CONVERTIBLE SUBORDINATED DEBENTURE




4% CONVERTIBLE SUBORDINATED DEBENTURE


THE DEBENTURE REPRESENTED HEREBY HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT
BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED
UNLESS AND UNTIL REGISTERED UNDER THE ACT OR UNLESS THE COMPANY HAS RECEIVED AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH
REGISTRATION IS NOT REQUIRED.

 

	
      No. __
	
      $___________



 


NAPRO BIOTHERAPEUTICS, INC.

4% CONVERTIBLE SUBORDINATED DEBENTURE

DUE FEBRUARY 13, 2007


[five years from issuance]

NaPro BioTherapeutics, Inc., a Delaware corporation (the
"Company"), for value received hereby promises to pay to
____________ or its registered assigns ("Holder") the principal
sum of __________________ Dollars ($___________) at the Company's office or
agency for said purpose in New York, New York on February __, 2007 in such coin
or currency (or, as provided herein, in shares of Common Stock) of the United
States of America as at the time of payment shall be legal tender for the
payment of public and private debts at the last address of the Holder last
appearing on the Register (as defined herein).

This Debenture is one of a duly authorized issue of 4%
Convertible Subordinated Debentures, due February 12, 2007 of the Company (each,
a "Debenture" and collectively, the "Debentures")
referred to in the Securities Purchase Agreement (the "Purchase
Agreement"), dated as of February 13, 2002, by and among the Company
and the Purchasers listed on Exhibit A thereto. The Debentures are subject to
the terms and conditions of the Purchase Agreement. The Company agrees to issue
from time to time replacement Debentures in the form hereof to facilitate any
transfers and assignments. In addition, after delivery of an indemnity in form
and substance reasonably satisfactory to the Company, the Company also agrees to
issue replacement Debentures for securities which have been lost, stolen,
mutilated or destroyed.

The Company shall keep at its principal office a register
(the "Register") in which shall be entered the names and
addresses of the registered holders of the Debentures and particulars of the
respective Debentures held by them and of all transfers of such Debentures.
References to the "Holder" or "Holders" shall
mean the Person listed in the Register as the payee of any Debenture unless the
payee shall have presented such Debenture to the Company for transfer and the
transferee shall have been entered in the Register as a subsequent holder, in
which case the term shall mean such subsequent holder. The ownership of the
Debentures shall be proven by the Register, absent manifest error. For the
purpose of paying interest and principal on the Debentures, the Company shall be
entitled to rely on the names and addresses in the Register.

No provision of this Debenture shall alter or impair the
obligations of the Company, which are absolute and unconditional, to pay the
principal of and interest on this Debenture at the place, times, rate, and in
the currency, herein prescribed.

The principal amount of this Debenture shall bear interest at
the rate of 4% per annum (the "Interest Rate"). The interest
shall accrue daily from the most recent Interest Payment Date (as defined below)
to which interest has been paid on this Debenture, or if no interest has been
paid on this Debenture from the date hereof until payment in full of the
principal amount has been made. Interest is payable in cash or an equivalent
value of the Company's Common Stock, valued for purposes of any such interest
payments at a value per share equal to the average Per Share Market Value over
the twenty (20) consecutive Trading Days immediately prior to the applicable
Interest Payment Date, subject to certain conditions contained herein,
semi-annually on August 15 and February 15 of each year (each, an "Interest
Payment Date"), commencing on August 15, 2002, to the Holder hereof
until the principal amount and any interest due hereunder is paid or made
available for payment. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will be paid or delivered to the
Holder of this Debenture at the close of business on the Record Date for the
interest payable on such Interest Payment Date. The "Record Date"
for any interest payment is the close of business on August 1 or February 1, as
the case may be, whether or not a Business Day, immediately preceding the
Interest Payment Date on which such interest is payable.

Any amounts that have become due and payable hereunder and
remain unpaid by the Company shall accrue interest thereafter until payment in
full of such amount at the rate of ten percent (10%) (the "Default Rate")
per annum and shall be payable upon demand by the Holder.

Interest, whether at the Interest Rate or the Default Rate,
will be computed on the basis of a fraction, the denominator of which is 365 (or
366 for any leap year) and the numerator of which is the actual number of days
elapsed from the date such interest begins to accrue, in the case of the
Interest Rate, or becomes due and payable, in the case of the Default Rate.

Each of the Interest Rate and the Default Rate shall be
effective both before and after any judgment may be rendered in a court of
competent jurisdiction, provided, however, that if either
the Interest Rate or Default Rate is deemed by a court of competent jurisdiction
to be in excess of the amount permitted to be charged by the Company under
applicable laws, the Holder shall be entitled to collect an Interest Rate or
Default Rate, as the case may be, only at the highest rate permitted by law.

The principal of, and any interest paid in cash on, this
Debenture are payable in coin or currency of the United States of America as at
the time of payment is legal tender for payment of public or private debts, at
the address of the Holder last appearing on the Register, except that (i) the
principal amount of this Debenture may be converted into shares of Common Stock
as further provided herein, and (ii) interest due on the principal amount, if
any (but not interest overdue for more than five (5) Business Days), may, at the
Company's option, be paid in shares of Common Stock, valued for purposes of
any such interest payments at a value per share equal to the average Per Share
Market Value over the twenty (20) consecutive Trading Days immediately prior to
the applicable Interest Payment Date. It shall be assumed that the Company shall
elect to make all payments of interest in shares of Common Stock, unless the
Company shall have given written notice to each Holder not less than one (1)
calendar week prior to the applicable Interest Payment Date of its intention to
pay such interest in cash. Notwithstanding anything to the contrary contained
herein, the Company may not issue shares of Common Stock in payment of the
interest on principal if: (i) the number of shares of Common Stock at the time
authorized, unissued and unreserved for all other purposes is insufficient to
pay interest hereunder in shares of Common Stock or there is an insufficient
number of authorized shares of Common Stock reserved for issue upon full
conversion of all of the Debentures issued pursuant to the Purchase Agreement;
(ii) such shares are not either registered for resale pursuant to a Registration
Statement (as defined in the Registration Rights Agreement (as defined herein))
or freely transferable without volume restrictions pursuant to Rule 144(k)
promulgated under the Securities Act, as determined by counsel to the Company
pursuant to a written opinion letter addressed and in form and substance
acceptable to the Holder and the transfer agent for such shares; (iii) such
shares are not listed or quoted on Nasdaq or a Subsequent Market; or (iv) an
Event of Default has occurred and is continuing or an event that, with the
passage of time or giving of notice or both or otherwise would constitute an
Event of Default, has occurred and is continuing.

Notwithstanding anything to the contrary contained herein, in
no event shall the Company be required to issue upon conversion of this
Debenture (whether pursuant to Section 4.2 or otherwise) a number of shares of
Common Stock in excess of the Maximum Share Amount (as defined herein).

	DEFINITIONS

 

  

    	Certain Terms Defined. The following terms (except as
    otherwise expressly provided or unless the context otherwise clearly
    requires) for all purposes of this Debenture shall have the respective
    meanings specified below. All accounting terms used herein and not expressly
    defined shall have the meanings given to them in accordance with generally
    accepted accounting principles. Capitalized terms not otherwise defined
    herein shall have the meanings assigned to them in the Purchase Agreement.
    The terms defined in this Section 1.1 include the plural as well as the
    singular.

"Abbott" means Abbott Laboratories, an
    Illinois corporation.

    "Abbott Loan Agreement" means that
    certain Loan and Security Agreement effective as of July 26, 1999, between
    the Company and Abbott.

    "Acceleration Notice" has the meaning
    set forth in Section 3.1.

    "Affiliate" has the meaning set forth in
    Rule 12b-2 of the Exchange Act.

    "Appraiser" means a nationally
    recognized investment banking firm or firm of independent certified public
    accountants of recognized standing.

    "Automatic Conversion" has the meaning
    set forth in Section 5.1(a).

    "Automatic Conversion Date" has the
    meaning set forth in Section 5.2.

    "Automatic Conversion Event" has the
    meaning set forth in Section 5.1(a).

    "Automatic Conversion Notice" has the
    meaning set forth in Section 5.2.

    "Average Price" on any date means (i)
    the sum of the Per Share Market Value for the twenty (20) Trading Days
    immediately preceding such date, divided by (ii) twenty (20), or a similar
    calculation if another figure for the number of Trading Days is set forth
    for clause (i) of this definition.

    "Board of Directors" means either the
    Board of Directors of the Company or any committee of such Board duly
    authorized to act hereunder.

    "Business Day" means any day except a
    Saturday, Sunday and any day on which banking institutions in the State of
    Colorado generally are authorized or required by law or other governmental
    actions to close.

    "Capital Stock" means, with respect to
    any Person, any and all shares, interests, participations or other
    equivalents (however designated) of such Person's capital stock whether
    now outstanding or issued after the Original Issue Date, including, without
    limitation, all Common Stock and all Preferred Stock.

    "Cash" of any Person means cash and cash
    equivalents of such Person as reported in the financial statements of such
    Person prepared in accordance with generally accepted accounting principles.

    "Closing" has the meaning set forth in
    the Purchase Agreement.

    "Closing Date" has the meaning set forth
    in the Purchase Agreement.

    "Common Stock" means the common stock,
    par value $0.0075 per share, of the Company.

    "Company" has the meaning set forth in
    the first paragraph hereof.

    "Company Conversion Indebtedness Notice"
    has the meaning set forth in Section 4.3.

    "Conversion Date" has the meaning set
    forth in Section 4.5(a).

    "Conversion Indebtedness" means all
    Senior Indebtedness incurred by the Company after the Closing, except any
    Senior Indebtedness incurred by the Company or any Subsidiary of the Company
    pursuant to (i) the Abbott Loan Agreement (provided any such
    Senior Indebtedness incurred pursuant to the Abbott Loan Agreement does not
    exceed an aggregate of Twenty Million Dollars ($20,000,000)), (ii) any
    equipment loan or leasing arrangement, real property loan, mortgage or
    leasing arrangement or other similar asset-backed loan, mortgage or leasing
    arrangement (including any loan secured by prepaid insurance that is
    incurred by the Company in the ordinary course of business consistent with
    past practice), or (iii) any other Senior Indebtedness that is approved in
    writing by the Holders of more than fifty percent (50%) of the principal
    amount of the Debentures then outstanding.

    "Conversion Indebtedness Repurchase Price"
    has the meaning set forth in Section 4.3.

    "Conversion Price" has the meaning set
    forth in Section 4.2(a).

    "Debenture" or "Debentures"
    has the meaning set forth in the second paragraph hereof.

    "Debenture Shares" has the meaning set
    forth in the Purchase Agreement.

    "Default Rate" has the meaning set forth
    in the sixth paragraph hereof.

    "Event of Default" has the meaning set
    forth in Section 3.1.

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

    "GAAP" or "generally accepted
    accounting principles" means generally accepted accounting
    principles in the United States, including, without limitation, those 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 approved by a significant segment of the
    accounting profession.

    "Holder", "Holder of Debentures",
    "Debentureholder" or other similar terms means the
    registered holder of any Debenture.

    "Holder Conversion Indebtedness Notice"
    has the meaning set forth in Section 4.3.

    "Incurrence" or "incurrence"
    means the incurrence, creation, assumption or in any other manner becoming
    liable with respect to, or the extension of the maturity of or becoming
    responsible for the payment of, any Indebtedness. "Incur"
    or "incur" shall have a comparable meaning.

    "Indebtedness" of any Person means, at
    any date, without duplication:

    	all indebtedness, obligations and other liabilities (contingent or
        otherwise) of such Person (i) for borrowed money (including obligations
        of such Person in respect of overdrafts, foreign exchange contracts,
        currency exchange agreements, interest rate protection agreements, and
        any loans or advances from banks, whether or not evidenced by notes or
        similar instruments) or (ii) evidenced by credit or loan agreements,
        bonds, debentures, notes or similar instruments (whether or not the
        recourse of the lender is to the whole of the assets of such Person or
        to only a portion thereof) (other than any accounts payable or other
        accrued current liability or obligation incurred in the ordinary course
        of business in connection with the obtaining of materials or services);
	all reimbursement obligations and other liabilities (contingent or
        otherwise) of such Person with respect to letters of credit, bank
        guarantees or bankers' acceptances;
	all obligations and liabilities (contingent or otherwise) of such
        Person in respect of leases of such Person required, in conformity with
        GAAP, to be accounted for as capitalized lease obligations on the
        balance sheet of such Person;
	all obligations and liabilities (contingent or otherwise) as lessee
        under leases for facility equipment (and related assets leased together
        with such equipment) and under any lease or related document (including
        a purchase agreement, conditional sale or other title retention or
        synthetic lease agreement) in connection with the lease of real property
        or improvement thereon (or any personal property included as part of any
        such lease) which provides that such Person is contractually obligated
        to purchase or cause a third party to purchase the leased property or
        pay an agreed upon residual value of the leased property, including the
        obligations under such lease or related document to purchase or cause a
        third party to purchase such leased property (whether or not such lease
        transaction is characterized as an operating lease or a capitalized
        lease in accordance with GAAP) or pay an agreed upon residual value of
        the leased property to the lessor;
	all obligations and liabilities (contingent or otherwise) of such
        Person with respect to any interest rate or other swap, cap, floor or
        collar agreement, hedge agreement, forward contract, or other similar
        instrument or agreement or foreign currency hedge, exchange, purchase or
        similar instrument or agreement;
	all direct or indirect guarantees or similar agreements by such Person
        in respect of, and obligations or liabilities of such Person (contingent
        or otherwise) to purchase or otherwise acquire or otherwise assure a
        creditor against loss in respect of, indebtedness, obligations or
        liabilities of another Person of the kind described in clauses (a)
        through (e);
	any indebtedness or other obligations described in clauses (a) through
        (f) secured by any mortgage, pledge, lien or other encumbrance existing
        on property which is owned or held by such Person, regardless of whether
        the indebtedness or other obligations secured thereby shall have been
        assumed by such Person; and
	any and all deferrals, renewals, extensions, refinancings,
        replacements and refundings of, or amendments, modifications or
        supplements to, any indebtedness, obligation or liability of the kind
        described in clauses (a) through (g).


  
  "Interest Payment Date" has the meaning
  set forth in the fifth paragraph hereof.

  "Interest Rate" has the meaning set forth
  in the fifth paragraph hereof.

  "Maturity Date" means the date on which
  the principal of a Debenture becomes due and payable as herein provided,
  whether on the Stated Maturity Date or pursuant to acceleration upon an Event
  of Default.

  "Maximum Share Amount" means [INSERT
  PRO RATA PORTION OF (A) 19.9% OF THE NUMBER OF SHARES OUTSTANDING IMMEDIATELY
  PRIOR TO THE CLOSING DATE, LESS (B) 888,889 SHARES] shares of Common Stock
  less the number of shares of Common Stock issued from time to time in payment
  of interest on this Debenture (such numbers to be adjusted from time to time
  for stock splits, stock dividends, combinations, capital reorganizations and
  similar events relating to the Common Stock occurring after the Closing to the
  extent consistent with the requirements of Rule 4350(i)(1) of the Nasdaq
  Marketplace Rules).

  "Nasdaq" means the Nasdaq National Market.

  "Notice of Conversion" has the meaning set
  forth in Section 4.2(e).

  "Original Issue Date" of any Debenture (or
  portion thereof) means the earlier of (i) the date of such Debenture and (ii)
  the date of any Debenture (or portion thereof) for which such security was
  issued (directly or indirectly) on registration of transfer, exchange or
  substitution.

  "Payment Blockage Notice" has the meaning
  set forth in Section 6.2(b).

  "Per Share Market Value" means on any
  particular date (i) the closing sale price per share of the Common Stock at
  4:00 p.m. Eastern Standard Time on such date (as reported by Bloomberg
  Information Services, Inc., or any successor reporting service) on Nasdaq or,
  if the Common Stock is not then quoted on Nasdaq, any Subsequent Market on
  which the Common Stock is then listed or if there is no such price on such
  date, then the closing sale price at 4:00 p.m. Eastern Standard Time on such
  exchange or quotation system on the date nearest preceding such date, (ii) if
  the Common Stock is not listed then on Nasdaq or any Subsequent Market, the
  closing sale price for a share of Common Stock in the over-the-counter market,
  as reported by the National Quotation Bureau Incorporated (or similar
  organization or agency succeeding to its functions of reporting prices) at the
  close of business on such date or (iii) if the Common Stock is not then
  publicly traded the fair market value of a share of Common Stock as determined
  by an Appraiser selected in good faith by the Holder of this Debenture, whose
  fees and expenses shall be borne by the Company; provided, however,
  that the Company, after receipt of the determination by such Appraiser, shall
  have the right to select, in good faith, an additional Appraiser, which
  additional Appraiser shall be reasonably acceptable to the Holder, in which
  case the fair market value shall be equal to the average of the determinations
  by each such Appraiser; and provided, further that all
  determinations of the Per Share Market Value shall be appropriately adjusted
  for any stock dividends, stock splits or other similar transactions during
  such period.

  "Person" means an individual or
  corporation, partnership, trust, incorporated or unincorporated association,
  joint venture, limited liability company, joint stock company, government (or
  an agency or subdivision thereof) or other entity of any kind.

  "Preferred Stock" means, with respect to
  any Person, any and all shares, interests, participations or other equivalents
  (however designated) of such Person's preferred or preference stock whether
  now outstanding or issued after the date of this Debenture, and includes,
  without limitation, all classes and series of preferred or preference stock.

  "Principal" or "principal"
  or "principal amount" wherever used with reference to the
  Debentures or any Debenture or any portion thereof, shall be deemed to include
  "and premium or interest, if any."

  "Property" or "property"
  of any Person means all types of real, personal, tangible, intangible or mixed
  property owned by such Person whether or not included in the most recent
  consolidated balance sheet of such Person under generally accepted accounting
  principles.

  "Purchase Agreement" has the meaning set
  forth in the second paragraph hereof.

  "Purchase Price" means, with respect to
  any Debenture, the purchase price paid to the Company upon issuance of such
  Debenture.

  "Record Date" has the meaning set forth in
  the fifth paragraph hereof.

  "Register" has the meaning set forth in
  the third paragraph hereof.

  "Registrable Securities" has the meaning
  set forth in the Registration Rights Agreement.

  "Registration Rights Agreement" means that
  certain Registration Rights Agreement, dated as of February 13, 2002, among
  the Company and the Purchasers.

  "Remaining Conversion Indebtedness Price"
  has the meaning set forth in Section 4.2(d).

  "Reserved Amount" has the meaning set
  forth in Section 4.9.

  "Rights Plan" has the meaning set forth in
  Section 4.6(c).

  "Senior Indebtedness" means any
  Indebtedness of the Company incurred after the Closing Date that (i) the
  Company designates as Senior Indebtedness by written notice to the Holder or
  (ii) the instrument creating or evidencing such Indebtedness expressly
  provides shall be "senior" in right of payment to the Debentures.
  Notwithstanding the foregoing, the term Senior Indebtedness shall not include
  (a) the Debentures, (b) any instrument evidencing Indebtedness incurred
  by the Company or any Subsidiary of the Company after the Closing Date in
  connection with the issuance or any future issuance of any securities (other
  than evidencing such Indebtedness, provided such instrument is not
  convertible into equity) of the Company to any Person, or (c) any Indebtedness
  to any Subsidiaries of the Company, other than Indebtedness to such
  Subsidiaries arising by reason of guarantees by the Company of Indebtedness of
  such Subsidiaries to a Person that is not a Subsidiary of the Company. If any
  payment made to any holder of any Senior Indebtedness or its representative
  with respect to such Senior Indebtedness is rescinded or must otherwise be
  returned by such holder upon the insolvency, bankruptcy or reorganization of
  the Company or otherwise, the reinstated Indebtedness of the Company arising
  as a result of such rescission or return shall constitute Senior Indebtedness
  effective as of the date of such rescission or return.

  "Stated Maturity Date" means February 12,
  2007.

  "Subscription Rights" has the meaning set
  forth in Section 4.6(c).

  "Subsequent Market" means the New York
  Stock Exchange, American Stock Exchange or Nasdaq SmallCap Market.

  "Subsidiary" means, with respect to any
  Person, any corporation or other entity of which a majority of the Capital
  Stock or other ownership interests having ordinary voting power to elect a
  majority of the Board of Directors or other persons performing similar
  functions are at the time directly or indirectly owned by such Person.

  "Trading Day" means (i) a day on which the
  Common Stock is traded or quoted on Nasdaq or, if the Common Stock is not then
  designated on Nasdaq, on such Subsequent Market on which the Common Stock is
  then listed or quoted, (ii) if the Common Stock is not listed on Nasdaq or a
  Subsequent Market, a day on which the Common Stock is traded in the
  over-the-counter Market, as reported by the OTC Bulletin Board or (iii) if the
  Stock is not quoted on the OTC Bulletin Board, a day on which the Common Stock
  is quoted in the over-the-counter market as reported by the National Quotation
  Bureau Incorporated (or any similar organization or agency succeeding its
  functions or reporting prices); provided, however,
  that in any event that the Common Stock is not listed or quoted as set forth
  in (i), (ii) or (iii) hereof, then a Trading Day shall mean any Business Day.

  "Underlying Shares" shall mean those
  shares of Common Stock (or other securities or property) that would be
  issuable upon a conversion of the Debentures.

  	PAYMENT; THE SECURITIES



      	Payment of Principal and Interest. The Company covenants
      and agrees that it will duly and punctually pay or cause to be paid the
      principal and interest and interest on overdue principal and interest (to
      the extent enforceable under applicable law), with respect to each of the
      Debentures at the place or places, at the respective times and in the
      manner provided herein.


    	Mutilated, Defaced, Destroyed, Lost and Stolen Debentures. In
    case any temporary or definitive Debenture shall become mutilated, defaced
    or be apparently destroyed, lost or stolen, the Company shall execute and
    deliver a new Debenture, bearing a number not contemporaneously outstanding,
    in exchange and substitution for the mutilated or defaced Debenture or in
    substitution for the apparently destroyed, lost or stolen Debenture. In the
    case that a Debenture has been destroyed, lost or stolen, the applicant for
    a substitute Debenture shall furnish to the Company such security or
    indemnity as the Company may reasonably require to indemnify and defend and
    to save the Company harmless from all risks, and shall also furnish to the
    Company evidence to the Company's reasonable satisfaction of the apparent
    destruction, loss or theft of such Debenture and of the ownership thereof.

Upon the issuance of any substitute Debenture, the
    Company may require the payment of a sum sufficient to cover any tax or
    other governmental charge that may be imposed in relation to such issuance
    and any other expenses connected therewith. In case any Debenture which has
    matured or is about to mature, or is being surrendered for conversion in
    full shall become mutilated or defaced or be apparently destroyed, lost or
    stolen, the Company may, instead of issuing a substitute Debenture, with the
    Holder's consent, pay or authorize the payment or conversion of the same
    (without surrender thereof except in the case of a mutilated or defaced
    Debenture), if in the case that a Debenture has been destroyed, lost or
    stolen, the applicant for such payment shall furnish to the Company such
    security or indemnity as the Company may reasonably require to indemnify and
    defend and to save the Company harmless from all risks, and, in every case
    of apparent destruction, loss or theft, the applicant shall also furnish to
    the Company evidence to the Company's reasonable satisfaction of the
    apparent destruction, loss or theft of such Debenture and of the ownership
    thereof.

    Every substitute Debenture issued pursuant to the
    provisions of this Section by virtue of the fact that any Debenture is
    apparently destroyed, lost or stolen shall constitute an additional
    contractual obligation of the Company, whether or not the apparently
    destroyed, lost or stolen Debenture shall be at any time enforceable by
    anyone and shall be entitled to all the benefits of (but shall be subject to
    all the limitations of rights set forth in) this Debenture equally and
    proportionately with any and all other Debentures duly authenticated and
    delivered hereunder. All Debentures shall be held and owned upon the express
    condition that, to the extent permitted by law, the foregoing provisions are
    exclusive with respect to the replacement or payment or conversion of
    mutilated, defaced, or apparently destroyed, lost or stolen Debentures and
    shall preclude any and all other rights or remedies notwithstanding any law
    or statute existing or hereafter enacted to the contrary with respect to the
    replacement or payment of negotiable instruments or other securities without
    their surrender.

    
    	Cancellation of Debentures; Destruction Thereof. All
    Debentures surrendered for payment, registration of transfer or exchange
    shall be delivered to the Company for cancellation, and no Debentures shall
    be issued in lieu thereof except as expressly permitted by any of the
    provisions of this Debenture. The Company shall destroy canceled Debentures
    held by it and deliver a certificate of destruction to the Holder, unless
    otherwise required hereunder. If the Company shall acquire any of the
    Debentures, such acquisition alone shall not operate as a redemption or
    satisfaction of the indebtedness represented by such Debentures unless and
    until such indebtedness is satisfied.
	DEFAULTS



      	Event of Default Defined; Acceleration of Maturity; Waiver of
      Default. In case one or more of the following events (each, an "Event
      of Default") (whatever the reason for such Event of Default and
      whether it shall be voluntary or involuntary or be effected by operation
      of law or pursuant to any judgment, decree or order of any court or any
      order, rule or regulation of any administrative or governmental body)
      shall have occurred and be continuing:



      	a default in the payment of any interest on any of the Debentures
      as and when the same shall become due and payable; provided, however,
      that such default shall not be deemed an Event of Default until it shall
      have occurred and be continuing for a period of thirty (30) days; or


      	a default in the payment of all or any part of the principal of
      any of the Debentures as and when the same shall become due and payable
      either at maturity, by declaration or otherwise, whether or not prohibited
      by any provisions hereof; provided, however, that
      such default shall not be deemed an Event of Default until it shall have
      occurred and be continuing for a period of thirty (30) days; or


      	a failure on the part of the Company to duly observe or perform
      any of the covenants or agreements on the part of the Company contained in
      this Debenture (including the failure to issue Common Stock upon
      conversion of this Debenture in accordance with the terms hereof) for a
      period of 60 days after the date on which written notice thereof has been
      given to the Company by the Holder; or


      	a court having jurisdiction in the premises shall enter a decree
      or order for relief in respect of the Company or any of its Subsidiaries
      in an involuntary case under any applicable bankruptcy, insolvency or
      other similar law now or hereafter in effect, or appointing a receiver,
      liquidator, assignee, custodian, trustee, sequestrate (or similar
      official) of the Company or any of its Subsidiaries or for any substantial
      part of the property of the Company or any of its Subsidiaries or ordering
      the winding up or liquidation of the affairs of the Company or any of its
      Subsidiaries, and such decree or order shall remain unseated and in effect
      for a period of sixty (60) consecutive days; or


      	the Company or any of its Subsidiaries shall commence a voluntary
      case under any applicable bankruptcy, insolvency or other similar law now
      or hereafter in effect, or consent to the entry of an order for relief in
      an involuntary case under any such law, or consent to the appointment or
      taking possession by a receiver, liquidator, assignee, custodian, trustee,
      sequestrate (or similar official) of the Company or any of its
      Subsidiaries or for any substantial part of the property of the Company or
      any of its Subsidiaries, or the Company or any of its Subsidiaries shall
      make any general assignment for the benefit of creditors; or
	a failure on the part of the Company to pay the purchase price on any
        of the Debentures when due, whether or not prohibited by the
        subordination provisions (including those in Article VI) of the
        Debenture; provided, however, that such default
        shall not be deemed an Event of Default until it shall have occurred and
        be continuing for a period of thirty (30) days;
	a failure on the part of the Company to provide timely notice of the
        occurrence of an event set forth in Section 4.7(b) or 4.7(c) hereof;
	any Indebtedness for money borrowed by the Company or a Subsidiary of
        the Company in an outstanding principal amount in excess of $2,500,000
        is not paid at final maturity or upon acceleration and such Indebtedness
        is not discharged, or such default in payment or acceleration is not
        cured or rescinded, within thirty (30) days; provided, however,
        that this Section 3.1(h) shall not apply to any default in the repayment
        of any Indebtedness outstanding under the Abbott Loan Agreement, upon
        acceleration thereof, if the Company contests such acceleration in good
        faith; and provided further, however,
        that any such contested acceleration under the Abbott Loan Agreement
        shall automatically be deemed an Event of Default under this Agreement
        if such contested acceleration has not been cured or rescinded within
        six (6) months; or
	(A) a material breach by the Company of a representation or
        warranty that is not qualified as to materiality made by the Company in
        the Purchase Agreement, (B) a breach by the Company of a representation
        or warranty that is qualified as to materiality made by the Company in
        the Purchase Agreement, or (C) a material breach by the Company of
        a covenant made by the Company in the Purchase Agreement; provided
        that an Event of Default shall exist with respect to breaches occurring
        under clauses (A) or (B) hereof only with respect to breaches as to
        which written notice has been given by the Holder to the Company within
        two years of the Closing Date;

then, in each and every such case (other than an Event of
    Default specified in Section 3.1(d) or 3.1(e)), unless the principal shall
    have already become due and payable, by notice in writing to the Company
    (the "Acceleration Notice"), a Holder may declare the
    entire principal amount of the Debentures owned by such Holder and any
    interest accrued thereon (and the aggregate amounts described below) to be
    due and payable immediately, and upon any such declaration the same shall
    become immediately due and payable. If an Event of Default specified in
    Section 3.1(d) or 3.1(e) occurs, the principal of and any accrued interest
    on the Debentures (and the aggregate amounts described below) shall become
    and be immediately due and payable without any declaration or other act on
    the part of any Holder of Debentures.

    For purposes of this Section 3.1, the principal amount of
    the Debenture is outstanding until such date as the Holder shall have been
    issued Underlying Shares upon a conversion (or attempted conversion)
    thereof. Within five (5) Business Days of receipt by the Holder of payments
    of amounts due to the Holder, the Holder shall return the Debenture to the
    Company. In the event of the occurrence of an Event of Default, the Holder
    need not provide and the Company hereby waives any presentment, demand,
    protest or other notice of any kind, and the Holder may immediately and
    without expiration of any grace period enforce any and all of its rights and
    remedies hereunder and all other remedies available to it under applicable
    law. Any demand for payment may be rescinded and annulled by the Holder at
    any time prior to payment hereunder. No such rescission or annulment shall
    affect any subsequent Event of Default or impair any right consequent
    thereon.

    Upon delivery of any Acceleration Notice to the Company,
    the Company shall promptly provide a copy of such notice to the other
    Holders, if any, within three (3) Business Days of the Company's receipt
    thereof. Failure to deliver such notice shall not affect the validity of the
    notice delivered by the Holders in accordance with the provisions referred
    to above.

    The exercise of any rights and remedies conferred upon or
    reserved to the Holders upon any Event of Default shall be subject to the
    subordination provisions contained in Article VI hereof.

    
    	Powers and Remedies Cumulative; Delay or Omission Not Waiver of
    Default. No right or remedy herein conferred upon or reserved to the
    Holder is intended to be exclusive of any other right or remedy, and every
    right and remedy shall, to the extent permitted by law, be cumulative and in
    addition to every other right and remedy given hereunder or now or hereafter
    existing at law or in equity or otherwise. The assertion or employment of
    any right or remedy hereunder, or otherwise, shall not prevent the
    concurrent assertion or employment of any other right or remedy.

No delay or omission of the Holder to exercise any right or
  power accruing upon any Event of Default occurring and continuing as aforesaid
  shall impair any such right or power or shall be construed to be a waiver of
  any such Event of Default or an acquiescence therein; and every power and
  remedy given by the Debenture or by law may be exercised from time to time,
  and as often as shall be deemed expedient, by the Holder.

  	EXCHANGE; CONVERSION



      	Right of Debentureholder to Exchange Debenture. Subject to
      and upon compliance with the provisions of this Article IV, this Debenture
      is exchangeable for an equal principal amount of Debentures of different
      authorized denominations, as requested by the Holder surrendering the
      same. No service charge will be made for such registration of transfer or
      exchange.


    	Right of Debentureholder to Convert Debenture into Common
    Stock.



      	Optional Conversion. Subject to and upon compliance with
      the provisions of this Section 4.2, the principal amount of this
      Debenture, or any portion thereof (and any accrued but unpaid interest
      thereon) may, at any time and at or before the close of business on the
      Maturity Date be converted into duly authorized, validly issued, fully
      paid and nonassessable shares of Common Stock at a conversion price equal
      to $15.00 per share, subject to the provisions of this Article IV (the
      "Conversion Price"). If any adjustment in the Conversion
      Price and, if applicable, a change in the securities or other property
      issuable upon conversion has taken place pursuant to Articles III, IV or V
      hereof, then the conversion described in this Section 4.2(a) shall be at
      the applicable Conversion Price and in such securities or other property
      as so adjusted.
	Conversion upon Event of Default. If an Event of Default
        occurs, and if the Company has not paid in full all of the principal and
        interest due and payable on this Debenture within five (5) Business Days
        after receipt of the Holder's Acceleration Notice (or within five (5)
        Business Days after the occurrence of an Event of Default specified in
        Section 3.1(d) or 3.1(e)), the unpaid principal amount of this
        Debenture, or any portion thereof (and any accrued but unpaid interest
        thereon) and any other amounts owed hereunder (and any accrued but
        unpaid interest thereon) may, at the Holder's option at any time at or
        before such principal and interest and any other amounts owed hereunder
        and any additional interest that may accrue thereafter have been paid in
        full by the Company, be converted into duly authorized, validly issued,
        fully paid and nonassessable shares of Common Stock at a conversion
        price equal to the greater of (i) the Average Price on the date the
        related Notice of Conversion is delivered to the Company and (ii) the
        par value per share of the Common Stock on the date the related Notice
        of Conversion is delivered to the Company.
	Conversion after the Stated Maturity Date. After the Stated
        Maturity Date, if the Company has not paid in full all of the principal
        and interest due and payable on this Debenture as of such date, the
        unpaid principal amount of this Debenture, or any portion thereof (and
        any accrued but unpaid interest thereon) may at the option of Holder, at
        any time at or before such principal and interest due and payable as of
        the Stated Maturity Date and any additional interest that may accrue
        thereafter have been paid in full by the Company, be converted into duly
        authorized, validly issued, fully paid and nonassessable shares of
        Common Stock at a conversion price equal to the Average Price on the
        date the related Notice of Conversion is delivered to the Company.
	Conversion upon Incurrence of Conversion Indebtedness. In the
        event the Holder exercises its option to cause the Company to repurchase
        this Debenture, or any portion thereof (and any accrued but unpaid
        interest thereon) pursuant to Section 4.3, and the Cash of the Company,
        measured as of the end of the fiscal quarter most recently completed
        prior to the date of the Holder Conversion Indebtedness Notice, is not
        sufficient to pay in full the Conversion Indebtedness Repurchase Price,
        the unpaid principal amount of this Debenture, or any portion thereof
        (and any accrued but unpaid interest thereon) may, at the option of the
        Holder, be converted into a number of duly authorized, validly issued,
        fully paid and nonassessable shares of Common Stock equal to
        "A" divided by "B," where "A" is the
        Conversion Indebtedness Repurchase Price minus the amount of the
        Conversion Indebtedness Repurchase Price that has been paid in cash to
        the Holder by the Company (such difference, the "Remaining
        Conversion Indebtedness Repurchase Price"), and "B"
        is the Average Price on the date the related Notice of Conversion is
        delivered to the Company. In the event that the number of duly
        authorized, validly issued, fully paid and nonassessable shares of
        Common Stock to be issued by the Company upon a conversion under this
        Section 4.2(d) is greater than the Maximum Share Amount, in addition to
        issuing to the Holder a number of duly authorized, validly issued, fully
        paid and nonassessable shares of Common Stock equal to the Maximum Share
        Amount, the Company shall, within five (5) Business Days after such
        issuance, pay the Holder in cash an amount equal to the Remaining
        Conversion Indebtedness Repurchase Price minus an amount equal to (y)
        the Maximum Share Amount times (z) the Average Price on the date the
        related Notice of Conversion is delivered to the Company.


      	Notice of Conversion. The Holder desiring to make any
      conversion of this Debenture pursuant to this Section 4.2 shall deliver to
      the Company, during usual business hours of the Company's office, or, at
      the Holder's option, to the Company's transfer agent during its usual
      business hours (with a copy to the Company), a written notice of election
      to convert, as provided in the form attached hereto as Exhibit A (a "Notice
      of Conversion"), accompanied, if required, by this Debenture or
      the Debentures, the principal amount of which is (are) to be converted.
	Repurchase upon Incurrence of Conversion Indebtedness.

	Right to Cause Repurchase. In the event that the Company incurs
        any Conversion Indebtedness, then the Company shall, within two (2)
        Business Days after the execution and delivery of the instrument
        creating or evidencing the same, give written notice (a "Company
        Conversion Indebtedness Notice") of the incurrence of such
        Conversion Indebtedness and a copy of the instrument creating or
        evidencing such Conversion Indebtedness to the Holder. For a period of
        ten (10) Business Days after receipt of a Company Conversion
        Indebtedness Notice, the Holder shall have the right, exercisable upon
        written notice to the Company (a "Holder Conversion Indebtedness
        Notice"), delivered within such ten (10) Business Day period,
        to cause the Company to repurchase all or part of this Debenture from
        the Holder in cash at a purchase price (the "Conversion
        Indebtedness Repurchase Price") equal to "X," where
        "X" equals (a) the unpaid principal amount of this Debenture
        on the date of the Holder Conversion Indebtedness Notice, plus (b) an
        amount that is equal to

C x [(1+r)t-1],

       

      where "C" equals the aggregate principal
      amount in U.S. Dollars of the Debenture to be converted as set forth in
      the Holder Conversion Indebtedness Notice, "r" equals 0.35, and
      "t" equals the number of years or fractional years between the
      Closing Date and the date of the applicable Holder Conversion Indebtedness
      Notice (e.g. if the date of the Holder Conversion Indebtedness
      Notice is two years and 10 days after the Closing Date, "t"
      equals 2 plus 10/360), minus (c) the aggregate amount of interest paid on
      this Debenture as of the date the Holder Conversion Indebtedness Notice is
      delivered to the Company. In the event that the Holder exercises its
      option to cause the Company to repurchase all or part of this Debenture in
      cash pursuant to this Section 4.3, the Company shall pay the Conversion
      Indebtedness Repurchase Price within five (5) Business Days of its receipt
      of the applicable Holder Conversion Indebtedness Notice.

      	Administrative Matters. Upon a repurchase of all of this
        Debenture pursuant to this Section 4.3, the Holder shall physically
        surrender the Debenture to the Company. Upon a repurchase of part of
        this Debenture pursuant to this Section 4.3, the Holder and the Company
        shall maintain records showing the principal amount already repurchased
        and the dates of such repurchases or shall use such other method,
        reasonably satisfactory to the Holder and the Company, so as not to
        require physical surrender of this Debenture upon each such repurchase.
        Promptly after any repurchase under this Section 4.3, the Company shall
        provide the Holder with a certificate executed by an officer of the
        Company that sets forth the aggregate principal amount repurchased prior
        to such repurchase, the principal amount remaining under the Debenture
        after such repurchase and the dates of all repurchases that have
        occurred as of the date of such certificate. In the event of any dispute
        or discrepancy, such records of the Company shall be controlling and
        determinative in the absence of manifest error. Notwithstanding the
        foregoing, if any portion of the Debenture is repurchased, the Holder
        may not transfer the Debenture unless the Holder first physically
        surrenders the Debenture to the Company, whereupon the Company shall
        promptly issue and deliver upon the order of the Holder a new Debenture
        of like tenor, registered as the Holder (upon payment by the Holder of
        any applicable transfer taxes) may request, representing in the
        aggregate the remaining unpaid principal amount of the Debenture. The
        Holder and any assignee, by acceptance of the Debenture, acknowledge and
        agree that, by reason of the provisions of this paragraph, following the
        repurchase of a portion of a Debenture, the unpaid and unconverted
        principal amount of such Debenture represented by such Debenture may be
        less than the amount stated on the face thereof.


    	Adjustment for Dividends; Interest Payment After Conversion.
    No payment or adjustment will be made for dividends on any Common Stock
    except as provided herein. On conversion of a Debenture, that portion of
    interest accrued and unpaid attributable to the period from the Original
    Issuance Date to the Conversion Date with respect to the converted Debenture
    shall not be canceled, extinguished or forfeited, but rather shall be paid
    in full to the Holder thereof by the payment of an amount of shares of
    Common Stock valued at the then applicable Conversion Price; provided,
    however, that the Company may pay such amount in cash if it
    provides the Holder with not less than ten (10) days' prior written notice
    of such intention. If the Holder converts more than one Debenture at the
    same time, the number of shares of Common Stock issuable upon the conversion
    shall be based on the total principal amount of the Debentures converted.


    	Issuance of Shares Upon Conversion.



      	As promptly as practicable, but in any event no later than three
      (3) Trading Days after delivery of a Notice of Conversion and, if
      required, the surrender, as herein provided, of any Debenture or
      Debentures for conversion, the Company shall deliver or cause to be
      delivered to the Holder of this Debenture or the Debentures delivering
      such Notice of Conversion, or such Holder's designee, a certificate or
      certificates representing the number of duly authorized, validly issued,
      fully paid and nonassessable shares of Common Stock, into which such
      Debenture or Debentures may be converted in accordance with the provisions
      of this Article IV. Such conversion shall be deemed to have been made at
      the time and on the date the Notice of Conversion is delivered to the
      Company, as long as, if required, this Debenture or the Debentures being
      converted are promptly delivered to the Company. The rights of the Holder
      of such Debenture or Debentures as a Holder (subject to the Company's
      satisfaction of its obligations hereunder with respect to such conversion)
      shall cease at such time with respect to the converted Debentures, and the
      Person or Persons entitled to receive the shares of Common Stock, upon
      conversion of such Debenture or Debentures, shall be treated for all
      purposes as having become the record holder or holders of such shares of
      Common Stock at such time, and such conversion shall be at the Conversion
      Price in effect at such time (the "Conversion Date").
      Subject to paragraph 4.5(b), if any Debenture is converted in part only,
      upon such conversion the Company shall execute and deliver to the Holder
      thereof a new Debenture or Debentures of authorized denominations, as
      requested by such Holder, in aggregate principal amount equal to the
      unconverted portion of such Debenture.


      	Notwithstanding anything to the contrary set forth herein, upon
      conversion of a Debenture in accordance with the terms thereof, the Holder
      shall not be required to physically surrender the Debenture to the Company
      unless the entire unpaid principal amount of the Debenture is so
      converted. The Holder and the Company shall maintain records showing the
      principal amount already converted and the dates of such conversions or
      shall use such other method, reasonably satisfactory to the Holder and the
      Company, so as not to require physical surrender of this Debenture upon
      each such conversion. Promptly after any conversion hereunder, the Company
      shall provide the Holder with a certificate executed by an officer of the
      Company that sets forth the aggregate principal amount converted under the
      Debenture prior to such conversion, the principal amount remaining under
      the Debenture after such conversion and the dates of all conversions that
      have occurred as of the date of such certificate. In the event of any
      dispute or discrepancy, such records of the Company shall be controlling
      and determinative in the absence of manifest error. Notwithstanding the
      foregoing, if any portion of the Debenture is converted, the Holder may
      not transfer the Debenture unless the Holder first physically surrenders
      the Debenture to the Company, whereupon the Company shall promptly issue
      and deliver upon the order of the Holder a new Debenture of like tenor,
      registered as the Holder (upon payment by the Holder of any applicable
      transfer taxes) may request, representing in the aggregate the remaining
      unpaid principal amount of the Debenture. The Holder and any assignee, by
      acceptance of the Debenture, acknowledge and agree that, by reason of the
      provisions of this paragraph, following conversion of a portion of a
      Debenture, the unpaid and unconverted principal amount of such Debenture
      represented by such Debenture may be less than the amount stated on the
      face thereof.


      	In lieu of delivering physical certificates representing the
      Debenture Shares, provided the Company's transfer agent is participating
      in the Depository Trust Company Fast Automated Securities Transfer (FAST)
      program, upon request of the Holder and in compliance with the provisions
      of Sections 4.1, 4.2 and 4.5, the Company shall use its commercially
      reasonable best efforts to cause its transfer agent to electronically
      transmit the shares of Common Stock issuable upon conversion of this
      Debenture to the Holder by crediting the account of a broker designated by
      Holder at the Depository Trust Company through its Deposit Withdrawal
      Agent Commission system. The time period for delivery described in Section
      4.5(a) shall apply to the electronic transmittals described herein.


    	Adjustment of Conversion Price. In addition to any adjustment
    to the Conversion Price provided elsewhere in this Debenture, the Conversion
    Price in effect at any time shall be subject to adjustment from time to time
    upon the happening of certain events, as follows:



      	Common Stock Dividends; Common Stock Splits; Reverse Common
      Stock Splits. If the Company, at any time while this Debenture is
      outstanding, (a) shall pay a stock dividend on its Common Stock, (b)
      subdivide outstanding shares of Common Stock into a larger number of
      shares, (c) combine outstanding shares of Common Stock into a smaller
      number of shares or (d) issue by reclassification of shares of Common
      Stock any shares of Capital Stock of the Company, the Conversion Price
      thereafter shall be determined by multiplying the Conversion Price by a
      fraction the numerator of which shall be the number of shares of Common
      Stock (excluding treasury shares, if any) outstanding before such event
      and the denominator of which shall be the number of shares of Common Stock
      outstanding after such event. Any adjustment made pursuant to this
      paragraph 4.6(a) shall become effective immediately after the record date
      for the determination of stockholders entitled to receive such dividend or
      distribution and shall become effective immediately after the effective
      date in the case of a subdivision, combination or re-classification.


      	Rights; Warrants. If the Company, at any time while this
      Debenture is outstanding, shall issue rights or warrants to all of the
      holders of Common Stock entitling them to subscribe for or purchase shares
      of Common Stock (or securities convertible into Common Stock) at a price
      per share (or having a conversion price per share) less than the Average
      Price (such Average Price to be determined as of the record date for the
      determination of stockholders entitled to receive such rights or
      warrants), the Conversion Price thereafter shall be determined by
      multiplying the Conversion Price by a fraction, the denominator of which
      shall be the number of shares of Common Stock (excluding treasury shares,
      if any) outstanding on the such record date plus the number of additional
      shares of Common Stock offered for subscription or purchase, and the
      numerator of which shall be the number of shares of Common Stock
      (excluding treasury shares, if any) outstanding on such record date plus
      the number of shares which the aggregate offering price of the total
      number of shares so offered (or the aggregate conversion price of the
      convertible securities so offered, which shall be determined by
      multiplying the number of shares of Common Stock issuable upon conversion
      of such convertible securities by the conversion price per share of Common
      Stock pursuant to the terms of such convertible securities) would purchase
      at the Average Price as of such record date. Such adjustment shall be made
      whenever such rights or warrants are issued, and shall become effective
      immediately after the record date for the determination of stockholders
      entitled to receive such rights or warrants. Upon the expiration of any
      right or warrant to purchase Common Stock the issuance of which resulted
      in an adjustment in the Conversion Price pursuant to this Section 4.6, if
      any right or warrant shall expire and shall not have been exercised, the
      Conversion Price shall immediately upon such expiration be recomputed to
      the Conversion Price which would have been in effect had the adjustment of
      the Conversion Price made upon the issuance of such rights or warrants
      been made on the basis of (i) that number of shares of Common Stock
      actually purchased upon the exercise of such rights or warrants actually
      exercised and (ii) such number of shares of Common Stock that were issued
      and sold for the consideration actually received by the Company upon the
      actual exercise of such rights and warrants plus the consideration, if
      any, actually received by the Company for the issuance, sale or grant of
      all such rights or warrants.


      	Subscription Rights. If the Company, at any time while this
      Debenture is outstanding, shall distribute to all of the holders of Common
      Stock evidence of its indebtedness or assets or rights or warrants to
      subscribe for or purchase any security (excluding those referred to in
      Sections 4.6(a) and (b) above) ("Subscription Rights"),
      then in each such case the Conversion Price at which this Debenture shall
      thereafter be exercisable shall be determined by multiplying the
      Conversion Price in effect immediately prior to the record date fixed for
      determination of stockholders entitled to receive such distribution by a
      fraction, the denominator of which shall be the Average Price determined
      as of the record date mentioned above, and the numerator of which shall be
      such Average Price on such record date less the then fair market value at
      such record date of the portion of such assets or evidence of indebtedness
      so distributed applicable to one outstanding share of Common Stock as
      determined by the Board of Directors in good faith; provided, however,
      that in the event of a distribution exceeding twenty five percent (25%) of
      the net assets of the Company, such fair market value shall be determined
      by an Appraiser selected in good faith by the Holder, whose fees and
      expenses shall be paid by the Company; and provided, further,
      that the Company, after receipt of the determination by such Appraiser
      shall have the right to select an additional Appraiser meeting the same
      qualifications, in good faith, in which case the fair market value shall
      be equal to the average of the determinations by each such Appraiser. Such
      adjustment shall be made whenever any such distribution is made and shall
      become effective immediately after the record date mentioned above. Upon
      the expiration or termination of any such Subscription Rights, the
      Conversion Price of the Debenture to the extent in any way affected by or
      computed using such Subscription Rights, shall be recomputed to reflect
      the issuance of only the number of shares of Common Stock (and convertible
      or exchangeable securities which remain in effect) actually issued upon
      the exercise of such Subscription Rights. In the event that the Company
      has a preferred shares rights plan in effect ("Rights Plan"),
      upon conversion of any portion of the Debentures into Common Stock, the
      Holder of the Debentures so converted will receive, in addition to the
      Common Stock, the rights described therein (whether or not the rights have
      separated from the Common Stock at the time of conversion), subject to the
      limitations set forth in the Rights Plan. Any distribution of rights or
      warrants pursuant to a Rights Plan complying with the requirements set
      forth in the immediately preceding sentence of this paragraph shall not
      constitute a distribution of rights or warrants pursuant to this Section
      4.6(c).


      	Rounding. All calculations under this Section 4.6 shall be
      made to the nearest cent or the nearest l/l00th of a share, as the case
      may be.


      	Notice of Adjustment. Whenever the Conversion Price is
      adjusted pursuant to paragraphs 4.6(a), (b) or (c), the Company shall
      promptly deliver to the Holder a certificate executed by an officer of the
      Company setting forth the Conversion Price after such adjustment and
      setting forth a brief statement of the facts requiring such adjustment.


      	Reclassification, Etc. If:



        	the Company shall declare a dividend (or any other distribution)
        on its Common Stock; or


        	the Company shall declare a special nonrecurring cash dividend
        on or a redemption of its Common Stock; or
	the Company shall authorize the granting to the holders of the
          Common Stock rights or warrants to subscribe for or purchase any
          shares of Capital Stock of any class or any rights; or
	the approval of any stockholders of the Company shall be required in
          connection with any reclassification of the Common Stock, any
          consolidation or merger to which the Company is a party, any sale or
          transfer of all or substantially all of the assets of the Company, or
          any compulsory share exchange whereby the Common Stock is converted
          into other securities, cash or other property; or
	the Company shall authorize the voluntary or involuntary
          dissolution, liquidation or winding up of the affairs of the Company;

then, the Company shall cause to be filed at each office
    or agency maintained for the purpose of conversion of this Debenture, and
    shall cause to be delivered to the Holder, at least five (5) Business Days
    prior to the applicable record or effective date hereinafter specified, a
    notice (provided such notice shall not include any material non-public
    information) stating (x) the date on which a record is to be taken for the
    purpose of such dividend, distribution, redemption, rights or warrants, or
    if a record is not to be taken, the date as of which the holders of Common
    Stock of record to be entitled to such dividend, distribution, redemption,
    rights or warrants are to be determined or (y) the date on which such
    reclassification, consolidation, merger, sale, transfer, share exchange,
    dissolution, liquidation or winding up is expected to become effective or
    close, and the date as of which it is expected that holders of Common Stock
    of record shall be entitled to exchange their shares of Common Stock for
    securities, cash or other property deliverable upon such reclassification,
    consolidation, merger, sale, transfer, share exchange, dissolution,
    liquidation or winding up; provided, however, that the
    failure to mail such notice or any defect therein or in the mailing thereof
    shall not affect the validity of the corporate action required to be
    specified in such notice.

    
    	Effect of Reclassification, Consolidation, Merger or Sale on
    Conversion Right.

	General. If any of the following shall occur, namely: (a) any
        reclassification or change of shares of Common Stock issuable upon
        conversion of the Debentures (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, or any other change for which an
        adjustment is provided in Section 4.6); (b) any consolidation or merger
        or combination to which the Company is a party other than a
        consolidation or merger or combination in which the stockholders of the
        Company immediately prior to such consolidation or merger or combination
        directly or indirectly hold more than fifty percent (50%) of the voting
        power of the continuing corporation immediately after such consolidation
        or merger or combination and which does not result in any
        reclassification of, or change (other than (i) 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 or (ii) as a
        result of the issuance in exchange for the Common Stock of shares of
        common stock of a newly formed parent of the Company, such common stock
        having characteristics substantially equivalent to the Common Stock) in,
        outstanding shares of Common Stock; or (c) any sale or conveyance as an
        entirety or substantially as an entirety of the property and assets of
        the Company, directly or indirectly, to any Person, then the Company, or
        such successor, purchasing or transferee corporation, as the case may
        be, shall, as a condition precedent to such reclassification, change,
        combination, consolidation, merger, sale or conveyance, execute and
        deliver to each Holder an executed supplemental written instrument
        providing that the Holder of each Debenture then outstanding shall have
        the right to convert such Debenture into the kind and amount of shares
        of stock and other securities and property (including cash) receivable
        upon such reclassification, change, combination, consolidation, merger,
        sale or conveyance by a holder of the number of shares of Common Stock
        deliverable upon conversion of such Debenture immediately prior to such
        reclassification, change, combination, consolidation, merger, sale or
        conveyance. Such supplemental written instrument 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 IV. If, in the case of any such
        consolidation, merger, combination, sale or conveyance, the stock or
        other securities and property (including cash) receivable thereupon by a
        holder of Common Stock include shares of stock or other securities and
        property of a person other than the successor, purchasing or transferee
        corporation, as the case may be, in such consolidation, merger,
        combination, sale or conveyance, then such supplemental written
        instrument shall also be executed by such other person and shall contain
        such additional provisions to protect the interests of the Holders of
        the Debentures as the Board of Directors shall reasonably consider
        necessary by reason of the foregoing. The provisions of this Section 4.7
        shall similarly apply to successive reclassifications, changes,
        combinations, consolidations, mergers, sales or conveyances.
        Notwithstanding the foregoing, for a period of twenty (20) Business Days
        after the Holder's receipt of the supplemental written instrument
        referred to above, the Holder shall have the right, exercisable upon
        written notice to the Company or any successor, purchasing or transferee
        corporation, as the case may be, delivered within such twenty (20)
        Business Day period, to cause the Company or any successor, purchasing
        or transferee corporation, as the case may be, to repurchase all or part
        of this Debenture from the Holder at a purchase price equal to $1,000
        per $1,000 principal amount of the Debenture to be repurchased, together
        with accrued interest up to, but not including, the repurchase date.
	Administrative Matters. Upon a repurchase of all of this
        Debenture pursuant to Section 4.7(a), the Holder shall physically
        surrender the Debenture to the Company. Upon a repurchase of part of
        this Debenture pursuant to Section 4.7(a), the Holder and the Company or
        any successor, purchasing or transferee corporation, as the case may be,
        shall maintain records showing the principal amount already repurchased
        and the dates of such repurchases or shall use such other method,
        reasonably satisfactory to the Holder and the Company or any successor,
        purchasing or transferee corporation, as the case may be, so as not to
        require physical surrender of this Debenture upon each such repurchase.
        Promptly after any repurchase under this Section 4.7, the Company or any
        successor, purchasing or transferee corporation, as the case may be,
        shall provide the Holder with a certificate executed by an officer of
        the Company or any successor, purchasing or transferee corporation, as
        the case may be, that sets forth the aggregate principal amount
        repurchased prior to such repurchase, the principal amount remaining
        under the Debenture after such repurchase and the dates of all
        repurchases that have occurred as of the date of such certificate. In
        the event of any dispute or discrepancy, such records of the Company
        shall be controlling and determinative in the absence of manifest error.
        Notwithstanding the foregoing, if any portion of the Debenture is
        repurchased, the Holder may not transfer the Debenture unless the Holder
        first physically surrenders the Debenture to the Company, whereupon the
        Company shall promptly issue and deliver upon the order of the Holder a
        new Debenture of like tenor, registered as the Holder (upon payment by
        the Holder of any applicable transfer taxes) may request, representing
        in the aggregate the remaining unpaid principal amount of the Debenture.
        The Holder and any assignee, by acceptance of the Debenture, acknowledge
        and agree that, by reason of the provisions of this paragraph, following
        the repurchase of a portion of a Debenture, the unpaid and unconverted
        principal amount of such Debenture represented by such Debenture may be
        less than the amount stated on the face thereof.


    
    	Officer's Certificate. Whenever the number of shares
    purchasable upon conversion shall be adjusted as required by the provisions
    of Section 4.6 or 4.7, the Company shall forthwith file in the custody of
    its secretary or an assistant secretary at its principal office and with its
    stock transfer agent, if any, an officer's certificate showing the
    adjusted number of shares and the adjusted Conversion Price determined as
    herein provided, setting forth in reasonable detail the facts requiring such
    adjustment and the manner of computing such adjustment. Each such officer's
    certificate shall be signed by the chairman, president or chief financial
    officer of the Company and by the secretary or any assistant secretary of
    the Company. Each such officer's certificate shall be made available at
    all reasonable times for inspection by any Holder of the Debentures and the
    Company shall, forthwith after each such adjustment, deliver a copy of such
    certificate to each Holder.


    	Reservation of Shares. The Company covenants that it will at
    all times reserve and keep available out of its authorized shares of Common
    Stock, free from preemptive rights, solely for the purpose of issue upon
    conversion of the Debentures as herein provided, such number of shares of
    the Common Stock as shall then be issuable upon the conversion of all
    outstanding Debentures into Common Stock under the Debentures at the then
    applicable Conversion Price (the "Reserved Amount"). The
    Company covenants that all shares of the Common Stock issued upon conversion
    of the Debenture which shall be so issuable shall, when issued, be duly and
    validly issued and fully paid and nonassessable. If at any time the number
    of authorized but unissued shares of Common Stock of the Company shall not
    be sufficient to effect the conversion of all outstanding Debentures into
    Common Stock, the Company will forthwith take such corporate action as may
    be necessary and within its control and use its commercially reasonable best
    efforts to cause the shareholders of the Company to take such corporate
    action as may be necessary to increase its authorized but unissued shares of
    Common Stock to such number of shares as shall be sufficient for such
    purpose.


    	Compliance with Governmental Requirements. The Company
    covenants that if any shares of Common Stock required to be reserved for
    purposes of conversion of Debentures hereunder require registration with or
    approval of any governmental authority under any federal or state law, or
    any national securities exchange or quotation system, before such shares may
    be issued upon conversion, the Company will use its commercially reasonable
    best efforts to cause such shares to be duly registered or approved, as the
    case may be.


    	Fractional Shares. Upon a conversion hereunder, the Company
    shall not be required to issue stock certificates representing fractions of
    shares of the Common Stock, but may if otherwise permitted, make a cash
    payment in respect of any final fraction of a share based on the Per Share
    Market Value at such time. If the Company elects not, or is unable, to make
    such a cash payment, the Holder shall be entitled to receive, in lieu of the
    final fraction of a share, one whole share of Common Stock.


    	Payment of Tax Upon Issue or Transfer. The issuance of
    certificates for shares of the Common Stock on conversion of the Debentures
    shall be made without charge to the Holders thereof for any documentary
    stamp or similar taxes that may be payable in respect of the issue or
    delivery of such certificate, provided that the Company shall not be
    required to pay any tax that may be payable in respect of any transfer
    involving the issuance and delivery of any such certificate upon conversion
    in a name other than that of the Holder of such Debentures so converted, and
    the Company shall not be required to issue or deliver such certificates in a
    name other than that of the Holder 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.


    	Allocations of Reserved Amount. The Reserved Amount shall be
    allocated pro rata among the Holders based on the principal amount of
    Debentures issued to each Holder. Each increase to the Reserved Amount shall
    be allocated pro rata among the Holders based on the principal amount of
    Debentures held by each Holder at the time of the increase in the Reserved
    Amount. In the event a Holder shall sell or otherwise transfer any of such
    Holder's Debentures, each transferee shall be allocated a pro rata portion
    of such transferor's Reserved Amount. Any portion of the Reserved Amount
    which remains allocated to any Person which does not hold any Debentures
    shall be allocated to the remaining Holders, pro rata, based on the
    principal amount of such Debentures then held by such Holders.
	AUTOMATIC CONVERSION



    	Automatic Conversion.



      	Automatic Conversion. Subject to the conditions set forth
      below in this Section 5.1, the entire outstanding principal amount of this
      Debenture (and any accrued but unpaid interest thereon) shall
      automatically be converted into shares of Common Stock at the then
      applicable Conversion Price, if the average Per Share Market Value over
      fifteen (15) consecutive Trading Days exceeds 146.6667% of the then
      applicable Conversion Price. After February 12, 2004, subject to the
      conditions set forth below in this Section 5.1, the entire outstanding
      principal amount of this Debenture (and any accrued but unpaid interest
      thereon) shall automatically be converted into shares of Common Stock at
      the then applicable Conversion Price, if the average Per Share Market
      Value over thirty (30) consecutive Trading Days exceeds 106.6667% of the
      then applicable Conversion Price. The automatic conversion of this
      Debenture into shares of Common Stock pursuant to either of the preceding
      two sentences shall be defined herein as an "Automatic Conversion."
      The average Per Share Market Value meeting the criteria set forth in
      either of the first two sentences of this Section 5.1(a) shall be defined
      herein as an "Automatic Conversion Event."


      	Conditions to Automatic Conversion. Any Automatic
      Conversion set forth in Section 5.1(a) shall occur automatically without
      any further action by the Company or any Holder so long as the following
      conditions are satisfied as of the date of the Automatic Conversion Event:
      (i) no Event of Default (or any event that with the passage of time or
      giving of notice or both would constitute an Event of Default) shall have
      occurred and be continuing, (ii) any Registration Statement required to be
      filed and be effective pursuant to the Registration Rights Agreement is
      then in effect and has been in effect and sales of all of the Registrable
      Securities can be made thereunder (subject to any restrictions contained
      in applicable underwriter or other lock up agreements) for at least twenty
      (20) Business Days prior to the date of the Automatic Conversion Event,
      and (iii) the Company has a sufficient number of authorized shares of
      Common Stock reserved for issuance upon full conversion of the Debentures.


    	Mechanics of Automatic Conversion. Upon the occurrence of any
    Automatic Conversion Event, the Company shall deliver a notice (an "Automatic
    Conversion Notice") by facsimile and overnight courier to each
    Holder no later than two (2) Business Days after the occurrence of the
    Automatic Conversion Event. Such Automatic Conversion Notice shall indicate
    (a) the Conversion Price, (b) the number of shares of Common Stock that each
    Holder shall receive as a result of the Automatic Conversion, and (c) a
    confirmation of the date that the Automatic Conversion Event occurred (the
    "Automatic Conversion Date"). For all purposes hereunder,
    the Automatic Conversion Date shall be deemed the Conversion Date. The
    Company shall issue the Common Stock promptly after the Automatic Conversion
    Date unless the Holder notifies the Company within five (5) Business Days
    after receipt of the Automatic Conversion Notice from the Company that the
    Holder disagrees with the occurrence of the Automatic Conversion Event or
    any other matter contained in the Automatic Conversion Notice. If the Holder
    and the Company fail to agree upon the occurrence of the Automatic
    Conversion Event or any other matter contained in the Automatic Conversion
    Notice within one (1) Business Day after the Holder has given such notice,
    the matter shall be determined promptly by a securities firm (the fees and
    expenses of which shall be paid by the Company) acceptable to both the
    Holder and the Company, and such computation shall be final and binding. The
    issuance of shares by the Company following the occurrence of an Automatic
    Conversion Event shall be subject to the provisions set forth in Section
    4.5, mutatis mutandis.
	SUBORDINATION OF DEBENTURES



      	Debentures Subordinate to Senior Indebtedness. The Company
      covenants and agrees, and each Holder of a Debenture, by his or its
      acceptance thereof, likewise covenants and agrees, that, to the extent and
      in the manner hereinafter set forth in this Article VI, the payment of the
      principal of (and premium, if any) and interest on each and all of the
      Debentures are hereby expressly made subordinate and subject in right of
      payment to the prior payment in full in cash or payment satisfactory to
      the holders of Senior Indebtedness of all Senior Indebtedness.


    	No Payment on Debentures in Certain Circumstances.



      	No payment or distribution of cash, property or securities (other
      than Common Stock of the Company or other securities of the Company that
      are subordinated to Senior Indebtedness to at least the same extent as the
      Debentures) of the Company shall be made by the Company with respect to
      the principal of or interest on the Debentures, or to defease or acquire
      any of the Debentures, or on account of the repurchase provisions of the
      Debentures and no action shall be taken (judicial or otherwise) to collect
      any such payment or distribution (i) upon the maturity of any Senior
      Indebtedness by lapse of time, acceleration or otherwise, unless and until
      all Senior Indebtedness shall first be paid in full in cash, or such
      payment duly made in a manner satisfactory to the holders of such Senior
      Indebtedness or (ii) in the event that the Company defaults (and such
      default continues beyond any applicable period of grace) in the payment of
      any principal of, premium, if any, or interest on or any other amounts
      payable on or due in connection with any Senior Indebtedness when it
      becomes due and payable, whether at maturity or at a date fixed for
      prepayment or by declaration or otherwise, unless and until such default
      has been waived in writing by the holders of the Senior Indebtedness.


      	If any default other than a payment default contemplated by
      Section 6.2(a)(ii) above shall have occurred and be continuing that would
      permit the holders of the Senior Indebtedness to accelerate the maturity
      of Senior Indebtedness, upon written notice (a "Payment Blockage
      Notice") of the default given to the Company and the Holders by
      the holders of, or an agent, trustee or other representative for, such
      Senior Indebtedness, then, unless and until such default has been waived
      in writing, no payment or distribution of cash or property (other than
      Common Stock of the Company or other securities of the Company that are
      subordinated to Senior Indebtedness to at least the same extent as the
      Debentures) of the Company shall be made by the Company with respect to
      the principal of or interest on the Debentures or to acquire or repurchase
      any of the Debentures for cash or property other than Common Stock of the
      Company, and no action shall be taken (judicial or otherwise) to collect
      any such payment or distribution. If such Senior Indebtedness is not
      declared due and payable within one hundred eighty (180) days after
      written notice of the event of default is given, promptly after the end of
      the 180-day period, the Company shall pay all sums due in respect of the
      Debentures and not paid during the 180-day period. Payments on the
      Debentures may and shall be resumed in the case of a payment default only
      upon the date on which such default is waived in writing by the holders of
      the Senior Indebtedness or their agent. During any 360-day consecutive
      period, only one such period during which payment with respect to the
      Debentures may not be made as the result of a Payment Blockage Notice may
      commence and the duration of such period may not exceed one hundred eighty
      (180) days. No nonpayment default that existed or was continuing on the
      date of delivery of any Payment Blockage Notice to the Holders shall be,
      or be made, the basis for a subsequent Payment Blockage Notice.


      	In the event of the acceleration of the Debentures because of an
      Event of Default, no payment or distribution shall be made to any Holder
      of Debentures in respect of the principal of, premium, if any, or interest
      on the Debentures by the Company until all Senior Indebtedness has been
      paid in full in cash or other payment satisfactory to the holders of
      Senior Indebtedness or such acceleration is rescinded in accordance with
      the terms of the Debentures. If payment of the Debentures is accelerated
      because of an Event of Default, the Company shall promptly notify holders
      of Senior Indebtedness of such acceleration.


    	Debentures Subordinated To Prior Payment Of All Senior
    Indebtedness On Dissolution, Winding Up, Liquidation Or Reorganization.
    Upon any distribution of assets of the Company upon any dissolution, winding
    up, liquidation or reorganization of the Company (whether in bankruptcy,
    insolvency, receivership or similar proceedings relating to the Company or
    its property or upon an assignment for the benefit of creditors or any
    marshalling of the Company's assets or liabilities or otherwise):



      	the holders of all Senior Indebtedness will first be entitled to
      receive payment in full of the principal of and interest due on Senior
      Indebtedness (including interest accruing after the commencement of a
      bankruptcy or insolvency at the rate specified in the applicable Senior
      Indebtedness documents and including, without limitation, in respect of
      premiums, indemnities or otherwise), before the Holders are entitled to
      receive any payment or distribution on account of the principal of or
      interest on the Debentures; and


      	any payment or distribution of assets of the Company of any kind
      or character, whether in cash, property or securities (except that the
      Holders may receive securities that are subordinated at least to the same
      extent as the Debentures to Senior Indebtedness and any securities issued
      in exchange for Senior Indebtedness), to which the Holders would be
      entitled except for the provisions of this Section 6.3 will be paid by the
      liquidating trustee or agent or other Persons making such a payment or
      distribution directly to the holders of Senior Indebtedness (pro rata as
      to each of such holders on the basis of the respective amounts of Senior
      Indebtedness held by such holders) or their representatives to the extent
      necessary to make or provide for payment in full in cash of all Senior
      Indebtedness remaining unpaid, after giving effect to any concurrent
      payment or distribution to the holders of such Senior Indebtedness or
      provision for that payment or distribution.

The Company will give prompt written notice to the
    Holders of any dissolution, winding up, liquidation or reorganization of it
    or any assignment for the benefit of its creditors.

    
    	Subrogation To Rights Of Holders Of Senior Indebtedness.
    Subject to the payment in full of all Senior Indebtedness, the Holders shall
    be subrogated to the rights of the holders of Senior Indebtedness to receive
    payments or distributions of cash, property or securities of the Company
    applicable to the Senior Indebtedness until all amounts owing on the
    Debentures shall be paid in full; and, for the purposes of such subrogation:



      	no payments or distributions to the holders of the Senior
      Indebtedness of any cash, property or securities to which the Holders
      would be entitled except for the provisions of this Article VI and no
      payment pursuant to the provisions of this Article VI to the holders of
      Senior Indebtedness by the Holders shall, as between the Company, its
      creditors (other than holders of Senior Indebtedness) and the Holders, be
      deemed to be a payment by the Company to or on account of the Senior
      Indebtedness; and


      	no payments or distributions of cash, property or securities to or
      for the benefit of the Holders pursuant to the subrogation provisions of
      this Article VI, which would otherwise have been paid to the holders of
      Senior Indebtedness, shall be deemed to be a payment by the Company to or
      for the account of the Holders of the Debentures.


    	Provisions Solely To Define Relative Rights. The provisions
    of this Article VI 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
    Indebtedness on the other hand. Nothing contained in this Article VI or
    elsewhere in this Debenture or in the Debentures is intended to or shall (a)
    impair, as among the Company, its creditors other than holders of Senior
    Indebtedness and the Holders of the Debentures, the obligation of the
    Company, which is absolute and unconditional, to pay to the Holders of the
    Debentures the principal of (any premium, if any) and interest on the
    Debentures as and when the same shall become due and payable in accordance
    with their terms, (b) affect the relative rights against the Company of the
    Holders of the Debentures and creditors of the Company other than the
    holders of Senior Indebtedness or (c) prevent the Holder of any Debenture
    from exercising all remedies otherwise permitted by applicable law upon
    default under this Debenture, subject to the rights, if any, under this
    Article VI of the holders of Senior Indebtedness to receive cash, property
    or securities otherwise payable or deliverable to the Holder upon the
    exercise of any such remedy.


    	Right To File Proof Of Claim. In the event of any
    dissolution, winding up, liquidation or reorganization of the Company
    (whether in bankruptcy, insolvency, receivership or similar proceedings
    relating to the Company or its property or upon any assignment for the
    benefit of creditors or any marshalling of the Company's assets or
    liabilities or otherwise) tending towards liquidation of the business and
    assets of the Company, with respect to the filing of a claim for the unpaid
    balance of any Holder's Debentures in the form required in those
    proceedings, if the Holder does not file a proper claim or proof of debt in
    the form required in such proceeding at least thirty (30) days before the
    expiration of the time to file such claim or claims, then the holders of
    Senior Indebtedness and their agents, trustees, or other representatives are
    hereby authorized to have the right to file, and are hereby authorized to
    file, an appropriate claim for and on behalf of each such Holder.


    	No Waiver Of Subordination Provisions. No right of any
    present or future holder of any Senior Indebtedness 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 Debenture,
    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 Indebtedness may, at any time and
    from time to time, without the consent of or notice to the Holders of the
    Debentures, without incurring responsibility to the Holders of the
    Debentures and without impairing or releasing the subordination provided in
    this Article VI or the obligations hereunder of the Holders of the
    Debentures to the holders of Senior Indebtedness, do any one or more of the
    following: (i) change the manner, place or terms of payment or extend the
    time of payment of, or renew or alter, Senior Indebtedness, or otherwise
    amend or supplement in any manner Senior Indebtedness or any instrument
    evidencing the same or any agreement under which Senior Indebtedness is
    outstanding; (ii) sell, exchange, release or otherwise deal with any
    property pledged, mortgaged or otherwise securing Senior Indebtedness; (iii)
    release any Person liable in any manner for the collection of Senior
    Indebtedness; and (iv) exercise or refrain from exercising any rights
    against the Company and any other Person.

    
    	Notice To Holders. The Company shall give prompt written
    notice to the Holders of any fact known to the Company which would prohibit
    the making of any payment to or by the Holders in respect of the Debentures.

The Holders shall be entitled to rely on the delivery to
    them of a written notice by a Person representing himself to be a holder of
    Senior Indebtedness (or a representative thereof) to establish that such
    notice has been given by a holder of Senior Indebtedness (or representative
    thereof). In the event that the Holders determine in good faith that further
    evidence is required with respect to the right of any Person as a holder of
    Senior Indebtedness (or a representative thereof) to participate in any
    payment or distribution pursuant to this Article VI, the Holders may request
    such Person to furnish evidence to the reasonable satisfaction of the
    Holders as to the amount of Senior Indebtedness 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 VI, and if such evidence is not furnished, the Holders
    may defer any payment or distribution to such Person pending judicial
    determination as to the right of such Person to receive such payment or
    distribution.

    
    	Reliance On Judicial Order Or Certificate Of Liquidating Agent.
    Upon the payment or distribution of assets of the Company referred to in
    this Article VI, the Holders of the Debentures shall be entitled to rely
    upon any order or decree entered by any court of competent jurisdiction in
    which such proceeding is pending, or a certificate of the trustee in
    bankruptcy, receiver, liquidating trustee, custodian, assignee for the
    benefit of the creditors, agent or other Person making such payment or
    distribution, delivered to the Holders of Debentures, for the purpose of
    ascertaining the Persons entitled to participate in such payment or
    distribution, the holders of the Senior Indebtedness 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 VI.


    	No Adverse Modification To Debenture. Neither the Holders nor
    the Company shall enter into any modification of the Debentures that is in
    any way adverse to the holders of the Senior Indebtedness.


    	Notice To Holders Of Senior Indebtedness. The Company will
    furnish to the holders of Senior Indebtedness no less frequently than once
    per fiscal quarter, or at any time upon request therefor, a true and correct
    copy of the then most current Register setting forth the names and addresses
    of the Holders as of such date.
	MISCELLANEOUS



      	Modification Of Debentures. This Debenture may be modified
      without prior notice to the Holder upon the written consent of the Company
      and the Holders of more than fifty percent (50%) of the principal amount
      of the Debentures then outstanding. The Holders of more than fifty percent
      (50%) of the principal amount of the Debentures then outstanding may waive
      compliance by the Company with any provision of this Debenture without
      prior notice to any Holder. However, without the consent of each Holder
      affected, an amendment, supplement or waiver may not (i) reduce the amount
      of Debentures whose Holders must consent to an amendment, supplement or
      waiver, (ii) reduce the principal amount of or extend the fixed maturity
      of any Debenture or (iii) make any Debenture payable in money or property
      other than as stated in the Debentures.


    	Governing Law. This Debenture shall be governed by and
    construed and enforced in accordance with the internal laws of the State of
    Delaware without regard to the principles of conflicts of law thereof. Each
    party hereby irrevocably submits to the nonexclusive jurisdiction of the
    state and federal courts sitting in the State of Delaware, for the
    adjudication of any dispute hereunder or in connection herewith or with any
    transaction contemplated hereby or discussed herein, and hereby irrevocably
    waives, and agrees not to assert in any suit, action or proceeding, any
    claim that it is not personally subject to the jurisdiction of any such
    court, or that such suit, action or proceeding is improper. The parties
    hereto, including all guarantors or endorsers, hereby waive presentment,
    demand, notice, protest and all other demands and notices in connection with
    the delivery, acceptance, performance and enforcement of this Debenture,
    except as specifically provided herein, and assent to extensions of the time
    of payment, or forbearance or other indulgence without notice. The Holder of
    this Debenture by acceptance of this Debenture agrees to be bound by the
    provisions of this Debenture which are expressly binding on such Holder.


    	Rank And Subordination. Except as expressly provided herein,
    no provision of this Debenture shall alter or impair the obligation of the
    Company, which is absolute and unconditional, to pay the principal of and
    interest on, this Debenture at the time, place, and rate, and in the coin or
    currency (or, as provided herein, in Common Stock), herein prescribed. This
    Debenture is a direct obligation of the Company and is subordinate to the
    Senior Indebtedness. Except as otherwise provided herein, the Company may
    not voluntarily prepay the outstanding principal amount of this Debenture.


    	Debentures Owned By Company Deemed Not Outstanding. In
    determining whether the holders of the requisite aggregate principal amount
    of Debentures have concurred in any direction, consent or waiver under this
    Debenture, Debentures which are owned by the Company or any other obligor on
    the Debentures or by any Person directly or indirectly controlling or
    controlled by or under direct or indirect common control with the Company or
    any other obligor on the Debentures shall be disregarded and deemed not to
    be outstanding for the purpose of any such determination; provided that any
    Debentures owned by the Purchasers shall be deemed outstanding for purposes
    of making such a determination. Debentures so owned which have been pledged
    in good faith may be regarded as outstanding if the pledgee establishes to
    the satisfaction of the Company the pledgee's right so to act with respect
    to such Debentures and that the pledgee is not the Company or any other
    obligor on the Debentures or any Person directly or indirectly controlling
    or controlled by or under direct or indirect common control with the Company
    or any other obligor on the Debentures.


    	Limitations on Transfer. In addition to any other
    restrictions contained herein or imposed by law, this Debenture may not be
    sold, assigned or otherwise transferred if as a result thereof, the Company's
    4% Convertible Subordinated Debentures due February 12, 2007 would be held
    of record or beneficially by more than five (5) Persons.


    	Notices. Any notices, consents, waivers or other
    communications required or permitted to be given under the terms of this
    Agreement shall be in writing and shall be deemed to have been delivered (a)
    upon receipt, when delivered personally, (b) upon receipt, when sent by
    facsimile, provided confirmation of transmission is mechanically or
    electronically generated and kept on file by the sending party (if received
    before 7:00 p.m. local time where such notice is received) or the first
    business day following such delivery (if received on or after 7:00 p.m.
    local time where such notice is received) or (c) one (1) business day after
    deposit with a nationally recognized overnight courier, in each case
    properly addressed to the party to receive the same. The addresses and
    facsimile numbers for such communications shall be:




        	If to the Company:

Napro BioTherapeutics, Inc.

        6304 Spine Road, Unit A

        Boulder, Colorado 80301

        Attention: Mr. Leonard P. Shaykin

        Chairman and Chief Executive Officer

        Telephone: (303) 530-3891

        Facsimile: (303) 530-1296

        with a copy to:

        Cooley Godward LLP

        380 Interlocken Crescent, Suite 900

        Broomfield, Colorado 80021-8023

        Attention: Francis R. Wheeler, Esq.

        Telephone: (720) 566-4000

        Facsimile: (720) 566-4099

        
        	If to the Holder:


     

     

     

     

    
    Attention:

    Telephone:

    Facsimile:

    with a copy to:

    
     

     

     

     

    
    Attention:

    Telephone:

    Facsimile:

     

    Each party shall provide written notice to the other
    parties of any change in address or facsimile number in accordance with the
    provisions hereof.

    
    	Effect Of Titles And Headings; References. The titles and
    headings herein are for convenience only and shall not affect the
    construction hereof. References herein to Sections and Articles are to
    Sections and Articles of this Debenture, unless otherwise expressly
    provided.


    	No Rights As Stockholder. This Debenture shall not entitle
    the Holder to any rights as a stockholder of the Company, including without
    limitation, the right to vote, to receive dividends and other distributions,
    or to receive notice of, or to attend, meetings of stockholders or any other
    proceedings of the Company, unless and to the extent converted into shares
    of Common Stock in accordance with the terms hereof.


    	Failure Or Indulgence Not Waiver. No failure or delay on the
    part of the Holder in the exercise of any power, right or privilege
    hereunder shall operate as a waiver thereof, nor shall any single or partial
    exercise of any such power, right or privilege preclude other or further
    exercise thereof or of any other right, power or privilege. All rights and
    remedies existing hereunder are cumulative to, and not exclusive of, any
    rights or remedies otherwise available.


IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed under its corporate seal.


  
    
      
        
          
            
              
                
                  
                    
                      
                        
                        NAPRO BIOTHERAPEUTICS, INC.

                        
                        By:

                        Name:

                        Title:

                         

                         

                      

                    

                  

                

              

            

          

        

      

    

  




EXHIBIT A

NAPRO BIOTHERAPEUTICS, INC.

CONVERSION NOTICE


Reference is made to the Debenture issued by Napro
Biotherapeutics, Inc. (the "Debenture"). In accordance with and
pursuant to the Debenture, the undersigned hereby irrevocably elects to convert
the principal amount of the Debenture, indicated below into shares of Common
Stock, par value $0.0075 per share (the "Common Stock"), of the
Company, by tendering the Debenture specified below as of the date specified
below.

Date of Conversion:

Aggregate Principal Amount to be converted:

Debenture no(s). of Debenture to be converted:

Please confirm the following information:

Conversion Price:

Number of shares of Common Stock to be issued:

Please issue the Common Stock into which the Debenture is
being converted and, if applicable, any check drawn on an account of the Company
in the following name and to the following address:

Issue to:

Facsimile Number:

Authorization: By:

Title:

Dated:

Account Number (if electronic book entry transfer):

Transaction Code Number (if electronic book entry transfer):

 


Acknowledged and Accepted:

 

NAPRO BIOTHERAPEUTICS, INC.


 

By:

Name:

Title: