in paragraph (h) below) and the  denominator  of which shall be such
Current Market Price less the then fair market value (as determined by the Board
of Directors,  whose  determination  shall be  conclusive  evidence of such fair
market value and described in a Board  Resolution (as defined in the Indenture))
of the portion of the assets so  distributed or of such  subscription  rights or
warrants  applicable to one share of Common Stock.  Such adjustment shall become
effective immediately after the record date for the determination of the holders
of Common Stock entitled to receive such distribution.

     (e) In case the  Company  shall,  by  dividend  or  otherwise,  at any time
distribute to all holders of its Common Stock cash (including any  distributions
of cash out of current or retained  earnings of the Company,  but  excluding any
cash that is  distributed  as part of a  distribution  requiring  an  adjustment
pursuant to paragraph (d) above) in an aggregate amount that,  together with the
sum of (x) the aggregate amount of any other distributions to all holders of its
Common  Stock made in cash plus (y) all Excess  Payments  (as  defined  below in
paragraph (i)), in each case made within the 12 months  preceding the date fixed
for   determining  the   shareholders   entitled  to  such   distribution   (the
"Distribution  Record  Date")  and in  respect  of  which no  adjustment  to the
Exercise Price of Warrants pursuant to paragraphs (d) or (f) of this Section 4.1
or this  paragraph (e) has been made,  exceeds 15% of the product of the Current
Market Price per share (determined as provided in paragraph (i) below) of Common
Stock on the  Distribution  Record  Date  multiplied  by the number of shares of
Common Stock  outstanding on the Distribution  Record Date (excluding  shares of
Common Stock held in the treasury of the Company),  the number of Warrant Shares
purchasable  pursuant  hereto shall be adjusted so that the same shall equal the
number of Warrant Shares  determined by multiplying the number of Warrant Shares
purchasable  pursuant  hereto  immediately  prior  to the  effectiveness  of the
adjustment  contemplated  by this  paragraph  (e) by a fraction the numerator of
which  shall be the  Current  Market  Price  per  share of  Common  Stock on the
Distribution Record Date (determined as provided in paragraph (h) below) and the
denominator  of which shall be such Current Market Price less the amount of such
cash and other  consideration  (including  any Excess  Payments) so  distributed
applicable to one share of Common Stock (equal to the  aggregate  amount of such
cash and other  consideration  (including  any Excess  Payments)  divided by the
number of shares of Common Stock  outstanding on the Distribution  Record Date).
Such  adjustment  shall  become  effective  immediately  prior to the opening of
business on the day following the Distribution Record Date.

                                        6
                                     



<PAGE>



(f) In case a tender offer or other  negotiated  transaction made by the Company
or any  subsidiary  of the Company  for all or any  portion of the Common  Stock
shall be  consummated,  if an Excess  Payment is made in respect of such  tender
offer or other  negotiated  transaction  and the amount of such Excess  Payment,
together  with the sum of (x) the aggregate  amount of all Excess  Payments plus
(y) the aggregate amount of all distributions to all holders of the Common Stock
made in cash  (including  any  distributions  of cash out of current or retained
earnings of the Company),  in each case made within the 12 months  preceding the
date  of  payment  of  such  current  negotiated  transaction  consideration  or
expiration  of such  current  tender  offer,  as the case may be (the  "Purchase
Date"), and as to which no adjustment pursuant to paragraph (d) or paragraph (e)
of this  Section  4.1 or this  paragraph  (f) has been made,  exceeds 15% of the
product of the Current  Market  Price per share of Common  Stock on the Purchase
Date (determined as provided in paragraph (i) below) multiplied by the number of
shares of Common Stock outstanding  (including any tendered shares but excluding
any shares of Common  Stock held in the treasury of the Company) on the Purchase
Date, the number of Warrant Shares purchasable pursuant hereto shall be adjusted
so that the same shall equal the number of Warrant Shares  purchasable  pursuant
hereto  determined  by  multiplying  the  number of Warrant  Shares  purchasable
pursuant  hereto  in  effect  immediately  prior  to  the  effectiveness  of the
adjustment  contemplated  by this  paragraph  (f) by a fraction the numerator of
which  shall be the  Current  Market  Price  per  share of  Common  Stock on the
Purchase  Date   (determined  as  provided  in  paragraph  (h)  below)  and  the
denominator  shall be such  Current  Market Price less the amount of such Excess
Payments and such cash distributions,  if any, applicable to one share of Common
Stock  (equal to the  aggregate  amount of such  Excess  Payments  and such cash
distributions divided by the number of shares of Common Stock outstanding on the
Purchase Date). Such adjustment shall become effective  immediately prior to the
opening of business on the day following the Purchase Date.

     (g) Whenever the number of Warrant Shares  purchasable  pursuant  hereto is
adjusted as herein provided, the Exercise Price shall be adjusted by multiplying
the Exercise  Price  immediately  prior to such  adjustment  by a fraction,  the
numerator of which shall be the number of Warrant  Shares  purchasable  pursuant
hereto immediately prior to such adjustment,  and the denominator of which shall
be  the  number  of  Warrant  Shares  purchasable  pursuant  hereto  immediately
thereafter.

     (h) The  "Current  Market  Price" per share of Common  Stock on any date of
determination  shall be deemed to be the average of the Daily Market  Prices for
the shorter of (i) 15 consecutive  Business Days ending on the last full Trading
Day on the  exchange or market  referred  to in  determining  such Daily  Market
Prices prior to the time of determination or (ii) the period

                                        7
                                     


<PAGE>



commencing  on the date next  succeeding  the first public  announcement  of the
issuance of such  rights or such  warrants  or such other  distribution  or such
negotiated  transaction  through  such last full  Trading Day on the exchange or
market referred to in determining  such Daily Market Prices prior to the time of
determination.

     (i) "Excess  Payment" means the excess of (A) the aggregate of the cash and
fair  market  value of other  consideration  paid by the  Company  or any of its
subsidiaries  with  respect to the shares  acquired  in a tender  offer or other
negotiated  transaction  over (B) the  Daily  Market  Price on the  Trading  Day
immediately  following the  completion of such tender offer or other  negotiated
transaction multiplied by the number of acquired shares.

     (j) "Daily  Market Price" means the price of a share of Common Stock on the
relevant  date,  determined  (a) on the basis of the last  reported  sale  price
regular way of the Common Stock as reported on the Nasdaq Stock  Market's  Small
Cap Market (the "Nasdaq  Small Cap"),  or if the Common Stock is not then listed
on the Nasdaq Small Cap, as reported on such national  securities  exchange upon
which the Common Stock is listed,  or (b) if there is no such  reported  sale on
the day in  question,  on the basis of the  average of the closing bid and asked
quotations regular way as so reported,  or (c) if the Common Stock is not listed
on the Nasdaq Small Cap or on any national securities exchange,  on the basis of
the average of the high bid and low asked  quotations  regular way on the day in
question in the over-the-counter  market as reported by the National Association
of  Securities  Dealers  Automated  Quotation  System,  or if not so quoted,  as
reported by National Quotation Bureau, Incorporated, or a similar organization.

     4.2.  No  Adjustment.  No  adjustment  in  the  number  of  Warrant  Shares
purchasable  pursuant  hereto  shall be required  until  cumulative  adjustments
amount to 1% or more of the number of Warrant Shares purchasable pursuant hereto
as last adjusted;  provided,  however,  that any adjustments  which by reason of
this Section 4.2 are not required to be made shall be carried  forward and taken
into account in any subsequent adjustment. All calculations under this Section 4
shall be made to the nearest cent or to the nearest one-hundredth of a share, as
the case may be. No adjustment  need be made for rights to purchase Common Stock
pursuant  to a Company  plan for  reinvestment  of  dividends  or  interest.  No
adjustment  need be made for a change  in the par  value or no par  value of the
Common Stock.

     4.3.  Other  Adjustments.  In the event that shares of Common Stock are not
delivered  after the expiration of any of the rights or warrants  referred to in
Section 4.1(c) and Section 4.1(d)

                                        8
                                    


<PAGE>


hereof,  the number of  Warrant  Shares  purchasable  pursuant  hereto  shall be
readjusted to the number of Warrant  Shares  purchasable  pursuant  hereto which
would  otherwise be in effect had the adjustment  made upon the issuance of such
rights or  warrants  been made on the basis of  delivery  of only the  number of
shares of Common Stock actually delivered.

     4.4.  Adjustments  for Tax Purposes.  The Company may, at its option,  make
such reductions in the number of Warrant Shares purchasable  pursuant hereto, in
addition  to those  required  by  Section  4.1  above,  as it  determines  to be
advisable in order that any stock dividend,  subdivision of shares, distribution
of  rights  to  purchase  stock or  securities  or  distribution  of  securities
convertible  into  or  exchangeable  for  stock  made  by  the  Company  to  its
shareholders will not be taxable to the recipients thereof.

     4.5.  Adjustments by the Company. The Company from time to time may, to the
extent  permitted  by law,  increase  the number of Warrant  Shares  purchasable
pursuant  hereto by any amount for any period of at least 20 days, in which case
the  Company  shall  give at least 15 days'  prior  notice of such  increase  in
accordance  with Section 4.6, if the Board of Directors has made a determination
that  such  increase  would  be in the  best  interests  of the  Company,  which
determination shall be conclusive.

     4.6.   Reorganization,   Merger,   etc.  If  any  capital   reorganization,
reclassification  or similar  transaction  involving  the  capital  stock of the
Company (other than a stock  dividend),  any  consolidation,  merger or business
combination of the Company with another  corporation,  or the sale or conveyance
of all or any  substantial  part of its  assets  to  another  corporation  (such
transactions collectively, a "Reorganization"),  shall be effected in such a way
that holders of the shares of Common  Stock shall be entitled to receive  stock,
securities or assets (including, without limitation,  cash)with respect to or in
exchange for shares of the Common  Stock,  then,  prior to and as a condition of
such  Reorganization,  lawful and adequate  provision  shall be made whereby the
Holder  shall  thereafter  have the right to purchase and receive upon the basis
and upon the terms and  conditions  specified in this Warrant and in lieu of the
Warrant Shares of the Company immediately theretofore purchasable and receivable
upon the exercise of this Warrant, such shares of stock, securities or assets as
may be  issued  or  payable  with  respect  to or in  exchange  for a number  of
outstanding  Warrant  Shares equal to the number of Warrant  Shares  immediately
theretofore   purchasable  and  receivable  upon  the  exercise  of  the  rights
represented  hereby had such  Reorganization  not taken place. The Company shall
not effect any such  Reorganization  unless prior to or simultaneously  with the
consummation  thereof the survivor or successor  corporation  (if other than the
Company) resulting

                                        9
                                     


<PAGE>


from a  consolidation  or merger,  or the  corporation  purchasing the Company's
assets, as the case may be, shall assume by written instrument executed and sent
to each registered  Holder, the obligation to deliver to such Holder such shares
of stock,  securities or assets as, in accordance with the foregoing provisions,
such Holder may be entitled to receive.

     4.7.  Other  Events.  If any event  occurs as to which  the  provisions  of
Section 4.6 are not strictly applicable or, if strictly  applicable,  would not,
in the good faith judgment of the Board of Directors of the Company,  fairly and
adequately protect the purchase rights represented by the Warrants in accordance
with the essential intent and principles of such provisions,  then such Board of
Directors shall make such adjustments in the application of such provisions,  in
accordance  with such essential  intent and  principles,  as shall be reasonably
necessary, in the good faith opinion of such Board of Directors, to protect such
purchase rights as aforesaid.

     4.8. Statement on Warrant Certificates.  Irrespective of any adjustments in
the  Exercise  Price or the number or kind of Warrant  Shares,  this Warrant may
continue  to express  the same price and number and kind of shares as are stated
on the front page hereof.

     4.9.   Exceptions   to   Adjustment.   Anything   herein  to  the  contrary
notwithstanding, the Company shall not be required to make any adjustment of the
number of Warrant Shares  issuable  hereunder in the case of the issuance of the
Warrants  or the  issuance  of shares of the Common  Stock upon  exercise of the
Warrants.

     4.10.  Common Stock  Outstanding.  The number of shares of the Common Stock
outstanding  at any time shall not  include  shares  owned or held by or for the
account  of the  Company,  but the  disposition  of any  such  shares  shall  be
considered an issue or sale of the Common Stock for the purposes of this Section
4.

     4.11.  Adjustment  Notices to Holder.  Upon any increase or decrease in the
number of Warrant  Shares  purchasable  upon the  exercise  of this  Warrant the
Company shall, within 15 days thereafter,  deliver written notice thereof to the
Holder,  which notice shall state the  increased or decreased  number of Warrant
Shares  purchasable  upon the exercise of this Warrant and the changed  Exercise
Price, if any, setting forth in reasonable  detail the method of calculation and
the facts upon which such  calculations  are based. If the Company shall fail so
to timely  deliver  any notice  required  pursuant  to this  Section  4.11,  the
Exercise  Period  shall be extended  until the Holder  shall have  received  the
proper notification under this Section 4.11.

                                       10
                                    

<PAGE>

     Section 5.1. Special  Covenants of the Company.  The Company  covenants and
agrees that until all Warrants have been exercised in full:

          (a)  The  Company  will  not,  by  amendment  of  its  certificate  of
     incorporation   or  through   any   reorganization,   transfer  of  assets,
     consolidation,  merger,  dissolution,  issue or sale of  securities  or any
     other voluntary  action,  directly or indirectly avoid or seek to avoid the
     observance  or  performance  of any of the  terms  of this  Warrant  or the
     Warrant  Agreement,  but will at all  times  in good  faith  assist  in the
     carrying  out of all such terms and in the taking of all such action as may
     be  necessary or  appropriate  in order to protect the rights of the Holder
     against  dilution or other  impairment in accordance with the terms of this
     Warrant.  Without limiting the generality of the foregoing, the Company (i)
     will not increase  the par value of any shares of Common  Stock  receivable
     upon the exercise of the Warrants above the Exercise Price payable therefor
     upon such exercise,  and (ii) will take all such action as may be necessary
     or  appropriate  in order that the Company  may  validly and legally  issue
     fully  paid and  nonassessable  shares of stock  upon the  exercise  of all
     Warrants  from  time  to  time  outstanding  (including  as a  result  of a
     reduction in the purchase price pursuant to the terms hereof).

          (b) If any Warrant Shares  required to be reserved for the purposes of
     exercise  of this  Warrant  require  registration  with or  approval of any
     governmental  authority  under any federal  law (other than the  Securities
     Act) or under any state law before such  Warrant  Shares may be issued upon
     exercise  of  this  Warrant,   the  Company   will,  at  its  expense,   as
     expeditiously as possible use its best efforts to cause such Warrant Shares
     to be duly registered or approved, as the case may be.

          (c) If at any time as the  Common  Stock  is  listed  on any  national
     securities  exchange (as defined in the Exchange Act), the Company will, at
     its  expense,  obtain and  maintain  the  approval for listing on each such
     exchange upon official notice of issuance of all Warrant Shares  receivable
     upon the exercise of the Warrants at the time  outstanding and maintain the
     listing of such Warrant Shares after their  issuance;  and the Company will
     so list on such  national  securities  exchange,  will  register  under the
     Exchange  Act (and any similar  state  statute  then in  effect),  and will
     maintain  such  listing  of,  any  other  securities  that at any  time are
     issuable  upon  exercise  of the  Warrants,  if and at the  time  that  any
     securities  of the same class shall be listed on such  national  securities
     exchange by the Company.

                                       11
                                    



<PAGE>



          (d) The Company will give notice to the Holder  within five days after
     the  Company  shall  have filed with the  Commission  or with any  national
     securities  exchange an  application  to  register  any  securities  of the
     Company pursuant to the Exchange Act.

     Section  5.2. Pro Rata  Purchase.  If at any time the Company or any of its
Affiliates shall offer to purchase any shares of Common Stock, other than shares
purchased  from any  employees  of the  Company  or any of its  subsidiaries  as
permitted by the terms of any employee  benefit plan or  shareholders or similar
agreement  that has been approved by the Board of Directors of the Company,  the
Company  shall,  as part of such  offer,  also  make an  offer to  purchase  the
Warrants and Warrant Shares from the holders of all  outstanding  Warrant Shares
and Warrants,  and with any purchase  pursuant to each offer to be allocated pro
rata among the holders of Warrant  Shares and Warrants and the other  holders of
Common Stock accepting each offer to purchase.


                                       12
                                     



<PAGE>


     Section 6. Notification by the Company. In case at any time:

          (i)the  Company  shall  declare any dividend or make any  distribution
     upon its Common Stock or any other class of its capital stock; or

          (ii)the Company shall offer for  subscription  pro rata to the holders
     of its Common Stock or any other class of its capital stock any  additional
     shares of stock of any class or any other  securities  convertible  into or
     exchangeable  for shares of stock or any  rights or  options  to  subscribe
     thereto; or

          (iii)the Board of Directors of the Company shall authorize any capital
     reorganization,  reclassification  or  similar  transaction  involving  the
     capital  stock  of  the  Company,  or a  sale  or  conveyance  of  all or a
     substantial part of the assets of the Company,  or a consolidation,  merger
     or business combination of the Company with another Person; or

          (iv)actions  or  proceedings  shall be  authorized  or commenced for a
     voluntary or  involuntary  dissolution,  liquidation  or  winding-up of the
     Company;

then, in any one or more of such cases, the Company shall give written notice to
the Holder, at the earliest time legally  practicable (and not less than 15 days
before any record date or other date set for  definitive  action) of the date on
which (A) the books of the Company  shall  close or a record  shall be taken for
such  dividend,  distribution  or  subscription  rights or  options  or (B) such
reorganization,   reclassification,  sale,  conveyance,  consolidation,  merger,
dissolution,  liquidation  or  winding  up  shall  take  place or be voted on by
shareholders of the Company,  as the case may be. Such notice shall also specify
the date as of which the holders of the Common Stock of record shall participate
in said  dividend,  distribution,  subscription  rights or  options  or shall be
entitled  to  exchange  their  Common  Stock for  securities  or other  property
deliverable  upon  such  reorganization,   reclassification,  sale,  conveyance,
consolidation,  merger, dissolution,  liquidation or winding-up, as the case may
be. If the action in question or the record date is subject to the effectiveness
of a registration  statement  under the Securities Act or to a favorable vote of
shareholders,  the notice required by this Section 6 shall so state.  

     Section 7. No Voting Rights;  Limitations of Liability.  Prior to exercise,
this Warrant will not entitle the Holder to any voting rights or other rights as
a shareholder of the Company. No provision hereof, in the absence of affirmative
action by the Holder to purchase Common Stock, and no enumeration  herein of the
rights or  privileges  of the  Holder  shall give rise to any  liability  of the
Holder for the purchase price of Common Stock  acquirable by exercise  hereof or
as a shareholder of the Company.


                                       13
                                     



<PAGE>



     Section 8. Date of  Issuance.  The date the Company  initially  issues this
Warrant  will be  deemed  to be the "Date of  Issuance"  hereof  and of each new
Warrant issued in exchange,  transfer or replacement  hereof,  regardless of the
number of times new  certificates  representing  the unexpired  and  unexercised
rights formerly represented by this Warrant shall be issued.

     Section 9.  Amendment and Waiver.  (a) No failure or delay of the Holder in
exercising any power or right hereunder  shall operate as a waiver thereof,  nor
shall any single or partial  exercise of such right or power, or any abandonment
or discontinuance of steps to enforce such a right or power,  preclude any other
or further  exercise  thereof or the  exercise of any other right or power.  The
rights and remedies of the Holder are cumulative and not exclusive of any rights
or remedies which it would otherwise have. The provisions of this Warrant may be
amended,  modified  or waived  with (and only with) the  written  consent of the
Company and the Required Holders.

     (b) Any such amendment,  modification  or waiver effected  pursuant to this
Section 9 shall be binding upon the Holders of all Warrants and Warrant  Shares,
upon each future holder thereof,  upon the Company and its shareholders.  In the
event of any such  amendment,  modification  or waiver,  the Company  shall give
prompt  written  notice  thereof to all Holders  and, if  appropriate,  notation
thereof shall be made on all Warrants thereafter surrendered for registration of
transfer or exchange.

     (c) No notice  or  demand on the  Company  in any case  shall  entitle  the
Company  to  any  other  or  further  notice  or  demand  in  similar  or  other
circumstances.

     Section 10. No Fractional Warrant Shares. The Company shall not be required
to issue stock certificates representing fractions of Warrant Shares, but may at
its option in respect of any final fraction of a Warrant Share make a payment in
cash based on the then current  market price of the Common Stock (as  determined
in good faith by the Board of Directors of the Company)  after giving  effect to
the full exercise or conversion of the Warrants.

     Section 11.  Reservation  of Warrant  Shares.  The Company will  authorize,
reserve  and keep  available  at all  times,  free  from  preemptive  rights,  a
sufficient  number of Warrant Shares to satisfy the requirements of this Warrant
and any other outstanding Warrants.


                                       14
                                    



<PAGE>



     Section  12.   Notices.   All   notices,   requests,   consents  and  other
communications  hereunder shall be in writing  (including,  telegraphic,  telex,
facsimile or cable  communication) and delivered,  mailed telegraphed,  telexed,
telecopied or cabled:

     (i)if to a Holder,  to its address as set forth in records of the  Company;
and

     (ii)if to the Company,  to Amnex,  Inc., 6 Nevada Drive, Lake Success,  New
York  11042,  Attention:  President,  or at such other  address as may have been
furnished  to the Holder in writing  by the  Company,  with a copy to Amy Gross,
Esq., Amnex, Inc. 100 West Lucerne Circle, Orlando, Florida 32801.

     All such  notices  and  communications  shall,  when  mailed,  telegraphed,
telexed,  facsimiled, or cabled or sent by overnight courier, be effective three
Business Days after deposited in the mails, certified, return receipt requested,
when  delivered to the  telegraph  company,  cable  company or one day following
delivery  to an  overnight  courier,  as the  case  may be,  or sent by telex or
facsimile device.

     Section 13. Headings.  The headings of the sections and subsections of this
Warrant are inserted for convenience  only and shall not be deemed to constitute
a part of this Warrant.

     Section 14. Governing Law;  Consent to Jurisdiction.  THIS WARRANT SHALL BE
GOVERNED BY, AND  CONSTRUED  IN  ACCORDANCE  WITH,  THE LAWS OF THE STATE OF NEW
YORK.  If any  action or  proceeding  shall be brought by the Holder in order to
enforce any right or obligation in respect of this Warrant,  the Company  hereby
consents  and  submits,   to  the  fullest  extent  permitted  by  law,  to  the
non-exclusive   jurisdiction   of  any  state  or  federal  court  of  competent
jurisdiction  sitting within the area  comprising  the Southern  District of New
York on the date of this  Warrant,  and agrees  that venue will be proper in any
such court.

     Section 15. Binding Effect.  The terms and provisions of this Warrant shall
inure to the benefit of the original  Holder and its  successors and assigns and
shall be binding upon the Company and its  successors  and  assigns,  including,
without   limitation,   any  Person   succeeding   to  the  Company  by  merger,
consolidation  or  acquisition  of all  or  substantially  all of the  Company's
assets.


                                       15
                                    



<PAGE>



     Section 16. Registration  Rights; etc. Each Holder shall be entitled to the
benefits of registration and other rights pursuant to the Warrant  Agreement and
shall be subject to the  restrictions on sale or transfer of this Warrant or the
Warrant  Shares  subject  hereto,  as the case may be,  pursuant  to the Warrant
Agreement.

                                       ***

     IN WITNESS  WHEREOF,  the seal of the Company and the signature of its duly
authorized officer have been affixed hereto as of September 29, 1997.

                                              AMNEX, INC.

                                              By______________________________
                                                Name:
                                               Title:



                                              Attest: _________________



                                       16
                                   



<PAGE>


                                  PURCHASE FORM

                                                         Dated ________________,

     The undersigned  hereby irrevocably elects to exercise the attached Warrant
to the extent of purchasing  ___ shares of the Common Stock  issuable  hereunder
and hereby makes payment of $________ in payment of the exercise price thereof.

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

                        INSTRUCTIONS FOR REGISTRATION OF
                                  COMMON STOCK


Name
   (please typewrite or print in block letters)

Address


Signature




                                       17
                                    


<PAGE>

                                 ASSIGNMENT FORM


     FOR VALUE RECEIVED,  ____________________________ hereby sells, assigns and
transfers unto

Name

           (please typewrite or print in block letters)
Address

its right to purchase ___ shares of the Common Stock represented by this Warrant
and does hereby irrevocably constitute and appoint __________________  Attorney,
to  transfer  the  same  on the  books  of  the  Company,  with  full  power  of
substitution in the premises.

Date: ________________________

                                          Signature ________________________

                                          Signature Guaranteed:





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