Execution Copy















                                   AMNEX, INC.

                                       to

                               MARINE MIDLAND BANK

                                     Trustee





                                   ___________

                                    Indenture

                         Dated as of September 29, 1997

                   8-1/2% Convertible Subordinated Notes due 2002







                                        i




                                                          Execution Copy



                                TABLE OF CONTENTS

                                                                          Page



                                    ARTICLE I

                   Definitions and Incorporation by Reference

SECTION 1.01.  Definitions                                                     1

SECTION 1.02.  Other Definitions                                               7

SECTION 1.03.  Incorporation by Reference of Trust Indenture Act               8

SECTION 1.04.  Rules of Construction                                           8


                                   ARTICLE II

                                 The Securities

SECTION 2.01.  Form and Dating                                                 8

SECTION 2.02.  Execution and Authentication                                   11

SECTION 2.03.  Registrar, Transfer Agent, Paying Agent and Conversion Agent   12

SECTION 2.04.  Paying Agent to Hold Money in Trust                            12

SECTION 2.05.  Securityholder Lists                                           13

SECTION 2.06.  Transfer and Exchange                                          13

SECTION 2.07.  Replacement Securities                                         17

SECTION 2.08.  Outstanding Securities                                         18

SECTION 2.09.  Treasury Securities                                            18

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SECTION 2.10.  Temporary Securities                                           18

SECTION 2.11.  Cancellation                                                   18

SECTION 2.12.  Defaulted Interest or Liquidated Damages                       19


                                   ARTICLE III

                                   Redemption

SECTION 3.01.  Notices to Trustee                                             19

SECTION 3.02.  Selection of Securities to be Redeemed                         19

SECTION 3.03.  Notice of Redemption                                           20

SECTION 3.04.  Effect of Notice of Redemption                                 20

SECTION 3.05.  Deposit of Redemption Price                                    20

SECTION 3.06.  Securities Redeemed in Part                                    21

SECTION 3.07.  Optional Redemption                                            21

SECTION 3.08.  Designated Event Offer                                         21


                                   ARTICLE IV

                                    Covenants

SECTION 4.01.  Payment of Securities                                          23

SECTION 4.02.  SEC Reports                                                    23

SECTION 4.03.  Compliance Certificate                                         24

SECTION 4.04.  Stay, Extension and Usury Law                                  24

SECTION 4.05.  Corporate Existence                                            24

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                                                                Execution Copy




SECTION 4.06.  Taxes                                                          25

SECTION 4.07.  Designated Event                                               25

SECTION 4.08.  Listing on the Luxembourg Stock Exchange                       25


                                    ARTICLE V

                                   Conversion

SECTION 5.01.  Conversion Privilege                                           25

SECTION 5.02.  Conversion Procedure                                           26

SECTION 5.03.  Fractional Shares                                              27

SECTION 5.04.  Taxes on Conversion.                                           27

SECTION 5.05.  Company to Provide Stock                                       27

SECTION 5.06.  Adjustment of Conversion Price                                 28

SECTION 5.07.  No Adjustment                                                  31

SECTION 5.08.  Other Adjustments                                              31

SECTION 5.09.  Adjustments for Tax Purposes                                   31

SECTION 5.10.  Adjustments by the Company                                     31

SECTION 5.11.  Notice of Adjustment                                           32

SECTION 5.12.  Notice of Certain Transactions                                 32

SECTION 5.13.  Effect of Reclassifications, Consolidations, 
               Mergers or Sales on Conversion Privilege                       32


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SECTION 5.14.  Trustee's Disclaimer                                           33


                         ARTICLE VI

                        Subordination

SECTION 6.01.  Agreement to Subordinate                                       33

SECTION 6.02.  No Payment on Securities if Senior Debt in Default             34

SECTION 6.03.  Distribution on Acceleration of Securities; 
               Dissolution and Reorganization; Subrogation of Securities      35

SECTION 6.04.  Reliance by Senior Debt on Subordination Provisions            38

SECTION 6.05.  No Waiver of Subordination Provisions                          38

SECTION 6.06.  Trustee's Relation to Senior Debt                              38

SECTION 6.07.  Other Provisions Subject Hereto                                39


                         ARTICLE VII

                         Successors

SECTION 7.01.  Merger, Consolidation or Sale of Assets                        39

SECTION 7.02.  Successor Corporation Substituted                              40


                        ARTICLE VIII

                    Defaults and Remedies

SECTION 8.01.  Events of Default                                              40

SECTION 8.02.  Acceleration                                                   42

SECTION 8.03.  Other Remedies                                                 42

SECTION 8.04.  Waiver of Past Defaults                                        42


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SECTION 8.05.  Control by Majority                                            42

SECTION 8.06.  Limitation on Suits                                            43

SECTION 8.07.  Rights of Securityholders to Receive Payment                   43

SECTION 8.08.  Collection Suit by Trustee                                     43

SECTION 8.09.  Trustee May File Proofs of Claim                               43

SECTION 8.10.  Priorities                                                     44

SECTION 8.11.  Undertaking for Costs                                          44


                         ARTICLE IX

                           Trustee

SECTION 9.01.  Duties of Trustee                                              44

SECTION 9.02.  Rights of Trustee                                              45

SECTION 9.03.  Individual Rights of Trustee                                   46

SECTION 9.04.  Trustee's Disclaimer                                           46

SECTION 9.05.  Notice of Defaults                                             46

SECTION 9.06.  Reports by Trustee to Securityholders                          46

SECTION 9.07.  Compensation and Indemnity                                     46


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SECTION 9.08.  Replacement of Trustee                                         47

SECTION 9.09.  Successor Trustee by Merger, Etc.                              48

SECTION 9.10.  Eligibility; Disqualification                                  48

SECTION 9.11.  Preferential Collection of Claims Against Company              48


                                    ARTICLE X

                   Discharge of Indenture

SECTION 10.01.  Termination of Companys Obligations                          48

SECTION 10.02.  Repayment to Company                                          49

                                   ARTICLE XI

                       Amendments, Supplements and Waivers

SECTION 11.01.  Without Consent of Securityholders                            49

SECTION 11.02.  With Consent of Securityholders                               50

SECTION 11.03.  Compliance with Trust Indenture Act                           50

SECTION 11.04.  Revocation and Effect of Consents.                            51

SECTION 11.05.  Notation on or Exchange of Securities                         51

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                                                                 Execution Copy




SECTION 11.06.  Trustee Protected                                             51


                                   ARTICLE XII

                                  Miscellaneous

SECTION 12.01.  Trust Indenture Act Controls                                  52

SECTION 12.02.  Notices                                                       52

SECTION 12.03.  Communication by Securityholders with Other Securityholders   52

SECTION 12.04.  Certificate and Opinion as to Conditions Precedent            53

SECTION 12.05.  Statements Required in Certificate or Opinion                 53

SECTION 12.06.  Rules by Trustee and Agents                                   53

SECTION 12.07.  Legal Holidays                                                53

SECTION 12.08.  No Recourse Against Others                                    54

SECTION 12.09.  Counterparts                                                  54

SECTION 12.10.  Variable Provisions                                           54


                                       vii





SECTION 12.11.  Governing Law                                                 55

SECTION 12.12.  No Adverse Interpretation of Other Agreements                 55

SECTION 12.13.  Successors                                                    55

SECTION 12.14.  Severability                                                  55

SECTION 12.15.  Table of Contents, Headings, Etc                              55

EXHIBIT A
FORM OF CONVERTIBLE SUBORDINATED NOTE........................................A-1

EXHIBIT B
FORM OF TRANSFER CERTIFICATE FOR EXCHANGE OR TRANSFER FROM RESTRICTED
GLOBAL SECURITY OR RESTRICTED CERTIFICATED SECURITY TO REGULATION S 
GLOBAL SECURITY..............................................................B-1

EXHIBIT C
FORM OF TRANSFER CERTIFICATE FOR EXCHANGE OR TRANSFER FROM RESTRICTED
GLOBAL SECURITY OR RESTRICTED CERTIFICATED SECURITY TO UNRESTRICTED
GLOBAL SECURITY..............................................................C-1

EXHIBIT D
FORM OF TRANSFER CERTIFICATE FOR EXCHANGE OR TRANSFER FROM REGULATION S
GLOBAL SECURITY AND RESTRICTED OR UNRESTRICTED CERTIFICATED SECURITY TO
RESTRICTED GLOBAL SECURITY...................................................D-1

EXHIBIT E
FORM OF ACCREDITED INVESTOR TRANSFEREE CERTIFICATE...........................E-1

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                                                                 Execution Copy




EXHIBIT F
FORM OF REGISTRATION RIGHTS AGREEMENT........................................F-1



                                       ix




                                                                  Execution Copy



     INDENTURE dated as of  September 29,  1997 between AMNEX,  Inc., a New York
corporation  (the  "Company"),  and  Marine  Midland  Bank,  a New York  banking
corporation, as trustee (the "Trustee").

     Each party agrees as follows for the benefit of the other party and for the
equal  and  ratable  benefit  of the  Securityholders  of the  Company's  8-1/2%
Convertible Subordinated Notes due 2002 (the "Securities"):

                                    ARTICLE I

                   Definitions and Incorporation by Reference

     SECTION 1.01.  Definitions.  "Affiliate" of any specified  person means any
other person directly or indirectly controlling or controlled by or under direct
or indirect common control with such specified person.  For the purposes of this
definition,   "control"  (including,   with  correlative  meanings,   the  terms
"controlling",  "controlled by" and "under common control  with"),  as used with
respect to any person, shall mean the possession, directly or indirectly, of the
power to direct or cause the  direction  of the  management  or policies of such
person,  whether  through the ownership of voting  securities or by agreement or
otherwise;  provided,  however,  that beneficial ownership of 10% or more of the
voting securities of a person shall be deemed to be control.

     "Agent" means any  Registrar,  Paying Agent,  Conversion  Agent or Transfer
Agent.

     "Board of  Directors"  means the Board of  Directors  of the Company or any
authorized committee of the Board.

     "Board  Resolution"  means a copy of a resolution of the Board of Directors
certified by the  Secretary  or an  Assistant  Secretary of the Company to be in
full  force and effect on the date of such  certification  and  delivery  to the
Trustee.

     "Business Day" means any day that is not a Legal Holiday.

     "Capital Stock" means any and all shares, interests, participations, rights
or other  equivalents  (however  designated) of equity  interests in any entity,
including, without limitation, corporate stock and partnership interests.

     "Change of Control" means any event where:  (i) any "person" or "group" (as
such  terms  are used in  Section  13(d) and  14(d) of the  Exchange  Act) is or
becomes  the  "beneficial  owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act) of shares  representing more than 50% of the combined voting power
of the  then-outstanding  securities  entitled to vote generally in elections of


                                        1




Directors of the Company ("Voting Stock"), (ii) the Company consolidates with or
merges into any other corporation,  or any other person merges into the Company,
and, in the case of any such  transaction,  the outstanding  Common Stock of the
Company is  reclassified  into or exchanged for any other  property or security,
unless the stockholders of the Company  immediately before such transaction own,
directly  or  indirectly  immediately  following  such  transaction,  at least a
majority of the combined  voting power of the outstanding  voting  securities of
the  corporation  resulting  from such  transaction  in  substantially  the same
proportion  as their  ownership  of the Voting  Stock  immediately  before  such
transaction, (iii) the Company conveys, transfers or leases all or substantially
all  of its  assets  to any  person  (other  than  to one or  more  wholly-owned
Subsidiaries  of the Company) or (iv) any time the  Continuing  Directors do not
constitute  a  majority  of the  Board  of  Directors  of the  Company  (or,  if
applicable,  a successor corporation to the Company);  provided that a Change of
Control  shall  not  be  deemed  to  have  occurred  if  at  least  90%  of  the
consideration (excluding cash payments for fractional shares) in the transaction
or transactions  constituting the Change of Control consists of shares of common
stock that are, or upon issuance  will be,  traded on a United  States  national
securities  exchange  or  approved  for  trading  on  an  established  automated
over-the-counter  trading  market in the  United  States and as a result of such
transaction or transactions the Securities become  convertible  solely into such
common stock.

     "Common Stock" means the common stock,  par value $0.001 per share,  of the
Company as the same exists at the date of the execution of this  Indenture or as
such stock may be constituted from time to time.

     "Company" means the party named as such above until a successor replaces it
in accordance with Article VI and thereafter means the successor.

     "Continuing Directors" means as of any date of determination, any member of
the Board of  Directors  of the  Company  who (i) was a member of such  Board of
Directors on the date of this  Indenture or (ii) was  nominated  for election or
elected to such  Board of  Directors  with the  approval  of a  majority  of the
Continuing  Directors  who  were  members  of  such  board  at the  time of such
nomination or election.

     "Conversion  Agent" means any person  authorized  by the Company to convert
any  Security in  accordance  with  Article  5.01.  The  Company  has  initially
appointed the Trustee as its Conversion  Agent in the Borough of Manhattan,  The
City of New York, and Kredietbank S.A. Luxembourgeoise,  43 Boulevard Royal, L -
2955 Luxembourg, as its Conversion Agent in Luxembourg.

     "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


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                                                                 Execution Copy



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.

     "Default"  means any  event  that is,  or with the  passage  of time or the
giving of notice or both, would be an Event of Default.

     "Depositary"  means The Depository  Trust  Company,  its nominees and their
respective successors.

     "Designated  Event"  means  the  occurrence  of a Change  of  Control  or a
Termination of Trading.

     "Designated Senior Debt" means (i) any Senior Debt which, as of the date of
this  Indenture,  has an  aggregate  principal  amount  outstanding  of at least
U.S.$25,000,000,  and (ii) any Senior Debt which, at the date of  determination,
has an aggregate  principal amount outstanding of, or commitments to lend up to,
at least  U.S.$25,000,000  and is specifically  designated by the Company in the
instrument  evidencing or governing such Senior Debt as "Designated Senior Debt"
for  purposes  of this  Indenture  (provided  that  such  instrument  may  place
limitations  and  conditions  on the right of such Senior  Debt to exercise  the
rights of Designated Senior Debt).

     "Exchange Act" means the Securities Exchange Act of 1934, as amended.

     "GAAP" means  generally  accepted  accounting  principles  set forth in the
opinions and  pronouncements of the Accounting  Principles Board of the American
Institute of Certified Public  Accountants and statements and  pronouncements of
the Financial  Accounting  Standards  Board or in such other  statements by such
other  entity as may be  approved  by a  significant  segment of the  accounting
profession in the United States, which are in effect from time to time.

     "Guarantee"  means a guarantee  (other than by  endorsement  of  negotiable
instruments  for  collection  in the  ordinary  course of  business),  direct or
indirect,  in any manner (including,  without limitation,  letters of credit and
reimbursement  agreements  in  respect  thereof),  of  all or  any  part  of any
Indebtedness.

                                        3




     "Indebtedness" means, with respect to any person, all obligations,  whether
or not contingent, of such person (i)(a) for borrowed money (including,  but not
limited to, any indebtedness  secured by a security interest,  mortgage or other
lien on the  assets of such  person  which is (1) given to secure all or part of
the purchase price of property subject  thereto,  whether given to the vendor of
such  property  or to  another,  or (2)  existing  on  property  at the  time of
acquisition  thereof),  (b)  evidenced  by a note,  debenture,  bond or  written
instrument, (c) under a lease required to be capitalized on the balance sheet of
the  lessee  under  GAAP or under any lease or  related  document  (including  a
purchase  agreement) which provides that such person is contractually  obligated
to purchase or to cause a third party to purchase such leased  property,  (d) in
respect of letters of credit, bank guarantees or bankers' acceptances (including
reimbursement  obligations  with  respect  to any of the  foregoing),  (e)  with
respect to Indebtedness secured by a mortgage, pledge, lien, encumbrance, charge
or adverse claim  affecting  title or resulting in an  encumbrance  to which the
property or assets of such  person are  subject,  whether or not the  obligation
secured  thereby shall have been assumed or Guaranteed by or shall  otherwise be
such person's legal liability, (f) in respect of the balance of the deferred and
unpaid purchase price of any property or assets,  and (g) under interest rate or
currency swap  agreements,  cap, floor and collar  agreements,  spot and forward
contracts  and similar  agreements  and  arrangements;  (ii) with respect to any
obligation of others of the type described in the preceding  clause (i) or under
clause (iii) below  assumed by or  guaranteed in any manner by such person or in
effect  guaranteed by such person  through an agreement to purchase  (including,
without  limitation,  "take or pay" and  similar  arrangements),  contingent  or
otherwise  (and the  obligations  of such  person  under  any such  assumptions,
guarantees  or  other  such  arrangements);  and  (iii)  any and all  deferrals,
renewals,   extensions,   refinancings   and   refundings   of,  or  amendments,
modifications or supplements to, any of the foregoing.

     "Indenture" means this Indenture as amended from time to time.

     "Initial Purchaser" means HSBC Securities, Inc.

     "Issuance   Date"  means  the  date  on  which  the  Securities  are  first
authenticated and issued.

     "Liquidated  Damages" means any liquidated  damages payable pursuant to the
Registration Rights Agreement.

     "Material Subsidiary" means any Subsidiary of the Company which at the date
of  determination  is a  "significant  subsidiary" as defined in Rule 1-02(w) of
Regulation S-X under the Securities Act and the Exchange Act (as such Regulation
is in effect on the date hereof).

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                                                                 Execution Copy




     "Obligations"   means   any   principal,    interest,    penalties,   fees,
indemnifications,  reimbursements,  damages and other liabilities  payable under
the documentation governing any Indebtedness.

     "Offering  Memorandum"  means  the  offering  memorandum  relating  to  the
Securities  dated  September  11,  1997,  as  amended  by the  Supplement  dated
September 25, 1997.

     "Officers'  Certificate" means a certificate signed by two Officers, one of
whom must be the  Chairman  of the Board,  the  President,  the Chief  Financial
Officer,  the Treasurer or a Vice- President of the Company.  See Sections 12.04
and 12.05 hereof.

     "Opinion  of Counsel"  means a written  opinion  from legal  counsel who is
acceptable  to the Trustee.  The counsel may be an employee of or counsel to the
Company or the Trustee. See Sections 12.04 and 12.05 hereof.

     "Paying  Agent"  means any  person  authorized  by the  Company  to pay the
principal  of or  interest  on and  any  other  amounts  due in  respect  of any
Securities on behalf of the Company and,  except as otherwise  specifically  set
forth  herein,  such term shall  include  the Company if it shall act as its own
Paying  Agent.  The Company has  initially  appointed  the Trustee as its Paying
Agent in the Borough of Manhattan,  The City of New York, and  Kredietbank  S.A.
Luxembourgeoise, 43 Boulevard Royal, L - 2955 Luxembourg, as its Paying Agent in
Luxembourg.

     "person" means any individual, corporation,  partnership, limited liability
company, joint venture, association,  joint stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.

     "principal" of a debt security means the principal of the security plus the
premium, if any, on the security.

     "Registrar"  means any person authorized by the Company (i) to maintain the
register,  subject to such reasonable  regulations as the Company may prescribe,
in  which  the  Company  shall  provide  for  the  registration,   exchange  and
registration of transfer of any Security, and (ii) to effectuate the exchange or
registration  of transfer of any Security on behalf of the Company.  The Company
has initially appointed the Trustee as Registrar.

     "Registration  Rights  Agreement" means the  Registration  Rights Agreement
relating to the Securities dated September 25, 1997, between the Company and the
Initial Purchaser, a form of which is attached as Exhibit F hereto.

                                        5







     "Representative" means the trustee, agent or representative (if any) for an
issue of Senior Debt.

     "SEC" means the Securities and Exchange Commission.

     "Securities" means the Securities  described in the preamble above that are
issued, authenticated and delivered under this Indenture.

     "Securities Act" means the Securities Act of 1933, as amended.

     "Securityholder"  or Holder"  means a person in whose  name a  Security  is
registered.

     "Senior  Debt" means the principal of and interest and other amounts due on
Indebtedness of the Company, whether outstanding on the date of the Indenture or
thereafter created,  incurred,  assumed or Guaranteed by the Company; unless, in
the  instrument  creating or  evidencing  or pursuant to which  Indebtedness  is
outstanding,  it is expressly  provided that such  Indebtedness is not senior in
right of payment to the  Securities.  Senior Debt includes,  with respect to the
obligations  described above,  interest accruing,  pursuant to the terms of such
Senior  Debt,  on or after  the  filing of any  petition  in  bankruptcy  or for
reorganization relating to the Company,  whether or not post- filing interest is
allowed in such  proceeding,  at the rate specified in the instrument  governing
the  relevant  obligation.  Notwithstanding  anything  to  the  contrary  in the
foregoing,  Senior Debt shall not  include:  (a)  Indebtedness  in respect of or
amounts  owned by the  Company  for  compensation  to  employees,  or for goods,
services  or  materials  purchased  in the  ordinary  course  of  business;  (b)
Indebtedness of the Company to a Subsidiary of the Company; or (c) any liability
for Federal, state, local or other taxes owed or owing by the Company.

     "Shelf  Registration  Statement"  shall have the  meaning  set forth in the
Registration Rights Agreement.

     "Subsidiary" means in relation to any person other than an individual,  any
corporation, partnership, limited liability company, joint venture, association,
joint  stock  company,  or other  business  entity of which more than 50% of the
total voting power of shares of Capital Stock  entitled  (without  regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof is at the time owned or controlled,  directly or indirectly, by
such person and any one or more of the other Subsidiaries of that person.



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     "Termination  of Trading"  means an event where the Common  Stock (or other
securities into which the Securities are then convertible) is neither listed for
trading on a United States national securities exchange nor approved for trading
on an  established  automated  over-the-  counter  trading  market in the United
States.

     "TIA"  means  the  Trust   Indenture   Act  of  1939  (15  U.S.   Code  SS.
77aaa-77bbbb), as amended.

     "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 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 or Sunday or a day on which  banking  institutions  in
the State of New York are  authorized or obligated by law or executive  order to
close.

     "Transfer  Agent" means any person  authorized by the Company to effectuate
the  exchange or  facilitate  the  registration  of transfer of any  Security on
behalf the  Company.  The  Company  has  initially  appointed  Kredietbank  S.A.
Luxembourgeoise,  43 Boulevard Royal, L - 2955 Luxembourg, as its Transfer Agent
in Luxembourg.

     "Trustee" means the party named as such above until a successor replaces it
in accordance  with the  applicable  provisions of this Indenture and thereafter
means the successor.

     "Trust  Officer"  means any  officer or  assistant  officer of the  Trustee
assigned by the Trustee to administer this Indenture.

     "United States" or "U.S." means the United States of America (including the
states and the District of Columbia), its territories, its possessions and other
areas subject to its jurisdiction.

SECTION 1.02. Other Definitions.



                                        7




                                                                       
                                                                      Defined in
                    Term                                               Section

                  "Agent Members"                                       2.01  

                  "Applicable Procedures"                               2.06


                  "Bankruptcy Law"                                      8.01

                                       8
<PAGE>


                  "Cedel"                                               2.01


                  "Certificated Securities"                             2.01


                  "Commencement Date"                                   3.08


                  "Conversion Date"                                     5.02


                  "Conversion Price"                                    5.01


                  "Conversion Shares"                                   5.06


                  "Current Market Price"                                5.06
5

                  "Custodian"                                           8.01


                  "Designated Event Offer"                              4.07


                  "Designated Event Payment"                            4.07




                                        9






                  "Designated Event Payment Date"                       3.08


                  "Distribution Date"                                   5.06


                  "Distribution Record Date"                            5.06


                  "Excess Payment"                                      5.06


                  "Euroclear"                                           2.01


                  "Event of Default"                                    8.01


                  "Global Securities"                                   2.01


                  "Global Securities Legend"                            2.01
2.01

                  "Kredietbank"                                         12.10


                  "Legal Holiday"                                       12.07


                  "Offer Amount"                                        3.08


                  "Officer"                                             12.10


                  "Payment Blockage Notice"                             6.02




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                  "Payment Blockage Period"                             6.02


                  "Payment Default"                                     8.01


                  "Purchase Agreement"                                  2.01


                  "Purchase Date"                                       5.06


                  "QIBs"                                                2.01


                  "Regulation S"                                        2.01


                  "Restricted Certificated Securities"                  2.01


                  "Restricted Global Security"                          2.01


                  "Regulation S Global Security"                        2.01


                  "Restricted Period"                                   2.01


                  "Restricted Securities Legend"                        2.01


                  "Rights"                                              5.06




                                       11






                  "Rule 144A"                                           2.01


                  "Tender Period"                                       3.08


                  "Unrestricted Certificated Securities"                2.01


                  "Unrestricted Global Security"                        2.01


     SECTION 1.03.  Incorporation by Reference of Trust Indenture Act.  Whenever
this Indenture  refers to a provision of the TIA, the provision is  incorporated
by reference in and made a part of this Indenture.

     The following TIA terms used in this Indenture have the following meanings:

     "indenture securities" means the Securities;

     "indenture security holder" means a Securityholder;

     "indenture to be qualified" means this Indenture;

     "indenture trustee" or "institutional trustee" means the Trustee; and

     "obligor" on the  Securities  means the Company or any other obligor on the
Securities.

     All other terms used in this Indenture that are defined by the TIA, defined
by TIA  reference  to another  statute or defined by SEC rule under the TIA have
the meanings so assigned to them.

     SECTION 1.04. Rules of Construction. Unless the context otherwise requires:

     (a) a term has the meaning assigned to it;

     (b) an accounting term not otherwise defined has the meaning assigned to it
in accordance with GAAP consistently applied;

     (c) "or" is not exclusive;

     (d) words in the  singular  include  the  plural,  and words in the  plural
include the singular; and

     (e) provisions apply to successive events and transactions.

                                   ARTICLE II
                                 The Securities

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     SECTION 2.01. Form and Dating. The Securities and the Trustee's certificate
of  authentication  shall be  substantially  in the form of Exhibit A,  which is
hereby incorporated in and expressly made a part of this Indenture.

     The Securities may have notations, legends or endorsements required by law,
stock  exchange  rule,  agreements  to which the Company is subject,  if any, or
usage  (provided  that any such  notation,  legend or  endorsement  is in a form
acceptable  to the  Company).  The  Company  shall  furnish  any such legend not
contained in Exhibit A to the Trustee in writing.  Each Security  shall be dated
the date of its  authentication.  The terms and provisions of the Securities set
forth in  Exhibit A are part of the terms of this  Indenture  and to the  extent
applicable, the Company and the Trustee, by their execution and delivery of this
Indenture, expressly agree to such terms and provisions and to be bound thereby.

     (a) Global  Securities.  The  Securities  are being offered and sold by the
Company  pursuant  to a Purchase  Agreement  relating to the  Securities,  dated
September 11, 1997,  among the Company and the Initial  Purchaser (the "Purchase
Agreement").

               (i)  Securities  offered and sold  outside  the United  States in
          reliance on Regulation S under the Securities Act  ("Regulation S") as
          provided by the Purchase  Agreement  will be represented by beneficial
          interests  in  a  permanent  global  Security  in  definitive,   fully
          registered form without interest coupons, duly executed by the Company
          and  authenticated by the Trustee as hereinafter  provided and bearing
          the  global  Securities  legend  set forth in  Exhibit  A hereto  (the
          "Global Securities Legend"), which shall be deposited on behalf of the
          purchasers of the Securities  represented  thereby with the Trustee as
          custodian  for  the  Depositary  and  registered  in the  name  of the
          Depositary  or  a  nominee  of  the  Depositary,  for  credit  to  the
          respective  accounts of beneficial  owners of interests in such global
          Securities  (or to such  accounts as they may  direct)  only at Morgan
          Guaranty Trust Company of New York,  Brussels  office,  as operator of
          the Euroclear  System  ("Euroclear")  or Cedel Bank,  societe  anonyme
          ("Cedel") (or to such other accounts as Euroclear or Cedel may direct)
          unless  delivery is made  through the  Restricted  Global  Security in
          accordance with the  certification  requirements  set forth in Section
          2.06.  Until  the  expiration  of 40  days  after  the  later  of  the
          commencement  of  the  offering  or the  original  issue  date  of the
          Securities (the  "Restricted  Period"),  such global Security shall be
          referred to herein as the "Regulation S Global  Security."  After such
          time as the Restricted Period shall have expired, such global Security
          shall be referred to herein as the "Unrestricted Global Security." The
          aggregate principal amount of the Regulation S Global Security and the
          Unrestricted  Global  Security  may from time to time be  increased or
          decreased  by  adjustments  made on the records of the Trustee and the
          Depositary or its nominee as hereinafter  provided,  provided that the
          aggregate   principal   amount  of  the   Securities  may  not  exceed
          U.S.$23,000,000.

               The Company shall notify the Trustee in writing  immediately upon
          the expiration of the  Restricted  Period and the Trustee shall not be
          deemed to have knowledge of the  expiration of the  Restricted  Period
          until such notice from the Company is received.

               (ii)  Securities  offered  and  sold to  Qualified  Institutional
          Buyers  ("QIBs")  in the United  States in reliance on Rule 144A under
          

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          the  Securities  Act ("Rule 144A") will be  represented  by beneficial
          interests  in a permanent  global  Security in fully  registered  form
          without   interest   coupons,   duly   executed  by  the  Company  and
          authenticated  by the Trustee as hereinafter  provided and bearing the
          restricted  Securities  legend  set  forth in  Exhibit  A hereto  (the
          "Restricted  Securities Legend") and the Global Securities Legend (the
          "Restricted  Global  Security",  and  together  with the  Regulation S
          Global  Security and the  Unrestricted  Global  Security,  the "Global
          Securities")  and will be deposited  with the Trustee as custodian for
          the  Depositary  and  registered  in the name of the  Depositary  or a
          nominee  of the  Depositary.  The  aggregate  principal  amount of the
          Restricted  Global  Security  may from  time to time be  increased  or
          decreased  by  adjustments  made on the records of the Trustee and the
          Depositary  as  hereinafter  provided,  provided  that  the  aggregate
          principal amount of the Securities may not exceed U.S.$23,000,000.

     (b)  Book-Entry  Provisions.  This Section  2.01(b) shall apply only to the
Global Securities deposited with or on behalf of the Depositary.

     The Company shall execute and the Trustee  shall,  in accordance  with this
Section 2.01(b) and the written order of the Company,  authenticate  and deliver
initially one or more Global Securities that (i) shall be registered in the name
of Cede & Co. or other nominee of such Depositary and (ii) shall be delivered by
the Trustee to such Depositary or pursuant to such Depositary's  instructions or
held by the Trustee as custodian for the  Depositary  pursuant to a FAST Balance
Certificate Agreement between the Depositary and the Trustee.

     Members of, or participants in, the Depositary ("Agent Members") shall have
no rights under this Indenture with respect to any Global Security held on their
behalf by the Depositary or by the Trustee as the custodian of the Depositary or
under such Global  Security,  and the  Depositary may be treated by the Company,
the Trustee and any agent of the Company or the Trustee as the absolute owner of
such Global Security for all purposes whatsoever. Notwithstanding the foregoing,
nothing  herein  shall  prevent  the  Company,  the  Trustee or any agent of the
Company or the Trustee from giving effect to any written certification, proxy or
other  authorization  furnished  by the  Depositary  or impair,  as between  the
Depositary and its Agent Members,  the operation of customary  practices of such
Depositary  governing  the  exercise  of the rights of a holder of a  beneficial
interest in any Global Security.

     (c) Certificated Securities.

          (i) Except as provided in this  Section 2.01(c),  owners of beneficial
     interests  in Global  Securities  will not be entitled to receive  physical
     delivery of certificates  evidencing the Securities  beneficially  owned by
     such owners ("Certificated Securities").  Purchasers of Securities that are
     institutional  "accredited  investors" (as defined in Rule 501(a)(1),  (2),
     (3) or (7) of  Regulation D  under the  Securities  Act) which are not QIBs
     will receive  Certificated  Securities  bearing the  Restricted  Securities
     Legend ("Restricted  Certificated Securities") in denominations of $250,000
     or in  integral  multiples  of  $10,000  in  excess  thereof.  Certificated
     Securities  will bear the  Restricted  Securities  Legend unless removed in
     accordance  with  Section  2.06(b)  and  may be  exchanged  for  beneficial
     interests  in  a  Global  Security  in  accordance  with   Section 2.06(a).
     Beneficial  interests  in  Global  Securities  may  not  be  exchanged  for
     Certificated Securities except as provided in Section 2.01(c)(ii).


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          (ii) Any Global  Security  deposited  with the  Depositary or with the
     Trustee as custodian for the Depositary  pursuant to Section 2.01(a)  shall
     be transferred to the beneficial owners thereof in the form of Certificated
     Securities  only if such  transfer  complies  with Section 2.06 and (x) the
     Depositary  notifies the Company that it is unwilling or unable to continue
     as Depositary  for such Global  Security or if at any time such  Depositary
     ceases to be a "clearing  agency"  registered  under the Exchange Act and a
     successor Depositary is not appointed by the Company within 90 days of such
     notice, or (y) an Event of Default has occurred and is continuing.

          (iii)  Any  Global  Security  evidencing  Securities  that  are  to be
     transferred  to the beneficial  owners thereof in the form of  Certificated
     Securities  pursuant to this  Section 2.01(c)  shall be  surrendered by the
     Depositary to the Trustee to be so  transferred,  in whole or, from time to
     time, in part,  and the Trustee  shall  authenticate  and deliver,  without
     charge,  upon the  registration  of transfer of each portion of such Global
     Security,  an equal aggregate principal amount at maturity of Securities of
     authorized  denominations  in the  form  of  Certificated  Securities.  Any
     portion of a Global Security  transferred pursuant to this Section shall be
     executed,  authenticated  and delivered only in denominations of U.S.$1,000
     and any  integral  multiple  thereof  and  registered  in such names as the
     Depositary  shall  direct.  Any  Securities  in the  form  of  Certificated
     Securities  delivered  in exchange  for an interest in any Global  Security
     shall, except as otherwise provided by Section 2.06(b), bear the Restricted
     Securities  Legend and shall be executed,  authenticated  and  delivered in
     authorized denominations as set forth in the Securities.

          (iv)  Prior  to  any   registration  of  transfer   pursuant  to  this
     Section 2.01(c),  the  registered  Holder  of a Global  Security  may grant
     proxies and  otherwise  authorize any person,  including  Agent Members and
     persons that may hold interests  through Agent Members,  to take any action
     which a holder is entitled to take under this Indenture or the Securities.

          (v) In the event of the  occurrence of either of the events  specified
     in  Section 2.01(c)(ii),  the Company will promptly  make  available to the
     Trustee a reasonable  supply of Certificated  Securities in definitive form
     without interest coupons.

     SECTION 2.02.  Execution and  Authentication.  Two Officers  shall sign the
Securities for the Company by manual or facsimile signature.  The Company's seal
or a facsimile thereof shall be reproduced on the Securities.

     If an Officer whose  signature is on a Security no longer holds that office
at the time the Security is  authenticated,  the Security shall  nevertheless be
valid.

     A Security shall not be valid until  authenticated  by the manual signature
of an  authorized  officer of the Trustee.  The  signature  shall be  conclusive
evidence that the Security has been authenticated under this Indenture.

     Upon a written  order of the Company  signed by two  Officers,  the Trustee
shall  authenticate  the  Securities  for  original  issue  up to  an  aggregate
principal  amount  of  U.S.$15,000,000  (plus  up  to  U.S.$8,000,000  aggregate
principal  amount of Securities that may be sold by the Company  pursuant to the
over-allotment option granted pursuant to the Purchase Agreement). The aggregate
principal  amount of  Securities  outstanding  at any time shall not exceed such
amount except as provided in Section 2.07.

     The Trustee may appoint an  authenticating  agent acceptable to the Company
to authenticate Securities.  An authenticating agent may authenticate Securities
whenever  the  Trustee  may  do  so.  Each   reference  in  this   Indenture  to
authentication  by  the  Trustee  includes  authentication  by  such  agent.  An
authenticating agent has the same rights as an Agent to deal with the Company or
an Affiliate.


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    SECTION 2.03. Registrar, Transfer Agent, Paying Agent and Conversion Agent.
The  Company  shall  maintain,  or caused to be  maintained,  in the  Borough of
Manhattan, The City of New York and, so long as the Securities are listed on the
Luxembourg  Stock  Exchange  and the  rules  of such  Exchange  so  require,  in
Luxembourg,  (i) an office or  agency  where  Securities  may be  presented  for
registration  of  transfer  or for  exchange,  (ii) an office  or  agency  where
Securities  may be  presented  for payment  and (iii) an office or agency  where
Securities may be presented for conversion.  The Registrar shall keep a register
of the Securities  and of their  transfer and exchange.  The Company may appoint
the Registrar,  the Transfer Agent, the Paying Agents and the Conversion  Agents
and may  appoint  one or more  co-registrars,  one or more  additional  transfer
agents,  one or  more  additional  paying  agents  and  one or  more  additional
conversion  agents  in such  other  locations  as it shall  determine.  The term
"Paying Agent" includes any additional  paying agent,  the term "Transfer Agent"
includes any additional transfer agent, and the term "Conversion Agent" includes
any  additional  conversion  agent.  The  Company  may change any Paying  Agent,
Registrar,  Transfer  Agent or  Conversion  Agent  without  prior  notice to any
Securityholder.  The Company shall notify the Trustee of the name and address of
any such agent which is not a party to this  Indenture.  If the Company fails to
appoint or maintain another entity as Registrar, Transfer Agent, Paying Agent or
Conversion  Agent,  the  Trustee  shall act as such.  The  Company or any of its
Affiliates  may act as Paying  Agent,  Registrar,  Transfer  Agent or Conversion
Agent.

     SECTION  2.04.  Paying  Agent to Hold  Money in Trust.  The  Company  shall
require  each Paying  Agent other than the Trustee to agree in writing  that the
Paying  Agent  will  hold in trust for the  benefit  of  Securityholders  or the
Trustee  all money  held by the  Paying  Agent  for the  payment  of  principal,
interest or Liquidated Damages on the Securities, and will notify the Trustee of
any default by the Company in making any such  payment.  While any such  default
continues, the Trustee may require a Paying Agent to pay all money held by it to
the Trustee. The Company at any time may require a Paying Agent to pay all money
held by it to the  Trustee and to account  for any money  disbursed  by it. Upon
payment over to the  Trustee,  the Paying Agent (if other than the Company or an
Affiliate of the Company) shall have no further  liability for the money. If the
Company or an Affiliate of the Company acts as Paying Agent,  it shall segregate
and hold in a separate  trust fund for the  benefit of the  Securityholders  all
money held by it as Paying Agent.

     SECTION  2.05.  Securityholder  Lists.  The  Trustee  shall  preserve in as
current a form as is reasonably practicable the most recent list available to it
of the  names  and  addresses  of  Securityholders.  If the  Trustee  is not the
Registrar,  the Company  shall furnish to the Trustee on or before each interest
payment  date and at such other  times as the  Trustee  may request in writing a
list in such form and as of such date as the Trustee may  reasonably  require of
the names and addresses of Securityholders.

     SECTION 2.06. Transfer and Exchange.  Where Securities are presented to the
Registrar  or a  Transfer  Agent with a request  to  register  a transfer  or to
exchange   them  for  an  equal   principal   amount  of   Securities  of  other
denominations,  the  Registrar  shall  register  the transfer or exchange if the
Registrar's or Transfer Agent's  requirements for such transactions are met, and
such  Registrar or Transfer  Agent,  as the case may be, shall  effectuate  such
registration of transfer or exchange.  To permit  registrations of transfers and


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exchanges, the Company shall issue and the Trustee shall authenticate Securities
at the Registrar's or Transfer Agent's request.  No service charge shall be made
for any  registration  of transfer or exchange  (except as  otherwise  expressly
permitted  herein),  but the Company may require  payment of a sum sufficient to
cover any  transfer tax or similar  governmental  charge  payable in  connection
therewith  (other  than any such  transfer  tax or similar  governmental  charge
payable upon exchanges  pursuant to Sections  2.10,  3.06,  3.08,  5.02 or 11.05
hereof).

     The Company  shall not be required (i) to issue,  register the transfer of,
or exchange  Securities  during a period beginning at the opening of business 15
days before the day of any selection of Securities for redemption  under Section
3.02 hereof and ending at the close of business on the day of selection, or (ii)
to exchange or register the transfer of any Security so selected for  redemption
in whole  or in part,  except  the  unredeemed  portion  of any  Security  being
redeemed in part.

     (a)  Notwithstanding  any  other  provision  herein  or in the  Securities,
transfers  of a Global  Security,  in whole  or in  part,  or of any  beneficial
interest  therein of the kind  described in  clauses (ii),  (iii) or (iv) below,
shall only be made in accordance with this Section 2.06(a), and all transfers of
an  interest   in  the   Regulation S   Global   Security   shall   comply  with
Section 2.06(a)(vi).

          (i) General. A Global Security may not be transferred,  in whole or in
     part,  to any person  other than the  Depositary  or any  successor  to the
     Depositary  or a nominee  thereof,  and no such  transfer to any such other
     person may be registered;  provided that this clause (i) shall not prohibit
     any transfer of a Security that is issued in exchange for a Global Security
     but is not itself a Global  Security.  No  transfer  of a  Security  to any
     person shall be effective under this Indenture or the Securities unless and
     until such Security has been registered in the name of such person. Nothing
     in  this  Section 2.06(a)(i)  shall  prohibit  or  render  ineffective  any
     transfer  of  a  beneficial  interest  in a  Global  Security  effected  in
     accordance with the other provisions of this Section 2.06(a).

          (ii)  Restricted  Security to  Regulation  S Global  Security.  If the
     holder of a beneficial  interest in the Restricted  Global  Security or the
     Holder of a Restricted  Certificated  Security  wishes at any time prior to
     the expiration of the  Restricted  Period to transfer the whole or any part
     of such  beneficial  interest  or the  whole or any  part of the  principal
     amount of such Restricted  Certificated  Security to a person who wishes to
     take  delivery  thereof  in  the  form  of a  beneficial  interest  in  the
     Regulation S Global Security, such transfer may be effected, subject to the
     rules and procedures of the  Depositary,  Euroclear and Cedel Bank, in each
     case  to the  extent  applicable  (the  "Applicable  Procedures"),  only in
     accordance with the provisions of this Section 2.06(a)(ii). Upon receipt by
     the  Registrar of (1) written  instructions  given in  accordance  with the
     Applicable  Procedures  from an Agent  Member  directing  the  Registrar to
     credit or cause to be  credited  to a specified  Agent  Member's  account a
     beneficial  interest  in the  Regulation  S Global  Security in a principal
     amount equal to that of the beneficial  interest in the  Restricted  Global
     Security (or the principal amount of the Restricted  Certificated Security)
     to be so  transferred,  and,  in the  case of the  Restricted  Certificated
     Security,  the  surrender  thereof with the  assignment  of transfer on the
     reverse  thereof duly  completed,  (2) a written  order given in accordance
    

                                       17




     with the Applicable Procedures containing information regarding the account
     of the Agent Member (and the Euroclear or Cedel Bank  account,  as the case
     may be) to be  credited  with,  and the  account of the Agent  Member to be
     debited  for,  such  beneficial  interest  or, in the case of a  Restricted
     Certificated  Security,  written instructions  regarding the account of the
     Agent Member (and the Euroclear or Cedel Bank account,  as the case may be)
     to be credited with the  principal  amount of the  Restricted  Certificated
     Security to be transferred,  and (3) a certificate in  substantially in the
     form specified in Exhibit B  hereto given by the holder of such  beneficial
     interest  or the  Holder  of such  Restricted  Certificated  Security,  the
     Registrar shall instruct the Depositary (A)(I) in the case of a transfer of
     a beneficial  interest in the  Restricted  Global  Security,  to reduce the
     principal  amount  thereof  and to  increase  the  principal  amount of the
     Regulation S Global  Security,  by the principal  amount of the  beneficial
     interest in the Restricted Global Security to be so transferred, or (II) in
     the case of the Restricted Certificated Security, to increase the principal
     amount of the  Regulation S  Global Security by the principal amount of the
     Restricted Certificated Security so transferred, and (B) to credit or cause
     to be credited to the account of the person specified in such  instructions
     (which  shall be the Agent Member for  Euroclear or Cedel Bank or both,  as
     the case may be) a beneficial  interest in the Regulation S Global Security
     having a principal amount equal to the amount by which the principal amount
     of the  Restricted  Global  Security was reduced upon such transfer (or, in
     the case of a transfer of a Restricted Certificated Security, the principal
     amount thereof so  transferred).  In the case of a transfer of a Restricted
     Certificated   Security,   the  Registrar   shall  cancel  such  Restricted
     Certificated  Security  and issue one or more new  Restricted  Certificated
     Securities  in  authorized  denominations  in the  aggregate  amount of any
     untransferred portion thereof.

          (iii) Restricted Global Security to Unrestricted  Global Security.  If
     the holder of a  beneficial  interest  in the  Restricted  Global  Security
     wishes at any time to  transfer  the  whole or any part of such  beneficial
     interest or the Holder of a Restricted  Certificated Security wishes at any
     time to  transfer  the  whole or any part of the  principal  amount of such
     Restricted  Certificated  Security to a person who wishes to take  delivery
     thereof in the form of a  beneficial  interest in the  Unrestricted  Global
     Security following the expiration of the Restricted  Period,  such transfer
     may be effected,  subject to the Applicable Procedures,  only in accordance
     with this  Section  2.06(a)(iii).  Upon  receipt  by the  Registrar  of (1)
     written  instructions  given in accordance  with the Applicable  Procedures
     from an Agent  Member  directing  the  Registrar  to  credit or cause to be
     credited to a specified Agent Member's account a beneficial interest in the
     Unrestricted  Global  Security in a principal  amount  equal to that of the
     beneficial  interest in the  Restricted  Global  Security (or the principal
     amount of Restricted  Certificated Security) to be so transferred,  and, in
     the case of a Restricted  Certificated Security, the surrender thereof with
     the  assignment of transfer on the reverse  thereof duly  completed,  (2) a
     written order given in accordance with the Applicable Procedures containing
     information  regarding the account of the Agent Member (and, in the case of
     any such  transfer  pursuant to  Regulation  S, the Euroclear or Cedel Bank
     account for which such Agent Member's account is held) to be credited with,
     and the  account of the Agent  Member to be debited  for,  such  beneficial
     interest or, in the case of a  Restricted  Certificated  Security,  written
     instructions regarding the account of the Agent Member (and,

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                                                                  Execution Copy



     in the case of any such transfer pursuant to Regulation S, the Euroclear or
     Cedel Bank  account  for which such Agent  Member's  account is held) to be
     credited with the principal amount of the Restricted  Certificated Security
     to be  transferred,  and (3) a  certificate  in  substantially  the form of
     Exhibit C hereto  given by the holder of such  beneficial  interest  or the
     Holder of such Restricted  Certificated  Security,  as the case may be, the
     Registrar shall instruct the Depositary (A)(I) in the case of a transfer of
     a beneficial  interest in the  Restricted  Global  Security,  to reduce the
     principal  amount  thereof,  and to increase  the  principal  amount of the
     Unrestricted  Global  Security,  by the principal  amount of the beneficial
     interest in the Restricted  Global Security to be so transferred or (II) in
     the case of a transfer of a Restricted  Certificated  Security, to increase
     the principal amount of the  Unrestricted  Global Security by the principal
     amount of the Restricted  Certificated  Security to be so transferred,  and
     (B) to  credit  or  cause  to be  credited  to the  account  of the  person
     specified in such  instructions a beneficial  interest in the  Unrestricted
     Global Security having a principal  amount equal to the amount by which the
     principal  amount of the Restricted  Global  Security was reduced upon such
     transfer  (or,  in the  case of a  transfer  of a  Restricted  Certificated
     Security,  the principal amount thereof so  transferred).  In the case of a
     transfer of a Restricted  Certificated Security, the Registrar shall cancel
     such Restricted  Certificated Security and issue one or more new Restricted
     Certificated Securities in authorized denominations in the aggregate amount
     of any untransferred portion thereof.

          (iv) Regulation S Global  Security or Unrestricted  Global Security to
     Restricted Global Security.  If the holder of a beneficial  interest in the
     Regulation S  Global  Security or the  Unrestricted  Global Security or the
     Holder  of an  Unrestricted  Certificated  Security  wishes  at any time to
     transfer the whole or any part of such beneficial  interest to a person who
     wishes to take delivery thereof in the form of a beneficial interest in the
     Restricted Global Security,  such transfer may be effected,  subject to the
     Applicable  Procedures,  only in accordance with this Section  2.06(a)(iv).
     Upon  receipt  by  the  Registrar  of (1)  written  instructions  given  in
     accordance with the Applicable  Procedures  from an Agent Member  directing
     the  Registrar  to  credit or cause to be  credited  to a  specified  Agent
     Member's  account a beneficial  interest in the Restricted  Global Security
     equal  to  that of the  beneficial  interest  in the  Regulation  S  Global
     Security or  Unrestricted  Global  Security to be so transferred (or in the
     case  of a  Certificated  Security,  the  principal  amount  thereof  to be
     transferred),  and, in the case of a Certificated  Security,  the surrender
     thereof  with the  assignment  of  transfer  on the  reverse  thereof  duly
     completed,  (2) a written  order given in  accordance  with the  Applicable
     Procedures  containing  information  regarding the  accounting of the Agent
     Member to be credited  with,  and the  account of the Agent  Member (or, if
     such account is held for  Euroclear of Cedel Bank,  the  Euroclear or Cedel
     Bank  Account,  as the  case may be) to be  debited  for,  such  beneficial
     interest or, in the case of a Certificated  Security,  written instructions
     regarding  the account of the Agent  Member  (and,  in the case of any such
     transfer pursuant to Regulation S,  the Euroclear or Cedel Bank account for
     which  such  Agent  Member's  account  is  held)  to be  credited  with the
     principal  amount of the Certificated  Security to be transferred,  and (3)
     with respect to a transfer of a beneficial

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     interest in the  Regulation  S Global  Security  (but not the  Unrestricted
     Global  Security) or a transfer of a Restricted  Certificated  Security,  a
     certificate  substantially  in the form of  Exhibit  D hereto  given by the
     holder  of such  beneficial  interest  or the  Holder  of  such  Restricted
     Certificated Security, as the case may be, the Registrar shall instruct the
     Depositary (A)(I) in the case of a transfer of a beneficial interest in the
     Regulation S Global Security or Unrestricted Global Security, to reduce the
     principal amount of the Regulation S Global Security or Unrestricted Global
     Security,  as the case may be, and to increase the principal  amount of the
     Restricted  Global  Security,  by the  principal  amount of the  beneficial
     interest  in the  Regulation  S  Global  Security  or  Unrestricted  Global
     Security  to be so  transferred,  or  (II) in the  case  of a  Certificated
     Security, to increase the principal amount of the Restricted Global Note by
     the principal amount of the Certificated Security to be so transferred, and
     (B) to  credit  or  cause  to be  credited  to the  account  of the  person
     specified  in such  instructions  a beneficial  interest in the  Restricted
     Global Security having a principal  amount equal to the amount by which the
     principal amount of the Regulation S Global Security or Unrestricted Global
     Security,  as the case may be, was reduced upon such  transfer  (or, in the
     case  of  a  Certificated   Security,   the  principal  amount  thereof  so
     transferred).  In the case of a transfer of a  Certificated  Security,  the
     Registrar shall cancel such Certificated Security and issue one or more new
     Certificated Securities in authorized denominations in the aggregate amount
     of any untransferred portion thereof.

          (v)  Other  Exchanges.  In the  event  that a Global  Security  or any
     portion thereof is exchanged for Securities  other than Global  Securities,
     such other Securities and any Certificated  Securities then outstanding may
     in turn be exchanged (on transfer or otherwise) for Securities that are not
     Global Securities or Certificated Securities or for beneficial interests in
     a Global Security (if any is then outstanding) only in accordance with such
     procedures,  which shall be substantially consistent with the provisions of
     Section 2.06(a)(i) and (iv) above (including the certification requirements
     intended to insure  that  transfers  of  beneficial  interests  in a Global
     Security  comply  with  Rule 144A,   Rule 144  or  Regulation S  under  the
     Securities Act, as the case may be) and any Applicable  Procedures,  as may
     be from time to time adopted by the Company and the Trustee.

          (vi) Holding of Interests in Regulation S Global  Security.  Until the
     termination of the Restricted Period,  interests in the Regulation S Global
     Security may be held only through Agent Members acting for and on behalf of
     Euroclear and Cedel Bank, provided that this Section 2.06(a)(vi)  shall not
     prohibit any transfer in accordance with Section 2.06(a)(iv).

     (b) Except in connection with a Shelf Registration  Statement  contemplated
by and in accordance with the terms of the  Registration  Rights  Agreement,  if
Securities are issued upon the registration of transfer, exchange or replacement
of Securities bearing the Restricted  Securities Legend, or if a request is made
to  remove  such  Restricted   Securities  Legend  on  certificates   evidencing
Securities or shares of Common Stock issued upon  conversion of such  Securities
and  bearing a  comparable  legend as  provided  in  Section  5.05  hereof,  the
certificates  evidencing  Securities  or such  shares so issued  shall  bear the
Restricted  Securities Legend, or the Restricted  Securities Legend shall not be
removed,  as the case may be,  unless  there is  delivered  to the Company  such
satisfactory  evidence,  which may  include an opinion  of counsel  licensed  to
practice  law in the State of New York,  as may be  reasonably  required  by the
Company,  that  neither the legend nor the  restrictions  on transfer  set forth
therein are required to ensure that transfers thereof comply with the provisions
of Rule 144A, Rule 144 or Regulation S under the Securities Act or, with respect


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                                                                  Execution Copy



to  Certificated  Securities or such shares,  that such Securities or shares are
not  "restricted"  within the meaning of Rule 144 under the Securities Act. Upon
provision to the Company of such  satisfactory  evidence,  the  Trustee,  at the
written direction of the Company,  shall  authenticate and deliver Securities or
shares of Common Stock that do not bear the Restricted Securities Legend.

     (c) The Trustee shall have no  responsibility  for any actions taken or not
taken by the Depositary.

     SECTION 2.07.  Replacement  Securities.  If the Holder of a Security claims
that the  Security  has been  lost,  destroyed  or  wrongfully  taken or if such
Security is mutilated and is surrendered to the Trustee, the Company shall issue
and the Trustee shall  authenticate a replacement  Security if the Trustee's and
the Company's  requirements  are met. If required by the Trustee or the Company,
an  indemnity  bond must be  sufficient  in the  judgment of both to protect the
Company,  the Trustee, any Agent or any authenticating agent from any loss which
any of them may suffer if a Security is replaced. The Company may charge for its
expenses in replacing a Security.

     In case any such mutilated,  destroyed,  lost or stolen Security has become
or is about to become due and  payable,  or is about to be redeemed or purchased
by the Company pursuant to Article III hereof or converted into shares of Common
Stock pursuant to Article V hereof,  the Company in its discretion may,  instead
of issuing a new Security, pay, redeem or convert such Security, as the case may
be.

     Every replacement Security is an additional obligation of the Company.

     SECTION 2.08.  Outstanding  Securities.  The Securities  outstanding at any
time are all the  Securities  authenticated  by the  Trustee  except  for  those
canceled by it, those delivered to it for  cancellation,  and those described in
this Section as not outstanding.

     If a Security is replaced,  paid, redeemed or converted pursuant to Section
2.07  hereof,  it ceases to be  outstanding  unless,  in the case of a  replaced
Security,  the  Trustee  receives  proof  satisfactory  to it that the  replaced
Security is held by a bona fide purchaser.

     If Securities are considered paid under Section 4.01 hereof,  they cease to
be outstanding and interest on them ceases to accrue.

     A  Security  does not cease to be  outstanding  because  the  Company or an
Affiliate of the Company holds the Security.

     SECTION   2.09.   Treasury   Securities.   In   determining   whether   the
Securityholders of the required principal amount of Securities have concurred in
any  direction,  waiver  or  consent,  Securities  owned  by the  Company  or an
Affiliate of the Company shall be considered as though they are not outstanding,
except  that for the  purposes  of  determining  whether  the  Trustee  shall be
protected in relying on any such direction,  waiver or consent,  only Securities
which a Trust Officer knows are so owned shall be so disregarded.

     SECTION 2.10. Temporary  Securities.  Until definitive Securities are ready
for  delivery,  the  Company may  prepare  and the  Trustee  shall  authenticate
temporary Securities. Temporary Securities shall be substantially in the form of


                                       21




definitive  Securities  but may  have  variations  that  the  Company  considers
appropriate for temporary  Securities.  Without  unreasonable delay, the Company
shall  prepare and the  Trustee  shall  authenticate  definitive  Securities  in
exchange for temporary Securities.

     SECTION 2.11. Cancellation.  The Company at any time may deliver Securities
to the Trustee for cancellation.  The Registrar,  Transfer Agent,  Paying Agents
and Conversion Agents shall forward to the Trustee any Securities surrendered to
them for registration of transfer, redemption,  conversion, exchange or payment.
The Trustee shall promptly cancel all Securities surrendered for registration of
transfer, redemption, conversion, exchange, payment, replacement or cancellation
and shall destroy all canceled  Securities unless the Company otherwise directs.
The Company may not issue new Securities to replace  Securities that it has paid
or that have been delivered to the Trustee for  cancellation  or that any Holder
has converted.

     SECTION  2.12.  Defaulted  Interest or Liquidated  Damages.  If the Company
fails to make a payment of interest or Liquidated Damages on the Securities,  it
shall pay such  defaulted  interest  or  Liquidated  Damages  plus any  interest
payable on the defaulted interest or Liquidated  Damages,  in any lawful manner.
It may pay such defaulted interest or Liquidated Damages, plus any such interest
payable on them, to the persons who are  Securityholders on a subsequent special
record date.  The Company  shall fix any such record date and payment  date.  At
least  15  days  before  any  such  record  date,  the  Company  shall  mail  to
Securityholders  a notice that states the record date,  payment date, and amount
of such interest or Liquidated Damages to be paid.

                                   ARTICLE III
                                   Redemption

     SECTION  3.01.  Notices  to  Trustee.  If  the  Company  elects  to  redeem
Securities  pursuant to Section 3.07 hereof,  it shall notify the Trustee of the
redemption  date and the  principal  amount of  Securities  to be redeemed.  The
Company  shall give each notice  provided  for in this  Section 3.01 at least 40
days  before  the  redemption  date  (unless a shorter  notice  period  shall be
satisfactory to the Trustee).

     SECTION 3.02. Selection of Securities to be Redeemed.  If less than all the
Securities  are to be redeemed,  the Trustee  shall select the  Securities to be
redeemed  by a method  that  complies  with the  requirements  of the  principal
national securities exchange, if any, on which the Securities are listed, or, if
the Securities are not so listed,  on a pro rata basis,  by lot or by such other
method as the Trustee considers fair and appropriate. The Trustee shall make the
selection not more than 60 days and not less than 30 days before the  redemption
date from  Securities  outstanding  not previously  called for  redemption.  The
Trustee may select for redemption  portions of the principal of Securities  that
have  denominations  larger than U.S.$1,000.  Securities and portions of them it
selects shall be in amounts of U.S.$1,000 or integral  multiples of  U.S.$1,000;
provided,  however that Restricted  Certificated Securities may be redeemed only
in whole to the extent a redemption  in part would reduce the  principal  amount
thereof to an amount less than  U.S.$250,000.  Provisions of this Indenture that
apply to Securities  called for redemption  also apply to portions of Securities
called for  redemption.  The Trustee  shall  notify the Company  promptly of the
Securities or portions of Securities to be called for redemption.

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                                                                  Execution Copy




     If any Security selected for partial  redemption is converted in part after
such selection,  the converted  portion of such Security shall be deemed (so far
as may be) to be the portion to be selected for  redemption.  The Securities (or
portions  thereof) so selected  shall be deemed duly selected for redemption for
all  purposes  hereof,  notwithstanding  that any such  Security is converted in
whole or in part  before  the  mailing  of the  notice of  redemption.  Upon any
redemption  of less than all the  Securities,  the  Company  and the Trustee may
treat as outstanding any Securities surrendered for conversion during the period
15 days next  preceding the mailing of a notice of redemption and need not treat
as outstanding any Security  authenticated  and delivered  during such period in
exchange for the  unconverted  portion of any Security  converted in part during
such period.

     SECTION 3.03.  Notice of Redemption.  At least 30 days but not more than 60
days before a redemption date, the Company shall (i) mail a notice of redemption
to each Holder whose  Securities are to be redeemed at such Holder's  registered
address,  and  (ii)  publish  such  notice  in a daily  newspaper  with  general
circulation in Luxembourg.

     The notice shall identify the Securities to be redeemed and shall state:

          (a) the redemption date;

          (b) the redemption price;

          (c) if any  Security  is being  redeemed  in part,  the portion of the
     principal  amount of such  Security  to be  redeemed  and  that,  after the
     redemption  date,  upon  cancellation  of such Security,  a new Security or
     Securities  in  principal  amount equal to the  unredeemed  portion will be
     issued in the name of the Holder thereof;

          (d) the name and address of the Paying Agents;

          (e) that  Securities  called for redemption must be surrendered to any
     Paying  Agent to collect the  redemption  price plus  accrued  interest and
     Liquidated Damages, if any;

          (f) that,  unless  the  Company  defaults  in making  such  redemption
     payment or any Paying Agent is prohibited from making such payment pursuant
     to  the  terms  of  this  Indenture,  by  law or  otherwise,  interest  and
     Liquidated  Damages on Securities called for redemption ceases to accrue on
     and after the redemption date; and

          (g) the paragraph of the  Securities  pursuant to which the Securities
     called for redemption are being redeemed.

     Such notice shall also state the current  Conversion  Price and the date on
which the right to convert such Securities or portions thereof into Common Stock
of the Company will expire.

     At the  Company's  request,  the Trustee shall give notice of redemption in
the Company's name and at its expense.

     SECTION 3.04. Effect of Notice of Redemption.  Once notice of redemption is
mailed,

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Securities  called for redemption  become due and payable on the redemption date
at the price set forth in the Security.

     SECTION 3.05.  Deposit of  Redemption  Price.  On or before the  redemption
date, the Company shall deposit with the Trustee or with the Paying Agents money
sufficient to pay the  redemption  price of and accrued  interest and Liquidated
Damages,  if any, up to but not including the redemption  date on all Securities
to be  redeemed  on that date  (subject to the right of holders of record on the
relevant  record  date to receive  interest  and  Liquidated  Damages  due on an
interest payment date) unless  theretofore  converted into Common Stock pursuant
to the provisions  hereof.  The Trustee or the Paying Agents shall return to the
Company any money not required for that purpose.

     SECTION 3.06.  Securities  Redeemed in Part.  Upon  surrender of a Security
that is  redeemed  in part,  the  Company  shall  issue  and the  Trustee  shall
authenticate  for the  Holder  at the  expense  of the  Company  one or more new
Securities of authorized  denominations  equal in aggregate  principal amount to
the unredeemed portion of the Security surrendered.

     SECTION  3.07.  Optional  Redemption.  The  Company  may  redeem all or any
portion of the Securities, upon the terms and at the redemption prices set forth
in each of the Securities. Any redemption pursuant to this Section 3.07 shall be
made pursuant to the provisions of Section 3.01 through 3.06 hereof.

     SECTION 3.08.  Designated Event Offer.  (a) In the event that,  pursuant to
Section 4.07 hereof,  the Company shall commence a Designated  Event Offer,  the
Company shall follow the procedures in this Section 3.08.

     (b) The Designated  Event Offer shall remain open for a period specified by
the Company  which  shall be no less than 30  calendar  days and no more than 40
calendar days following its commencement on the date of the mailing of notice in
accordance with Section 4.07(b) hereof (the "Commencement  Date"), except to the
extent that a longer period is required by applicable law (the "Tender Period").
Upon the expiration of the Tender Period (the "Designated  Event Payment Date"),
the Company  shall  purchase the principal  amount of Securities  required to be
purchased pursuant to Section 4.07 hereof (the "Offer Amount").

     (c) If the Designated Event Payment Date is on or after an interest payment
record  date and on or before the related  interest  payment  date,  any accrued
interest and  Liquidated  Damages to the related  interest  payment date will be
paid to the  person  in whose  name a  Security  is  registered  at the close of
business on such record date, and no additional  interest or Liquidated  Damages
will be  payable  to  Securityholders  who  tender  Securities  pursuant  to the
Designated Event Offer.

     (d) The  Company  shall  provide  the Trustee  with  written  notice of the
Designated Event Offer at least ten Business Days before the  Commencement  Date
(unless a shorter period shall be satisfactory to the Trustee).

     (e) Subject to Section  4.07(b),  on or before the  Commencement  Date, the
Company or the Trustee (at the request and expense of the  Company)  shall send,
by first class mail, a notice to each of the Securityholders, which shall govern
the terms of the Designated Event Offer and shall state:

          (i) that the  Designated  Event  Offer is being made  pursuant to this
     Section 3.08 and Section 4.07 hereof and that all Securities  tendered will
     be accepted for payment;


                                       24








                                                                 Execution Copy



          (ii) the Offer Amount, the purchase price (as determined in accordance
     with Section 4.07 hereof),  the length of time the  Designated  Event Offer
     will remain open and the Designated Event Payment Date;

          (iii) that any  Security or portion  thereof not  tendered or accepted
     for payment will continue to accrue interest and, if applicable, Liquidated
     Damages;

          (iv)  that,  unless  the  Company  defaults  in  the  payment  of  the
     Designated  Event  Payment,  any Security or portion  thereof  accepted for
     payment  pursuant  to the  Designated  Event  Offer  shall  cease to accrue
     interest or Liquidated Damages after the Designated Event Payment Date;

          (v)  that  Securityholders  electing  to have a  Security  or  portion
     thereof  purchased  pursuant to any Designated Event Offer will be required
     to surrender the Security, with the form entitled "Option of Securityholder
     To Elect Purchase" on the reverse of the Security completed,  to the Paying
     Agent at the address specified in the notice prior to the close of business
     on the third Business Day preceding the Designated Event Payment Date;

          (vi) that  Securityholders will be entitled to withdraw their election
     if any Paying Agent  receives,  not later than the close of business on the
     second  Business Day preceding the  Designated  Event Payment Date, or such
     longer  period as may be required  by law, a letter or a  telegram,  telex,
     facsimile transmission (receipt of which is confirmed and promptly followed
     by a letter)  setting forth the name of the  Securityholder,  the principal
     amount of the Security or portion thereof the Securityholder  delivered for
     purchase  and a  statement  that such  Securityholder  is  withdrawing  his
     election to have the Security or portion thereof purchased; and

          (vii) that  Securityholders  whose Securities are being purchased only
     in part will be issued  new  Securities  equal in  principal  amount to the
     unpurchased  portion  of  the  Securities  surrendered,  which  unpurchased
     portion  must be equal to  U.S.$1,000  in  principal  amount or an integral
     multiple thereof.

                                       25






     In addition,  the notice shall contain all  instructions and materials that
the Company shall  reasonably deem necessary to enable such  Securityholders  to
tender Securities pursuant to the Designated Event Offer.

     (f) At least one Business Day prior to the  Designated  Event Payment Date,
the Company shall  irrevocably  deposit with the Trustee or the Paying Agents in
immediately  available  funds an amount equal to the Offer Amount to be held for
payment in accordance  with the terms of this Section  3.08.  On the  Designated
Event Payment Date,  the Company  shall,  to the extent  lawful,  (i) accept for
payment the Securities or portions thereof  tendered  pursuant to the Designated
Event Offer, (ii) deliver or cause to be delivered to the Trustee  Securities so
accepted and (iii) deliver to the Trustee an Officers'  Certificate stating such
Securities or portions  thereof have been accepted for payment by the Company in
accordance with the terms of this Section 3.08. The Paying Agents shall promptly
(but in any case not later than five  calendar days after the  Designated  Event
Payment Date) mail or deliver to each tendering  Securityholder  an amount equal
to the purchase price of the Securities tendered by such Securityholder, and the
Trustee shall promptly  authenticate and mail or deliver to such Securityholders
a new  Security  equal in  principal  amount to any  unpurchased  portion of the
Security  surrendered,  if any;  provided,  that each new Security shall be in a
principal amount of U.S.$1,000 or an integral  multiple  thereof;  and provided,
further  that a Holder of a  Restricted  Certificated  Security  may tender such
Security only in whole to the extent a tender in part would reduce the principal
amount  thereof  to an amount  less than  U.S.$250,000.  Any  Securities  not so
accepted shall be promptly mailed or delivered by or on behalf of the Company to
the Holder  thereof.  The  Company  will  publicly  announce  the results of the
Designated Event Offer on, or as soon as practicable after, the Designated Event
Payment Date.

     (g) The  Designated  Event Offer shall be made by the Company in compliance
with all applicable  provisions of the Exchange Act, and all  applicable  tender
offer rules  promulgated  thereunder,  and shall  include all  instructions  and
materials  that the  Company  shall  reasonably  deem  necessary  to enable such
Securityholders to tender their Securities.

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                                                                 Execution Copy




                                   ARTICLE IV
                                    Covenants

     SECTION 4.01. Payment of Securities. The Company shall pay the principal of
and interest and  Liquidated  Damages on the  Securities on the dates and in the
manner provided in the Securities.  Principal,  interest and Liquidated  Damages
shall be  considered  paid on the date due if the Paying  Agents (other than the
Company or an Affiliate of the Company) hold on that date money  designated  for
and  sufficient to pay all principal,  interest and Liquidated  Damages then due
and  such  Paying  Agents  are not  prohibited  from  paying  such  money to the
Securityholders  on that date  pursuant to the terms of this  Indenture.  To the
extent lawful, the Company shall pay interest (including  post-petition interest
in any proceeding under any Bankruptcy Law) on overdue  installments of interest
and Liquidated  Damages  (without regard to any applicable  grace period) at the
rate borne by the Securities,  compounded  semiannually.  The Company shall also
pay all  Liquidated  Damages,  if any,  in the  manner,  on the dates and in the
amounts set forth in the Registration Rights Agreement.

     SECTION  4.02.  SEC  Reports.  Whether  or not  required  by the  rules and
regulations of the SEC, so long as any Securities are  outstanding,  the Company
will  file  with  the SEC and  furnish  to the  Trustee  and to the  Holders  of
Securities  all  quarterly  and  annual  financial  information  required  to be
contained  in a  filing  with  the SEC on  Forms  10-Q  and  10-K,  including  a
"Management's  Discussion  and Analysis of Financial  Conditions  and Results of
Operations"  and, with respect to annual  information  only, a report thereon by
the Company's certified independent accountants.

     SECTION  4.03.  Compliance  Certificate.  The Company  shall deliver to the
Trustee,  within 120 days after the end of each fiscal year of the  Company,  an
Officers' Certificate stating that a review of the activities of the Company and
its  subsidiaries  during  the  preceding  fiscal  year has been made  under the
supervision  of the  signing  Officers  with a view to  determining  whether the
Company has kept,  observed,  performed and fulfilled its obligations under, and
complied with the covenants and  conditions  contained in, this  Indenture,  and
further stating,  as to each such Officer signing such certificate,  that to the
best of such Officer's knowledge the Company has kept,  observed,  performed and
fulfilled  each  and  every  covenant,  and  complied  with  the  covenants  and
conditions  contained in this Indenture and is not in default in the performance
or observance of any of the terms,  provisions and  conditions  hereof (or, if a
Default or Event of Default shall have occurred, describing all such Defaults or
Events of Default of which such Officer may have knowledge) and that to the best
of such  Officer's  knowledge  no event has occurred and remains in existence by
reason  of  which  payments  on  account  of the  principal  or of  interest  or
Liquidated Damages, if any, on the Securities are prohibited.

     One of the Officers signing such Officers'  Certificate shall be either the
Company's principal executive officer,  principal financial officer or principal
accounting officer.

     The Company will, so long as any of the Securities are outstanding, deliver
to the Trustee, forthwith upon becoming aware of:

          (a) any Default, Event of Default or default in the performance of any
     covenant, agreement or condition contained in this Indenture; or

                                       27






          (b) any  event of  default  under  any other  mortgage,  indenture  or
     instrument as that term is used in Section 8.01(e),

          an Officers' Certificate  specifying such Default, Event of Default or
     default.

     SECTION 4.04. Stay,  Extension and Usury Law. The Company covenants (to the
extent that it may  lawfully  do so) that it will not at any time  insist  upon,
plead,  or in any manner  whatsoever  claim or take the benefit or advantage of,
any stay,  extension or usury law wherever enacted, now or at any time hereafter
in force,  which may affect the covenants or the  performance of this Indenture;
and the Company (to the extent it may  lawfully do so) hereby  expressly  waives
all benefit or  advantage of any such law,  and  covenants  that it will not, by
resort  to any such law,  hinder,  delay or impede  the  execution  of any power
herein granted to the Trustee, but will suffer and permit the execution of every
such power as though no such law has been enacted.

     SECTION  4.05.  Corporate  Existence.  Except as  provided  in Article  VII
hereof, the Company will do or cause to be done all things necessary to preserve
and keep in full force and effect its  corporate  existence  and the  corporate,
partnership or other  existence of each  Subsidiary of the Company in accordance
with the respective  organizational  documents of each Subsidiary and the rights
(charter  and  statutory),  licenses  and  franchises  of the  Company  and  its
Subsidiaries;  provided,  however,  that the  Company  shall not be  required to
preserve any such right, license or franchise, or the corporate,  partnership or
other  existence of any  Subsidiary,  if the Board of Directors  shall determine
that the  preservation  thereof  is no longer  desirable  in the  conduct of the
business of the Company and its Subsidiaries  taken as a whole and that the loss
thereof is not adverse in any material respect to the Securityholders.

     SECTION  4.06.  Taxes.  The  Company  shall,  and shall  cause  each of its
Subsidiaries   to,  pay  prior  to  delinquency   all  taxes,   assessments  and
governmental  levies,  except as  contested  in good  faith  and by  appropriate
proceedings.

     SECTION 4.07.  Designated  Event.  (a) Upon the  occurrence of a Designated
Event,  each holder of Securities  shall have the right, in accordance with this
Section 4.07 and Section 3.08 hereof,  to require the Company to repurchase  all
or any part (equal to U.S.$1,000 or an integral multiple thereof, subject to the
limitation  set forth in the  second  proviso to the third  sentence  of Section
3.08(f)  hereof) of such  holder's  Securities  pursuant to the terms of Section
3.08 (the  "Designated  Event  Offer") at a purchase  price equal to 101% of the
principal  amount  thereof,  plus  accrued and unpaid  interest  and  Liquidated
Damages  thereon to the  Designated  Event Payment Date (the  "Designated  Event
Payment").

     (b) Within 30 days following any Designated  Event,  the Company shall mail
to each Holder the notice provided by Section 3.08(e) and publish such notice in
a daily newspaper with general circulation in Luxembourg.

     SECTION 4.08.  Listing on the Luxembourg Stock Exchange.  The Company shall
use its reasonable  best efforts to cause and maintain the listing of all of the
Securities on the Luxembourg Stock Exchange.

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                                                                 Execution Copy





                                    ARTICLE V
                                   Conversion

     SECTION 5.01. Conversion Privilege.  A holder of a Security may convert the
principal amount thereof (or any portion thereof that is an integral multiple of
U.S.$1,000;  provided,  however  that  a  Holder  of a  Restricted  Certificated
Security may convert such  Security  only in whole to the extent a conversion in
part  would  reduce  the  principal  amount  thereof  to  an  amount  less  than
U.S.$250,000)  into fully paid and  nonassessable  shares of Common Stock of the
Company at any time after 90 days  following  the Issuance Date and prior to the
close of business (New York time) on the Business Day immediately  preceding the
maturity  date of the Security at the  Conversion  Price then in effect,  except
that, with respect to any Security called for redemption,  such conversion right
shall  terminate  at the close of business  (New York time) on the  Business Day
immediately  preceding the redemption  date (unless the Company shall default in
making the redemption  payment when it becomes due, in which case the conversion
right shall  terminate on the date such default is cured).  The number of shares
of Common Stock issuable upon conversion of a Security is determined by dividing
the principal amount of the Security converted by the conversion price in effect
on the Conversion Date (the "Conversion Price").

     The initial  Conversion  Price is stated in paragraph 10 of the  Securities
and is subject to adjustment as provided in this Article V.

     Provisions of this  Indenture that apply to conversion of all of a Security
also  apply to  conversion  of a portion  of it. A holder of  Securities  is not
entitled  to any  rights  of a holder  of  Common  Stock  until  such  holder of
Securities  has converted  such  Securities  into Common Stock,  and only to the
extent that such  Securities are deemed to have been converted into Common Stock
under this Article V.

     SECTION 5.02.  Conversion  Procedure.  To convert a Security, a Holder must
satisfy the  requirements in paragraph 10 of the  Securities.  The date on which
the Holder  satisfies  all of those  requirements  is the  conversion  date (the
"Conversion Date"). As soon as practicable after the Conversion Date (subject to
the  expiration of any required  waiting  period  following any required  filing
pursuant to the provisions of the  Hart-Scott-Rodino  Improvements Act of 1976),
the Company shall deliver to the Holder through a Conversion Agent a certificate
for the number of whole shares of Common Stock  issuable upon the conversion and
a check for any fractional share determined pursuant to Section 5.03. The person
in whose name the  certificate  is registered  shall become the  stockholder  of
record on the Conversion  Date and, as of such date,  such person's  rights as a
Holder with respect to the converted  Security shall cease;  provided,  however,
that no surrender of a Security on any date when the stock transfer books of the
Company shall be closed shall be effective to constitute the person  entitled to
receive the shares of Common Stock upon such  conversion as the  stockholder  of
record of such shares of Common Stock on such date, but such surrender  shall be
effective  to  constitute  the person  entitled to receive such shares of Common
Stock as the  stockholder  of record  thereof  for all  purposes at the close of
business on the next succeeding day on which such stock transfer books are open;
provided  further,  that such  conversion  shall be at the  Conversion  Price in
effect  on  the  date  that  such  Security  shall  have  been  surrendered  for
conversion, as if the stock transfer books of the Company had not been closed.


                                       29





     No payment or adjustment  will be made for accrued and unpaid  interest and
Liquidated  Damages on a converted Security or for dividends or distributions on
shares of Common Stock issued upon  conversion of a Security,  but if any Holder
surrenders a Security for  conversion  after the close of business on the record
date for the payment of an installment  of interest and  Liquidated  Damages and
prior to the opening of business on the next  interest  and  Liquidated  Damages
payment date, then, notwithstanding such conversion, the interest and Liquidated
Damages  payable on such interest and Liquidated  Damages  payment date shall be
paid to the Holder of such Security on such record date.  In such event,  unless
such  Security  has been  called  for  redemption  on or prior to such  interest
payment  date,  such  Security,   when  surrendered  for  conversion,   must  be
accompanied by payment in funds  acceptable to the Company of an amount equal to
the interest and  Liquidated  Damages  payable on such  interest and  Liquidated
Damages payment date on the portion so converted.

     If a Holder converts more than one Security at the same time, the number of
whole shares of Common Stock issuable upon the conversion  shall be based on the
total principal amount of Securities converted.

     Upon  surrender of a Security that is converted in part,  the Trustee shall
authenticate   for  the  Holder  one  or  more  new   Securities  of  authorized
denominations  equal in aggregate principal amount to the unconverted portion of
the Security surrendered.

     SECTION  5.03.  Fractional  Shares.  The Company will not issue  fractional
shares of Common  Stock upon  conversion  of a Security.  In lieu  thereof,  the
Company  will pay an amount in cash  based  upon the Daily  Market  Price of the
Common Stock on the trading day prior to the date of conversion.

     SECTION 5.04. Taxes on Conversion.  The issuance of certificates for shares
of Common Stock upon the conversion of any Security shall be made without charge
to the converting Securityholder for such certificates or for any tax in respect
of the issuance of such  certificates,  and such certificates shall be issued in
the  respective  names of, or in such names as may be directed by, the Holder or
Holders of the converted  Security;  provided,  however,  that in the event that
certificates  for  shares of Common  Stock are to be issued in a name other than
the  name  of  the  Holder  of  the  Security  converted,  such  Security,  when
surrendered for  conversion,  shall be accompanied by an instrument of transfer,
in form  satisfactory  to the Company,  duly  executed by the Holder or his duly
authorized attorney;  and provided further,  however, that the Company shall not
be  required  to pay any tax which may be payable  in  respect  of any  transfer
involved in the issuance and delivery of any such  certificates  in a name other
than that of the Holder of the converted Security,  and the Company shall not be
required  to issue or deliver  such  certificates  unless or until the person or
persons  requesting  the  issuance  thereof  shall have paid to the  Company the
amount of such tax or shall have  established to the satisfaction of the Company
that such tax has been paid or is not applicable.

     SECTION  5.05.  Company to Provide  Stock.  The Company  shall at all times
reserve and keep available,  free from preemptive  rights, out of its authorized
but unissued Common Stock, solely for the purpose of issuance upon conversion of
Securities as herein provided,  a sufficient number of shares of Common Stock to
permit the conversion of all outstanding Securities for shares of Common Stock.

     All  shares of Common  Stock  which may be issued  upon  conversion  of the
Securities   shall  be  duly   authorized,   validly  issued,   fully  paid  and
nonassessable when so issued.

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                                                                 Execution Copy




     Shares  of  Common  Stock  issued  upon   conversion   of  any   Restricted
Certificated  Security or the  Restricted  Global  Security  shall bear a legend
comparable to the Restricted  Securities  Legend until the  requirements for the
removal thereof set forth in Section 2.06(b) hereof are met.

     SECTION 5.06. Adjustment of Conversion Price. The Conversion Price shall be
subject to adjustment from time to time as follows:

     (a) In case the Company  shall (1) pay a dividend in shares of Common Stock
to holders of Common Stock, (2) make a distribution in shares of Common Stock to
holders of Common Stock,  (3) subdivide its  outstanding  shares of Common Stock
into a greater  number of shares of Common Stock or (4) combine its  outstanding
shares of Common  Stock  into a smaller  number of shares of Common  Stock,  the
Conversion Price in effect immediately prior to such action shall be adjusted so
that the holder of any Security  thereafter  surrendered for conversion shall be
entitled  to receive  the number of shares of Common  Stock  which he would have
owned  immediately  following  such action had such  Securities  been  converted
immediately  prior thereto.  Any adjustment made pursuant to this subsection (a)
shall  become  effective  immediately  after  the  record  date in the case of a
dividend  or  distribution  and shall  become  effective  immediately  after the
effective date in the case of a subdivision or combination.

     (b) 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 (as  determined  pursuant to subsection  (f) below) of the Common Stock on
such record date, the Conversion  Price shall be adjusted so that the same shall
equal  the  price  determined  by  multiplying  the  Conversion  Price in effect
immediately prior to such record date by a fraction of which the numerator 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,
and of which the  denominator  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).  Such adjustments  shall become effective  immediately  after such
record date.

     (c) 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 those
securities  referred to in  subsection  (b)  above),  then in each such case the
Conversion  Price  shall be  adjusted  so that the same  shall  equal  the price
determined by multiplying the Conversion  Price in effect  immediately  prior to
the date of such  distribution by a fraction of which the numerator shall be the
Current  Market Price  (determined  as provided in subsection  (f) below) of the
Common Stock on the record date mentioned  below 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) of the portion of the assets so distributed or of such  subscription
rights or warrants  applicable  to one share of Common  Stock,  and of which the
denominator  shall be such  Current  Market  Price  of the  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.  Notwithstanding  the  foregoing,  in case the Company shall issue
rights or warrants to subscribe for additional  shares of the Company's  capital
stock  (other than those  referred to in  subsection  (b) above)  ("Rights")  to
substantially  all holders of Common  Stock,  the Company may, in lieu of making
any adjustment pursuant to this Section 5.06, make proper provision so that each
holder of a Security who converts such Security (or any portion  thereof)  after
the record date for such  distribution and prior to the expiration or redemption
of the Rights shall be entitled to receive upon such conversion,  in addition to
the  shares of Common  Stock  issuable  upon such  conversion  (the  "Conversion
Shares"), a number of Rights to be determined as follows: (i) if such conversion


                                       31

occurs on or prior to the date for the  distribution to the holders of Rights of
separate certificates evidencing such Rights (the "Distribution Date"), the same
number of Rights to which a holder of a number of shares of Common  Stock  equal
to the number of Conversion Shares is entitled at the time of such conversion in
accordance  with the terms and provisions of and  applicable to the Rights;  and
(ii) if such conversion  occurs after the Distribution  Date, the same number of
Rights to which a holder of the number of shares of Common  Stock into which the
principal amount of the Security so converted was convertible  immediately prior
to the Distribution  Date would have been entitled on the  Distribution  Date in
accordance with the terms and provisions of and applicable to the Rights.

     (d) 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 a Conversion Price
adjustment  pursuant to paragraph  (c) of this  Section) 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, in each case made within the 12 months preceding the date fixed
for   determining  the   stockholders   entitled  to  such   distribution   (the
"Distribution  Record  Date")  and in  respect  of  which  no  Conversion  Price
adjustment  pursuant to paragraphs  (c) or (e) of this Section or this paragraph
(d) has been made,  exceeds 15% of the product of the Current  Market  Price per
share  (determined  as provided in paragraph  (f) of this Section) of the Common
Stock on the  Distribution  Record  Date  multiplied  by the number of shares of
Common Stock outstanding on the Distribution  Record Date (excluding shares held
in the treasury of the Company),  the Conversion  Price shall be reduced so that
the same shall equal the price  determined by multiplying  such Conversion Price
in  effect  immediately  prior  to the  effectiveness  of the  Conversion  Price
reduction  contemplated  by  this  paragraph  (d) by a  fraction  of  which  the
numerator shall be the Current Market Price per share (determined as provided in
paragraph  (f) of this Section) of the Common Stock on the  Distribution  Record
Date 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) and the denominator shall be such Current Market Price
per share  (determined  as provided  in  paragraph  (f) of this  Section) of the
Common Stock on the Distribution Record Date, such reduction to become effective
immediately  prior  to  the  opening  of  business  on  the  day  following  the
Distribution Record Date.

     (e) 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 (c)
or paragraph (d) of this Section or this  paragraph  (e) has been made,  exceeds
15% of the product of the Current Market Price per share (determined as provided
in  paragraph  (f) of this  Section) of the Common  Stock on the  Purchase  Date
multiplied by the number of shares of Common Stock  outstanding  (including  any


                                       32








                                                                 Execution Copy



tendered  shares but excluding any shares held in the treasury of the Company or
any Subsidiary of the Company) on the Purchase Date, the Conversion  Price shall
be reduced so that the same shall equal the price determined by multiplying such
Conversion  Price  in  effect  immediately  prior  to the  effectiveness  of the
Conversion  Price reduction  contemplated by this paragraph (e) by a fraction of
which the numerator  shall be the Current Market Price per share  (determined as
provided in paragraph  (f) of this  Section) of the Common Stock on the Purchase
Date 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) and the denominator  shall be
such Current Market Price per share  (determined as provided in paragraph (f) of
this Section) of the Common Stock on the Purchase Date, such reduction to become
effective  immediately prior to the opening of business on the day following the
Purchase Date.

     (f) The "Current  Market Price" per share of Common Stock on any date shall
be deemed to be the average of the Daily Market Prices for the shorter of (i) 30
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  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.

     (g) "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.

     (h) In any case in which this Section 5.06 shall require that an adjustment
be made immediately  following a record date for an event, the Company may elect
to defer,  until such  event,  issuing to the Holder of any  Security  converted
after such record date the shares of Common Stock and other Capital Stock of the
Company  issuable upon such conversion over and above the shares of Common Stock
and other Capital Stock of the Company issuable upon such conversion only on the
basis of the Conversion  Price prior to  adjustment;  and, in lieu of the shares
the  issuance  of which is so  deferred,  the  Company  shall issue or cause its
transfer agents to issue due bills or other appropriate evidence of the right to
receive such shares.

     SECTION 5.07. No Adjustment. No adjustment in the Conversion Price shall be
required  until  cumulative  adjustments  amount to 1% or more of the Conversion
Price as last adjusted;  provided, however, that any adjustments which by reason
of this Section  5.07 are not  required to be made shall be carried  forward and
taken into account in any subsequent  adjustment.  All  calculations  under this
Article V 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.

     SECTION 5.08. Other  Adjustments.  (a) In the event that, as a result of an
adjustment  made  pursuant  to Section  5.06 above,  the holder of any  Security


                                       33





thereafter  surrendered  for  conversion  shall  become  entitled to receive any
shares of Capital  Stock of the Company  other than shares of its Common  Stock,
thereafter  the  Conversion  Price  of such  other  shares  so  receivable  upon
conversion of any Securities 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 Common Stock contained in this Article V.

     (b) 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  5.06(b) and
Section  5.06(c)  hereof,  the  Conversion  Price  shall  be  readjusted  to the
Conversion Price 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.

     SECTION 5.09. Adjustments for Tax Purposes. The Company may, at its option,
make such  reductions in the Conversion  Price, in addition to those required by
Section  5.06 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  stockholders  will  not be  taxable  to the
recipients thereof.

     SECTION  5.10.  Adjustments  by the Company.  The Company from time to time
may, to the extent  permitted by law, reduce the Conversion  Price by any amount
for any  period of at least 20 days,  in which  case the  Company  shall give at
least 15 days' notice of such reduction in accordance  with Section 5.11, if the
Board of Directors has made a determination  that such reduction would be in the
best interests of the Company, which determination shall be conclusive.

     SECTION  5.11.  Notice of  Adjustment.  Whenever  the  Conversion  Price is
adjusted,  the Company shall promptly mail to  Securityholders  at the addresses
appearing on the Registrar's  books a notice of the adjustment and file with the
Trustee  an  Officers'  Certificate  briefly  stating  the facts  requiring  the
adjustment and the manner of computing it. The  certificate  shall be conclusive
evidence of the correctness of such adjustment.

     SECTION 5.12. Notice of Certain Transactions. In the event that:

     (1) the Company  takes any action which would  require an adjustment in the
Conversion Price;

     (2) the  Company  takes  any  action  that  would  require  a  supplemental
indenture pursuant to Section 5.13; or

     (3) there is a dissolution or liquidation of the Company;

     a holder of a Security  may wish to convert  such  Security  into shares of
Common  Stock  prior  to  the  record  date  for or the  effective  date  of the
transaction  so that he may receive the rights,  warrants,  securities or assets
which a holder of shares of Common  Stock on that date may  receive.  Therefore,
the Company  shall mail to  Securityholders  at the  addresses  appearing on the
Registrar's  books  and the  Trustee a notice  stating  the  proposed  record or
effective  date,  as the case may be. The Company shall mail the notice at least
15 days  before  such date;  however,  failure to mail such notice or any defect
therein shall not affect the validity of any  transaction  referred to in clause
(1), (2) or (3) of this Section 5.12.


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                                                                 Execution Copy



     SECTION 5.13. Effect of Reclassifications, Consolidations, Mergers or Sales
on Conversion  Privilege.  If any of the following shall occur,  namely: (i) any
reclassification  or change of outstanding  shares of Common Stock issuable upon
conversion of Securities (other than a change in par value, or from par value to
no par value, or from no par value to par value, or as a result of a subdivision
or  combination),  (ii) any  consolidation  or merger to which the  Company is a
party other than a merger in which the Company is the continuing corporation and
which does not result in any reclassification of, or change (other than a change
in name, or par value,  or from par value to no par value,  or from no par value
to par value or as a result of a subdivision  or  combination)  in,  outstanding
shares of Common Stock or (iii) any sale or conveyance  of all or  substantially
all of the property or business of the Company as an entirety, then the Company,
or such  successor or purchasing  corporation,  as the case may be, shall,  as a
condition precedent to such  reclassification,  change,  consolidation,  merger,
sale or conveyance,  execute and deliver to the Trustee a supplemental indenture
in form  satisfactory to the Trustee  providing that the holder of each Security
then outstanding shall have the right to convert such Security into the kind and
amount of shares of stock and other  securities  and property  (including  cash)
receivable upon such reclassification,  change,  consolidation,  merger, sale or
conveyance by a holder of the number of shares of Common Stock  deliverable upon
conversion of such Security immediately prior to such reclassification,  change,
consolidation,  merger,  sale or conveyance.  Such supplemental  indenture shall
provide  for  adjustments  of the  Conversion  Price  which  shall be as  nearly
equivalent as may be  practicable to the  adjustments  of the  Conversion  Price
provided for in this  Article V. The  foregoing,  however,  shall not in any way
affect the right a holder of a Security may otherwise  have,  pursuant to clause
(ii) of the last sentence of subsection  (c) of Section 5.06, to receive  Rights
upon  conversion  of a  Security.  If,  in the case of any  such  consolidation,
merger,  sale  or  conveyance,  the  stock  or  other  securities  and  property
(including  cash)  receivable  thereupon  by a holder of Common  Stock  includes
shares of stock or other securities and property of a corporation other than the
successor or purchasing corporation,  as the case may be, in such consolidation,
merger,  sale or  conveyance,  then such  supplemental  indenture  shall also be
executed by such other corporation and shall contain such additional  provisions
to  protect  the  interests  of the  holders of the  Securities  as the Board of
Directors of the Company shall  reasonably  consider  necessary by reason of the
foregoing.  The  provision  of  this  Section  5.13  shall  similarly  apply  to
successive consolidations, mergers, sales or conveyances.

     In the event the Company shall execute a supplemental indenture pursuant to
this Section 5.13, the Company shall promptly file with the Trustee an Officers'
Certificate  briefly stating the reasons therefor,  the kind or amount of shares
of stock or securities or property (including cash) receivable by holders of the
Securities   upon  the   conversion   of  their   Securities   after   any  such
reclassification,  change,  consolidation,  merger,  sale or conveyance  and any
adjustment to be made with respect thereto.

     SECTION 5.14.  Trustee's  Disclaimer.  The Trustee has no duty to determine
when an adjustment under this Article V should be made, how it should be made or
what such  adjustment  should be, but may accept as  conclusive  evidence of the
correctness of any such  adjustment,  and shall be protected in relying upon the
Officers'  Certificate  with respect  thereto  which the Company is obligated to
file  with  the  Trustee   pursuant  to  Section  5.11.  The  Trustee  makes  no
representation  as to the validity or value of any  securities  or assets issued
upon conversion of Securities,  and the Trustee shall not be responsible for the
Company's failure to comply with any provisions of this Article V.

                                       35






     The  Trustee  shall  not be  under  any  responsibility  to  determine  the
correctness of any provisions  contained in any supplemental  indenture executed
pursuant  to  Section  5.13,  but  may  accept  as  conclusive  evidence  of the
correctness  thereof,  and shall be protected  in relying  upon,  the  Officers'
Certificate with respect thereto which the Company is obligated to file with the
Trustee pursuant to Section 5.13.

                                   ARTICLE VI
                                  Subordination

     SECTION 6.01.  Agreement to  Subordinate.  The Company,  for itself and its
successors, and each Securityholder, by his acceptance of Securities, agree that
the payment of the  principal  of or interest  or  Liquidated  Damages on or any
other amounts due on the Securities is subordinated in right of payment,  to the
extent and in the manner stated in this Article VI, to the prior payment in full
of all existing and future Senior Debt.

     SECTION 6.02. No Payment on Securities if Senior Debt in Default.  Anything
in this  Indenture  to the  contrary  notwithstanding,  no payment on account of
principal  of or  redemption  of,  interest  or  Liquidated  Damages on or other
amounts due on the Securities, and no redemption, purchase, or other acquisition
of the Securities,  shall be made by or on behalf of the Company (i) unless full
payment of amounts then due for  principal and interest and of all other amounts
then due on all Senior Debt has been made or duly  provided  for pursuant to the
terms of the instrument governing such Senior Debt, (ii) if, at the time of such
payment, redemption,  purchase or other acquisition, or immediately after giving
effect  thereto,  there  shall  exist under any Senior  Debt,  or any  agreement
pursuant to which any Senior Debt is issued,  any default,  which  default shall
not have been cured or waived and which  default shall have resulted in the full
amount of such  Senior Debt being  declared  due and payable or (iii) if, at the
time of such payment,  redemption,  purchase or other  acquisition,  the Trustee
shall have received  written  notice from the  Representative  of the holders of
Designated  Senior Debt (a "Payment  Blockage  Notice")  that there exists under
such Designated Senior Debt, or any agreement  pursuant to which such Designated
Senior Debt is issued,  any default,  which default shall not have been cured or
waived, permitting the holders thereof to declare any amounts of such Designated
Senior  Debt due and  payable,  but only for the period (the  "Payment  Blockage
Period")  commencing on the date of receipt of the Payment  Blockage  Notice and
ending  (unless  earlier  terminated  by  notice  given  to the  Trustee  by the
Representative  of the holders of such Designated Senior Debt) on the earlier of
(a) the date on which such  event of default  shall have been cured or waived or
(b) 180 days from the receipt of the Payment  Blockage  Notice.  Notwithstanding
the provisions  described in the immediately  preceding  sentence (other than in
clauses (i) and (ii)),  unless the holders of such Designated Senior Debt or the
Representative  of such  holders  shall have  accelerated  the  maturity of such
Designated  Senior Debt, the Company may resume payments on the Securities after
the end of such  Payment  Blockage  Period.  Not more than one Payment  Blockage
Notice  may be given in any  consecutive  365-day  period,  irrespective  of the
number of defaults with respect to Senior Debt during such period.

     In the event that,  notwithstanding  the  provisions  of this Section 6.02,
payments  are  made by or on  behalf  of the  Company  in  contravention  of the
provisions of this Section 6.02, such payments shall be held by the Trustee, any
Paying Agent or the  holders,  as  applicable,  in trust for the benefit of, and


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shall be paid over to and  delivered  to, the  Representative  of the holders of
Senior Debt or the trustee  under the  indenture  or other  agreement  (if any),
pursuant  to which any  instruments  evidencing  any  Senior  Debt may have been
issued for  application  to the payment of all Senior Debt ratably  according to
the aggregate amounts remaining unpaid to the extent necessary to pay all Senior
Debt in full in  accordance  with the terms of such Senior  Debt,  after  giving
effect to any concurrent payment or distribution to or for the holders of Senior
Debt.

     The Company shall give prompt  written notice to the Trustee and any Paying
Agent of any  default  or event of default  under any  Senior  Debt or under any
agreement pursuant to which any Senior Debt may have been issued.

     SECTION 6.03.  Distribution on Acceleration of Securities;  Dissolution and
Reorganization;  Subrogation of  Securities.  (a) If the Securities are declared
due and payable  because of the  occurrence of an Event of Default,  the Company
shall give  prompt  written  notice to the  holders of all Senior Debt or to the
trustee(s)  for such Senior Debt of such  acceleration.  The Company may not pay
the principal of or interest or  Liquidated  Damages on or any other amounts due
on the  Securities  until five Business Days after such holders or trustee(s) of
Senior  Debt  receive  such  notice  and,  thereafter,  the  Company may pay the
principal of or interest or  Liquidated  Damages on or any other  amounts due on
the Securities only if the provisions of this Article VI permit such payment.

     (b) Upon (i) any acceleration of the principal amount due on the Securities
because of an Event of Default or (ii) any direct or  indirect  distribution  of
assets  of  the  Company  upon  any  dissolution,  winding  up,  liquidation  or
reorganization of the Company (whether in bankruptcy, insolvency or receivership
proceedings  or upon an  assignment  for the benefit of  creditors  or any other
dissolution, winding up, liquidation or reorganization of the Company):

     (1) the  holders of all  Senior  Debt shall  first be  entitled  to receive
payment in full of the  principal  thereof,  the interest  thereon and any other
amounts due  thereon  before the  Holders  are  entitled  to receive  payment on
account of the principal of or interest and  Liquidated  Damages on or any other
amounts due on the Securities;

     (2) any  payment or  distribution  of assets of the  Company of any kind or
character, whether in cash, property or securities (other than securities of the
Company as  reorganized  or readjusted or securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment the payment
of which is  subordinate,  at least to the extent  provided in this Article with
respect  to the  Securities,  to the  payment  in  full  without  diminution  or
modification  by such plan of all  Senior  Debt),  to which the  holders  or the
Trustee would be entitled  except for the  provisions of this Article,  shall be
paid by the  liquidating  trustee or agent or other person making such a payment
or   distribution,   directly   to  the   holders  of  Senior   Debt  (or  their
representative(s)  or trustee(s)  acting on their behalf),  ratably according to
the  aggregate  amounts  remaining  unpaid on  account  of the  principal  of or
interest  on and other  amounts due on the Senior  Debt held or  represented  by
each,  to the  extent  necessary  to make  payment  in full of all  Senior  Debt
remaining unpaid,  after giving effect to any concurrent payment or distribution
to the holders of such Senior Debt; and

     (3) in the event  that,  notwithstanding  the  foregoing,  any  payment  or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities  (other than  securities of the Company as reorganized or
readjusted,  or securities of the Company or any other corporation  provided for
by a plan of reorganization or readjustment the payment of which is subordinate,
at least to the extent  provided in this Article with respect to the Securities,
to the payment in full without diminution or modification by such plan of Senior
Debt), shall be received by the Trustee or the holders before all Senior Debt is
paid in full,  such  payment  or  distribution  shall  be held in trust  for the
benefit of, and be paid over to upon request by a holder of the Senior Debt, the
holders of the  Senior  Debt  remaining  unpaid  (or their  representatives)  or
trustee(s) acting on their behalf, ratably as aforesaid,  for application to the
payment of such  Senior  Debt until all such Senior Debt shall have been paid in
full,  after giving  effect to any  concurrent  payment or  distribution  to the
holders of such Senior Debt.

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     Subject to the payment in full of all Senior  Debt,  the  Holders  shall be
subrogated  to the rights of the holders of Senior  Debt to receive  payments or
distributions of cash,  property or securities of the Company  applicable to the
Senior Debt until the  principal of and interest and  Liquidated  Damages on the
Securities shall be paid in full and, for purposes of such subrogation,  no such
payments or  distributions  to the  holders of Senior Debt of cash,  property or
securities  which otherwise would have been payable or  distributable to Holders
shall,  as between the Company,  its creditors  other than the holders of Senior
Debt, and the Holders, be deemed to be a payment by the Company to or on account
of the Senior Debt, it being  understood that the provisions of this Article are
and are intended  solely for the purpose of defining the relative  rights of the
Holders, on the one hand, and the holders of Senior Debt, on the other hand.

     Nothing  contained in this Article or elsewhere in this Indenture or in the
Securities  is intended  to or shall (i) impair,  as between the Company and its
creditors  other than the holders of Senior Debt, the obligation of the Company,
which is absolute and unconditional, to pay to the Holders the principal of, and
interest and  Liquidated  Damages on, the  Securities as and when the same shall
become due and  payable in  accordance  with the terms of the  Securities,  (ii)
affect the relative  rights of the Holders and  creditors  of the Company  other
than  holders of Senior Debt or, as between the  Company  and the  Trustee,  the
obligations  of the Company to the Trustee,  or (iii) prevent the Trustee or the
Holders from exercising all remedies otherwise  permitted by applicable law upon
default under this Indenture,  subject to the rights, if any, under this Article
of the holders of Senior Debt in respect of cash, property and securities of the
Company received upon the exercise of any such remedy.

     Upon distribution of assets of the Company referred to in this Article, the
Trustee, subject to the provisions of Section 9.01 hereof, and the Holders shall
be entitled to rely upon a certificate  of the  liquidating  trustee or agent or
other person  making any  distribution  to the Trustee or to the Holders for the
purpose  of   ascertaining   the  persons   entitled  to   participate  in  such
distribution,  the  holders of the  Senior  Debt and other  indebtedness  of the
Company,  the amount thereof or payable  thereon,  the amount or amounts paid or
distributed  thereon and all other facts  pertinent  thereto or to this Article.
The  Trustee,  however,  shall not be deemed  to owe any  fiduciary  duty to the
holders of Senior Debt.  Nothing  contained in this Article or elsewhere in this
Indenture, or in any of the Securities, shall prevent the good faith application
by the Trustee of any moneys which were  deposited  with it hereunder,  prior to
its receipt of written  notice of facts which would  prohibit such  application,
for the purpose of the payment of or on account of the principal of, or interest
and  Liquidated  Damages on, the Securities  unless,  prior to the date on which
such  application  is made by the  Trustee,  the Trustee  shall be charged  with
actual notice under Section 6.03(d) hereof of the facts which would prohibit the
making of such application.

     (c) The  provisions  of this Article  shall not be  applicable to any cash,
properties or securities  received by the Trustee or by any Holder when received
as a holder of Senior Debt and nothing in Section  9.11 hereof or  elsewhere  in
this Indenture  shall deprive the Trustee or such Holder of any of its rights as
such Holder.

     (d) The Company shall give prompt written notice to the Trustee of any fact
known to the Company which would  prohibit the making of any payment of money to
or by the Trustee in respect of the  Securities  pursuant to the  provisions  of
this  Article.  The Trustee,  subject to the  provisions of Section 9.01 hereof,
shall be entitled  to assume that no such fact exists  unless the Company or any
holder of Senior Debt or any trustee  therefor has given  notice  thereof to the
Trustee.  Notwithstanding the provisions of this Article or any other provisions
of this  Indenture,  the  Trustee  shall not be charged  with  knowledge  of the
existence  of any fact which would  prohibit the making of any payment of moneys
to or by the Trustee in respect of the Securities  pursuant to the provisions in
this Article,  unless,  and until three  Business Days after,  the Trustee shall
have received  written  notice thereof from the Company or any holder or holders
of Senior Debt or from any trustee  therefor;  and,  prior to the receipt of any
such written  notice,  the Trustee,  subject to the  provisions  of Section 9.01
hereof,  shall be entitled in all respects  conclusively  to assume that no such
facts  exist;  provided  that if on a date not less  than  three  Business  Days
immediately  preceding the date upon which, by the terms hereof, any such moneys
may become payable for any purpose (including, without limitation, the principal


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of or interest and Liquidated  Damages on any  Security),  the Trustee shall not
have  received  with  respect to such  moneys the  notice  provided  for in this
Section 6.03(d), then anything herein contained to the contrary notwithstanding,
the Trustee  shall have full power and  authority  to receive such moneys and to
apply the same to the  purpose  for which they were  received,  and shall not be
affected by any notice to the  contrary  which may be received by it on or after
such prior date.

     The Trustee shall be entitled to conclusively rely on the delivery to it of
a written notice by a person representing  himself to be a holder of Senior Debt
(or a trustee on behalf of such holder) to  establish  that such notice has been
given by a holder of Senior  Debt (or a trustee on behalf of any such  holder or
holders).  In the event that the Trustee  determines  in good faith that further
evidence  is  required  with  respect  to the right of any person as a holder of
Senior  Debt to  participate  in any  payment or  distribution  pursuant to this
Article,  the  Trustee  may  request  such  person to  furnish  evidence  to the
reasonable  satisfaction  of the Trustee as to the amount of Senior Debt held by
such person,  the extent to which such person is entitled to participate in such
payment or  distribution  and any other  facts  pertinent  to the rights of such
person under this Article,  and, if such evidence is not furnished,  the Trustee
may defer any payment to such person pending  judicial  determination  as to the
right of such person to receive such  payment;  nor shall the Trustee be charged
with  knowledge  or the  curing  or  waiving  of any  default  of the  character
specified in Section 6.02 hereof or that any event or any  condition  preventing
any payment in respect of the Securities shall have ceased to exist,  unless and
until the Trustee shall have received written notice to such effect.

     (e) The  provisions  of this Section 6.03  applicable  to the Trustee shall
(unless the context  requires  otherwise) also apply to any Paying Agent for the
Company.

     SECTION 6.04.  Reliance by Senior Debt on  Subordination  Provisions.  Each
Holder of any Security by his acceptance  thereof  acknowledges  and agrees that
the  foregoing  subordination  provisions  are,  and  are  intended  to  be,  an
inducement and a consideration for each holder of any Senior Debt,  whether such
Senior  Debt was  created  or  acquired  before  or after  the  issuance  of the
Securities, to acquire and continue to hold, or to continue to hold, such Senior
Debt, and such holder of Senior Debt shall be deemed conclusively to have relied
on such  subordination  provisions  in acquiring  and  continuing to hold, or in
continuing  to hold,  such Senior Debt.  Notice of any default in the payment of
any Senior  Debt,  except as  expressly  stated in this  Article,  and notice of
acceptance  of the  provisions  hereof are hereby  expressly  waived.  Except as
otherwise  expressly  provided herein, no waiver,  forbearance or release by any
holder of Senior  Debt  under  such  Senior  Debt or under  this  Article  shall
constitute a release of any of the  obligations or liabilities of the Trustee or
Holders of the Securities provided in this Article.

     SECTION 6.05. No Waiver of  Subordination  Provisions.  Except as otherwise
expressly  provided  herein,  no right of any  present  or future  holder of any
Senior Debt to enforce subordination as herein provided shall at any time in any
way be  prejudiced  or  impaired by any act or failure to act on the part of the
Company or by any act or failure to act, in good faith,  by any such holder,  or
by any noncompliance by the Company with the terms,  provisions and covenants of
this Indenture,  regardless of any knowledge thereof any such holder may have or
be otherwise charged with.

     Without in any way limiting the generality of the foregoing paragraph,  the
holders  of Senior  Debt may,  at any time and from  time to time,  without  the
consent of, or notice to, the Trustee or the Holders of the Securities,  without
incurring  responsibility to the Holders of the Securities and without impairing
or releasing the  subordination  provided in this Article VI or the  obligations
hereunder of the Holders of the Securities to the holders of Senior Debt, do any
one or more of the following:  (i) change the manner,  place or terms of payment
of, or renew or alter,  Senior Debt,  or otherwise  amend or  supplement  in any


                                       39


manner Senior Debt or any instrument  evidencing the same or any agreement under
which  Senior Debt is  outstanding;  (ii) sell,  exchange,  release or otherwise
dispose of any property  pledged,  mortgaged or otherwise  securing Senior Debt;
(iii) release any person liable in any manner for the collection of Senior Debt;
and (iv) exercise or refrain from  exercising  any rights against the Company or
any other person.

     SECTION  6.06.  Trustee's  Relation  to Senior  Debt.  The  Trustee  in its
individual  capacity  shall be  entitled  to all the  rights  set  forth in this
Article in respect of any Senior Debt at any time held by it, to the same extent
as any holder of Senior Debt, and nothing in Section 9.11 hereof or elsewhere in
this Indenture shall deprive the Trustee of any of its rights as such holder.

     With  respect to the  holders of Senior  Debt,  the Trustee  undertakes  to
perform  or to  observe  only  such of its  covenants  and  obligations,  as are
specifically set forth in this Article,  and no implied covenants or obligations
with  respect to the  holders of Senior  Debt shall be read into this  Indenture
against the Trustee. The Trustee shall not owe any fiduciary duty to the holders
of Senior  Debt but shall  have only such  obligations  to such  holders  as are
expressly set forth in this Article.

     Each Holder of a Security by his acceptance  thereof authorizes and directs
the Trustee on his behalf to take such action as may be necessary or appropriate
to  effectuate  the  subordination  provided in this  Article and  appoints  the
Trustee his  attorney-in-fact for any and all such purposes,  including,  in the
event of any dissolution,  winding up or liquidation or reorganization under any
applicable  bankruptcy law of the Company (whether in bankruptcy,  insolvency or
receivership  proceedings  or  otherwise),  the timely filing of a claim for the
unpaid  balance  of  such  Holder's  Securities  in the  form  required  in such
proceedings  and the causing of such claim to be  approved.  If the Trustee does
not file a claim or proof of debt in the form required in such proceedings prior
to 30 days before the expiration of the time to file such claims or proofs, then
any holder or holders of Senior Debt or their  representative or representatives
shall have the right to demand,  sue for,  collect,  receive and receipt for the
payments and distributions in respect of the Securities which are required to be
paid or  delivered to the holders of Senior Debt as provided in this Article and
to file and prove all claims  therefor  and to take all such other action in the
name  of  the  holders  or  otherwise,   as  such  holders  of  Senior  Debt  or
representative  thereof may  determine to be necessary  or  appropriate  for the
enforcement of the provisions of this Article.

     SECTION 6.07. Other Provisions  Subject Hereto.  Except as expressly stated
in this Article,  notwithstanding  anything  contained in this  Indenture to the
contrary, all the provisions of this Indenture and the Securities are subject to
the provisions of this Article.  However, nothing in this Article shall apply to
or  adversely  affect  the claims of, or payment  to, the  Trustee  pursuant  to
Section 9.07.  Notwithstanding  the foregoing,  the failure to make a payment on
account of principal of or interest or Liquidated  Damages on the  Securities by
reason of any  provision of this Article VI shall not be construed as preventing
the occurrence of an Event of Default under Section 8.01.

                                   ARTICLE VII
                                   Successors

     SECTION 7.01. Merger,  Consolidation or Sale of Assets. The Company may not
consolidate or merge with or into any person  (whether or not the Company is the
surviving corporation),  or sell, assign,  transfer,  lease, convey or otherwise
dispose of all or substantially all of its properties or assets unless:

          (a) the Company is the surviving  corporation  or the person formed by
     or surviving any such  consolidation  or merger (if other than the Company)
     or to which such sale,  assignment,  transfer,  lease,  conveyance or other
     disposition  shall have been made is a  corporation  organized  or existing
     under the laws of the United  States,  any state thereof or the District of
     Columbia;

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                                                                 Execution Copy



         

          (b) the corporation  formed by or surviving any such  consolidation or
     merger (if other than the Company) or the  corporation  to which such sale,
     assignment, transfer, lease, conveyance or other disposition will have been
     made assumes all the Obligations of the Company, pursuant to a supplemental
     indenture  in a form  reasonably  satisfactory  to the  Trustee,  under the
     Securities and the Indenture;

          (c) any such sale, assignment,  transfer,  lease,  conveyance or other
     disposition  of all or  substantially  all of the  Company's  properties or
     assets  shall  be  as an  entirety  or  virtually  as an  entirety  to  one
     corporation;

          (d) immediately  after such transaction no Default or Event of Default
     exists; and

          (e) the  Company  or such  corporation  shall  have  delivered  to the
     Trustee an Officers'  Certificate  and an Opinion of Counsel,  each stating
     that  such  transaction  and the  supplemental  indenture  comply  with the
     Indenture and that all  conditions  precedent in the Indenture  relating to
     such transaction have been satisfied.

     SECTION 7.02. Successor Corporation Substituted.  Upon any consolidation or
merger,  or  any  sale,  assignment,   transfer,   lease,  conveyance  or  other
disposition  of  all  or  substantially  all of the  assets  of the  Company  in
accordance with Section 7.01 hereof,  the successor  corporation  formed by such
consolidation  or into or with which the Company is merged or the corporation to
which such sale, assignment, transfer, lease, conveyance or other disposition is
made shall succeed to, and be  substituted  for and may exercise every right and
power of, the  Company  under  this  Indenture  with the same  effect as if such
successor person has been named as the Company herein;  provided,  however, that
the  predecessor  Company in the case of a sale,  assignment,  transfer,  lease,
conveyance or other disposition shall not be released from the obligation to pay
the principal of and interest and Liquidated Damages on the Securities.

                                  ARTICLE VIII
                              Defaults and Remedies

     SECTION 8.01. Events of Default. An "Event of Default" occurs if:

          (a) the Company  defaults  in the  payment of  interest or  Liquidated
     Damages on any  Security  when the same  becomes due and  payable,  and the
     Default continues for a period of 30 days after the date due and payable;

          (b) the  Company  defaults  in the  payment  of the  principal  of any
     Security when the same becomes due and payable at maturity, upon redemption
     or otherwise;

          (c) the Company  fails to observe or perform any covenant or agreement
     contained in Section 4.07 hereof;

          (d) the  Company  fails to observe or perform  any other  covenant  or
     agreement contained in this Indenture or the Securities,  required by it to
     be performed  and the Default  continues  for a period of 60 days after the
     receipt  of written  notice  from the  Trustee  to the  Company or from the
     Holders  of 25% in  aggregate  principal  amount  of the  then  outstanding
     Securities  to the Company and the  Trustee  stating  that such notice is a
     "Notice of Default";

          (e) there is a default  under any  mortgage,  indenture or  instrument
     under  which  there  may be  issued or by which  there  may be  secured  or
     evidenced  any  Indebtedness  for  money  borrowed  by the  Company  or any
     Material  Subsidiary  of the Company (or the payment of which is guaranteed
     by the Company or any Material  Subsidiary  of the  Company),  whether such
     Indebtedness or guarantee now exists or is created after the Issuance

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     Date, which default (i) is caused by a failure to pay when due principal of
     or interest or  Liquidated  Damages on such  Indebtedness  within the grace
     period provided for in such  Indebtedness  (which failure  continues beyond
     any applicable  grace period) (a "Payment  Default") or (ii) results in the
     acceleration of such  Indebtedness  prior to its express maturity  (without
     such  acceleration  being  rescinded  or annulled)  and, in each case,  the
     principal  amount of any such  Indebtedness,  together  with the  principal
     amount  of any  other  such  Indebtedness  under  which  there is a Payment
     Default  or the  maturity  of  which  has been so  accelerated,  aggregates
     U.S.$3,000,000 or more;

          (f) a final, non-appealable judgment or final non-appealable judgments
     (other  than any  judgment as to which a  reputable  insurance  company has
     accepted full liability) for the payment of money are entered by a court or
     courts of  competent  jurisdiction  against  the  Company  or any  Material
     Subsidiary  of the Company  and remain  undischarged  for a period  (during
     which execution shall not be effectively  stayed) of 60 days, provided that
     the aggregate of all such judgments exceeds U.S.$3,000,000;

          (g) the Company or any Material  Subsidiary  pursuant to or within the
     meaning of any  Bankruptcy  Law:  (i)  commences  a  voluntary  case,  (ii)
     consents to the entry of an order for relief  against it in an  involuntary
     case in which it is the  debtor,  (iii)  consents to the  appointment  of a
     Custodian of it or for all or substantially all of its property, (iv) makes
     a general  assignment  for the benefit of its  creditors,  or (v) makes the
     admission  in writing  that it  generally is unable to pay its debts as the
     same become due; or

          (h) a court of competent  jurisdiction enters an order or decree under
     any  Bankruptcy  Law that:  (i) is for relief  against  the  Company or any
     Material  Subsidiary of the Company in an involuntary case, (ii) appoints a
     Custodian of the Company or any Material  Subsidiary  of the Company or for
     all or substantially  all of its property,  and the order or decree remains
     unstayed and in effect for 60 days or (iii) orders the  liquidation  of the
     Company or any Material Subsidiary of the Company,  and the order or decree
     remains unstayed and in effect for 60 days.

     The term  "Bankruptcy Law" means Title 11, U.S. Code or any similar Federal
or state law for the relief of debtors. The term "Custodian" means any receiver,
trustee, assignee, liquidator or similar official under any Bankruptcy Law.

     SECTION 8.02. Acceleration.  If an Event of Default (other than an Event of
Default  specified in clauses (g) and (h) of Section 8.01 hereof)  occurs and is
continuing, the Trustee by notice to the Company, or the Holders of at least 25%
in principal amount of the then-outstanding  Securities by notice to the Company
and the Trustee, may declare all the Securities to be due and payable. Upon such
declaration,  the principal of, premium, if any, and accrued and unpaid interest
and Liquidated  Damages on the Securities shall be due and payable  immediately.
If an Event of Default  specified  in clause (g) or (h) of Section  8.01  hereof
occurs,  such an amount  shall ipso  facto  become  and be  immediately  due and
payable  without any  declaration or other act on the part of the Trustee or any
Securityholder.  The Holders of a majority in aggregate  principal amount of the
then-   outstanding   Securities  by  notice  to  the  Trustee  may  rescind  an
acceleration  and its consequences if the rescission would not conflict with any
judgment or decree,  if all amounts  payable to the Trustee  pursuant to Section
9.07 hereof have been paid and if all existing Events of Default have been cured
or waived except nonpayment of principal or interest and Liquidated Damages that
has become due solely because of the acceleration.



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                                                                 Execution Copy



     SECTION  8.03.  Other  Remedies.  If an  Event  of  Default  occurs  and is
continuing,  the Trustee may pursue any available  remedy to collect the payment
of principal or interest and Liquidated  Damages on the Securities or to enforce
the performance of any provision of the Securities or this Indenture.

     The Trustee may  maintain a  proceeding  even if it does not possess any of
the  Securities  or does not produce any of them in the  proceeding.  A delay or
omission by the Trustee or any  Securityholder in exercising any right or remedy
accruing  upon an Event of  Default  shall  not  impair  the  right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.

     SECTION  8.04.  Waiver of Past  Defaults.  The  Holders  of a  majority  in
aggregate principal amount of the  then-outstanding  Securities by notice to the
Trustee may waive an existing  Default or Event of Default and its  consequences
except a continuing Default or Event of Default in the payment of the Designated
Event Payment or the  principal  of, or interest or  Liquidated  Damages on, any
Security.  When a Default or Event of Default is waived, it is cured and ceases;
but no such waiver shall extend to any subsequent or other Default or impair any
right consequent thereon.

     SECTION 8.05.  Control by Majority.  The Holders of a majority in principal
amount of the then-outstanding  Securities may direct the time, method and place
of  conducting  any  proceeding  for any  remedy  available  to the  Trustee  or
exercising any trust or power conferred on it.  However,  the Trustee may refuse
to follow any direction  that conflicts  with law or this  Indenture,  is unduly
prejudicial to the rights of other Securityholders, or would involve the Trustee
in personal liability.

     SECTION 8.06.  Limitation on Suits.  A  Securityholder  may pursue a remedy
with respect to this Indenture or the Securities only if:

          (a) the  Securityholder  gives to the Trustee  notice of a  continuing
     Event of Default;

          (b) the  Securityholders  of at least 25% in  principal  amount of the
     then-outstanding  Securities  make a request  to the  Trustee to pursue the
     remedy;

          (c)  such  Securityholder  or  Securityholders  offer  to the  Trustee
     indemnity  satisfactory  to the  Trustee  against  any loss,  liability  or
     expense;

          (d) the Trustee does not comply with the request  within 60 days after
     receipt of the request and the offer of indemnity; and

          (e) during such 60-day  period the Holders of a majority in  principal
     amount  of the  then-outstanding  Securities  do not  give  the  Trustee  a
     direction inconsistent with the request.

     A  Securityholder  may not use this  Indenture to  prejudice  the rights of
another  Securityholder  or to obtain a  preference  or  priority  over  another
Securityholder.

     SECTION 8.07. Rights of Securityholders to Receive Payment. Notwithstanding
any other provision of this Indenture,  the right of any Holder of a Security to
receive  payment  of  principal  and  interest  and  Liquidated  Damages on such
Security, on or after the respective due dates expressed in such Security, or to
bring suit for the  enforcement of any such payment on or after such  respective
dates, shall not be impaired or affected without the consent of such Holder.

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     SECTION 8.08.  Collection Suit by Trustee. If an Event of Default specified
in Section  8.01(a) or (b) occurs and is  continuing,  the  Trustee  may recover
judgment in its own name and as trustee of an express  trust against the Company
for the whole amount of principal and interest and Liquidated  Damages remaining
unpaid on the  Securities  and  interest on overdue  principal  and interest and
Liquidated  Damages and such further  amount as shall be sufficient to cover the
costs  and,  to  the  extent  lawful,  expenses  of  collection,  including  the
reasonable  compensation,  expenses,  disbursements and advances of the Trustee,
its agents and counsel, and any other amounts payable under Section 9.07 hereof.

     SECTION 8.09.  Trustee May File Proofs of Claim.  The Trustee may file such
proofs of claim and other  papers or  documents as may be necessary or advisable
in order to have the claims of the  Trustee and the  Securityholders  allowed in
any judicial proceedings relative to the Company, its creditors or its property.
Nothing  contained  herein shall be deemed to authorize the Trustee to authorize
or  consent  to or accept or adopt on behalf of any  Securityholder  any plan of
reorganization,  arrangement, adjustment or composition affecting the Securities
or the rights of any Securityholder thereof, or to authorize the Trustee to vote
in respect of the claim of any Securityholder in any such proceeding.

     SECTION 8.10.  Priorities.  If the Trustee  collects any money  pursuant to
this Article, it shall pay out the money in the following order:

          First: to the Trustee for amounts due under Section 9.07 hereof;

          Second:  to the  holders  of Senior  Debt to the  extent  required  by
     Article VI;

          Third:  to the  Securityholders,  for  amounts  due and  unpaid on the
     Securities  for principal  and interest and  Liquidated  Damages,  ratably,
     according to the amounts due and payable on the  Securities  for  principal
     and interest and Liquidated Damages, respectively; and

          Fourth: to the Company.

     Except as otherwise  provided in Section 2.12 hereof, the Trustee may fix a
record date and payment date for any payment to Securityholders made pursuant to
this Section.

     SECTION 8.11. Undertaking for Costs. In any suit for the enforcement of any
right or remedy under this  Indenture or in any suit against the Trustee for any
action  taken or  omitted  by it as a  Trustee,  a court in its  discretion  may
require the filing by any party  litigant in the suit of an  undertaking  to pay
the costs of the suit,  and the court in its  discretion  may assess  reasonable
costs,  including reasonable  attorneys' fees, against any party litigant in the
suit,  having due regard to the merits and good faith of the claims or  defenses
made by the  party  litigant.  This  Section  does  not  apply  to a suit by the
Trustee,  a suit by a holder  pursuant  to  Section  8.07  hereof,  or a suit by
Holders of more than 10% in principal amount of the then-outstanding Securities.

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                                   ARTICLE IX
                                     Trustee
 
     SECTION  9.01.  Duties of Trustee.  (a) If an Event of Default has occurred
and is  continuing,  the Trustee  shall  exercise  such of the rights and powers
vested  in it by this  Indenture,  and use the same  degree of care and skill in
their exercise,  as a prudent man would exercise or use under the  circumstances
in the conduct of his own affairs.

     (b) Except during the  continuance of an Event of Default:  (i) the Trustee
need perform only those duties that are specifically set forth in this Indenture
and no others and (ii) in the absence of bad faith on its part,  the Trustee may
conclusively  rely, as to the truth of the statements and the correctness of the
opinions  expressed  therein,  upon  certificates  or opinions  furnished to the
Trustee and, if required by the terms hereof,  conforming to the requirements of
this Indenture. However, the Trustee shall examine the certificates and opinions
to determine whether or not they conform to the requirements of this Indenture.

     (c) The Trustee may not be relieved  from  liability  for its own negligent
action, its own negligent failure to act, or its own willful misconduct,  except
that:  (i) this  paragraph  does not limit the effect of  paragraph  (b) of this
Section  9.01;  (ii) the  Trustee  shall not be liable for any error of judgment
made in good faith by a Trust Officer,  unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts and (iii) the Trustee shall not be
liable  with  respect  to any  action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to Section 8.05 hereof.

     (d)  Every  provision  of this  Indenture  that in any way  relates  to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section 9.01.

     (e) The Trustee  may refuse to perform  any duty or  exercise  any right or
power  unless  it  receives  indemnity  satisfactory  to it  against  any  loss,
liability or expense.

     (f) The Trustee  shall not be liable for interest on any money  received by
it except as the Trustee may agree in writing  with the  Company.  Money held in
trust by the  Trustee  need not be  segregated  from other  funds  except to the
extent required by law.

     SECTION 9.02.  Rights of Trustee.  (a) The Trustee may rely on any document
believed by it to be genuine and to have been signed or  presented by the proper
person.  The  Trustee  need not  investigate  any fact or  matter  stated in the
document.

     (b) Before the Trustee  acts or  refrains  from  acting,  it may require an
Officers'  Certificate or an Opinion of Counsel,  or both. The Trustee shall not
be liable for any action it takes or omits to take in good faith in  reliance on
such Officers' Certificate or Opinion of Counsel.

     (c) The Trustee may act through agents and shall not be responsible for the
misconduct or negligence of any agent appointed with due care.

     (d) The  Trustee  shall not be liable  for any  action it takes or omits to
take in good faith which it believes  to be  authorized  or within its rights or
powers.

     (e) The Trustee shall not be charged with knowledge of any Event of Default
under Section 8.01 (other than an Event of Default under  Section 8.01(a) or (b)
if the Trustee is also a Paying  Agent with  respect to the  Securities)  unless
either (1) a Trust Officer assigned to its Corporate Trust Department shall have


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actual knowledge thereof,  or (2) the Trustee shall have received notice thereof
in accordance with Section 12.02 hereof from the Company or any Holder.

     SECTION 9.03.  Individual Rights of Trustee.  The Trustee in its individual
or any other  capacity  may become the owner or  pledgee of  Securities  and may
otherwise  deal with the Company or an  Affiliate  with the same rights it would
have if it were not  Trustee.  Any  Agent  may do the  same  with  like  rights.
However, the Trustee is subject to Sections 9.10 and 9.11 hereof.

     SECTION 9.04. Trustee's Disclaimer.  The Trustee makes no representation as
to the validity or adequacy of this Indenture or the Securities, it shall not be
accountable  for the Company's use of the proceeds from the  Securities,  and it
shall not be  responsible  for any  statement of the Company in the Indenture or
any  statement  in  the  Securities  (other  than  its  authentication)  or  for
compliance by the Company with the Registration Rights Agreement.

     SECTION 9.05.  Notice of Defaults.  If a Default or Event of Default occurs
and is continuing  and if it is known to the Trustee,  the Trustee shall mail to
Securityholders a notice of the Default or Event of Default within 90 days after
it occurs. Except in the case of a Default or Event of Default in payment on any
Security,  the Trustee may  withhold the notice if and so long as a committee of
its Trust Officers in good faith  determines  that  withholding the notice is in
the interests of Securityholders.

     SECTION 9.06. Reports by Trustee to  Securityholders.  Within 60 days after
the  reporting  date  stated  in  Section  12.10,  the  Trustee  shall  mail  to
Securityholders  a brief report dated as of such  reporting  date that  complies
with TIA S-313(a) if and to the extent  required by such  S-313(a).  The Trustee
also shall comply with TIA S-313(b)(2).  The Trustee shall also transmit by mail
all reports as required by TIA S-313(c).

     A copy of each report at the time of its mailing to  Securityholders  shall
be filed  with the SEC and each  stock  exchange  on which  the  Securities  are
listed.  The Company shall notify the Trustee when the  Securities are listed on
any stock exchange.

     SECTION  9.07.  Compensation  and  Indemnity.  The Company shall pay to the
Trustee from time to time reasonable  compensation  for its services  hereunder.
The Trustee's  compensation shall not be limited by any law on compensation of a
trustee of an express  trust.  The Company  shall  reimburse  the  Trustee  upon
request for all reasonable disbursements, expenses and advances incurred or made
by it. Such disbursements and expenses may include the reasonable disbursements,
compensation and expenses of the Trustee's agents and counsel.

     The  Company  shall  indemnify  the Trustee  against any loss or  liability
incurred  by it except as set forth in the next  paragraph.  The  Trustee  shall
notify the Company  promptly of any claim for which it may seek  indemnity.  The
Company shall defend the claim and the Trustee  shall  cooperate in the defense.
The Company will not,  without the prior written consent of the Trustee,  settle
or  compromise  or consent to the entry of any judgment with respect to any such
claim unless such  settlement,  compromise or consent  includes an unconditional
release of the Trustee  from all  liabilities  arising  out of such  claim.  The
Trustee may have separate counsel and the Company shall pay the reasonable fees,
disbursements  and expenses of one such separate  counsel.  The Company need not


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pay for any  settlement  made without its consent,  which  consent  shall not be
unreasonably withheld.

     The Company need not reimburse any expense or indemnify against any loss or
liability incurred by the Trustee through negligence or bad faith.

     To secure the Company's  payment  obligations in this Section,  the Trustee
shall  have a lien  prior to the  Securities  on all money or  property  held or
collected  by the  Trustee,  except  money  or  property  held in  trust  to pay
principal and interest and Liquidated Damages on particular Securities.

     When the  Trustee  incurs  expenses or renders  services  after an Event of
Default  specified  in  Section  8.01(g) or (h)  occurs,  the  expenses  and the
compensation   for  the  services  are  intended  to   constitute   expenses  of
administration under any Bankruptcy Law.

     The  provisions of this  Section 9.07  shall survive the  appointment  of a
successor  trustee,  the  termination of this  Indenture and the  resignation or
removal of the Trustee.

     SECTION  9.08.  Replacement  of Trustee.  A  resignation  or removal of the
Trustee and appointment of a successor  Trustee shall become effective only upon
the successor Trustee's acceptance of appointment as provided in this Section.

     The Trustee may resign by so notifying the Company.  The Securityholders of
a majority in principal amount of the then-outstanding Securities may remove the
Trustee by so notifying the Trustee and the Company.  The Company may remove the
Trustee if:

          (a) the Trustee  fails to comply with Section 9.10 hereof,  unless the
     Trustee's duty to resign is stayed as provided in TIA S-310(b);

          (b) the Trustee is adjudged a bankrupt or an insolvent or an order for
     relief is entered with respect to the Trustee under any Bankruptcy Law;

          (c) a Custodian or public  officer  takes charge of the Trustee or its
     property; or

          (d) the Trustee becomes incapable of acting.

     If the Trustee  resigns or is removed or if a vacancy  exists in the office
of Trustee  for any  reason,  the  Company  shall  promptly  appoint a successor
Trustee.  Within  one  year  after  the  successor  Trustee  takes  office,  the
Securityholders  of a  majority  in  principal  amount  of the  then-outstanding
Securities  may appoint a successor  Trustee to replace  the  successor  Trustee
appointed by the Company.

     If a  successor  Trustee  does not take  office  within  60 days  after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in principal amount of the  then-outstanding  Securities
may  petition  any court of  competent  jurisdiction  for the  appointment  of a
successor Trustee.

     If the  Trustee  fails to comply  with  Section  9.10  hereof,  unless  the
Trustee's  duty  to  resign  is  stayed  as  provided  in  TIA  S-310(b),   any
Securityholder  who has been a bona fide  holder of a Security  for at least six
months may petition any court of competent  jurisdiction  for the removal of the
Trustee and the appointment of a successor Trustee.

     A successor  Trustee shall deliver a written  acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon the resignation or removal
of the retiring Trustee shall become effective,  and the successor Trustee shall
have all the rights, powers and duties of the Trustee under this Indenture.  The
successor Trustee shall mail a notice of its succession to Securityholders.  The
retiring  Trustee shall promptly  transfer all property held by it as Trustee to
the successor Trustee,  subject to the lien provided for in Section 9.07 hereof.
Notwithstanding the resignation

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or  replacement  of the Trustee  pursuant to this Section  9.08,  the  Company's
obligations  under  Section  9.07 hereof  shall  continue for the benefit of the
retiring  trustee with respect to expenses and liabilities  incurred by it prior
to such resignation or replacement.

     SECTION   9.09.   Successor   Trustee  by  Merger,   Etc.  If  the  Trustee
consolidates,  merges or converts into, or transfers all or substantially all of
its corporate trust business to, another corporation,  the successor corporation
without any further act shall be the successor Trustee.

     SECTION 9.10.  Eligibility;  Disqualification.  This Indenture shall always
have a Trustee who  satisfies the  requirements  of TIA S-310(a)(1) and (5). The
Trustee  shall  always have a combined  capital and surplus as stated in Section
12.10 hereof. The Trustee is subject to TIA S-310(b).

     SECTION  9.11.  Preferential  Collection  of Claims  Against  Company.  The
Trustee is subject to TIA S-311(a),  excluding any creditor  relationship listed
in TIA S-311(b).  A Trustee who has resigned or been removed shall be subject to
TIA S-311(a) to the extent indicated therein.

                                    ARTICLE X
                            Discharge of Indenture

     SECTION 10.01.  Termination of Company's Obligations.  This Indenture shall
cease to be of further  effect  (except  that the  Company's  obligations  under
Sections 9.07 and 10.02 hereof shall  survive) when all  outstanding  Securities
theretofore  authenticated  and issued  have been  delivered  to the Trustee for
cancellation and the Company has paid all sums payable hereunder. Thereupon, the
Trustee upon request of the Company,  shall acknowledge in writing the discharge
of the Company's  obligations  under this Indenture,  except for those surviving
obligations specified above.

     SECTION  10.02.  Repayment  to Company.  The Trustee and the Paying  Agents
shall  promptly pay to the Company  upon request any excess money or  securities
held by them at any time.

     The Trustee and the Paying Agents shall pay to the Company upon request any
money held by them for the  payment  of  principal  or  interest  or  Liquidated
Damages  that  remains  unclaimed  for two years  after the date upon which such
payment shall have become due;  provided,  however,  that the Company shall have
first  caused  notice  of such  payment  to the  Company  to be  mailed  to each
Securityholder  entitled  thereto  no less than 30 days  prior to such  payment.
After  payment to the Company,  the Trustee and the Paying  Agents shall have no
further  liability with respect to such money, and  Securityholders  entitled to
the money must look to the Company for payment as general  creditors  unless any
applicable abandoned property law designates another person.

                                   ARTICLE XI
                       Amendments, Supplements and Waivers

     SECTION  11.01.  Without  Consent of  Securityholders.  The Company and the
Trustee may amend or supplement  this  Indenture or the  Securities  without the
consent of any Securityholder:

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                                                                 Execution Copy


          (a) to cure any ambiguity, defect or inconsistency;

          (b) to comply with Sections 5.13 and 7.01 hereof;

          (c)  to  provide  for   uncertificated   Securities   in  addition  to
     certificated Securities;

          (d) to make any change that does not adversely affect the legal rights
     hereunder of any Securityholder;

          (e) to  qualify  this  Indenture  under the TIA or to comply  with the
     requirements  of the SEC in  order to  maintain  the  qualification  of the
     Indenture under the TIA; or

          (f) to make any change that provides any additional rights or benefits
     to the holders of Securities.

     An  amendment  under this  Section may not make any change  that  adversely
affects  the  rights  under  Article  VI of  any  holder  of  Senior  Debt  then
outstanding   unless  the   holders  of  such  Senior  Debt  (or  any  group  or
representative thereof authorized to give a consent) consent to such change.

     SECTION  11.02.  With Consent of  Securityholders.  Subject to Section 8.07
hereof,  the Company and the Trustee may amend or supplement  this  Indenture or
the  Securities  with  the  written  consent  (including  consents  obtained  in
connection   with  any  tender  or  exchange   offer  for   Securities)  of  the
Securityholders   of  at  least  a   majority   in   principal   amount  of  the
then-outstanding  Securities.  Subject to  Sections  8.04 and 8.07  hereof,  the
Holders of a majority in principal amount of the Securities then outstanding may
also by their written consent  (including  consents  obtained in connection with
any tender offer or exchange offer for Securities) waive any existing Default as
provided in Section 8.04 or waive  compliance  in a  particular  instance by the
Company with any provision of this Indenture or the Securities. However, without
the consent of each Securityholder affected, an amendment,  supplement or waiver
under  this  Section  may  not  (with  respect  to  any  Securities  held  by  a
nonconsenting Securityholder):

          (a) reduce the amount of  Securities  whose Holders must consent to an
     amendment, supplement or waiver;

          (b) reduce the rate of or change the time for  payment of  interest on
     any Security;

          (c)  reduce  the  principal  of or change  the fixed  maturity  of any
     Security or alter the redemption provisions with respect thereto;

          (d) make any  Security  payable in money other than that stated in the
     Security;

          (e) make any  change  in  Section  8.04,  8.07 or 11.02  hereof  (this
     sentence);

          (f) waive a default in the payment of the Designated  Event Payment or
     principal  of, or interest or  Liquidated  Damages on, any Security  (other
     than as provided in Section 8.04);

          (g) waive a redemption payment payable on any Security; or

          (h)  make  any   change   that   adversely   affects   the   right  of
     Securityholders to convert Securities into Common Stock of the Company.

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     To secure a consent of the  Securityholders  under this Section  11.02,  it
shall not be necessary for the Securityholders to approve the particular form of
any proposed amendment, supplement or waiver, but it shall be sufficient if such
consent approves the substance thereof.

     After an  amendment,  supplement  or  waiver  under  this  Section  becomes
effective, the Company shall mail to Securityholders a notice briefly describing
the amendment or waiver.

     SECTION 11.03. Compliance with Trust Indenture Act. Every amendment to this
Indenture or the Securities shall be set forth in a supplemental  indenture that
complies with the TIA as then in effect.

     SECTION  11.04.  Revocation  and Effect of  Consents.  Until an  amendment,
supplement or waiver becomes effective, a consent to it by a Securityholder of a
Security is a  continuing  consent by the  Securityholder  and every  subsequent
Securityholder  of a Security or portion of a Security  that  evidences the same
debt  as the  consenting  Securityholder's  Security,  even if  notation  of the
consent  is not  made on any  Security.  However,  any  such  Securityholder  or
subsequent Securityholder may revoke the consent as to such Holder's Security or
portion of a Security if the Trustee  receives the notice of  revocation  before
the date on which the Trustee receives an Officers' Certificate  certifying that
the  Securityholders  of the  requisite  principal  amount  of  Securities  have
consented to the amendment, supplement or waiver.

     The Company may,  but shall not be obligated  to, fix a record date for the
purpose of determining the Securityholders entitled to consent to any amendment,
supplement  or  waiver.  If a record  date is fixed,  then  notwithstanding  the
provisions  of the  immediately  preceding  paragraph,  those  persons  who were
Securityholders at such record date (or their duly designated proxies), and only
those  persons,  shall be entitled to consent to such  amendment,  supplement or
waiver or to revoke any consent  previously  given,  whether or not such persons
continue to be Securityholders after such record date. No consent shall be valid
or effective  for more than 90 days after such record date unless  consents from
Securityholders  of the principal  amount of Securities  required  hereunder for
such  amendment  or waiver to be  effective  shall  have also been given and not
revoked within such 90-day period.

     After an amendment,  supplement or waiver  becomes  effective it shall bind
every  Securityholder,  unless it is of the type described in any of clauses (a)
through (h) of Section 11.02 hereof. In such case, the amendment or waiver shall
bind  each   Securityholder  who  has  consented  to  it  and  every  subsequent
Securityholder  that evidences the same debt as the consenting  Securityholder's
Security.

     SECTION 11.05. Notation on or Exchange of Securities. The Trustee may place
an appropriate  notation about an amendment or waiver on any Security thereafter
authenticated.  The Company in  exchange  for all  Securities  may issue and the
Trustee shall authenticate new Securities that reflect the amendment or waiver.

     SECTION 11.06.  Trustee Protected.  The Trustee shall sign all supplemental
indentures,  except that the Trustee  may, but need not,  sign any  supplemental
indenture that adversely affects its rights or duties hereunder.  As a condition
to executing,  or accepting the additional  trusts created by, any  supplemental
indenture  permitted by this Article or the  modifications  thereby of the trust
created by this Indenture, the Trustee shall be entitled to receive (in addition


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to those documents  required by Section  12.04),  and (subject to Section 315 of
the TIA) shall be fully protected in relying upon, an Opinion of Counsel stating
that the execution of such supplemental  indenture is authorized or permitted by
this Indenture.

                                   ARTICLE XII
                                  Miscellaneous

     SECTION  12.01.  Trust  Indenture  Act  Controls.  If any provision of this
Indenture  limits,  qualifies,  or  conflicts  with another  provision  which is
automatically  deemed  to be  incorporated  in this  Indenture  by the TIA,  the
incorporated provision shall control.

     SECTION 12.02.  Notices.  Any notice or communication by the Company or the
Trustee  to the other is duly  given if in writing  and  delivered  in person or
mailed by  first-class  mail to the  other's  address  stated in  Section  12.10
hereof.  The  Company  or the  Trustee  by notice  to the  other  may  designate
additional or different addresses for subsequent notices or communications.

     Any  notice or  communication  to a  Securityholder  shall be (i) mailed by
first-class mail to his address shown on the register kept by the Registrar, not
later than the latest date (if any),  and not earlier than the earliest date (if
any),  prescribed for the giving of such notice, and (ii) published in a leading
newspaper  of general  circulation  in  Luxembourg,  which is expected to be the
Luxemburger  Wort so long as the Securities  are listed on the Luxembourg  Stock
Exchange and the rules of the Luxembourg  Stock Exchange so require,  or if such
newspaper  shall cease to be published or timely  publication in it shall not be
practicable, in such other newspaper as the Trustee shall deem necessary to give
fair and reasonable notice to the  Securityholders.  Failure to mail a notice or
communication  to a  Securityholder  or any  defect in it shall not  affect  its
sufficiency with respect to other Securityholders.

     Any notice given by publication  shall be deemed to have been validly given
on the date of such  publication or, if published more than once, on the date of
the first  publication.  If a notice or  communication  is mailed in the  manner
provided above within the time prescribed,  it is duly given, whether or not the
addressee receives it.

     If the Company mails a notice or communication to Securityholders, it shall
mail a copy to the Trustee and each Agent at the same time.

     All other notices or communications shall be in writing.

     In case by reason of the  suspension of regular mail service,  or by reason
of any other cause, it shall be impossible to mail any notice as required by the
Indenture,  then such method of  notification as shall be made with the approval
of the Trustee shall constitute a sufficient mailing of such notice.

     SECTION 12.03. Communication by Securityholders with Other Securityholders.
Securityholders   may   communicate   pursuant   to  TIA  S-312(b)  with  other
Securityholders  with  respect  to their  rights  under  this  Indenture  or the
Securities.  The Company,  the Trustee, the Registrar and anyone else shall have
the protection of TIA S-312(c).

     SECTION 12.04. Certificate and Opinion as to Conditions Precedent. Upon any
request or  application  by the Company to the Trustee to take any action  under
this Indenture, the Company shall furnish to the Trustee:


                                       51





          (a) an  Officers'  Certificate  stating  that,  in the  opinion of the
     signers, all conditions  precedent,  if any, provided for in this Indenture
     relating to the proposed action have been complied with; and

          (b) an  Opinion  of  Counsel  stating  that,  in the  opinion  of such
     counsel, all such conditions precedent have been complied with.

     SECTION  12.05.   Statements  Required  in  Certificate  or  Opinion.  Each
certificate  or opinion with respect to compliance  with a condition or covenant
provided  for in this  Indenture  (other than  pursuant  to Section  4.03) shall
include:

          (a) a statement that the person signing such  certificate or rendering
     such opinion has read such covenant or condition;

          (b) a brief statement as to the nature and scope of the examination or
     investigation  upon which the  statements  or  opinions  contained  in such
     certificate or opinion are based;

          (c) a statement  that, in the opinion of such person,  such person has
     made such  examination  or  investigation  as is  necessary  to enable such
     person to express an informed opinion as to whether or not such covenant or
     condition has been complied with; and

          (d) a statement  as to whether or not, in the opinion of such  person,
     such condition or covenant has been complied with.

     SECTION 12.06. Rules by Trustee and Agents. The Trustee may make reasonable
rules for action by, or a meeting of, Securityholders.  The Registrar,  Transfer
Agent, Paying Agents or Conversion Agents may each make reasonable rules and set
reasonable requirements for its functions.

     SECTION 12.07. Legal Holidays. A "Legal Holiday" is a Saturday, a Sunday or
a day on which banking  institutions in the State of New York and Luxembourg are
not  required  to be open.  If a payment  date is a Legal  Holiday at a place of
payment,  payment may be made at that place on the next  succeeding  day that is
not a Legal  Holiday,  and no interest or  Liquidated  Damages shall accrue with
respect to such payment for the intervening  period. If any other operative date
for  purposes  of this  Indenture  shall occur on a Legal  Holiday  then for all
purposes  the  next  succeeding  day that is not a Legal  Holiday  shall be such
operative date.

     SECTION 12.08. No Recourse Against Others. A director, Officer, employee or
stockholder,  as such,  of the  Company  shall  not have any  liability  for any
obligations  of the Company  under the  Securities  or the  Indenture or for any
claim  based  on,  in  respect  of or by  reason  of such  obligations  or their
creation.  Each  Securityholder  by accepting a Security waives and releases all
such  liability.  The waiver and release are part of the  consideration  for the
issue of the Securities.

     SECTION 12.09.  Counterparts.  This Indenture may be executed in any number
of  counterparts  and by the parties  hereto in separate  counterparts,  each of
which when so executed  shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

                                       52








                                                                 Execution Copy




     SECTION 12.10.  Variable  Provisions.  "Officer"  means the Chairman of the
Board,  the President,  any  Vice-President,  the Chief Financial  Officer,  the
Treasurer,  the Secretary, any Assistant Treasurer or any Assistant Secretary of
the Company.

     The Company initially  appoints the Trustee as Paying Agent,  Registrar and
Conversion  Agent in the  Borough of  Manhattan,  The City of New York,  and the
Trustee hereby accepts such appointments.

     The  Company  initially  appoints  Kredietbank  S.A.,  Luxembourgeoise,  43
Boulevard Royal, L - 2955  ("Kredietbank"),  as its Paying Agent, Transfer Agent
and Conversion Agent in Luxembourg, and Kredietbank accepts such appointments.

     The first  certificate  pursuant to Section  4.03  hereof  shall be for the
fiscal year ending on December 31, 1997.

     The  reporting  date for Section  9.06  hereof is May 15 of each year.  The
first reporting date is May 15, 1998.

     The Trustee  shall  always have a combined  capital and surplus of at least
U.S.$50,000,000  as set  forth in its most  recent  published  annual  report of
condition.

     The Company's address for purposes of the Indenture is:

                                   AMNEX, Inc.

     6 Nevada Drive
     Lake Success, New York 11042
     The Trustee's address is:

                               Marine Midland Bank

     Attn: Corporate Trust Department
     140 Broadway
     New York, New York  10005
     The Company or the  Trustee  may change its  address  for  purposes of this
Indenture by written notice to the other.

     SECTION  12.11.  Governing  Law. THE INTERNAL LAWS OF THE STATE OF NEW YORK
SHALL GOVERN THIS INDENTURE AND THE  SECURITIES,  WITHOUT REGARD TO THE CONFLICT
OF LAWS PROVISIONS THEREOF.

     SECTION  12.12.  No  Adverse  Interpretation  of  Other  Agreements.   This
Indenture may not be used to interpret another indenture, loan or debt agreement
of the Company or an Affiliate.  Any such indenture,  loan or debt agreement may
not be used to interpret this Indenture.

     SECTION 12.13. Successors.  All agreements of the Company in this Indenture
and the Securities  shall bind its  successor.  All agreements of the Trustee in
this Indenture shall bind its successor.


                                       53





     SECTION 12.14. Severability.  In case any provision in this Indenture or in
the  Securities  shall be  invalid,  illegal  or  unenforceable,  the  validity,
legality and enforceability of the remaining  provisions shall not in any way be
affected or impaired thereby.

     SECTION 12.15. Table of Contents,  Headings, Etc. The Table of Contents and
headings of the Articles and Sections of this  Indenture  have been inserted for
convenience of reference only, are not to be considered a part hereof, and shall
in no way modify or restrict any of the terms or provisions hereof.




                                       54








                                                                 Execution Copy



     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Indenture to be
duly  executed,  all as of the date first  written  above. 

                                               AMNEX, Inc., as the Company,

                                               by_________________________

                                               Name:

                                               Title:

                                               Marine Midland Bank, as Trustee,

                                               by_________________________

                                               Name:

                                               Title:



                                       55





STATE OF NEW YORK        )
                         )  ss.:
COUNTY OF NEW YORK       )


     Personally  appeared  before me, the  undersigned  authority in and for the
said  county  and  state,  on  this  29th  day of  September,  1997,  within  my
jurisdiction, the within named ____________________, who acknowledged that he is
a __________________ of AMNEX, Inc., a New York corporation, and that for and on
behalf of the said  corporation,  and as its act and deed he executed  the above
and  foregoing  instrument,  after  first  having been duly  authorized  by said
corporation so to do.

                                                      __________________ ______
                                                      NOTARY PUBLIC

                  [Notarial Seal]



                                       56








                                                                 Execution Copy



STATE OF NEW YORK        )
                         )  ss.:
COUNTY OF NEW YORK       )






     Personally  appeared  before me, the  undersigned  authority in and for the
said  county  and  state,  on  this  29th  day of  September,  1997,  within  my
jurisdiction, the within named ____________________, who acknowledged that he is
a  __________________  of Marine Midland Bank, and that for and on behalf of the
said  corporation,  and as its act and deed he executed the above and  foregoing
instrument,  after first having been duly  authorized by said  corporation so to
do.

                                                        ______________________
                                                        NOTARY PUBLIC


[Notarial Seal]


                                       57




                                                                  Execution Copy



EXHIBIT A

                      FORM OF CONVERTIBLE SUBORDINATED NOTE

                             [FORM OF FACE OF NOTE]

                           [Global Securities Legend]

     UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW YORK, TO
THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,  EXCHANGE OR PAYMENT, AND
ANY  CERTIFICATE  ISSUED IS  REGISTERED  IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED  REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO., OR TO SUCH OTHER  ENTITY AS IS  REQUESTED  BY AN  AUTHORIZED
REPRESENTATIVE  OF DTC) ANY  TRANSFER,  PLEDGE OR OTHER USE  HEREOF FOR VALUE OR
OTHERWISE  BY OR TO ANY PERSON IS  WRONGFUL  INASMUCH  AS THE  REGISTERED  OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

     TRANSFERS OF THIS GLOBAL  SECURITY  SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT  NOT IN  PART,  TO  NOMINEES  OF  DTC  OR TO A  SUCCESSOR  THEREOF  OR  SUCH
SUCCESSOR'S  NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL  SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE  RESTRICTIONS  SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.

                         [Restricted Securities Legend]

     THIS SECURITY HAS NOT BEEN REGISTERED  UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES  ACT"). THE HOLDER HEREOF, BY PURCHASING THIS SECURITY,
AGREES FOR THE  BENEFIT OF THE  COMPANY  THAT THIS  SECURITY  MAY NOT BE RESOLD,
PLEDGED OR  OTHERWISE  TRANSFERRED  (X) PRIOR TO THE SECOND  ANNIVERSARY  OF THE
ISSUANCE HEREOF (OR ANY PREDECESSOR  SECURITY  HERETO) OR (Y) BY ANY HOLDER THAT
WAS AN AFFILIATE  OF THE COMPANY AT ANY TIME DURING THE THREE  MONTHS  PRECEDING
THE DATE OF SUCH TRANSFER, IN EITHER CASE, OTHER THAN (1) TO THE COMPANY, (2) SO
LONG AS THIS  SECURITY  IS ELIGIBLE  FOR RESALE  PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A") TO A PERSON WHOM THE SELLER REASONABLY  BELIEVES IS
A QUALIFIED  INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A, PURCHASING FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL




     BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE,  PLEDGE OR OTHER TRANSFER IS
BEING MADE IN  RELIANCE  ON RULE 144A (AS  INDICATED  BY THE BOX  CHECKED BY THE
TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY),  (3)
IN AN OFFSHORE  TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES
ACT (AS  INDICATED BY THE BOX CHECKED BY THE  TRANSFEROR ON THE  CERTIFICATE  OF
TRANSFER  ON THE REVERSE OF THIS  SECURITY),  (4) TO AN  INSTITUTION  THAT IS AN
"ACCREDITED  INVESTOR" AS DEFINED IN RULE  501(a)(1),  (2), (3) OR (7) UNDER THE
SECURITIES  ACT  (AS  INDICATED  BY THE BOX  CHECKED  BY THE  TRANSFEROR  ON THE
CERTIFICATE  OF TRANSFER ON THE REVERSE OF THIS SECURITY) THAT IS ACQUIRING THIS
SECURITY FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION,  AND A CERTIFICATE IN
THE FORM ATTACHED TO THIS SECURITY IS DELIVERED BY THE TRANSFEREE TO THE COMPANY
AND THE  TRUSTEE,  (5)  PURSUANT TO AN  EXEMPTION  FROM  REGISTRATION  UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 (IF APPLICABLE) UNDER THE SECURITIES ACT, OR
(6) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN
EACH CASE IN ACCORDANCE WITH ANY APPLICABLE  SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES. AN INSTITUTIONAL ACCREDITED INVESTOR HOLDING THIS SECURITY AGREES
THAT IT WILL FURNISH TO THE COMPANY AND THE TRUSTEE SUCH  CERTIFICATES AND OTHER
INFORMATION AS THEY MAY REASONABLY REQUIRE TO CONFIRM THAT ANY TRANSFER BY IT OF
THIS SECURITY  COMPLIES WITH THE FOREGOING  RESTRICTIONS.  THE HOLDER HEREOF, BY
PURCHASING  THIS SECURITY,  REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY
THAT IT IS (1) A QUALIFIED  INSTITUTIONAL  BUYER WITHIN THE MEANING OF RULE 144A
OR (2) AN  INSTITUTION  THAT IS AN  "ACCREDITED  INVESTOR"  AS  DEFINED  IN RULE
501(a)(1),  (2), (3) OR (7) UNDER THE SECURITIES ACT AND THAT IT IS HOLDING THIS
SECURITY  FOR  INVESTMENT  PURPOSES AND NOT FOR  DISTRIBUTION  OR (3) A NON-U.S.
PERSON OUTSIDE THE UNITED STATES WITHIN THE MEANING OF (OR AN ACCOUNT SATISFYING
THE REQUIREMENTS OF PARAGRAPH  (o)(2) OF RULE 902 UNDER)  REGULATION S UNDER THE
SECURITIES ACT.






                                        2








                                                                Execution Copy



                                  No. _________
                           [CUSIP No. ______________]

                           [CINS No. _______________]
                           [ISIN No. ________________]

                                   AMNEX, INC.

                        8-1/2% CONVERTIBLE SUBORDINATED NOTE
                                    DUE 2002

     AMNEX,  Inc., a New York  corporation  (the  "Company")  promises to pay to
_________________________________________________________________  or registered
assigns,  the  principal  sum  [indicated  on Schedule A hereof]* [of  _________
Dollars]** on September 25, 2002.

                             Interest Payment Dates:

                                  Record Dates:

     Reference  is hereby made to the  further  provisions  of this  Convertible
Subordinated Note set forth on the reverse hereof which further provisions shall
for all purposes have the same effect as if set forth at this place.


--------
*    Applicable to Global Securities only.


**Applicable to Certificated Securities only.







     IN WITNESS  WHEREOF,  AMNEX,  INC. has caused this  Convertible  Note to be
signed manually or by facsimile by its duly authorized  Officers and a facsimile
of  its   corporate   seal  to  be   affixed   hereto   or   imprinted   hereon.

Dated:__________________                          AMNEX, INC.

                                                  by

                                                  Name:
                                                  Title:

                                                  by

                                                  Name:
                                                  Title:
 [Seal]



                            TRUSTEE'S CERTIFICATE OF

                                 AUTHENTICATION
                               This is one of the

                   8-1/2 Convertible Subordinated Notes due 2002

                            described in the within-

                              mentioned Indenture.
                        Marine Midland Bank, as Trustee,

                                       by

                              Authorized Signatory






                                        4








                                                                 Execution Copy



                                   AMNEX, INC.
                   8-1/2% Convertible Subordinated Note due 2002

     1. Interest.  AMNEX,  INC., a New York corporation (the "Company"),  is the
issuer of the 8-1/2%  Convertible  Subordinated  Notes due 2002 (the Convertible
Notes"),  of which this  Convertible Note is a part. The Company promises to pay
interest  on the  Convertible  Notes in cash  semiannually  on each March 25 and
September  25,  commencing  on March  25,  1998,  to  holders  of  record on the
immediately preceding March 10 and September 10.

     Interest on the Convertible  Notes will accrue from the most recent date to
which  interest has been paid, or if no interest has been paid,  from  September
25,  1997.  Interest  will be computed on the basis of a 360-day  year of twelve
30-day months. To the extent lawful,  the Company shall pay interest  (including
post-petition  interest in any proceeding  under any Bankruptcy  Law) on overdue
installments of interest or Liquidated Damages (without regard to any applicable
grace period) at the rate borne by the Convertible Notes, compounded annually.

     All  payments  made by the  Company on the  Convertible  Notes will be made
without  withholding  or deduction  for, or on account of, any present or future
taxes, duties, assessments or governmental charges of whatever nature imposed or
levied by or on behalf of the  jurisdiction of  incorporation  of the Company or
any political  subdivision  thereof or any authority  therein or thereof  having
power  to tax  unless  the  withholding  or  deduction  of such  taxes,  duties,
assessments or governmental  charges is required by law. If any such withholding
or deduction is required,  the Company will not be obliged to pay any additional
amounts in respect of such withholding or deduction.






     2. Method of Payment.  The Company will pay interest and Liquidated Damages
on the  Convertible  Notes  (except  defaulted  interest) to the persons who are
registered  Holders of the  Convertible  Notes at the close of  business  on the
record date for the next interest payment date even though Convertible Notes are
canceled  after the record date and on or before the interest  payment date. The
Securityholder  hereof must  surrender  Convertible  Notes to a Paying  Agent to
collect  principal  payments.  The Company will pay  principal  and interest and
Liquidated  Damages in money of the United States that at the time of payment is
legal tender for payment of public and private debts.  However,  the Company may
pay principal and interest and Liquidated Damages by check payable in such money
drawn on a bank in The City of New  York.  It may mail a check for  interest  or
Liquidated Damages to a Holders' registered address.

     3.  Paying  Agent and  Registrar.  The  Trustee  will act as Paying  Agent,
Registrar  and  Conversion  Agent in the Borough of  Manhattan,  The City of New
York. Kredietbank S.A.  Luxembourgeoise will act as Paying Agent, Transfer Agent
and  Conversion  Agent in  Luxembourg.  The Company may change any Paying Agent,
Registrar,  Transfer Agent or Conversion Agent without prior notice. The Company
or any of its Affiliates may act in any such capacity.

     4. Indenture.  The Company issued the Convertible Notes under an indenture,
dated as of September 25, 1997 (the "Indenture"), between the Company and Marine
Midland  Bank,  as Trustee.  The terms of the  Convertible  Notes  include those
stated in the  Indenture  and  those  made  part of the  Indenture  by the Trust
Indenture  Act of 1939  (15  U.S.  Code  S-77aaa-  77bbbb),  as  amended.  The
Convertible  Notes are subject to, and qualified by, all such terms,  certain of
which are summarized hereon, and  Securityholders  are referred to the Indenture
and such Act for a statement of such terms.  The  Convertible  Notes are general





                                        6








                                                                 Execution Copy



unsecured obligations of the Company limited to an aggregate principal amount of
U.S.$15,000,000  (or,  if  the  Initial  Purchaser's  over-allotment  option  is
exercised in full, U.S.$23,000,000). The Indenture does not limit the ability of
the  Company  or any of its  Subsidiaries  to  incur  indebtedness  or to  grant
security interests or liens in respect of their assets.

     5. Optional  Redemption.  The  Convertible  Notes are not redeemable at the
Company's  option prior to September 25, 2000.  On or after  September 25, 2000,
the  Convertible  Notes  will be  subject  to  redemption  at the  option of the
Company, in whole or in part (in any integral multiple of U.S.$1,000;  provided,
however,  that a Restricted  Certificated Security may be redeemed only in whole
to the extent a redemption in part would reduce the principal  amount thereof to
an amount less than  U.S.$250,000),  at a redemption  price equal to 100% of the
principal amount thereof  together with accrued interest and Liquidated  Damages
to the  redemption  date  (subject  to the  right of  holders  of  record on the
relevant  record  date to receive  interest  and  Liquidated  Damages  due on an
interest payment date). On or after the redemption date, interest and Liquidated
Damages  will cease to accrue on the  Convertible  Notes,  or  portion  thereof,
called for redemption.

     6. Notice of  Redemption.  Notice of redemption  will be mailed at least 30
days but not more than 60 days before the redemption  date to each Holder of the
Convertible Notes to be redeemed at his address of record.  Convertible Notes in
denominations  larger  than  U.S.$1,000  may be  redeemed  in part  but  only in
integral  multiples  of  U.S.$1,000;   provided,   however,  that  a  Restricted
Certificated  Security may be redeemed  only in whole to the extent a redemption
in part  would  reduce  the  principal  amount  thereof  to an amount  less than
U.S.$250,000.  In the event of a redemption of less than all of the  Convertible
Notes,  the  Convertible  Notes will be chosen for  redemption by the Trustee in
accordance with the





     Indenture.  Unless the Company defaults in making such redemption  payment,
or any Paying  Agent is  prohibited  from  making such  payment  pursuant to the
Indenture, by law or otherwise,  interest and Liquidated Damages cease to accrue
from and after the redemption date on the Convertible  Notes or portions thereof
called for redemption.

     If this  Convertible  Note is  redeemed  subsequent  to a record  date with
respect to any  interest  payment date  specified  above and on or prior to such
interest payment date, then any accrued  interest or Liquidated  Damages will be
paid to the  person in whose name this  Convertible  Note is  registered  at the
close of business on such record date.

     7. Mandatory Redemption. The Company will not be required to make mandatory
redemption  payments with respect to the Convertible Notes. There are no sinking
fund payments with respect to the Convertible Notes.

     8.  Repurchase  at Option of Holder.  If there is a Designated  Event,  the
Company shall be required to offer to purchase on the  Designated  Event Payment
Date all outstanding  Convertible Notes at a purchase price equal to 101% of the
principal  amount  thereof  on the date of  purchase,  plus  accrued  and unpaid
interest and Liquidated Damages to the Designated Event Payment Date. Holders of
Convertible  Notes  that are  subject  to an offer to  purchase  will  receive a
Designated  Event Offer from the Company prior to any related  Designated  Event
Payment Date and may elect to have such Convertible Notes or portions thereof in
authorized  denominations  purchased by completing the form entitled  "Option of
Securityholder  To Elect Purchase"  appearing  below.  Securityholders  have the
right to withdraw their election by delivering a written notice of withdrawal to
the Company or any Paying Agent in accordance with the terms of the Indenture.





                                        8








                                                                 Execution Copy



     9. Subordination.  The payment of the principal of, interest and Liquidated
Damages on or any other amounts due on the Convertible  Notes is subordinated in
right of payment to all  existing  and future  Senior  Debt of the  Company,  as
described in the  Indenture.  Each  Securityholder,  by accepting a  Convertible
Note, agrees to such subordination and authorizes and directs the Trustee on its
behalf to take such action as may be necessary or  appropriate to effectuate the
subordination so provided and appoints the Trustee as its attorney-  in-fact for
such purpose.

     10.  Conversion.  The  holder  of  any  Convertible  Note  has  the  right,
exercisable  at any time after 90 days  following the Issuance Date and prior to
the close of business (New York time) on the Business Day immediately  preceding
the date of the Convertible  Note's  maturity,  to convert the principal  amount
thereof (or any portion  thereof  that is an  integral  multiple of  U.S.$1,000;
provided,  however  that a holder  of a  Restricted  Certificated  Security  may
convert such  Security  only in whole to the extent a  conversion  in part would
reduce the principal  amount thereof to an amount less than  U.S.$250,000)  into
shares of Common Stock at the initial Conversion Price of U.S.$2.7844 per share,
subject to adjustment under certain circumstances,  except that if a Convertible
Note is called for redemption,  the conversion right will terminate at the close
of business (New York time) on the Business Day  immediately  preceding the date
fixed for redemption.

     To convert a Convertible Note, a Holder must (1) complete and sign a notice
of election to convert (a  "Conversion  Notice")  substantially  in the form set
forth  below  (copies  of  which  are  available  from the  Conversion  Agent in
Luxembourg or New York,  (2) deliver the Conversion  Notice and the  Convertible
Note to be converted  in whole or in part to a  Conversion  Agent in New York or
Luxembourg, (3) furnish appropriate endorsements or





transfer documents if required by the Registrar or such Conversion Agent and (4)
pay any transfer or similar tax, if required. Upon conversion,  no adjustment or
payment will be made for interest,  Liquidated Damages or dividends,  but if any
Securityholder  surrenders a Convertible  Note for conversion after the close of
business on the record date for the payment of an  installment  of interest  and
Liquidated  Damages and prior to the  opening of  business on the next  interest
payment date, then, notwithstanding such conversion, the interest and Liquidated
Damages  payable on such  interest  payment date will be paid to the  registered
Holder  of such  Convertible  Note on such  record  date.  In such  event,  such
Convertible  Note,  when  surrendered  for  conversion,  must be  accompanied by
payment in funds  acceptable  to the Company of an amount  equal to the interest
and Liquidated  Damages payable on such interest  payment date on the portion so
converted.  The number of shares of Common Stock  issuable upon  conversion of a
Convertible  Note  is  determined  by  dividing  the  principal  amount  of  the
Convertible  Note converted by the Conversion  Price in effect on the Conversion
Date. No fractional  shares will be issued upon conversion but a cash adjustment
will be made for any fractional interest.

     A Convertible Note in respect of which a holder has delivered an "Option of
Securityholder  to Elect Purchase" form appearing below exercising the option of
such  holder to require the Company to  purchase  such  Convertible  Note may be
converted  only if the notice of exercise is withdrawn as provided  above and in
accordance with the terms of the Indenture.  The above description of conversion
of the  Convertible  Notes is qualified  by reference  to, and is subject in its
entirety by, the more complete description thereof contained in the Indenture.

     11. Registration  Rights Agreement.  The holder of the Convertible Notes is
entitled to the benefits of the Registration  Rights Agreement,  dated September
25, 1997, among




                                       10








                                                                 Execution Copy



the Company and the Initial  Purchaser (the  "Registration  Rights  Agreement"),
which  agreement  is  attached  to the  Indenture  as an Exhibit  thereto.  Such
benefits  include the right of the holder to receive  Liquidated  Damages in the
event of a failure on the part of the Company to comply with  certain  covenants
pertaining to  registration  and  availability  of a prospectus  for resale,  as
provided in the Registration Rights Agreement.

     12.  Denominations,  Transfer,  Exchange.  The  Convertible  Notes  are  in
registered form,  without  coupons,  in denominations of U.S.$1,000 and integral
multiples of  U.S.$1,000;  provided that  Convertible  Notes offered and sold to
institutional "accredited investors" (as defined in rule 501(a)(1),  (2), (3) or
(7) of  Regulation D  under  the  Securities  Act)  which  are not QIBs  will be
issuable solely in minimum  denominations of U.S.$250,000 and integral multiples
of  U.S.$10,000  in excess  thereof.  The transfer of  Convertible  Notes may be
registered,  and  Convertible  Notes  may  be  exchanged,  as  provided  in  the
Indenture.  The Transfer Agent or Registrar may require a Securityholder,  among
other things, to furnish appropriate  endorsements and transfer documents and to
pay any  taxes and fees  required  by law or  permitted  by the  Indenture.  The
Transfer  Agent or  Registrar  need not  exchange or register  the  transfer of,
respectively, any Convertible Note or portion of a Convertible Note selected for
redemption (except the unredeemed portion of any Convertible Note being redeemed
in part).  Also,  the Transfer  Agent or Registrar need not exchange or register
the  transfer of,  respectively,  any  Convertible  Note for a period of 15 days
before a selection of Convertible Notes to be redeemed.

     13. Persons Deemed Owners.  The registered Holder of a Convertible Note may
be treated as its owner for all purposes.

     14. Unclaimed Money. If money for the payment of principal or interest and





Liquidated  Damages remains  unclaimed for two years, the Trustee and the Paying
Agents  shall pay the money back to the  Company  at its  request.  After  that,
Securityholders  of  Convertible  Notes  entitled  to the money must look to the
Company for payment, unless an abandoned property law designates another person,
and all  liability  of the Trustee and such Paying  Agents with  respect to such
money shall cease.

     15. Defaults and Remedies.  The Convertible  Notes shall have the Events of
Default  as set forth in  Section  8.01 of the  Indenture.  Subject  to  certain
limitations in the  Indenture,  if an Event of Default occurs and is continuing,
the Trustee by notice to the Company or the  Securityholders  of at least 25% in
aggregate principal amount of the  then-outstanding  Convertible Notes by notice
to the Company and the Trustee may declare all the  Convertible  Notes to be due
and payable immediately,  except that in the case of an Event of Default arising
from certain  events of  bankruptcy  or  insolvency,  all unpaid  principal  and
interest and Liquidated  Damages accrued on the  Convertible  Notes shall become
due and payable  immediately without further action or notice. Upon acceleration
as described in either of the preceding sentences,  the subordination provisions
of the Indenture preclude any payment being made to Securityholders for at least
five Business Days except as otherwise provided in the Indenture.

     The  Securityholders  of a majority in principal  amount of the Convertible
Notes  then  outstanding  by  written  notice  to the  Trustee  may  rescind  an
acceleration  and its consequences if the rescission would not conflict with any
judgment  or decree and if all  existing  Events of  Default  have been cured or
waived except nonpayment of principal or interest or Liquidated Damages that has
become due solely because of the acceleration.  Securityholders  may not enforce
the  Indenture or the  Convertible  Notes  except as provided in the  Indenture.
Subject to certain  limitations,  Securityholders  of a  majority  in  principal
amount of the then-outstanding  Convertible Notes issued under the Indenture may
direct the




                                       12








                                                                 Execution Copy



     Trustee in its  exercise of any trust or power.  The Company  must  furnish
compliance certificates to the Trustee annually. The above description of Events
of Default  and  remedies  is  qualified  by  reference  to, and  subject in its
entirety by, the more complete description thereof contained in the Indenture.

     16. Amendments, Supplements and Waivers. Subject to certain exceptions, the
Indenture  or the  Convertible  Notes may be  amended or  supplemented  with the
consent of the Securityholders of at least a majority in principal amount of the
then-outstanding  Convertible  Notes (including  consents obtained in connection
with a tender offer or exchange offer for Convertible  Notes),  and any existing
default may be waived with the consent of the  Securityholders  of a majority in
principal amount of the then-outstanding  Convertible Notes,  including consents
obtained in  connection  with a tender offer or exchange  offer for  Convertible
Notes.  Without  the  consent  of  any  Securityholder,  the  Indenture  or  the
Convertible  Notes may be amended,  among other things,  to cure any  ambiguity,
defect or inconsistency,  to provide for assumption of the Company's obligations
to Securityholders, to make any change that does not adversely affect the rights
of any Securityholder, to qualify the Indenture under the TIA, or to comply with
the  requirements  of the SEC in  order to  maintain  the  qualification  of the
Indenture under the TIA.

     17. Trustee  Dealings with the Company.  The Trustee,  in its individual or
any other capacity, may become the owner or pledgee of the Convertible Notes and
may  otherwise  deal with the  Company or an  Affiliate  with the same rights it
would have, as if it were not Trustee,  subject to certain limitations  provided
for in the Indenture and in the TIA. Any Agent may do the same with like rights.






     18.  No  Recourse  Against  others.  A  director,   Officer,   employee  or
stockholder,  as such,  of the  Company  shall  not have any  liability  for any
obligations of the Company under the  Convertible  Notes or the Indenture or for
any claim  based on, in  respect  of or by reason of such  obligations  or their
creation.  Each  Securityholder,  by accepting a  Convertible  Note,  waives and
releases  all  such   liability.   The  waiver  and  release  are  part  of  the
consideration for the issue of the Convertible Notes.

     19.  Governing Law. THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN
THE  INDENTURE  AND THE  CONVERTIBLE  NOTES  WITHOUT  REGARD TO  CONFLICT OF LAW
PROVISIONS THEREOF.

     20.  Authentication.  The  Convertible  Notes  shall  not  be  valid  until
authenticated by the manual signature of an authorized officer of the Trustee or
an authenticating agent.

     21.  Abbreviations.  Customary  abbreviations  may be used in the name of a
Securityholder or an assignee, such as: TEN COM (for tenants in common), TEN ENT
(for  tenants  by the  entireties),  JT TEN (for  joint  tenants  with  right of
survivorship and not as tenants in common),  CUST (for  Custodian),  and U/G/M/A
(for Uniform Gifts to Minors Act).

     22.  Definitions.  Capitalized  terms not defined in this  Convertible Note
have the meaning given to them in the Indenture.

     The Company will furnish to any  Securityholder  of the  Convertible  Notes
upon  written  request  and  without  charge  a copy  of the  Indenture  and the
Registration Rights Agreement. Request may be made to:





                                       14








                                                                 Execution Copy



                                  Amy S. Gross

                                   AMNEX, Inc.
                       c/o American Network Exchange, Inc.
                             100 West Lucerne Circle
                             Orlando, Florida 32801
                                 (407) 246-1234






                                 ASSIGNMENT FORM
            To assign this Convertible Note, fill in the form below:

     (I)   or   (we)   assign   and   transfer   this    Convertible   Note   to
_____________________________________________________________________________

     (Insert     assignee's     social     security    or    tax    I.D.    no.)
_____________________________________________________________________________

_____________________________________________________________________________

____________________________________________________________________________

              (Print or type assignee's name, address and zip code)

and irrevocably appoint  ____________________ agent to transfer this Convertible
Note on the books of the Company.  The agent may  substitute  another to act for
him.

Your Signature: ___________________________________________________





                                       16








                                Execution Copy



(Sign exactly as your name appears on the other side of this Convertible Note)

Date: ___________________

Signature Guarantee:*** _____________________________

     In connection with any transfer of any of the  Convertible  Notes evidenced
by this  certificate  occurring  prior to the date that is two  years  after the
later of the date of original  issuance of such  Convertible  Notes and the last
date, if any, on which such




--------
*** Signature must be guaranteed by a commercial bank, trust company or member
    firm of the New York Stock Exchange.







     Convertible  Notes  were  owned  by the  Company  or any  Affiliate  of the
Company,  the  undersigned  confirms  that  such  Convertible  Notes  are  being
transferred: CHECK ONE BOX BELOW

     (1) [ ] to the Company; or

     (2) [ ] pursuant to and in compliance  with Rule 144A under the  Securities
Act of 1933; or

     (3) [ ]  pursuant  to  and  in  compliance  with  Regulation  S  under  the
Securities Act of 1933; or

     (4) [ ] to an  institutional  "accredited  investor"  (as  defined  in Rule
501(a)(1),  (2), (3) or (7) under the Securities Act of 1933) that has furnished
to the  Trustee a signed  certificate  containing  certain  representations  and
agreements  (the form of which  certificate can be obtained from the Trustee and
is set forth in Exhibit E to the Indenture); or

     (5) [ ] pursuant to an exemption from registration under the Securities Act
of 1933 provided by Rule 144 thereunder.

     Unless one of the boxes is checked, the Trustee will refuse to register any
of the Convertible Notes evidenced by this certificate in the name of any person
other than the registered Holder thereof;  provided,  however,  that if box (3),
(4) or (5) is checked,  the Trustee may require,  prior to registering  any such
transfer of the Convertible Notes such legal opinions,  certifications and other
information  as the  Company  has  reasonably  requested  to  confirm  that such
transfer is being made pursuant to an exemption from,





                                       18








                                                                 Execution Copy



     or in a transaction  not subject to, the  registration  requirements of the
Securities Act of 1933.

                                              __________________________
                                              Signature

                                              Signature Guarantee:*

                                              ___________________________
                                              Signature


              TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.

     The  undersigned  represents  and  warrants  that  it  is  purchasing  this
Convertible  Note for its own  account  or an account  with  respect to which it
exercises  sole  investment  discretion  and that it and any such  account  is a
"qualified  institutional  buyer"  within  the  meaning  of Rule 144A  under the
Securities  Act of  1933,  and is aware  that  the  sale to it is being  made in
reliance on Rule 144A and  acknowledges  that it has received  such  information
regarding the Company as the undersigned has requested  pursuant to Rule 144A or
has  determined  not to request such  information  and that it is aware that the
transferor is relying upon the undersigned's foregoing  representations in order
to claim the exemption from registration provided by Rule 144A.




                                       19

     Dated:_______________________________________________

                                           NOTICE: To be executed by
                                           an executive officer


                                           _____________________________

      *Signature must be guaranteed by a commercial bank, trust company or
                   member firm of the New York Stock Exchange.






                                       20








                                                                Execution Copy



                      [TO BE ATTACHED TO GLOBAL SECURITIES]
                                   SCHEDULE A

     The initial  principal  amount at maturity of this Global Security shall be
U.S.$_________.  The following increases or decreases in the principal amount of
this Global Security have been made:

                                     
<TABLE>
<CAPTION>
<S>         <C>                       <C>                        <C>                       <C>    
            Amount of increase in
            Principal Amount of                                  Principal Amount of       Signature of
            this Global Security      Amount of decrease         this Global Security      authorized officer
            including upon exercise   in Principal Amount        following such            of Trustee or
Date Made   of over-allotment option  of this Global Security    decrease or increase      Securities Custodian
---------   ------------------------  -----------------------    --------------------      --------------------
</TABLE>







                                       22








                                                                  Execution Copy



                   OPTION OF SECURITYHOLDER TO ELECT PURCHASE

     If you want to elect to have this  Convertible  Note or a  portion  thereof
repurchased  by the Company  pursuant to Section 3.08 or 4.07 of the  Indenture,
check the box: [  ]

     If the  purchase  is in  part,  indicate  the  portion  (U.S.$1,000  or any
integral multiple thereof) to be purchased: ____________

     Your Signature: ________________________________________________

     (Sign  exactly as your name  appears on the other side of this  Convertible
Note)

     Date: ____________

     Signature Guarantee: * _______________________


--------
* Signature must be guaranteed by a commercial  bank,  trust company or
member firm of the New York Stock Exchange.





                                       23
                               ELECTION TO CONVERT
                                 To AMNEX, Inc.:

     The undersigned owner of this Convertible Note hereby irrevocably exercises
the option to convert this  Convertible  Note, or the portion below  designated,
into Common Stock of AMNEX,  INC. in accordance  with the terms of the Indenture
referred to in this  Convertible  Note, and directs that the shares issuable and
deliverable upon  conversion,  together with any check in payment for fractional
shares,  be issued in the name of and  delivered  to the  undersigned,  unless a
different name has been indicated in the assignment  below.  If shares are to be
issued in the name of a person other than the undersigned,  the undersigned will
pay all transfer taxes payable with respect thereto.

     The  undersigned  hereby  represents and warrants that the  undersigned did
not,  directly or  indirectly,  within the period of 90 days after the  original
issuance of the Convertible Note, sell,  dispose of, hedge or otherwise transfer
or part with the  economics  of ownership of all or any part of the Common Stock
issuable upon conversion of the Convertible Note.

     The undersigned agrees to be bound by the terms of the Registration  Rights
Agreement  relating  to  the  Common  Stock  issuable  upon  conversion  of  the
Convertible Notes.

     Date:

     In whole ____ orPortion of Convertible Note to be

     converted




                                       24








                                                                  Execution Copy



     (U.S.$1,000 or any integral multiple thereof):

     U.S.$_____________

     Your Signature: _______________________________________

     (Sign  exactly as your name  appears on the other side of this  Convertible
Note.)




                                       25

                       Please Print or Typewrite Name and

                        Address, Including Zip Code, and

                      Social Security or other Identifying

                                     Number






                                       26








                                                                 Execution Copy



                              Signature Guarantee:*

                               ___________________


--------
    * Signature  must be  guaranteed  by a commercial  bank,  trust  company or
member firm of the New York Stock Exchange.