FIELDS AIRCRAFT SPARES, INC.

                                     Issuer




                                       AND



                                  EPP FINANZ AG

                                     Trustee



                                    INDENTURE

                          Dated as of December 22, 1998



          8.5% Subordinated Convertible Redeemable Debentures Due 2001


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                                TABLE OF CONTENTS

                                      PAGE


                                    ARTICLE I

                                   DEFINITIONS

Section 1.1       Definitions...............................................  1
Section 1.2       Rules of Construction.....................................  6

                                   ARTICLE II

                   ISSUE, DESCRIPTION, EXECUTION, REGISTRATION
                           AND EXCHANGE OF DEBENTURES

Section 2.1       Designation, Amount and Issue of Debentures...............  6
Section 2.2       Form of Debentures........................................  6
Section 2.3       Date and Denomination of Debentures; 
                  Payments of Interest......................................  7
Section 2.4       Execution of Debentures...................................  7
Section 2.5       Exchange and Registration of Transfer of 
                  Debentures; Restrictions on Transfer......................  8
Section 2.6       Mutilated, Destroyed, Lost or Stolen Debentures..........  12
Section 2.7       Temporary Debentures.....................................  13
Section 2.8       Cancellation of Debentures Paid, Etc.....................  13
Section 2.9       CUSIP Numbers............................................  13

                                   ARTICLE III

                     REDEMPTION AND REPURCHASE OF DEBENTURES

Section 3.1       Redemption Prices........................................  14
Section 3.2       Notice of Redemption; Selection of Debentures............  14
Section 3.3       Payment of Debentures Called for Redemption..............  15

                                   ARTICLE IV

                       PARTICULAR COVENANTS OF THE COMPANY

Section 4.1       Payment of Principal and Interest........................  16
Section 4.2       Maintenance of Office or Agency..........................  16
Section 4.3       Appointments to Fill Vacancies in Trustee's Office.......  17
Section 4.4       Provisions as to Paying Agent............................  17


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Section 4.5       Corporate Existence......................................  18
Section 4.6       Stay, Extension and Usury Laws...........................  18

                                    ARTICLE V

                             DEBENTUREHOLDERS' LISTS

Section 5.1       Debentureholders' Lists..................................  18

                                   ARTICLE VI

                              DEFAULTS AND REMEDIES

Section 6.1       Events of Default........................................  19
Section 6.2       Payments of Debentures on Default; Suit Therefor.........  21
Section 6.3       Application of Monies Collected by Trustee...............  22
Section 6.4       Proceedings by Debentureholder...........................  23
Section 6.5       Proceedings by Trustee...................................  24
Section 6.6       Remedies Cumulative and Continuing.......................  24
Section 6.7       Direction of Proceedings and Waiver of Defaults 
                  by Majority of Debentureholders..........................  24
Section 6.8       Notice of Defaults.......................................  25
Section 6.9       Undertaking to Pay Costs.................................  25

                                   ARTICLE VII

                             CONCERNING THE TRUSTEE

Section 7.1       Duties and Responsibilities of Trustee...................  25
Section 7.2       Reliance on Documents, Opinions, Etc.....................  26
Section 7.3       No Responsibility for Recitals, Etc......................  27
Section 7.4       Trustee, Paying Agents, Conversion Agents or 
                  Registrar May Own Debentures.............................  28
Section 7.5       Monies to Be Held in Trust...............................  28
Section 7.6       Compensation and Expenses of Trustee.....................  28
Section 7.7       Officers' Certificate as Evidence........................  28
Section 7.8       Resignation or Removal of Trustee........................  29
Section 7.9       Acceptance by Successor Trustee..........................  30
Section 7.10      Successor by Merger, Etc.................................  30

                                  ARTICLE VIII

                         CONCERNING THE DEBENTUREHOLDERS

Section 8.1       Action by Debentureholders...............................  30

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Section 8.2       Proof of Execution by Debentureholders...................  31
Section 8.3       Who Are Deemed Absolute Owners...........................  31
Section 8.4       Company-Owned Debentures Disregarded.....................  31
Section 8.5       Revocation of Consents, Future Holders Bound.............  32

                                   ARTICLE IX

                           DEBENTUREHOLDERS' MEETINGS

Section 9.1       Purposes for Which Meetings May be Called................  32
Section 9.2       Manner of Calling Meetings; Record Date..................  33
Section 9.3       Call of Meeting by Company or Debentureholders...........  33
Section 9.4       Who May Attend and Vote at Meetings......................  33
Section 9.5       Manner of Voting at Meetings and Record to be Kept.......  33
Section 9.6       Exercise of Rights of Trustee and Debentureholders 
                  Not To Be Hindered or Delayed............................  34

                                    ARTICLE X

                             SUPPLEMENTAL INDENTURES

Section 10.1      Supplemental Indentures Without Consent of
                  Debentureholders.........................................  34
Section 10.2      Supplemental Indentures With Consent of 
                  Debentureholders.........................................  35
Section 10.3      Effect of Supplemental Indentures........................  36
Section 10.4      Notation on Debentures...................................  36
Section 10.5      Evidence of Compliance of Supplemental Indenture to Be
                  Furnished to the Trustee.................................  36

                                   ARTICLE XI

                    CONSOLIDATION, MERGER, SALE, CONVEYANCE,
                               TRANSFER AND LEASE

Section 11.1      Company May Consolidate, Etc. on Certain Terms...........  37
Section 11.2      Successor Company To Be Substituted......................  37
Section 11.3      Opinion of Counsel To Be Given to Trustee................  37

                                   ARTICLE XII

                    SATISFACTION AND DISCHARGE OF INDENTURE;
                                UNCLAIMED MONEYS

Section 12.1      Termination of Obligations upon Cancellation of 
                  the Debentures...........................................  37
Section 12.2      Survival of Certain Obligations..........................  38
Section 12.3      Acknowledgment of Discharge by Trustee...................  38


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Section 12.4      Application of Trust Assets..............................  38
Section 12.5      Repayment to the Company; Unclaimed Money................  39
Section 12.6      Reinstatement............................................  39

                                  ARTICLE XIII

                    IMMUNITY OF INCORPORATORS, SHAREHOLDERS,
                             OFFICERS AND DIRECTORS

Section 13.1      Indenture and Debentures Solely Corporate Obligations....  39

                                   ARTICLE XIV

                            CONVERSION OF DEBENTURES

Section 14.1      Right to Convert.........................................  40
Section 14.2      Exercise of Conversion Privilege; Issuance of Common 
                  Stock on Conversion; No Adjustment for Interest 
                  or Dividends.............................................  40
Section 14.3      Cash Payments in Lieu of Fractional Shares...............  42
Section 14.4      Conversion Price.........................................  42
Section 14.5      Adjustment of Conversion Price...........................  42
Section 14.6      Effect of Reclassification, Consolidation, Merger 
                  or Sale..................................................  44
Section 14.7      Taxes on Shares Issued...................................  45
Section 14.8      Reservation of Shares; Shares to Be Fully Paid...........  45
Section 14.9      Responsibility of Trustee................................  45
Section 14.10     Notice to Holders Prior to Certain Actions...............  46

                                   ARTICLE XV

                                  SUBORDINATION

Section 15.1      Agreement to Subordinate.................................  46
Section 15.2      Certain Definitions......................................  47
Section 15.3      Liquidation; Dissolution; Bankruptcy.....................  48
Section 15.4      Default on Senior Indebtedness...........................  48
Section 15.5      When Distribution Must Be Paid Over......................  48
Section 15.6      Notice by Company........................................  49
Section 15.7      Subrogation..............................................  49
Section 15.8      Relative Rights..........................................  49
Section 15.9      Subordination May Not Be Impaired by Company.............  50
Section 15.10     Distribution or Notice to Representative.................  50
Section 15.11     Rights of Trustee and Paying Agent.......................  50
Section 15.12     Authorization to Effect Subordination....................  51
Section 15.13     Conversions Not Deemed Payment...........................  51
Section 15.14     Amendments...............................................  51


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                                   ARTICLE XVI

                            MISCELLANEOUS PROVISIONS

Section 16.1      Provisions Binding on Company's Successors...............  51
Section 16.2      Official Acts by Successor Company.......................  52
Section 16.3      Addresses for Notices, Etc...............................  52
Section 16.4      Governing Law............................................  52
Section 16.5      Evidence of Compliance with Conditions Precedent; 
                  Certificates to Trustee..................................  52
Section 16.6      Legal Holidays...........................................  53
Section 16.7      Benefits of Indenture....................................  53
Section 16.8      Table of Contents, Headings Etc..........................  53
Section 16.9      Authenticating Agent.....................................  53
Section 16.10     Execution in Counterparts................................  54

EXHIBIT A - Form of Debenture ..............................................A-1

EXHIBIT B - Form of Transferee Certificate for Debentures to be Issued to
                  Accredited Investors......................................B-1

                                        v
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                  INDENTURE,  dated as of  December  22,  1998,  by and  between
FIELDS AIRCRAFT SPARES, INC., a Utah corporation (the "Company"), and EPP FINANZ
AG (the "Trustee"), a Lichtenstein corporation.


                              W I T N E S S E T H :


                  WHEREAS,  for its lawful corporate  purposes,  the Company has
duly  authorized the issuance of its 8.5%  Subordinated  Convertible  Redeemable
Debentures Due 2001 (the "Debentures"),  in an aggregate principal amount not to
exceed US  $2,000,000  and, to provide the terms and  conditions  upon which the
Debentures are to be authenticated,  issued and delivered,  the Company has duly
authorized the execution and delivery of this Indenture; and

                  WHEREAS, the Debentures,  the certificate of authentication to
be borne by the Debentures,  a form of assignment,  a form of conversion  notice
and  a  certificate  of  transfer  to be  borne  by  the  Debentures  are  to be
substantially in the forms hereinafter provided for; and

                  WHEREAS, all acts and things necessary to make the Debentures,
when executed by the Company and authenticated and delivered by the Trustee or a
duly authorized  authenticating agent, as in this Indenture provided, the valid,
binding and legal obligations of the Company, and to constitute these presents a
valid agreement  according to its terms,  have been done and performed,  and the
execution of this Indenture and the issuance hereunder of the Debentures have in
all respects been duly authorized.

                  NOW, THEREFORE, THIS INDENTURE WITNESSETH:

                  That in order to declare the terms and  conditions  upon which
the Debentures are, and are to be, authenticated,  issued and delivered,  and in
consideration  of the  premises  and  of  the  purchase  and  acceptance  of the
Debentures  by the holders  thereof,  the Company  covenants and agrees with the
Trustee for the equal and proportionate  benefit of the respective  holders from
time to time of the Debentures (except as otherwise provided below) as follows:

                                    ARTICLE I

                                   DEFINITIONS


                  Section 1.1 Definitions. The terms defined in this Section 1.1
(except as herein otherwise  expressly  provided or unless the context otherwise
requires) for all purposes of this  Indenture and of any indenture  supplemental
hereto  shall have the  respective  meanings  specified in this Section 1.1. All
other  terms  used  in this  Indenture  that  are by  reference  defined  in the
Securities Act (as hereinafter  defined),  except as herein otherwise  expressly
provided for or

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<PAGE>


unless the context otherwise requires,  shall have the meanings assigned to such
terms in said  Securities  Act as in force  on the date of this  Indenture.  The
words "herein," "hereof,"  "hereunder" and words of similar import refer to this
Indenture as a whole and not to any particular Article or Section.

                  Accredited Investor: The term "Accredited Investor" shall have
the meaning specified in Rule 501(a) under the Securities Act.

                  Affiliate:  An "Affiliate" of any specified  person shall mean
an  "affiliate"  as defined in Rule 144(a) as  promulgated  under the Securities
Act.

                  Board of Directors:  The term "Board of Directors"  shall mean
the Board of  Directors of the Company or a committee of such Board of Directors
duly authorized to act for it.

                  Board  Resolution:  The term "Board  Resolution"  shall mean a
copy of a resolution certified by the Secretary or an Assistant Secretary of the
Company to have been duly  adopted by the Board of  Directors  and to be in full
force and effect on the date of such certification.

                  Business Day: The term  "Business Day" shall mean a day, other
than a  Saturday,  a  Sunday  or a day on  which  the  banking  institutions  in
Switzerland  are authorized or obligated by law or executive order to close or a
day that is declared a United States or Swiss holiday.

                  Capital  Stock:  The term "Capital  Stock" of any person shall
mean any and all shares, interests, participations or other equivalents (however
designated) of such person's corporate stock or any and all equivalent ownership
interests in a person  (other than a  corporation)  whether now  outstanding  or
issued after the date hereof.

                  Commission:  The term  "Commission"  shall mean the Securities
and Exchange  Commission,  as from time to time  constituted,  created under the
Exchange Act.

                  Common Stock:  The term "Common Stock" shall mean any stock of
any class of the Company that does not have a preference in respect of dividends
or of amounts payable in the event of any voluntary or involuntary  liquidation,
dissolution  or winding up of the Company and that is not subject to  redemption
by the Company.  Subject to the  provisions  of Section  14.6,  however,  shares
issuable on  conversion  of  Debentures  shall  include only shares of the class
designated  as common  stock of the  Company  at the date of this  Indenture  or
shares  of  any  class  or  classes  resulting  from  any   reclassification  or
reclassifications  thereof  and  that do not have a  preference  in  respect  of
dividends or of amounts  payable in the event of any  voluntary  or  involuntary
liquidation,  dissolution  or winding up of the Company and that are not subject
to redemption  by the Company;  provided that if at any time there shall be more
than one such  resulting  class,  the shares of each such class then so issuable
shall be substantially in the proportion that the total number of shares of such
class  resulting  from all such  reclassification  bears to the total  number of
shares of all such classes resulting from all such reclassifications.

                                        2
<PAGE>


                  Company: The term "Company" shall mean Fields Aircraft Spares,
Inc. a Utah  corporation,  and subject to the  provisions  of Article XI,  shall
include its successors and assigns.

                  Conversion  Price: The term "Conversion  Price" shall have the
meaning specified in Section 14.4.

                  Corporate  Trust  Office of the Trustee:  The term  "Corporate
Trust Office of the Trustee," or other  similar  term,  shall mean the office of
the Trustee at which at any particular  time its corporate  trust business shall
be  principally  administered,  which  office  is, at the date as of which  this
Indenture is dated, located at Gartenstrasse 10, CH-8002,  Zurich,  Switzerland,
Attention:  Dr. Dieter Wicki at which office it is authorized to receive notices
hereunder.

                  Debenture or Debentures: The terms "Debenture" or "Debentures"
shall  mean any one or  more,  as the  case  may be,  of the  8.5%  Subordinated
Convertible  Redeemable  Debentures Due 2001  authenticated  and delivered under
this Indenture.

                  Debentureholder;   holder:  The  terms   "Debentureholder"  or
"holder" as applied to any Debenture,  or other similar terms (but excluding the
term  "beneficial  holder"),  shall  mean any person in whose name at the time a
particular Debenture is registered on the Debenture registrar's books.

                  Debenture register:  The term "Debenture  register" shall have
the meaning specified in Section 2.5(a).

                  Debenture registrar: The term "Debenture registrar" shall have
the meaning specified in Section 2.5(a).

                  default:  The term "default"  shall mean any event that is, or
after notice or passage of time, or both, would be, an Event of Default.

                  Event of Default:  The term "Event of Default"  shall mean any
event specified in Section 6.1(a) through (e).

                  Exchange  Act:  The  term   "Exchange   Act"  shall  mean  the
Securities  Exchange  Act of 1934,  as  amended,  and the rules and  regulations
promulgated thereunder.

                  Indenture:  The term "Indenture" shall mean this instrument as
originally  executed or, if amended or  supplemented as herein  provided,  as so
amended or supplemented.

                  Interest Payment Date: The term "Interest  Payment Date" shall
mean each June 30 and December 31, beginning June 30, 1999.

                  Nonpayment Default:  The term "Nonpayment  Default" shall have
the meaning specified in Section 15.4(b).

                                        3
<PAGE>


                  Officers' Certificate:  The term "Officers' Certificate," when
used  with  respect  to the  Company,  shall  mean a  certificate  signed by two
authorized officers which shall include (a) any of the Chairman,  President, the
Chief Executive  Officer or the Chief Financial Officer and (b) any Treasurer or
Secretary or any  Assistant  Secretary of the Company,  that is delivered to the
Trustee.  Each such  certificate  shall include the  statements  provided for in
Section 16.5 if and to the extent required by the provisions of such Section.

                  Opinion of Counsel:  The term "Opinion of Counsel"  shall mean
an opinion in writing  signed by legal  counsel,  who may be an  employee  of or
counsel to the  Company or other  counsel  acceptable  to the  Trustee,  that is
delivered  to the  Trustee.  Each such  opinion  shall  include  the  statements
provided for in Section 16.5 if and to the extent  required by the provisions of
such Section.

                  Outstanding:   The  term   "outstanding"   with  reference  to
Debentures as of any  particular  time shall mean,  subject to the provisions of
Section 8.4, all  Debentures  authenticated  and  delivered by the Trustee under
this Indenture, except

                  (a)  Debentures   theretofore   canceled  by  the  Trustee  or
         delivered to the Trustee for cancellation;

                  (b) Debentures,  or portions thereof,  for which monies in the
         necessary  amount  shall have been  deposited in trust with the Trustee
         for payment, redemption or repurchase; provided that if such Debentures
         are to be  redeemed  prior  to the  maturity  thereof,  notice  of such
         redemption  shall have been given  pursuant to Article III or provision
         satisfactory  to the  Trustee  shall  have  been made for  giving  such
         notice;

                  (c)  Debentures  paid or  converted  pursuant  to Section  2.6
         hereof or  Debentures  in lieu of or in  substitution  for which  other
         Debentures shall have been  authenticated and delivered pursuant to the
         terms of  Section  2.6  unless  proof  satisfactory  to the  Trustee is
         presented that any such Debentures are held by bona fide holders in due
         course; and

                  (d) Debentures converted into Common Stock or cash pursuant to
         Article XIV and Debentures not deemed  outstanding  pursuant to Section
         3.2.

                  Paying  Agent:  The term  Paying  Agent  shall mean any person
authorized by the Company to pay the principal of or interest on any  Debentures
on behalf of the Company, which term may include the Company.

                  Payment  Default:  The term "Payment  Default"  shall have the
meaning specified in Section 15.4(a).

                                        4
<PAGE>

                  person:  The  term  "person"  shall  mean  a  corporation,  an
association,  a  partnership,  an  individual,  a joint  venture,  a joint stock
company, a trust, an unincorporated organization or a government or an agency or
a political subdivision thereof.

                  Predecessor Debenture: The term "Predecessor Debenture" of any
particular  Debenture  shall mean every previous  Debenture  evidencing all or a
portion of the same debt as that evidenced by such  particular  Debenture;  and,
for the purposes of this definition,  any Debenture  authenticated and delivered
under  Section 2.6 in lieu of a lost,  destroyed  or stolen  Debenture  shall be
deemed to evidence the same debt as the lost, destroyed or stolen Debenture.

                  record  date:  The term  "record  date"  with  respect  to any
interest payment date shall have the meaning set forth in Section 2.3 hereof.

                  Regulation D: The term  "Regulation D" shall mean Regulation D
under the Securities Act and any successor regulation thereto.

                  Responsible  Officer:  The  term  "Responsible  Officer"  with
respect to the Trustee,  shall mean an officer of the Trustee  assigned and duly
authorized by the Trustee to administer its corporate trust matters.

                  Restricted Securities:  The term "Restricted Securities" shall
have the meaning specified in Section 2.5(b).

                  Securities  Act:  The term  "Securities  Act"  shall  mean the
Securities Act of 1933, as amended,  and the rules and  regulations  promulgated
thereunder.

                  Subsidiary:  The term  "Subsidiary"  of any  specified  person
shall mean (i) a corporation a majority of whose capital stock with voting power
under  ordinary  circumstances  to elect  directors  is at the time  directly or
indirectly  owned  by such  person  or  (ii)  any  other  person  (other  than a
corporation)   in  which  such  person  or  such  person  and  a  Subsidiary  or
Subsidiaries  of such  person or a  Subsidiary  or  Subsidiaries  of such person
directly  or  indirectly,  at the date of  determination  thereof,  has at least
majority ownership.

                  Successor Company: The term "Successor Company" shall have the
meaning specified in Section 11.1.

                  Trading  Day:  The term  "Trading  Day"  shall mean (x) if the
applicable  security  is quoted on the Nasdaq  SmallCap  Market,  a day on which
trades may be made thereon or (y) if the  applicable  security is not so listed,
admitted for trading or quoted, any day other than a Saturday or Sunday or a day
on which  banking  institutions  in the  State of New  York  are  authorized  or
obligated by law or executive order to close.

                  Transfer: The term "transfer" shall have the meaning specified
in Section 2.5(c).

                                        5
<PAGE>

                  Trustee:  The term  "Trustee"  shall  mean EPP  Finanz  AG its
successors and any corporation  resulting from or surviving any consolidation or
merger to which it or its successors may be a party and any successor trustee at
the time serving as successor trustee hereunder.

                  Section 1.2       Rules of Construction.

                  Unless the context otherwise requires:

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

                  (2) an accounting  term not otherwise  defined has the meaning
         assigned  to  it  in  accordance  with  generally  accepted  accounting
         principles;

                  (3) "or" is not exclusive;

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

                  (5) provisions apply to successive events and transactions.


                                   ARTICLE II

                   ISSUE, DESCRIPTION, EXECUTION, REGISTRATION
                           AND EXCHANGE OF DEBENTURES

                  Section 2.1 Designation,  Amount and Issue of Debentures.  The
Debentures  shall be designated  as "8.5%  Subordinated  Convertible  Redeemable
Debentures Due 2001." Debentures not to exceed the aggregate principal amount of
US  $2,000,000  upon  the  execution  of this  Indenture,  or from  time to time
thereafter,  may be executed by the  Company  and  delivered  to the Trustee for
authentication,  and the Trustee shall thereupon authenticate and make available
for delivery said  Debentures  upon the written order of the Company,  signed by
its (a) Chairman, Chief Executive Officer, President or Chief Financial Officer,
and (b) any  Treasurer  or  Secretary or any  Assistant  Secretary,  without any
further action by the Company hereunder.

                  Section 2.2 Form of Debentures. The Debentures will be offered
and sold to persons who are  Accredited  Investors  in reliance on  Regulation D
substantially in the form of Exhibit A hereto, with the legends in substantially
the form set  forth  in  Exhibit  A hereto  and  such  other  legends  as may be
applicable thereto. Such Debentures shall constitute "restricted  securities" as
defined in Regulation D and Rule 144 promulgated and the Securities Act.

                  Any of the Debentures may have such letters,  numbers or other
marks of  identification  and such  notations,  legends and  endorsements as the
Company  officers  executing  the  same may  approve  (execution  thereof  to be
conclusive evidence of such approval) and as are

                                        6
<PAGE>

not inconsistent with the provisions of this Indenture, or as may be required to
comply with any law or with any rule or regulation made pursuant thereto or with
any rule or  regulation  of any stock  exchange on which the  Debentures  may be
listed, or to conform to usage.

                  The terms and  provisions  contained  in the form of Debenture
attached as Exhibit A hereto shall constitute,  and are hereby expressly made, a
part of  this  Indenture  and to the  extent  applicable,  the  Company  and the
Trustee,  by their execution and delivery of this Indenture,  expressly agree to
such terms and provisions and to be bound thereby.

                  Section 2.3 Date and  Denomination of Debentures;  Payments of
Interest.  The  Debentures  shall be issuable in  registered  form only  without
coupons in  denominations  of $1,000  principal  amount and  integral  multiples
thereof.  Every Debenture shall be dated the date of its  authentication,  shall
bear interest from the original  issue date of such Debenture and interest shall
be payable  semiannually  on each June 30 and  December 31  commencing  June 30,
1999, as specified on the face of the form of  Debenture,  attached as Exhibit A
hereto.

                  The person in whose  name any  Debenture  (or its  Predecessor
Debenture)  is  registered  at the close of  business  on any  record  date with
respect to any interest  payment date (including any Debenture that is converted
after the  record  date and on or before the  interest  payment  date)  shall be
entitled  to  receive  the  interest  payable  on  such  interest  payment  date
notwithstanding  the cancellation of such Debenture upon any transfer,  exchange
or conversion  subsequent to the record date and prior to such interest  payment
date. Interest may, at the option of the Company, be paid by check mailed to the
address of such person as it appears on the Debenture register. The term "record
date"  with  respect  to any  interest  payment  date  shall mean the June 15 or
December 15 preceding said June 30 or December 31.

                  Interest on the Debentures shall be computed on the basis of a
360-day year composed of twelve 30-day months.

                  Section 2.4 Execution of Debentures.  The Debentures  shall be
signed  in the  name  and on  behalf  of the  Company  by the  signature  of its
Chairman,  Chief Executive  Officer,  President or Chief  Financial  Officer and
attested by the  signature of its  Treasurer,  Secretary or any of its Assistant
Secretaries  (any of which  signatures  may be printed,  engraved  or  otherwise
reproduced  thereon,  by facsimile or otherwise).  Only such Debentures as shall
bear thereon a certificate of authentication substantially in the form set forth
on the form of Debenture attached as Exhibit A hereto,  manually executed by the
Trustee  (or an  authenticating  agent  appointed  by the Trustee as provided by
Section  16.9),  shall be entitled to the benefits of this Indenture or be valid
or  obligatory  for any  purpose.  Such  certificate  by the Trustee (or such an
authenticating  agent)  upon any  Debenture  executed  by the  Company  shall be
conclusive   evidence  that  the  Debenture  so  authenticated   has  been  duly
authenticated  and  delivered  hereunder  and that the holder is entitled to the
benefits of this Indenture.

                  In case any  officer of the  Company who shall have signed any
of the Debentures shall cease to be such officer before the Debentures so signed
shall have been  authenticated  and delivered by the Trustee,  or disposed of by
the Company, such Debentures nevertheless may be

                                        7
<PAGE>

authenticated  and delivered or disposed of as though the person who signed such
Debentures  had not ceased to be such officer of the Company;  and any Debenture
may be signed on behalf of the Company by such persons as, at the actual date of
the execution of such  Debenture,  shall be the proper  officers of the Company,
although at the date of the execution of this  Indenture any such person was not
such an officer.

                  Section  2.5   Exchange  and   Registration   of  Transfer  of
Debentures; Restrictions on Transfer.

                  (a) The Company shall cause to be kept at the Corporate  Trust
Office of the Trustee a register (the register  maintained in such office and in
any other  office or agency of the  Company  designated  pursuant to Section 4.2
being herein sometimes  collectively referred to as the "Debenture register") in
which, subject to such reasonable  regulations as it may prescribe,  the Company
shall provide for the registration of Debentures and of transfers of Debentures.
Such Debenture register shall be in written form or in any form capable of being
converted  into written form within a reasonable  period of time. The Trustee is
hereby appointed "Debenture registrar" for the purpose of registering Debentures
and transfers of Debentures as herein  provided.  The Company may appoint one or
more co-registrars.

                  Upon surrender for  registration  of transfer of any Debenture
to  the  Debenture  registrar  or  any  co-registrar  and  satisfaction  of  the
requirements  for such transfer set forth in this Section 2.5, the Company shall
execute, and the Trustee shall authenticate and make available for delivery,  in
the name of the designated transferee or transferees, one or more new Debentures
of any authorized  denominations  and of a like aggregate  principal  amount and
bearing such legends as may be required by Section 2.5(b).

                  Debentures  may  be  exchanged  for  other  Debentures  of any
authorized  denominations  and  of  a  like  aggregate  principal  amount,  upon
surrender  of the  Debentures  to be  exchanged  at any such  office or  agency.
Whenever any  Debentures  are so  surrendered  for  exchange,  the Company shall
execute, and the Trustee shall authenticate and make available for delivery, the
Debentures that the  Debentureholder  making the exchange is entitled to receive
bearing certificate numbers not contemporaneously outstanding.

                  All Debentures  presented or surrendered  for  registration of
transfer or for exchange shall (if so required by the Company,  the Trustee, the
Debenture registrar or any co-registrar) be duly endorsed,  or be accompanied by
a written  instrument of transfer in form satisfactory to the Company,  executed
by the Debentureholder thereof or his attorney duly authorized in writing.

                  A   reasonable   service   charge  shall  be  charged  to  the
Debentureholder for any exchange or registration of transfer of Debentures,  and
the  Company  may  require  payment  of a  sum  sufficient  to  cover  any  tax,
assessments  or other  governmental  charges  that may be imposed in  connection
therewith.

                                        8
<PAGE>

                  None of the Company,  the Trustee,  the Debenture registrar or
any co-registrar shall be required to exchange or register a transfer of (a) any
Debentures  for a period of 15 days next  preceding  the  mailing of a notice of
redemption,  (b) any  Debentures  called for  redemption or, if a portion of any
Debenture is selected or called for redemption, such portion thereof selected or
called for  redemption,  (c) any Debentures  surrendered for conversion or, if a
portion of any Debenture is surrendered  for  conversion,  such portion  thereof
surrendered for conversion.

                  All  Debentures  issued  upon  any  transfer  or  exchange  of
Debentures  shall be the valid  obligations of the Company,  evidencing the same
debt and entitled to the same benefits  under this  Indenture as the  Debentures
surrendered upon such registration of transfer or exchange. All Debentures,  the
transfer,  exchange  and/or  registration of which is effectuated by the Trustee
pursuant to this Section 2.5, shall be  accompanied by an Officers'  Certificate
of the Company, executed by a Responsible Officer thereof,  certifying that such
transfer,  exchange  and/or  registration  is  authorized  by  the  Company  and
permitted hereunder.

                  (b) Every  Debenture  that  bears or is  required  under  this
Section  2.5(b) to bear the legend set forth in this  Section  2.5(b)  (together
with any Common Stock issued upon  conversion  of the  Debenture and required to
bear the legend  set forth in  Section  2.5(c),  collectively,  the  "Restricted
Securities")  shall be subject to the restrictions on transfer set forth in this
Section 2.5(b),  unless such  restrictions on transfer shall have been waived by
the written  consent of the Company or removed in accordance with the provisions
of Section  2.5(d),  and the holder of each such  Restricted  Security,  by such
holder's  acceptance  thereof,  agrees  to be  bound  by  such  restrictions  on
transfer.  As used in this Section 2.5(b),  the term "transfer"  encompasses any
sale, pledge, transfer or other disposition of any Restricted Security.

                  Any  certificate  evidencing any Debenture (and all securities
issued in exchange therefor or substitution thereof, other than Common Stock, if
any,  issued upon conversion  thereof,  which shall bear the legend set forth in
Section  2.5(c),  if  applicable)  shall  bear a  legend  in  substantially  the
following form,  unless  otherwise agreed by the Company (with notice thereof to
the Trustee):

         THE DEBENTURE  EVIDENCED  HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
         SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
         SECURITIES  LAWS, AND MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN
         THE  FOLLOWING   SENTENCE.   BY  ACQUISITION  HEREOF,  THE  HOLDER  (1)
         REPRESENTS THAT (A) IT IS AN "ACCREDITED  INVESTOR" (AS DEFINED IN RULE
         501(a) UNDER THE SECURITIES ACT) ("ACCREDITED  INVESTOR") AND (B) IT IS
         ACQUIRING THE DEBENTURE  EVIDENCED HEREBY FOR INVESTMENT  PURPOSES ONLY
         AND NOT WITH A VIEW TOWARDS  DISTRIBUTION;  (2) AGREES THAT IT WILL NOT
         RESELL OR OTHERWISE  TRANSFER  THE  DEBENTURE  EVIDENCED  HEREBY OR THE
         COMMON STOCK ISSUABLE UPON  CONVERSION OF SUCH DEBENTURE  EXCEPT (A) TO
         THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL
         BUYER IN COMPLIANCE  WITH RULE 144A UNDER THE SECURITIES ACT, (C) TO AN
         ACCREDITED INVESTOR THAT,

                                        9
<PAGE>


         PRIOR TO SUCH TRANSFER, FURNISHES TO EPP FINANZ AG AS TRUSTEE, A SIGNED
         LETTER CONTAINING CERTAIN  REPRESENTATIONS  AND AGREEMENTS  RELATING TO
         THE  RESTRICTIONS  ON TRANSFER OF THE DEBENTURE  EVIDENCED  HEREBY (THE
         FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH  TRUSTEE),  (D) PURSUANT
         TO THE  EXEMPTION  FROM  REGISTRATION  PROVIDED  BY RULE 144  UNDER THE
         SECURITIES  ACT  (IF  AVAILABLE)  OR  (E)  PURSUANT  TO A  REGISTRATION
         STATEMENT  WHICH HAS BEEN DECLARED  EFFECTIVE UNDER THE SECURITIES ACT;
         AND (3)  AGREES  THAT IT  WILL  DELIVER  TO  EACH  PERSON  TO WHOM  THE
         DEBENTURE EVIDENCED HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
         EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THE DEBENTURE
         EVIDENCED  HEREBY,  THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH
         ON THE  REVERSE  HEREOF  RELATING  TO THE MANNER OF SUCH  TRANSFER  AND
         SUBMIT THIS  CERTIFICATE TO EPP FINANZ AG, AS TRUSTEE.  IF THE PROPOSED
         TRANSFER IS PURSUANT TO CLAUSE (C) OR (D) ABOVE, THE HOLDER MUST, PRIOR
         TO  SUCH  TRANSFER,   FURNISH  TO  EPP  FINANZ  AG,  AS  TRUSTEE,  SUCH
         CERTIFICATIONS,  LEGAL OPINIONS OR OTHER INFORMATION AS THE COMPANY MAY
         REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT
         TO  AN  EXEMPTION  FROM,  OR  IN A  TRANSACTION  NOT  SUBJECT  TO,  THE
         REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

                  Any Debenture (or security  issued in exchange or substitution
therefor)  as to which such  restrictions  on  transfer  shall  have  expired in
accordance  with their  terms may,  upon  satisfaction  of the  requirements  of
Section  2.5(d) and  surrender of such  Debenture  for exchange to the Debenture
registrar in  accordance  with the  provisions of this Section 2.5, be exchanged
for a new Debenture or Debentures, of like tenor and aggregate principal amount,
which shall not bear the restrictive legend required by this Section 2.5(b).

                  (c) Any stock  certificate  representing  Common  Stock issued
upon  conversion  of any  Debenture  shall  bear a legend in  substantially  the
following  form,  unless  otherwise  agreed by the Company (with written  notice
thereof to the Trustee and any transfer agent for the Common Stock):

         THE COMMON STOCK  EVIDENCED  HEREBY HAS NOT BEEN  REGISTERED  UNDER THE
         U.S.  SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
         STATE  SECURITIES  LAWS,  AND MAY NOT BE OFFERED OR SOLD  EXCEPT AS SET
         FORTH IN THE FOLLOWING  SENTENCE.  THE HOLDER HEREOF AGREES THAT (1) IT
         WILL NOT RESELL OR OTHERWISE TRANSFER THE COMMON STOCK EVIDENCED HEREBY
         EXCEPT  (A)  TO  THE  COMPANY  OR  ANY  SUBSIDIARY  THEREOF,  (B)  TO A
         "QUALIFIED  INSTITUTIONAL  BUYER"  (AS  DEFINED  IN RULE 144A UNDER THE
         SECURITIES  ACT) IN COMPLIANCE  WITH RULE 144A,  (C) TO AN  "ACCREDITED
         INVESTOR"  (AS DEFINED IN RULE 501(a)  UNDER THE  SECURITIES  ACT) THAT
         PRIOR TO SUCH

                                       10
<PAGE>


         TRANSFER,  FURNISHES  TO THE  COMPANY'S  TRANSFER  AGENT FOR ITS COMMON
         STOCK,  A  SIGNED  LETTER  CONTAINING   CERTAIN   REPRESENTATIONS   AND
         AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THE COMMON STOCK
         EVIDENCED  HEREBY (THE FORM OF WHICH  LETTER CAN BE OBTAINED  FROM SUCH
         TRANSFER  AGENT),  (D)  PURSUANT  TO THE  EXEMPTION  FROM  REGISTRATION
         PROVIDED BY RULE 144 UNDER THE  SECURITIES  ACT (IF  AVAILABLE)  OR (E)
         PURSUANT TO A REGISTRATION  STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE
         UNDER THE  SECURITIES  ACT; (2) PRIOR TO ANY SUCH TRANSFER  PURSUANT TO
         CLAUSE (C) OR (D) ABOVE,  IT WILL  FURNISH  TO THE  COMPANY'S  TRANSFER
         AGENT FOR COMMON STOCK,  SUCH  CERTIFICATIONS,  LEGAL OPINIONS OR OTHER
         INFORMATION AS THE COMPANY MAY REASONABLY  REQUIRE TO CONFIRM THAT SUCH
         TRANSFER  IS  BEING  MADE  PURSUANT  TO  AN  EXEMPTION  FROM,  OR  IN A
         TRANSACTION  NOT  SUBJECT  TO,  THE  REGISTRATION  REQUIREMENTS  OF THE
         SECURITIES  ACT;  AND (3) IT WILL  DELIVER  TO EACH  PERSON TO WHOM THE
         COMMON STOCK EVIDENCED HEREBY IS TRANSFERRED A NOTICE  SUBSTANTIALLY TO
         THE  EFFECT  OF THIS  LEGEND.  THIS  LEGEND  WILL BE  REMOVED  UPON THE
         SATISFACTION  OF THE  TRANSFER  AGENT THAT THE COMMON  STOCK  EVIDENCED
         HEREBY HAS BEEN OR IS BEING  OFFERED AND SOLD  PURSUANT TO AN EFFECTIVE
         REGISTRATION  STATEMENT  OR IN  ACCORDANCE  WITH  RULE  144  UNDER  THE
         SECURITIES ACT.

                  Any  such  Common  Stock  as to  which  such  restrictions  on
transfer   shall  have  expired  in  accordance   with  their  terms  may,  upon
satisfaction  of  the  requirements  of  Section  2.5(d)  and  surrender  of the
certificates representing such shares of Common Stock for exchange in accordance
with the procedures of the transfer agent for the Common Stock, be exchanged for
a new  certificate  or  certificates  for a like  aggregate  number of shares of
Common  Stock,  which  shall not bear the  restrictive  legend  required by this
Section 2.5(c).

                  (d) Upon any sale or transfer of any  Restricted  Security (i)
that is  effected  pursuant to an  effective  registration  statement  under the
Securities Act, (ii) that is effected  pursuant to Rule 144 as promulgated under
the  Securities  Act as  determined  by  counsel  to the  Company  or  (iii)  in
connection  with which the Trustee (or transfer  agent for the Common Stock,  in
the case of shares of Common Stock) receives  certificates and other information
(including  an opinion of counsel,  if requested)  reasonably  acceptable to the
Company  to the  effect  that such  security  shall no longer be  subject to the
resale  restrictions under federal and state securities laws, then the Debenture
registrar or co-registrar (or transfer agent, in the case of Common Stock) shall
permit the holder  thereof to exchange such  Restricted  Security for a security
that  does not bear the  legends  set forth in  Section  2.5(b)  or  2.5(c),  as
applicable, and shall rescind any such restrictions on transfer.

                  (e) Each  holder or former  holder  of a  Debenture  agrees to
indemnify the Company and the Trustee against any liability that may result from
the transfer, exchange or

                                       11
<PAGE>

assignment  of such  holder's or former  holder's  Debenture in violation of any
provision of this Indenture  and/or  applicable U.S. federal or state securities
law.

                  Section 2.6 Mutilated,  Destroyed,  Lost or Stolen Debentures.
In case any Debenture  shall become  mutilated or be destroyed,  lost or stolen,
the Company in its discretion may execute,  and upon its request, the Trustee or
an  authenticating  agent appointed by the Trustee shall  authenticate  and make
available  for delivery a new Debenture  bearing a number not  contemporaneously
outstanding in exchange and substitution for the mutilated  Debenture or in lieu
of and in  substitution  for the  Debenture so  destroyed,  lost or stolen.  The
Company may charge such applicant for the expenses of the Company in replacing a
Debenture. In every case the applicant for a substituted Debenture shall furnish
to the Company, to the Trustee and, if applicable,  to such authenticating agent
such  security  or  indemnity  as may be  required  by them to save each of them
harmless from any loss,  liability,  cost or expense caused by or connected with
such  substitution,  and in  every  case  of  destruction,  loss or  theft,  the
applicant shall also furnish to the Company,  to the Trustee and, if applicable,
to such authenticating  agent evidence to their satisfaction of the destruction,
loss or theft of such Debenture and of the ownership thereof.

                  The Trustee or such authenticating  agent may authenticate any
such  substituted  Debenture  and  deliver  the same  upon the  receipt  of such
security or  indemnity  as the Trustee,  the Company  and, if  applicable,  such
authenticating  agent  may  require.   Upon  the  issuance  of  any  substituted
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 thereto and any
other expenses connected therewith. In case any Debenture that has matured or is
about to mature or has been called for  redemption or is about to be repurchased
or converted  into Common Stock or cash shall become  mutilated or be destroyed,
lost or stolen, the Company may, instead of issuing a substitute Debenture,  pay
or authorize the payment of or convert or authorize  the  conversion of the same
(without surrender thereof, except in the case of a mutilated Debenture), as the
case may be, if the applicant  for such payment or  conversion  shall furnish to
the Company,  to the Trustee and, if applicable,  to such  authenticating  agent
such  security  or  indemnity  as may be  required  by them to save each of them
harmless from any loss,  liability,  cost or expense caused by or connected with
such  substitution,  and  in  case  of  destruction,  loss  or  theft,  evidence
satisfactory to the Company, the Trustee and, if applicable, any paying agent or
conversion agent of the destruction,  loss or theft of such Debenture and of the
ownership thereof.

                  Every  substitute  Debenture issued pursuant to the provisions
of this Section 2.6 in lieu of any Debenture  that is destroyed,  lost or stolen
shall constitute an additional contractual obligation of the Company, whether or
not the destroyed,  lost or stolen Debenture shall be enforceable by anyone, and
shall be  entitled  to all the  benefits  of (but  shall be  subject  to all the
limitations set forth in) this Indenture  equally and  proportionately  with any
and all other Debentures duly issued hereunder.  To the extent permitted by law,
all  Debentures  shall be held and owned  upon the  express  condition  that the
foregoing provisions are exclusive with respect to the replacement or payment or
conversion of mutilated, destroyed, lost or stolen Debentures and shall preclude
any and all other rights or remedies notwithstanding any law or statute

                                       12
<PAGE>

existing or hereafter enacted to the contrary with respect to the replacement or
payment or conversion  of negotiable  instruments  or other  securities  without
their surrender.

                  Section 2.7 Temporary  Debentures.  Pending the preparation of
definitive   Debentures,   the  Company  may  execute  and  the  Trustee  or  an
authenticating agent appointed by the Trustee shall, upon written request of the
Company,  authenticate  and make  available  for delivery  temporary  Debentures
(printed  or  lithographed).  Temporary  Debentures  shall  be  issuable  in any
authorized denomination and shall be substantially in the form of the definitive
Debentures  but  with  such  omissions,  insertions  and  variations  as  may be
appropriate for temporary  Debentures,  all as may be determined by the Company.
Every  such   temporary   Debenture   shall  be  executed  by  the  Company  and
authenticated  by the  Trustee  or  such  authenticating  agent  upon  the  same
conditions and in substantially  the same manner,  and with the same effect,  as
the definitive Debentures.  Without unreasonable delay the Company shall execute
and deliver to the Trustee or such  authenticating  agent definitive  Debentures
and thereupon any or all temporary  Debentures  may be  surrendered  in exchange
therefor, at each office or agency maintained by the Company pursuant to Section
4.2 and the Trustee or such  authenticating  agent shall  authenticate  and make
available  for  delivery  in exchange  for such  temporary  Debentures  an equal
aggregate principal amount of definitive Debentures. Such exchange shall be made
by the Company at its own expense  and  without  any charge  therefor.  Until so
exchanged,  the  temporary  Debentures  shall in all respects be entitled to the
same  benefits  and  subject to the same  limitations  under this  Indenture  as
definitive Debentures authenticated and delivered hereunder.

                  Section  2.8   Cancellation  of  Debentures   Paid,  Etc.  All
Debentures  surrendered  for the  purpose of  payment,  redemption,  repurchase,
conversion,  exchange or  registration  of transfer shall, if surrendered to the
Company or any paying agent or any Debenture  registrar or any conversion agent,
be surrendered to the Trustee and promptly  canceled by it or, if surrendered to
the Trustee,  shall be promptly canceled by it and no Debentures shall be issued
in lieu thereof  except as expressly  permitted by any of the provisions of this
Indenture.  If  required  by the  Company,  the Trustee  shall  return  canceled
Debentures to the Company.  If the Company shall acquire any of the  Debentures,
such  acquisition  shall not  operate as a  redemption  or  satisfaction  of the
indebtedness  represented  by such  Debentures  unless  and  until  the same are
delivered to the Trustee for cancellation.

                  Section  2.9  CUSIP  Numbers.   The  Company  in  issuing  the
Debentures may use "CUSIP"  numbers (if then generally in use),  and, if so, the
Trustee shall use CUSIP  numbers in notices of  redemption  as a convenience  to
holders;  provided that any such notice may state that no representation is made
as to the  correctness of such numbers either as printed on the Debentures or as
contained in any notice of a redemption  and that reliance may be placed only on
the  other  identification  numbers  printed  on the  Debentures,  and any  such
redemption  shall not be affected by any defect in or omission of such  numbers.
The  Company  shall  promptly  notify  the  Trustee  of any  change in the CUSIP
numbers.

                                       13
<PAGE>


                                   ARTICLE III

                     REDEMPTION AND REPURCHASE OF DEBENTURES


                  Section  3.1  Redemption   Prices.   The  Debentures  are  not
redeemable  at the option of the Company prior to December 31, 1999. At any time
on or after that date, the  Debentures may be redeemed at the Company's  option,
upon  notice as set forth in Section  3.2,  in whole at any time or in part from
time to time, at 100% plus accrued and unpaid interest thereon to the applicable
redemption date.

                  Section 3.2 Notice of Redemption;  Selection of Debentures. In
case the Company  shall  desire to  exercise  the right to redeem all or, as the
case may be, any part of the Debentures  pursuant to Section 3.1, it shall fix a
date for redemption and, in the case of any redemption  pursuant to Section 3.1,
it or, at its written  request  accompanied  by the  proposed  form of notice of
redemption (which must be received by the Trustee at least ten days prior to the
date the  Trustee is  requested  to give  notice as  described  below,  unless a
shorter  period is agreed to by the Trustee),  the Trustee in the name of and at
the  expense of the  Company,  shall mail or cause to be mailed a notice of such
redemption  at least 30 and not more  than 60 days  prior to the date  fixed for
redemption  to the holders of Debentures so to be redeemed as a whole or in part
at their last addresses as the same appear on the Debenture  register,  provided
that subject to the approval of the form of notice by the Trustee if the Company
shall  give such  notice,  it shall  also give such  notice,  and  notice of the
Debentures to be redeemed,  to the Trustee. Such mailing shall be by first class
mail. The notice, if mailed in the manner herein provided, shall be conclusively
presumed  to have been duly  given,  whether  or not the  holder  receives  such
notice.  In any case,  failure to give such  notice by mail or any defect in the
notice to the holder of any Debenture designated for redemption as a whole or in
part shall not affect the validity of the  proceedings for the redemption of any
other Debenture.

                  Each such notice of redemption  shall  identify the Debentures
to be redeemed (including CUSIP numbers), specify the aggregate principal amount
of  Debentures to be redeemed,  the date fixed for  redemption,  the  redemption
price at which  Debentures  are to be redeemed,  the place or places of payment,
that payment shall be made upon  presentation  and surrender of such Debentures,
that  interest  accrued  to the  date  fixed  for  redemption  shall  be paid as
specified in said notice and that on and after said date, interest thereon or on
the portion thereof to be redeemed shall cease to accrue. Such notice shall also
state the  current  Conversion  Price and the date on which the right to convert
such  Debentures or portions  thereof into Common Stock shall  expire.  If fewer
than all the  Debentures  are to be  redeemed,  the notice of  redemption  shall
identify the Debentures to be redeemed.  In case any Debenture is to be redeemed
in part only, the notice of redemption  shall state the portion of the principal
amount  thereof to be redeemed  and shall state that on and after the date fixed
for redemption,  upon surrender of such Debenture, a new Debenture or Debentures
in principal amount equal to the unredeemed portion thereof shall be issued.

                                       14
<PAGE>


                  On or prior to the Business Day prior to the  redemption  date
specified in the notice of redemption given as provided in this Section 3.2, the
Company shall deposit with the Trustee or with one or more paying agents (or, if
the Company is acting as its own paying agent, set aside,  segregate and hold in
trust as provided in Section 4.4) an amount of money sufficient to redeem on the
redemption  date all the Debentures so called for  redemption  (other than those
theretofore  surrendered  for  conversion  into  Common  Stock  or  cash) at the
appropriate  redemption price,  together with accrued interest to the date fixed
for  redemption.  If any Debenture  called for redemption is converted  pursuant
hereto,  any  money  deposited  with  the  Trustee  or any  paying  agent  or so
segregated and held in trust for the redemption of such Debenture  shall be paid
to the Company upon its written  request or, if then held by the Company,  shall
be  discharged  from such  trust.  If fewer  than all the  Debentures  are to be
redeemed,  the Company shall give the Trustee  written  notice in the form of an
Officers'  Certificate not fewer than 45 days (or such shorter period of time as
may be  acceptable  to the  Trustee)  prior  to the  redemption  date  as to the
aggregate principal amount of Debentures to be redeemed.

                  If  fewer  than all the  Debentures  are to be  redeemed,  the
Trustee  shall  select the  Debentures  or portions  thereof to be redeemed  (in
principal amounts of $1,000 or integral  multiples  thereof),  by lot or, in its
discretion,  on a  pro  rata  basis.  If  any  Debenture  selected  for  partial
redemption is converted in part after such selection,  the converted  portion of
such  Debenture  shall  be  deemed  (so far as may be) to be the  portion  to be
selected for redemption.  The Debentures (or portions thereof) so selected shall
be deemed duly selected for redemption for all purposes hereof,  notwithstanding
that any such Debenture is converted as a whole or in part before the mailing of
the notice of redemption.

                  Upon any redemption of less than all  Debentures,  the Company
and the  Trustee  may  treat  as  outstanding  any  Debentures  surrendered  for
conversion  during the period of 15 days next  preceding the mailing of a notice
of redemption and need not treat as outstanding any Debenture  authenticated and
delivered  during  such period in exchange  for the  unconverted  portion of any
Debenture converted in part during such period.

                  Section 3.3 Payment of Debentures  Called for  Redemption.  If
notice of redemption has been given as above provided, the Debentures or portion
of  Debentures  with respect to which such notice has been given  shall,  unless
converted into Common Stock pursuant to the terms hereof, become due and payable
on the date and at the place or places  stated in such notice at the  applicable
redemption  price,  together with interest thereon accrued to the date fixed for
redemption,  and on and after said date (unless the Company shall default in the
payment of such  Debentures  at the  redemption  price,  together  with interest
thereon  accrued  to said  date),  interest  on the  Debentures  or  portion  of
Debentures so called for redemption  shall cease to accrue,  and such Debentures
shall cease after the close of business on the Business Day next  preceding  the
date fixed for  redemption  to be  convertible  into  Common  Stock or cash and,
except as provided in  Sections  7.5 and 12.4,  to be entitled to any benefit or
security under this  Indenture,  and the holders  thereof shall have no right in
respect of such  Debentures  except the right to receive  the  redemption  price
thereof  and  unpaid  interest  thereon  to the date  fixed for  redemption.  On
presentation and surrender of such Debentures at a place of payment in said

                                       15
<PAGE>

                  notice  specified,   the  said  Debentures  or  the  specified
portions  thereof  shall be paid and  redeemed by the Company at the  applicable
redemption  price,  together with interest accrued thereon to the date fixed for
redemption;  provided that any semi-annual  payment of interest  becoming due on
the date fixed for redemption shall be payable to the holders of such Debentures
registered  as such  on the  relevant  record  date  subject  to the  terms  and
provisions of Section 2.3 hereof.

                  Upon presentation of any Debenture  redeemed in part only, the
Company shall execute and the Trustee shall  authenticate and make available for
delivery to the holder thereof,  at the expense of the Company,  a new Debenture
or Debentures,  of authorized  denominations,  in principal  amount equal to the
unredeemed portion of the Debentures so presented.

                  If any Debenture  called for  redemption  shall not be so paid
upon surrender thereof for redemption,  the principal shall,  until paid or duly
provided for, bear interest from the date fixed for redemption at the rate borne
by the Debenture and such Debenture shall remain  convertible  into Common Stock
until the principal shall have been paid or duly provided for.


                                   ARTICLE IV

                       PARTICULAR COVENANTS OF THE COMPANY


                  Section 4.1 Payment of  Principal  and  Interest.  The Company
covenants and agrees that it shall duly and  punctually  pay or cause to be paid
the  principal  and  interest on each of the  Debentures  at the places,  at the
respective  times and in the manner provided herein and in the Debentures.  Each
installment  of  interest  on the  Debentures  due on any  semi-annual  interest
payment date may be paid by mailing  checks for the interest  payable to or upon
the written  order of the holders of Debentures  entitled  thereto as they shall
appear on the Debenture register.  An installment of principal or interest shall
be  considered  paid on the date due if the Trustee or paying  agent (other than
the Company,  a Subsidiary of the Company or any Affiliate of any of them) holds
on that date money  designated  for and  sufficient  to pay the  installment  of
principal  or  interest  and is not  prohibited  from  paying  such money to the
holders of the Debentures pursuant to the terms of this Indenture.

                  Section 4.2 Maintenance of Office or Agency. The Company shall
maintain  an office  or  agency  where the  Debentures  may be  surrendered  for
registration  of transfer or  exchange  or for  presentation  for payment or for
conversion,  redemption or  repurchase  and where notices and demands to or upon
the Company in respect of the Debentures  and this Indenture may be served.  The
Company shall give prompt written notice to the Trustee of the location, and any
change in the  location,  of such  office or agency.  If at any time the Company
shall fail to  maintain  any such  office or agency or shall fail to furnish the
Trustee with the address thereof,  such presentations,  surrenders,  notices and
demands may be made or served at the Corporate Trust Office of the Trustee.

                                       16
<PAGE>

                  The Company may also from time to time  designate  one or more
other offices or agencies  where the  Debentures may be presented or surrendered
for  any  or  all  such  purposes  and  may  from  time  to  time  rescind  such
designations. The Company shall give prompt written notice to the Trustee of any
such  designation  or  rescission  and of any change in the location of any such
other office or agency.

                  The Company will  initially  act as paying agent and initially
designates  the Trustee as  Debenture  registrar  and  conversion  agent and the
offices of the  Trustee in  Zurich,  Switzerland  as the office or agency of the
Company for the purposes set forth in this Section 4.2.

                  So long as the Trustee is the Debenture registrar, the Trustee
agrees to mail, or cause to be mailed, the notices set forth in Section 7.8(a).

                  Section  4.3  Appointments  to  Fill  Vacancies  in  Trustee's
Office. The Company, whenever necessary to avoid or fill a vacancy in the office
of Trustee,  shall appoint, in the manner provided in Section 7.8, a Trustee, so
that there shall at all times be a Trustee hereunder.

                  Section 4.4 Provisions as to Paying Agent.

                  (a) The Paying Agent agrees  subject to the provisions of this
Section 4.4:

                  (1) that it shall  hold all sums held by it as such  agent for
         the payment of the principal of or interest on the Debentures  (whether
         such sums have been paid to it by the  Company or by any other  obligor
         on the  Debentures)  in trust for the  benefit  of the  holders  of the
         Debentures;

                  (2)  that it shall  give the  Trustee  written  notice  of any
         failure by the Company (or by any other obligor on the  Debentures)  to
         make any payment of the principal of or interest on the Debentures when
         the same shall be due and payable; and

                  (3) that at any time  during  the  continuance  of an Event of
         Default,  upon request of the Trustee,  it shall  forthwith  pay to the
         Trustee all sums so held in trust.

                  The Company shall, before each due date of the principal of or
interest on the  Debentures,  deposit with the Paying Agent a sum  sufficient to
pay such  principal or  interest,  and (unless such paying agent is the Trustee)
the  Company  shall  promptly  notify the  Trustee  of any  failure to take such
action.

                  (b) If the  Company  shall  act as its own  paying  agent,  it
shall,  on or  before  each  due date of the  principal  of or  interest  on the
Debentures,  set  aside,  segregate  and hold in trust  for the  benefit  of the
holders of the  Debentures a sum sufficient to pay such principal or interest so
becoming due and shall notify the Trustee of any failure to take such action and
of

                                       17
<PAGE>


any failure by the Company (or any other obligor under the  Debentures)  to make
any payment of the  principal  of or interest  on the  Debentures  when the same
shall become due and payable.

                  (c)   Anything   in   this   Section   4.4  to  the   contrary
notwithstanding,  the Company  may, at any time,  for the purpose of obtaining a
satisfaction  and discharge of this Indenture,  or for any other reason,  pay or
cause to be paid to the  Trustee  all sums held in trust by the  Company  or any
paying agent  hereunder as required by this Section 4.4, such sums to be held by
the  Trustee  upon the  trusts  herein  contained  and upon such  payment by the
Company or any paying  agent to the  Trustee,  the Company or such paying  agent
shall be released from all further liability with respect to such sums.

                  (d)   Anything   in   this   Section   4.4  to  the   contrary
notwithstanding, the agreement to hold sums in trust as provided in this Section
4.4 is subject to Sections 12.3 and 12.4.

                  Section 4.5  Corporate  Existence.  Subject to Article XI, the
Company  shall do or cause to be done all things  necessary to preserve and keep
in full  force  and  effect  (i) its  corporate  existence,  and the  corporate,
partnership or other  existence of any Subsidiary of the Company,  in accordance
with the  respective  organizational  documents (as the same may be amended from
time to time) of the Company or any such Subsidiary and (ii) the rights (charter
and  statutory),  licenses and  franchises of the Company and its  Subsidiaries;
provided  that the Company  shall not be  required  to preserve  any such right,
license or franchise, or the corporate, partnership or other existence of any of
its Subsidiaries if the Board of Directors shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company and
its Subsidiaries,  taken as a whole, and that the loss thereof is not materially
adverse to the holders of the Debentures.

                  Section  4.6 Stay,  Extension  and  Usury  Laws.  The  Company
covenants  (to the extent  that it may  lawfully do so) that it shall not at any
time insist upon, plead or in any manner whatsoever claim or take the benefit or
advantage of, any stay,  extension or usury law or other law that would prohibit
or forgive the Company  from  paying all or any portion of the  principal  of or
interest on the Debentures as contemplated  herein,  wherever enacted, now or at
any time hereafter in force, or that may affect the covenants or the performance
of this Indenture;  and the Company (to the extent it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
shall not, by resort to any such law,  hinder,  delay or impede the execution of
any power  herein  granted  to the  Trustee,  but shall  suffer  and  permit the
execution of every such power as though no such law has been enacted.


                                    ARTICLE V

                             DEBENTUREHOLDERS' LISTS


                  Section  5.1   Debentureholders'   Lists.  The  Trustee  shall
preserve in as current a form as is reasonably  practicable the most recent list
available to it of the names and addresses

                                       18
<PAGE>

of holders of  Debentures.  If the Trustee is not the Debenture  registrar,  the
Company  shall  furnish to the  Trustee  and Paying  Agent on or before at least
seven Business Days preceding each interest payment date and at such other times
as the Trustee may request in writing a list in such form and as of such date as
the  Trustee  reasonably  may require of the names and  addresses  of holders of
Debentures.


                                   ARTICLE VI

                              DEFAULTS AND REMEDIES


                  Section  6.1  Events  of  Default.  In case one or more of the
following  Events 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 the principal of the  Debentures
         when due at maturity, upon redemption or otherwise (whether or not such
         payment  shall be  prohibited  by  Article XV of this  Indenture),  and
         continuance of such default for a period of 60 days; or

                  (b) default in the payment of any  installment  of interest on
         the  Debentures  as and when  the same  shall  become  due and  payable
         (whether or not such payment  shall be prohibited by Article XV of this
         Indenture), and continuance of such default for a period of 60 days; or

                  (c) a failure on the part of the  Company  to duly  observe or
         perform any other covenants or agreements on the part of the Company in
         this Indenture  (other than a default in the performance or breach of a
         covenant or agreement that is specifically dealt with elsewhere in this
         Section 6.1) that  continues  for a period of 90 days after the date on
         which written  notice of such failure,  requiring the Company to remedy
         the same,  shall have been given to the Company by the  Trustee,  or to
         the Company and a Responsible Officer of the Trustee, by the holders of
         at least 25% in aggregate  principal  amount of the  Debentures  at the
         time outstanding determined in accordance with Section 8.4; or

                  (d) the  Company  shall  commence  a  voluntary  case or other
         proceeding  seeking  liquidation,  reorganization  or other relief with
         respect  to itself or its debts  under any  bankruptcy,  insolvency  or
         other  similar  law  now  or  hereafter  in  effect,   or  seeking  the
         appointment  of a trustee,  receiver,  liquidator,  custodian  or other
         similar  official of it or any  substantial  part of its  property,  or
         shall  consent to any such  relief or to the  appointment  of or taking
         possession  by any  such  official  in an  involuntary  case  or  other
         proceeding  commenced against it or shall make a general assignment for
         the benefit of  creditors  or shall fail  generally to pay its debts as
         they become due; or

                                       19
<PAGE>


                  (e) an involuntary case or other proceeding shall be commenced
         against the Company seeking liquidation, reorganization or other relief
         with  respect to it or its debts under any  bankruptcy,  insolvency  or
         other similar law now or hereafter in effect or seeking the appointment
         of a trustee, receiver, liquidator, custodian or other similar official
         of it or any  substantial  part of its property,  and such  involuntary
         case or other  proceeding  shall remain  undismissed and unstayed for a
         period of 60 consecutive days;

then, and in each and every such case (other than an Event of Default  specified
in Section 6.1(d) or (e)),  unless the principal of all of the Debentures  shall
have already  become due and  payable,  either the Trustee or the holders of not
less than 25% in aggregate  principal  amount of the Debentures then outstanding
hereunder determined in accordance with Section 8.4, by notice in writing to the
Company  (and to the  Trustee if given by  Debentureholders),  may  declare  the
principal  of the  Debentures  and the  interest  accrued  thereon to be due and
payable  immediately,  and upon any such  declaration  the same shall become and
shall be  immediately  due and  payable,  anything in this  Indenture  or in the
Debentures  contained  to the contrary  notwithstanding.  If an Event of Default
specified in Section  6.1(d) or (e) occurs and is  continuing,  the principal of
all the Debentures and the interest accrued thereon shall be immediately due and
payable.  The foregoing  provision is subject to the conditions  that if, at any
time after the principal of the  Debentures  shall have been so declared due and
payable,  and before any  judgment  or decree for the  payment of the monies due
shall have been obtained or entered as hereinafter  provided,  the Company shall
pay or shall  deposit  with the  Trustee  a sum  sufficient  to pay all  matured
installments  of interest upon all  Debentures  and the principal of any and all
Debentures  that shall have  become due  otherwise  than by  acceleration  (with
interest on overdue installments of interest (to the extent that payment of such
interest is enforceable  under applicable law) and on such principal at the rate
borne by the Debentures, to the date of such payment or deposit) and amounts due
to the Trustee  pursuant to Section 7.6, and if any and all defaults  under this
Indenture,  other than the  nonpayment  of principal of and accrued  interest on
Debentures that shall have become due by acceleration,  shall have been cured or
waived  pursuant  to Section  6.7,  then and in every such case the holders of a
majority in aggregate  principal amount of the Debentures then  outstanding,  by
written  notice to the Company  and to the  Trustee,  may waive all  defaults or
Events of Default and rescind and annul such  declaration and its  consequences;
but no such waiver or rescission  and annulment  shall extend to or shall affect
any subsequent default or Event of Default, or shall impair any right consequent
thereto. The Company shall notify a Responsible Officer of the Trustee, promptly
upon becoming aware thereof, of any Event of Default.

                  In case the Trustee shall have  proceeded to enforce any right
under  this  Indenture  and such  proceedings  shall have been  discontinued  or
abandoned  because of such waiver or  rescission  and annulment or for any other
reason or shall have been determined adversely to the Trustee, then and in every
such case the  Company,  the  holders of  Debentures  and the  Trustee  shall be
restored  respectively to their several positions and rights hereunder,  and all
rights,  remedies and powers of the Company,  the holders of Debentures  and the
Trustee shall continue as though no such proceeding had been taken.

                                       20
<PAGE>


                  Section 6.2 Payments of Debentures on Default;  Suit Therefor.
The Company covenants that (a) in case a default shall be made in the payment of
any  installment  of interest  upon any of the  Debentures  as and when the same
shall become due and payable, and such default shall have continued for a period
of 60 days, or (b) in case default shall be made in the payment of the principal
of any of the Debentures as and when the same shall have become due and payable,
whether at maturity of the  Debentures or in connection  with any  redemption or
repurchase,  by declaration or otherwise,  and such default shall have continued
for a period of 60 days, then, upon demand of the Trustee, the Company shall pay
to the  Trustee,  for the  benefit of the holders of the  Debentures,  the whole
amount that then shall have become due and  payable on all such  Debentures  for
principal  or  interest,  or both,  as the case may be, with  interest  upon the
overdue  principal  and  (to  the  extent  that  payment  of  such  interest  is
enforceable  under applicable law) upon the overdue  installments of interest at
the rate borne by the Debentures;  and, in addition thereto, such further amount
as shall be sufficient to cover the costs and expenses of collection,  including
reasonable  compensation to the Trustee, its agents,  attorneys and counsel, and
any expenses or liabilities incurred by the Trustee hereunder other than through
its negligence or bad faith.  Until such demand by the Trustee,  the Company may
pay the principal of and interest on the Debentures to the  registered  holders,
whether or not the Debentures are overdue.

                  In case the Company  shall fail  forthwith to pay such amounts
upon such  demand,  the  Trustee,  in its own name and as  trustee of an express
trust,  shall be entitled and empowered to institute any actions or  proceedings
at law or in equity  for the  collection  of the sums so due and  unpaid and may
prosecute any such action or  proceeding  to judgment or final  decree,  and may
enforce  any such  judgment  or final  decree  against  the Company or any other
obligor on the Debentures  and collect in the manner  provided by law out of the
property of the Company or any other obligor on the Debentures wherever situated
the monies adjudged or decreed to be payable.

                  In case there shall be pending  proceedings for the bankruptcy
or for the  reorganization of the Company or any other obligor on the Debentures
under Title 11 of the United States Code or any other applicable law, or in case
a receiver,  assignee or trustee in  bankruptcy or  reorganization,  liquidator,
sequestrator  or  similar  official  shall  have  been  appointed  for or  taken
possession of the Company or such other obligor,  the property of the Company or
such other obligor, or in the case of any other judicial proceedings relative to
the Company or such other  obligor upon the  Debentures,  or to the creditors or
property of the Company or such other  obligor,  the  Trustee,  irrespective  of
whether the principal of the Debentures shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand pursuant to the provisions of this Section 6.2, shall
be entitled and empowered,  by intervention in such proceedings or otherwise, to
file and prove a claim or claims for the whole amount of principal  and interest
owing and unpaid in  respect  of the  Debentures  and,  in case of any  judicial
proceedings,  to file such proofs of claim and other  papers or documents as may
be  necessary or advisable in order to have the claims of the Trustee and of the
Debentureholders allowed in such judicial proceedings relative to the Company or
any other obligor on the  Debentures,  its or their  creditors,  or its or their
property and to collect and receive any monies or other property payable or

                                       21
<PAGE>


deliverable on any such claims and to distribute the same after the deduction of
any amounts due the Trustee  under  Section 7.6; and any  receiver,  assignee or
trustee  in  bankruptcy  or  reorganization,  liquidator,  custodian  or similar
official  is  hereby  authorized  by each of the  Debentureholders  to make such
payments to the Trustee and, in the event that the Trustee  shall consent to the
making of such payments directly to the Debentureholders,  to pay to the Trustee
any  amount  due  it  for  reasonable  compensation,   expenses,   advances  and
disbursements,  including  counsel  fees  incurred  by it up to the date of such
distribution.  To the  extent  that such  payment  of  reasonable  compensation,
expenses,  advances and  disbursements out of the estate in any such proceedings
shall be denied for any  reason,  payment of the same shall be secured by a lien
on,  and shall be paid out of,  any and all  distributions,  dividends,  monies,
securities and other property that the holders of the Debentures may be entitled
to receive in such  proceedings,  whether  in  liquidation  or under any plan of
reorganization or arrangement or otherwise.

                  Nothing  herein  contained  shall be deemed to  authorize  the
Trustee to authorize or consent to or adopt on behalf of any Debentureholder any
plan of reorganization or arrangement  affecting the Debentures or the rights of
any Debentureholder, or to authorize the Trustee to vote in respect of the claim
of any Debentureholder in any such proceeding.

                  All  rights of  action  and of  asserting  claims  under  this
Indenture,  or under  any of the  Debentures,  may be  enforced  by the  Trustee
without the possession of any of the Debentures or the production thereof on any
trial or other  proceeding  relative  thereto,  and any such suit or  proceeding
instituted  by the  Trustee  shall be  brought  in its own name as trustee of an
express  trust,  and any recovery of judgment  shall,  after  provision  for the
payment of the reasonable compensation,  expenses, disbursements and advances of
the Trustee,  its agents and counsel,  be for the ratable benefit of the holders
of the Debentures.

                  In any  proceedings  brought by the  Trustee  pursuant to this
Indenture  or any  supplement  hereto  (and  in any  proceedings  involving  the
interpretation  of any provision of this Indenture to which the Trustee shall be
a  party),  the  Trustee  shall  be held to  represent  all the  holders  of the
Debentures,  and it shall not be necessary to make any holders of the Debentures
parties to any such proceedings.

                  Section 6.3  Application of Monies  Collected by Trustee.  Any
monies  collected by the Trustee pursuant to this Article VI shall be applied in
the  order  following,  at the  date  or  dates  fixed  by the  Trustee  for the
distribution of such monies,  upon  presentation  of the several  Debentures and
stamping  thereon  the  payment,  if only  partially  paid,  and upon  surrender
thereof, if fully paid:

                  First:  To the payment of all  amounts  due the Trustee  under
         Section 7.6;

                  Second:  Subject to the  provisions of Article XV, in case the
         principal of the outstanding  Debentures  shall not have become due and
         be unpaid,  to the payment of interest on the  Debentures in default in
         the order of the maturity of the  installments  of such interest,  with
         interest (to the extent that such interest has been collected by the

                                       22
<PAGE>


         Trustee) upon the overdue installments of interest at the rate borne by
         the  Debentures,  such  payments  to be  made  ratably  to the  persons
         entitled thereto; and

                  Third:  Subject to the  provisions  of Article XV, in case the
         principal  of the  outstanding  Debentures  shall have  become  due, by
         declaration  or otherwise,  and be unpaid,  to the payment of the whole
         amount then holding and unpaid upon the  Debentures  for  principal and
         interest,  with  interest on the overdue  principal  and (to the extent
         that such  interest has been  collected  by the  Trustee)  upon overdue
         installments  of interest at the rate borne by the  Debentures;  and in
         case such monies shall be insufficient to pay in full the whole amounts
         so due and  unpaid  upon the  Debentures,  then to the  payment of such
         principal and interest without preference or priority of principal over
         interest,  or of  interest  over  principal  or of any  installment  of
         interest over any other  installment  of interest,  or of any Debenture
         over any other  Debenture,  ratably to the aggregate of such  principal
         and accrued and unpaid interest.

                  Section 6.4 Proceedings by  Debentureholder.  No holder of any
Debenture  shall have any right by virtue of or by availing of any  provision of
this  Indenture to institute any suit,  action or proceeding in equity or at law
upon or under or with respect to this  Indenture,  or for the  appointment  of a
receiver, trustee,  liquidator,  custodian or other similar official, or for any
other remedy  hereunder,  unless such holder  previously shall have given to the
Trustee written notice of an Event of Default and of the continuance thereof, as
hereinbefore  provided,  and  unless  also the  holders  of not less than 25% in
aggregate  principal amount of the Debentures then  outstanding  shall have made
written request upon the Trustee to institute such action, suit or proceeding in
its own name as Trustee  hereunder  and shall have  offered to the Trustee  such
reasonable  indemnity  as  it  may  require  against  the  costs,  expenses  and
liabilities to be incurred therein or thereby, and the Trustee for 60 days after
its receipt of such notice, request and offer of indemnity, shall have neglected
or refused to institute any such action,  suit or  proceeding,  and no direction
inconsistent  with such  written  request  shall have been given to the  Trustee
pursuant to Section 6.7; it being  understood and intended,  and being expressly
covenanted by the taker and holder of every Debenture with every other taker and
holder and the Trustee, that no one or more holders of Debentures shall have any
right in any manner  whatever by virtue of or by availing  of any  provision  of
this Indenture to affect, disturb or prejudice the rights of any other holder of
Debentures, to obtain or seek to obtain priority over or preference to any other
such holder or to enforce any right under this  Indenture,  except in the manner
herein provided and for the equal,  ratable and common benefit of all holders of
Debentures  (except  as  otherwise  provided  herein).  For the  protection  and
enforcement of this Section 6.4, each and every  Debentureholder and the Trustee
shall be entitled to such relief as can be given either at law or in equity.

                  Notwithstanding  any other provision of this Indenture and any
provision of any Debenture,  the right of any holder of any Debenture to receive
payment of the  principal  of and  interest on such  Debenture,  on or after the
respective due dates expressed in such  Debenture,  or to institute suit for the
enforcement  of any such payment on or after such  respective  dates against the
Company  shall not be impaired  or  affected  without the consent of such holder
except as otherwise set forth herein.

                                       23
<PAGE>

                  Anything in this  Indenture or the  Debentures to the contrary
notwithstanding,  the holder of any Debenture, without the consent of either the
Trustee or the holder of any other Debenture,  in his own behalf and for his own
benefit,  may enforce, and may institute and maintain any proceeding suitable to
enforce, his rights of conversion as provided herein.

                  Section 6.5  Proceedings  by  Trustee.  In case of an Event of
Default and subject to the provisions of Section 7.6 hereof,  the Trustee may in
its  discretion  proceed to protect and enforce the rights  vested in it by this
Indenture by such  appropriate  judicial  proceedings  as the Trustee shall deem
most  effectual  to protect and enforce  any of such  rights,  either by suit in
equity or by action at law or by proceeding in bankruptcy or otherwise,  whether
for the specific  enforcement  of any  covenant or  agreement  contained in this
Indenture or in aid of the exercise of any power granted in this Indenture or to
enforce  any  other  legal or  equitable  right  vested in the  Trustee  by this
Indenture or by law.

                  Section 6.6  Remedies  Cumulative  and  Continuing.  Except as
provided in Section 2.6, all powers and remedies given by this Article VI to the
Trustee or to the  Debentureholders  shall,  to the extent  permitted by law, be
deemed  cumulative and not exclusive of such powers and remedies or of any other
powers and remedies  available to the Trustee or the holders of the  Debentures,
by judicial  proceedings or otherwise,  to enforce the performance or observance
of the covenants and  agreements  contained in this  Indenture,  and no delay or
omission  of the Trustee or of any holder of any of the  Debentures  to exercise
any right or power  accruing upon any default or 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 default or any acquiescence  therein;  and,
subject to the  provisions of Section 6.4,  every power and remedy given by this
Article VI or by law to the Trustee or to the  Debentureholders may be exercised
from time to time, and as often as shall be deemed expedient,  by the Trustee or
by the Debentureholders.

                  Section 6.7 Direction of Proceedings and Waiver of Defaults by
Majority of  Debentureholders.  The holders of a majority in aggregate principal
amount of the Debentures at the time outstanding  (determined in accordance with
Section  8.4)  shall  have the right to direct  the  time,  method  and place of
conducting any proceeding for any remedy  available to the Trustee or exercising
any trust or power  conferred on the Trustee;  provided that (a) such  direction
shall not be in conflict with any rule of law or with this Indenture and (b) the
Trustee  may take any other  action  deemed  proper by the  Trustee  that is not
inconsistent  with such  direction.  The  holders  of a  majority  in  aggregate
principal  amount  of the  Debentures  at the time  outstanding  (determined  in
accordance  with  Section  8.4)  may  on  behalf  of the  holders  of all of the
Debentures  waive  any  past  default  or  Event of  Default  hereunder  and its
consequences  except  (i) a  default  in the  payment  of  interest  on,  or the
principal  of,  the  Debentures,  (ii) a failure by the  Company to convert  any
Debentures  into Common Stock or cash, as the case may be, or (iii) a default in
respect of a  covenant  or  provisions  hereof  that  under  Article X cannot be
modified or amended  without the consent of the holders of all  Debentures  then
outstanding.  Whenever any default or Event of Default hereunder shall have been
waived as permitted by this Section 6.7,  said default or Event of Default shall
for all  purposes of the  Debentures  and this  Indenture be deemed to have been
cured and to be not continuing and the Company, the Trustee and the

                                       24
<PAGE>

holders of the  Debentures  shall as  reasonably  possible  be restored to their
former  positions and rights  hereunder;  but no such waiver shall extend to any
subsequent or other  default or Event of Default or impair any right  consequent
thereon.

                  Section 6.8 Notice of Defaults.  The Trustee shall,  within 90
days after the  occurrence of a default,  mail to all  Debentureholders,  as the
names and addresses of such holders appear upon the Debenture  register,  notice
of all defaults of which a Responsible Officer has actual knowledge, unless such
defaults  shall  have been cured or waived  before  the  giving of such  notice;
provided that,  except in the case of default in the payment of the principal of
or  interest  on any of the  Debentures,  the  Trustee  shall  be  protected  in
withholding  such notice if and so long as a Responsible  Officer of the Trustee
in good faith  determine that the withholding of such notice is in the interests
of the Debentureholders.

                  Section  6.9  Undertaking  to Pay Costs.  All  parties to this
Indenture  agree,  and each holder of any  Debenture by his  acceptance  thereof
shall be deemed to have agreed, that any court may, in its discretion,  require,
in any suit for the enforcement of any right or remedy under this Indenture,  or
in any suit  against  the  Trustee  for any  action  taken or  omitted  by it as
Trustee,  the filing by any party litigant in such suit of an undertaking to pay
the  costs  of such  suit and  that  such  court  may in its  discretion  assess
reasonable costs, including reasonable attorneys' fees and expenses, against any
party  litigant in such suit,  having due regard to the merits and good faith of
the claims or defenses made by such party litigant; provided that the provisions
of this Section 6.9 shall not apply to any suit  instituted  by the Trustee,  to
any suit instituted by any Debentureholder or group of Debentureholders  holding
in the aggregate more than 10% in principal amount of the Debentures at the time
outstanding  determined in accordance with Section 8.4 or to any suit instituted
by any Debentureholder for the enforcement of the payment of the principal of or
interest on any Debenture on or after the due date  expressed in such  Debenture
or to any suit for the  enforcement  of the right to convert  any  Debenture  in
accordance with the provisions of Article XIV.


                                   ARTICLE VII

                             CONCERNING THE TRUSTEE


                  Section 7.1 Duties and Responsibilities of Trustee.

                  (a) If an Event of Default has occurred and is continuing, the
Trustee shall  exercise the rights and powers vested in it by this Indenture and
use the same degree of care and skill in its exercise as a prudent  person would
exercise  or use under the  circumstances  in the conduct of such  person's  own
affairs.

                  (b) Except during the continuance of an Event of Default:

                                       25
<PAGE>

                           (1) the Trustee  need  perform only those duties that
                  are  specifically  set forth in this  Indenture and no others;
                  and

                           (2) in the  absence  of bad  faith on its  part,  the
                  Trustee  may  conclusively  rely,  as  to  the  truth  of  the
                  statements  and  the  correctness  of the  opinions  expressed
                  therein,  upon  certificates  or  opinions  furnished  to  the
                  Trustee and conforming to the  requirements of this Indenture;
                  provided that in the case of any such certificates or opinions
                  that by any provision hereof are  specifically  required to be
                  furnished to the Trustee, the Trustee shall be under a duty to
                  examine the same to  determine  whether or not they conform to
                  the  requirements  of this  Indenture (but need not confirm or
                  investigate the accuracy of mathematical calculations or other
                  facts stated therein).

                  (c) The Trustee may not be relieved from liability for its own
negligent  action,  its  own  negligent  failure  to  act  or  its  own  willful
misconduct, except that:

                           (1) this  paragraph  (c) does not limit the effect of
                  paragraph (b) of this Section 7.1;

                           (2) the Trustee  shall not be liable for any error of
                  judgment  made in good faith by a  Responsible  Officer of the
                  Trustee  unless it is proved that the Trustee was negligent in
                  ascertaining the pertinent facts  reasonably  available to the
                  Trustee; and

                           (3) the Trustee  shall not be liable with  respect to
                  any  action  it  takes  or  omits  to take in  good  faith  in
                  accordance with a direction received by it pursuant to Section
                  6.7.

                  (d) Every  provision of this Indenture that in any way relates
to the Trustee is subject to  paragraphs  (a),  (b), (c) and (e) of this Section
7.1.

                  (e) The Trustee may refuse to perform any duty or exercise any
right or power or extend or risk its own funds or otherwise  incur any financial
liability  unless it  receives  indemnity  satisfactory  to it against any loss,
liability or expense.

                  Section 7.2 Reliance on Documents,  Opinions,  Etc.  Except as
otherwise provided in Section 7.1:

                  (a) The Trustee may rely and shall be protected in acting upon
         any resolution,  certificate,  statement,  instrument, opinion, report,
         notice, request, consent, order, bond, debenture, coupon or other paper
         or document believed by it in good faith to be genuine and to have been
         signed or presented by the proper party or parties;

                  (b) Any  request,  direction,  order or demand of the  Company
         mentioned  herein  shall  be  sufficiently  evidenced  by an  Officers'
         Certificate; and any resolution of the

                                       26
<PAGE>

         Board of  Directors  may be  evidenced to the Trustee by a copy thereof
         certified by the Secretary or an Assistant Secretary of the Company;

                  (c) The Trustee may consult with counsel of its  selection and
         any  advice  or  opinion  of  counsel   shall  be  full  and   complete
         authorization  and protection in respect of any action taken or omitted
         by it  hereunder  in good faith and in  accordance  with such advice or
         opinion of counsel;

                  (d) The  Trustee  may  execute  any of the  trusts  or  powers
         hereunder  or perform  any duties  hereunder  either  directly or by or
         through  agents or attorneys,  and the Trustee shall not be responsible
         for any  misconduct  or negligence on the part of any agent or attorney
         appointed by it with due care hereunder; no paying agent who is not the
         Trustee  shall be deemed an agent of the  Trustee,  and the Trustee (in
         its  capacity  as  Trustee)  shall  not be  responsible  for any act or
         omission by any such paying agent;

                  (e) The Trustee  shall be under no  obligation to exercise any
         of the rights or powers vested in it by the Indenture at the request or
         direction of any of the holders  pursuant to this Indenture unless such
         holders  have  offered the  Trustee  reasonable  security or  indemnity
         against the costs,  expenses and liabilities  that would be incurred by
         it in compliance with such request or direction.

                  (f) Subject to the provisions of Section  7.1(c),  the Trustee
         shall  not be liable  for any  action it takes or omits to take in good
         faith that it believes to be authorized or within its rights or powers;

                  (g) In connection with any request to transfer or exchange any
         Debenture,  the  Trustee  may  request a  direction  (in the form of an
         Officers'  Certificate) from the Company and an Opinion of Counsel with
         respect to  compliance  with any  restrictions  on transfer or exchange
         imposed by this Indenture,  the Securities Act, other applicable law or
         the rules and  regulations  of any exchange on which the  Debentures or
         the capital stock may be traded,  and the Trustee may rely and shall be
         protected in acting upon such  direction  and in  accordance  with such
         Officers' Certificate and Opinion of Counsel;

                  (h) The  Trustee  may rely and  shall  be fully  protected  in
         acting  upon  the  determination  and  notice  by  the  Company  of the
         Conversion Price; and

                  (i) The Trustee  shall not be deemed to have  knowledge of any
         Event of Default or other fact or event upon the occurrence of which it
         may be required to take action  hereunder unless one of its Responsible
         Officers has actual knowledge thereof obtained by a written statement.

                  Section 7.3 No Responsibility for Recitals,  Etc. The recitals
contained herein and in the Debentures  (except in the Trustee's  certificate of
authentication) shall be taken as the statements of the Company, and the Trustee
assumes no responsibility  for the correctness of the same. The Trustee makes no
representations as to the validity or sufficiency of this Indenture

                                       27
<PAGE>

or of the  Debentures.  The  Trustee  shall  not be  accountable  for the use or
application  by the Company of any  Debentures or the proceeds of any Debentures
authenticated  and delivered by the Trustee in conformity with the provisions of
this Indenture.

                  Section  7.4  Trustee,  Paying  Agents,  Conversion  Agents or
Registrar May Own  Debentures.  The Trustee,  any paying agent,  any  conversion
agent or any Debenture registrar,  in its individual or any other capacity,  may
become the owner or pledgee of Debentures  with the same rights it would have if
it were not Trustee, paying agent, conversion agent or Debenture registrar.

                  Section  7.5  Monies  to Be  Held  in  Trust.  Subject  to the
provisions of Section 12.4,  all monies  received by the Trustee or Paying Agent
shall,  until  used or  applied  as  herein  provided,  be held in trust for the
purposes for which they were received. Money held by the Trustee or Paying Agent
in trust  hereunder need not be segregated from other funds except to the extent
required by law.  The Trustee or Paying  Agent shall be under no  liability  for
interest  on any money  received by it  hereunder  except as may be agreed to in
writing from time to time by the Company and the Trustee or Paying Agent.

                  Section 7.6 Compensation and Expenses of Trustee.  The Company
covenants  and agrees to pay to the Trustee  from time to time,  and the Trustee
shall be entitled  to, such  compensation  as the Company and the Trustee  shall
from time to time agree in writing, for all services rendered by it hereunder in
any capacity  (which  shall not be limited by any  provision of law in regard to
the compensation of a trustee of an express trust), and the Company shall pay or
reimburse   the  Trustee   upon  its  request  for  all   reasonable   expenses,
disbursements  and advances  incurred or made by the Trustee in accordance  with
any of the provisions of this Indenture  (including the reasonable  compensation
and the  expenses  and  disbursements  of its  counsel  and of all  persons  not
regularly in its employ) except any such expense, disbursement or advance as may
arise from its negligence or bad faith.  The Company also covenants to indemnify
each of the  Trustee  or any  predecessor  Trustee  in any  capacity  under this
Indenture  and its agents  and any  authenticating  agent for,  and to hold them
harmless  against,  any and all  loss,  liability,  damage,  claim  or  expense,
including  taxes (other than taxes based on the income of the Trustee)  incurred
without  negligence  or bad faith on the part of the  Trustee  or such  agent or
authenticating  agent,  as the case may be, and arising out of or in  connection
with the  acceptance or  administration  of this trust or in any other  capacity
hereunder,  including the costs and expenses of defending themselves against any
claim of liability in the premises.  The  obligations  of the Company under this
Section 7.6 to  compensate  or indemnify the Trustee and to pay or reimburse the
Trustee for  expenses,  disbursements  and  advances  shall be secured by a lien
prior to that of the Debentures upon all property and funds held or collected by
the Trustee as such,  except  funds held in trust for the benefit of the holders
of particular Debentures. The obligation of the Company under this Section shall
survive the satisfaction and discharge of this Indenture.

                  Section  7.7  Officers'  Certificate  as  Evidence.  Except as
otherwise  provided  in  Section  7.1,  whenever  in the  administration  of the
provisions  of this  Indenture  the Trustee shall deem it necessary or desirable
that a matter be proved or  established  prior to taking or omitting  any action
hereunder, such matter (unless other evidence in respect thereof be herein

                                       28
<PAGE>

specifically  prescribed)  may, in the absence of negligence or bad faith on the
part of the Trustee,  be deemed to be conclusively  proved and established by an
Officers' Certificate delivered to the Trustee, and such Officers'  Certificate,
in the absence of negligence  or bad faith on the part of the Trustee,  shall be
full  warrant to the  Trustee  for any  action  taken or omitted by it under the
provisions of this Indenture upon the faith thereof.

                  Section 7.8 Resignation or Removal of Trustee.

                   (a) The  Trustee  may at any time  resign by  giving  written
notice of such resignation to the Company;  and the Company shall mail, or cause
to be mailed,  notice thereof to the holders of Debentures at their addresses as
they shall  appear on the  Debenture  register.  Upon  receiving  such notice of
resignation,  the Company shall promptly appoint a successor  trustee by written
instrument, in duplicate,  executed by order of the Board of Directors, one copy
of which instrument shall be delivered to the resigning  Trustee and one copy to
the successor trustee.

                  (b) In case the Trustee shall become  incapable of acting,  or
shall be  adjudged a bankrupt or  insolvent,  or a receiver of the Trustee or of
its property  shall be  appointed,  or any public  officer  shall take charge or
control  of the  Trustee  or of its  property  or  affairs  for the  purpose  of
rehabilitation, conservation or liquidation, then, in any such case, the Company
may remove the Trustee and appoint a successor trustee by written instrument, in
duplicate,  executed  by order  of the  Board  of  Directors,  one copy of which
instrument  shall be  delivered  to the  Trustee so removed  and one copy to the
successor trustee,  or any  Debentureholder who has been a bona fide holder of a
Debenture  or  Debentures  for at least six months may, on behalf of himself and
all others similarly situated,  petition any court of competent jurisdiction for
the removal of the  Trustee and the  appointment  of a successor  trustee.  Such
court may  thereupon,  after  such  notice,  if any,  as it may deem  proper and
prescribe, remove the Trustee and appoint a successor trustee.

                  (c) The holders of a majority in aggregate principal amount of
the  Debentures at the time  outstanding  may at any time remove the Trustee and
nominate a successor  trustee,  which  shall be deemed  appointed  as  successor
trustee  unless  within ten days after notice to the Company of such  nomination
the  Company  objects  thereto,  in which  case the  Trustee  so  removed or any
Debentureholder,  upon the terms and conditions and otherwise as provided in the
next  paragraph,  may  petition  any  court  of  competent  jurisdiction  for an
appointment of a successor trustee.

                  If no successor  trustee shall have been so appointed and have
accepted  appointment within 60 days after removal or the mailing of such notice
of resignation to the  Debentureholders,  the Trustee resigning or being removed
may  petition  any court of  competent  jurisdiction  for the  appointment  of a
successor  trustee,  or,  in the case of  either  resignation  or  removal,  any
Debentureholder who has been a bona fide holder of a Debenture or Debentures for
at least six months may, on behalf of himself and all others similarly situated,
petition any such court for the appointment of a successor  trustee.  Such court
may thereupon,  after such notice,  if any, as it may deem proper and prescribe,
appoint a successor trustee.

                                       29
<PAGE>


                  (d) Any  resignation or removal of the Trustee and appointment
of a successor  trustee  pursuant to any of the  provisions  of this Section 7.8
shall become  effective upon acceptance of appointment by the successor  trustee
as provided in Section 7.9.

                  Section 7.9  Acceptance  by Successor  Trustee.  Any successor
trustee  appointed  as provided in Section 7.8 shall  execute,  acknowledge  and
deliver to the Company and to its  predecessor  trustee an instrument  accepting
such  appointment  hereunder,  and thereupon,  the resignation or removal of the
predecessor  trustee shall become effective and such successor trustee,  without
any further act,  deed or  conveyance,  shall become vested with all the rights,
powers, duties and obligations of its predecessor hereunder, with like effect as
if originally named as trustee herein; but on the written request of the Company
or of the successor  trustee,  the Trustee ceasing to act shall, upon payment of
any amounts then due it pursuant to the  provisions of Section 7.6,  execute and
deliver an instrument  transferring to such successor trustee all the rights and
powers of the  Trustee  so ceasing to act.  Upon  request of any such  successor
trustee,  the Company shall execute any and all  instruments in writing for more
fully and certainly vesting in and confirming to such successor trustee all such
rights and powers. Any Trustee ceasing to act shall, nevertheless, retain a lien
upon all property  and funds held or  collected by such trustee as such,  except
for funds held in trust for the benefit of holders of particular Debentures,  to
secure any amounts then due it pursuant to the provisions of Section 7.6.

                  Upon  acceptance  of  appointment  by a  successor  trustee as
provided  in this  Section  7.9,  the  Company  shall mail or cause to be mailed
notice of the succession of such Trustee  hereunder to the holders of Debentures
at their  addresses  as they  shall  appear on the  Debenture  register.  If the
Company  fails  to  mail  such  notice  within  ten  days  after  acceptance  of
appointment  by the successor  trustee,  the successor  trustee shall cause such
notice to be mailed at the expense of the Company.

                  Section 7.10 Successor by Merger,  Etc. Any  corporation  into
which  the  Trustee  may  be  merged  or  converted  or  with  which  it  may be
consolidated,  or any  corporation  resulting  from any  merger,  conversion  or
consolidation  to  which  the  Trustee  shall  be a  party,  or any  corporation
succeeding to all or  substantially  all of the corporate  trust business of the
Trustee, shall be the successor to the Trustee hereunder.

                                  ARTICLE VIII

                         CONCERNING THE DEBENTUREHOLDERS


                  Section  8.1  Action  by  Debentureholders.  Whenever  in this
Indenture it is provided that the holders of a specified percentage in aggregate
principal amount of the Debentures may take any action  (including the making of
any demand or request, the giving of any notice, consent or waiver or the taking
of any other action),  the fact that at the time of taking any such action,  the
holders of such specified percentage have joined therein may be evidenced (a) by
any instrument or any number of instruments of similar tenor executed by

                                       30
<PAGE>


Debentureholders in person or by agent or proxy appointed in writing, (b) by the
record of the holders of  Debentures  voting in favor  thereof at any meeting of
Debentureholders  duly  called and held in  accordance  with the  provisions  of
Article IX or (c) by a combination  of such  instrument or  instruments  and any
such record of such a meeting of  Debentureholders.  Whenever the Company or the
Trustee solicits the taking of any action by the holders of the Debentures,  the
Company or the  Trustee may fix in advance of such  solicitation,  a date as the
record date for  determining  holders  entitled to take such action.  The record
date  shall  be not more  than 15 days  prior  to the  date of  commencement  of
solicitation of such action.

                  Section 8.2 Proof of Execution by Debentureholders. Subject to
the  provisions  of Sections  7.1,  7.2 and 9.5,  proof of the  execution of any
instrument by a Debentureholder or by agent or proxy shall be sufficient if made
in accordance with Section 7.3 hereof. The holding of Debentures shall be proved
by the Debenture register or by a certificate of the Debenture registrar.

                  The record of any Debentureholders' meeting shall be proved in
the manner provided in Section 9.5.

                  Section 8.3 Who Are Deemed Absolute Owners.  The Company,  the
Trustee,  any paying agent, any conversion agent and any Debenture registrar may
deem the person in whose name such Debenture  shall be registered upon the books
of the Company to be, and may treat such person as, the  absolute  owner of such
Debenture  (whether or not such Debenture  shall be overdue and  notwithstanding
any notation of ownership or other writing thereon) for the purpose of receiving
payment of or on account of the principal of and interest on such Debenture, for
conversion of such Debenture and for all other purposes; and neither the Company
nor the Trustee nor any paying agent nor any conversion  agent nor any Debenture
registrar shall be affected by any notice to the contrary.  All such payments so
made to any holder for the time being,  or upon order of such  holder,  shall be
valid and,  to the extent of the sum or sums so paid,  effectual  to satisfy and
discharge the liability for monies payable upon any such Debenture.

                  Section   8.4   Company-Owned   Debentures   Disregarded.   In
determining  whether the holders of the requisite  aggregate principal amount of
Debentures  have  concurred in any  direction,  consent,  waiver or other action
under  this  Indenture,  Debentures  that 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 for the
purposes of determining whether the Trustee shall be protected in relying on any
such  direction,  consent,  waiver  or  other  action,  only  Debentures  that a
Responsible  Officer  of the  Trustee  actually  knows are so owned  shall be so
disregarded.  Debentures  so owned  that have been  pledged in good faith may be
regarded as  outstanding  for the  purposes  of this  Section 8.4 if the pledgee
shall  establish to the  satisfaction of the Trustee the pledger's right to vote
such  Debentures  and that the pledgee is not the Company,  any other obligor on
the Debentures or a person  directly or indirectly  controlling or controlled by
or under direct or indirect common control with the Company or any such other

                                       31
<PAGE>

                  obligor.  In the  case  of a  dispute  as to such  right,  any
decision  by the  Trustee  taken  upon  the  advice  of  counsel  shall  be full
protection  to the  Trustee.  Upon  request of the  Trustee,  the Company  shall
furnish to the Trustee promptly an Officers' Certificate listing and identifying
all  Debentures,  if any, known by the Company to be owned or held by or for the
account of any of the above described  persons;  and subject to Section 7.1, the
Trustee  shall be entitled to accept such  Officers'  Certificate  as conclusive
evidence of the facts therein set forth and of the fact that all  Debentures not
listed therein are outstanding for the purpose of any such determination.

                  Section 8.5 Revocation of Consents,  Future Holders Bound.  At
any time prior to (but not after) the evidencing to the Trustee,  as provided in
Section  8.1,  of the taking of any action by the holders of the  percentage  in
aggregate  principal  amount of the  Debentures  specified in this  Indenture in
connection  with such  action,  any holder of a  Debenture  that is shown by the
evidence to be included in the Debentures the holders of which have consented to
such  action  may, by filing  written  notice with the Trustee at its  Corporate
Trust Office and upon proof of holding as provided in Section  8.2,  revoke such
action so far as concerns such Debenture.  Except as aforesaid,  any such action
taken by the holder of any Debenture  shall be conclusive  and binding upon such
holder  and upon all future  holders  and  owners of such  Debenture  and of any
Debentures issued in exchange or substitution therefor,  irrespective of whether
any  notation in regard  thereto is made upon such  Debenture  or any  Debenture
issued in exchange or substitution therefor.


                                   ARTICLE IX

                           DEBENTUREHOLDERS' MEETINGS


                  Section  9.1  Purposes  for Which  Meetings  May be Called.  A
meeting  of  Debentureholders  may be  called  at any time and from time to time
pursuant to the provisions of this Article IX for any of the following purposes:

                  (1) to give any notice to the Company or to the Trustee, or to
         give any directions to the Trustee, or to consent to the waiving of any
         default  hereunder  and its  consequences,  or to take any other action
         authorized  to be  taken  by  Debentureholders  pursuant  to any of the
         provisions of Article VI;

                  (2) to remove the  Trustee  and  appoint a  successor  trustee
         pursuant to the provisions of Article VII;

                  (3) to consent to the  execution of an indenture or indentures
         supplemental hereto pursuant to the provisions of Section 10.2; or

                  (4) to take any other action  authorized  to be taken by or on
         behalf of the holders of any specified  aggregate  principal  amount of
         the  Debentures  under any other  provisions of this Indenture or under
         applicable law.

                                       32
<PAGE>

                  Section  9.2  Manner of Calling  Meetings;  Record  Date.  The
Trustee  may at any time call a meeting of  Debentureholders  to take any action
specified  in  Section  9.1,  to be held at such  time and at such  place as the
Trustee  shall  determine.  Notice  of every  meeting  of the  Debentureholders,
setting  forth the time and the place of such  meeting and in general  terms the
action  proposed to be taken at such  meeting,  shall be mailed not less than 30
nor  more  than 60  days  prior  to the  date  fixed  for  the  meeting  to such
Debentureholders  at their  addresses as such addresses  appear in the Debenture
register. For the purpose of determining  Debentureholders entitled to notice of
any  meeting  of  Debentureholders,  the  Company,  upon  written  notice to the
Trustee,  shall fix in advance a date as the record date for such determination,
such date to be a  business  day not more than ten days prior to the date of the
mailing of such notice as hereinabove  provided.  Only persons in whose name any
Debenture shall be registered in the Debenture register at the close of business
on a record  date fixed by the  Trustee as  aforesaid,  or by the Company or the
Debentureholders  as provided in Section 9.3, shall be entitled to notice of the
meeting of Debentureholders with respect to which such record date was so fixed.

                  Section 9.3 Call of Meeting by Company or Debentureholders. In
case at any time the Company, pursuant to a resolution of its Board of Directors
or the holders of at least 10% in aggregate  principal  amount of the Debentures
then  outstanding  shall  have  requested  the  Trustee  to  call a  meeting  of
Debentureholders to take any action authorized in Section 9.1 by written request
setting  forth in  reasonable  detail  the  action  proposed  to be taken at the
meeting,  and the Trustee shall not have mailed notice of such meeting within 20
days  after  receipt  of such  request,  then  the  Company  or the  holders  of
Debentures in the amount above specified, as the case may be, may fix the record
date with respect to, and determine the time and the place for, such meeting and
may call such meeting to take any action  authorized  in Section 9.1, by mailing
notice  thereof as provided in Section 9.2. The record date fixed as provided in
the preceding sentence shall be set forth in a written notice to the Trustee and
shall be a business day not less than 15 nor more than 20 days after the date on
which the original request is sent to the Trustee.

                  Section 9.4 Who May Attend and Vote at Meetings.  Only persons
entitled to receive notice of a meeting of Debentureholders and their respective
proxies duly  appointed by an instrument in writing shall be entitled to vote at
such  meeting.  The only persons who shall be entitled to be present or to speak
at any meeting of Debentureholders shall be the persons entitled to vote at such
meeting and their counsel and any representatives of the Trustee and its counsel
and any representatives of the Company and its counsel.  When a determination of
Debentureholders  entitled to vote at any meeting of  Debentureholders  has been
made  as  provided  in this  Section,  such  determination  shall  apply  to any
adjournments thereof.

                  Section  9.5  Manner of Voting at  Meetings  and  Record to be
Kept. The vote upon any resolution  submitted to any meeting of Debentureholders
shall be by written  ballots on each of which shall be subscribed  the signature
of the  Debentureholder  or proxy casting such ballot and the identifying number
or numbers of the Debentures held or represented in respect of which such ballot
is cast.  The chairman of the meeting shall appoint two  inspectors of votes who
shall count all votes cast at the meeting for or against any  resolution and who
shall make and file with the  secretary of the meeting  their  verified  written
reports in duplicate of all votes cast at the meeting.  A record in duplicate of
the proceedings of each meeting of

                                       33
<PAGE>

Debentureholders  shall be  prepared by the  secretary  of the meeting and there
shall be attached to said record the original reports of the inspectors of votes
on any vote by ballot taken thereat and affidavits by one or more persons having
knowledge  of the facts  setting  forth a copy of the notice of the  meeting and
showing that said notice was mailed as provided in Section 9.2. The record shall
show the identifying numbers of the Debentures voting in favor of or against any
resolution.  Each counterpart of such record shall be signed and verified by the
affidavits  of  the  chairman  and  secretary  of  the  meeting  and  one of the
counterparts  shall be  delivered to the Company and the other to the Trustee to
be preserved by the Trustee.

                  Any  counterpart  record  so  signed  and  verified  shall  be
conclusive  evidence  of the  matters  therein  stated  and shall be the  record
referred to in clause (b) of Section 8.1.

                  Section 9.6 Exercise of Rights of Trustee and Debentureholders
Not To Be Hindered or Delayed.  Nothing in this  Article IX  contained  shall be
deemed or construed  to authorize or permit,  by reason of any call of a meeting
of  Debentureholders or any rights expressly or impliedly conferred hereunder to
make such call,  any  hinderance or delay in the exercise of any right or rights
conferred upon or reserved to the Trustee or to the  Debentureholders  under any
of the provisions of this Indenture or of the Debentures.


                                    ARTICLE X

                             SUPPLEMENTAL INDENTURES


                  Section  10.1  Supplemental   Indentures  Without  Consent  of
Debentureholders.  The Company,  when authorized by a Board Resolution,  and the
Trustee  may from  time to time  and at any  time  enter  into an  indenture  or
indentures supplemental hereto for one or more of the following purposes:

                  (a) to make provision with respect to the conversion rights of
         the holders of Debentures pursuant to the requirements of Section 14.6;

                  (b)  subject  to  Article  XV, to  convey,  transfer,  assign,
         mortgage or pledge to the Trustee as security for the  Debentures,  any
         property or assets;

                  (c) to  evidence  the  succession  of  another  person  to the
         Company, or successive successions, and the assumption by the Successor
         Company of the  covenants,  agreements  and  obligations of the Company
         pursuant to Article XI;

                  (d) to  add to the  covenants  of  the  Company  such  further
         covenants, restrictions or conditions as the Board of Directors and the
         Trustee  shall  consider  to be  for  the  benefit  of the  holders  of
         Debentures  and  to  make  the   occurrence,   or  the  occurrence  and
         continuance,   of  a  default   in  any  such   additional   covenants,
         restrictions or conditions a default or an Event of Default  permitting
         the enforcement of all or any of the several

                                       34
<PAGE>

         remedies provided in this Indenture as herein set forth;  provided that
         in respect of any such additional  covenant,  restriction or condition,
         such  supplemental  indenture  may provide for a  particular  period of
         grace after  default  (which  period may be shorter or longer than that
         allowed in the case of other  defaults) or may provide for an immediate
         enforcement  upon such default or may limit the  remedies  available to
         the Trustee upon such default;

                  (e) to  provide  for the  issuance  under  this  Indenture  of
         Debentures  in coupon  form  (including  Debentures  registrable  as to
         principal only) and to provide for  exchangeability  of such Debentures
         with the Debentures  issued  hereunder in fully  registered form and to
         make all appropriate changes for such purpose;

                  (f) to cure any  ambiguity  or to  correct or  supplement  any
         provision contained herein or in any supplemental indenture that may be
         defective or inconsistent with any other provision  contained herein or
         in any  supplemental  indenture,  or to make such other  provisions  in
         regard to matters or questions  arising under this Indenture that shall
         not adversely affect the interests of the holders of the Debentures; or

                  (g) to evidence and provide for the  acceptance of appointment
         hereunder by a successor Trustee with respect to the Debentures.

                  The Trustee is hereby  authorized  to join with the Company in
the  execution  of  any  such  supplemental   indenture,  to  make  any  further
appropriate  agreements and  stipulations  that may be therein  contained and to
accept the conveyance,  transfer and assignment of any property thereunder,  but
the Trustee shall not be obligated to, but may in its discretion, enter into any
supplemental  indenture  that  affects  the  Trustee's  own  rights,  duties  or
immunities under this Indenture or otherwise.

                  Any  supplemental  indenture  authorized by the  provisions of
this  Section  10.1 may be executed  by the Company and the Trustee  without the
consent  of  the  holders  of any of the  Debentures  at the  time  outstanding,
notwithstanding any of the provisions of Section 10.2.

                  Section   10.2   Supplemental   Indentures   With  Consent  of
Debentureholders.  With the consent  (evidenced  as provided in Article VIII) of
the holders of not less than a majority  in  aggregate  principal  amount of the
Debentures  at the time  outstanding,  the Company,  when  authorized by a Board
Resolution and the Trustee,  may from time to time and at any time enter into an
indenture  or  indentures  supplemental  hereto  for the  purpose  of adding any
provisions to or changing in any manner or eliminating  any of the provisions of
this Indenture or any  supplemental  indenture or of modifying in any manner the
rights of the  holders of the  Debentures;  provided  that no such  supplemental
indenture  shall (i) without the  consent of the  holders of each  Debenture  so
affected,  extend the fixed  maturity  of any  Debenture,  or reduce the rate or
extend the time of payment of interest  thereon,  or reduce the principal amount
thereof,  or reduce any amount payable on redemption or repurchase  thereof,  or
impair or affect  the right of any  Debentureholder  to  institute  suit for the
payment thereof or make the principal thereof or interest thereon payable in any
coin or currency other than that provided in the

                                       35
<PAGE>

Debentures,  modify  the  subordination  provisions  in a manner  adverse to the
holders of the  Debentures,  or impair the right to convert the Debentures  into
Common  Stock or cash  subject to the terms set forth herein or (ii) without the
consent  of the  holders  of all the  Debentures  then  outstanding,  reduce the
aforesaid percentage of Debentures, the holders of which are required to consent
to any such supplemental indenture.

                  Upon the request of the  Company,  accompanied  by a copy of a
Board Resolution  certified by its Secretary or Assistant Secretary  authorizing
the execution of any such supplemental  indenture,  and upon the filing with the
Trustee of evidence of the consent of Debentureholders as aforesaid, the Trustee
shall join with the  Company in the  execution  of such  supplemental  indenture
unless such supplemental  indenture affects the Trustee's own rights,  duties or
immunities  under this Indenture or otherwise,  in which case the Trustee may in
its  discretion,  but shall not be obligated  to,  enter into such  supplemental
indenture.

                  It  shall   not  be   necessary   for  the   consent   of  the
Debentureholders  under this Section 10.2 to approve the particular  form of any
proposed  supplemental  indenture,  but it shall be  sufficient  if such consent
shall approve the substance thereof.

                  Section  10.3  Effect  of  Supplemental  Indentures.  Upon the
execution  of any  supplemental  indenture  pursuant to the  provisions  of this
Article X, this  Indenture  shall be and be deemed to be modified and amended in
accordance   therewith  and  the  respective   rights,   limitation  of  rights,
obligations,  duties and  immunities  under this  Indenture of the Trustee,  the
Company and the holders of Debentures shall thereafter be determined,  exercised
and  enforced  hereunder  subject  in all  respects  to such  modifications  and
amendments and all the terms and conditions of any such  supplemental  indenture
shall be and be deemed to be part of the terms and  conditions of this Indenture
for any and all purposes.

                  Section 10.4 Notation on Debentures.  Debentures authenticated
and delivered after the execution of any supplemental  indenture pursuant to the
provisions of this Article X may bear a notation in form approved by the Company
as to any matter provided for in such supplemental indenture,  but they need not
do so. After notice to the Trustee, if the Company shall determine to add such a
notation,  new Debentures so modified as to conform, in the opinion of the Board
of  Directors,  to any  modification  of this  Indenture  contained  in any such
supplemental  indenture may, at the Company's expense,  be prepared and executed
by the Company,  authenticated by the Trustee (or an  authenticating  agent duly
appointed by the Trustee  pursuant to Section  16.14) and  delivered in exchange
for the Debentures  then  outstanding,  upon surrender of such  Debentures  then
outstanding.

                  Section 10.5 Evidence of Compliance of Supplemental  Indenture
to Be Furnished to the Trustee. The Trustee shall be furnished with and, subject
to the  provisions  of  Sections  7.1 and  7.2,  may rely  conclusively  upon an
Officers'  Certificate and an Opinion of Counsel as conclusive evidence that any
supplemental  indenture  executed pursuant hereto complies with the requirements
of this Article X.

                                       36
<PAGE>


                                   ARTICLE XI

                    CONSOLIDATION, MERGER, SALE, CONVEYANCE,
                               TRANSFER AND LEASE


                  Section 11.1 Company May  Consolidate,  Etc. on Certain Terms.
The  Company  shall  not  consolidate  with or merge  with or into,  or  convey,
transfer  or lease  all or  substantially  all of its  assets  (determined  on a
consolidated  basis) to any  person  unless:  (i) the  resulting,  surviving  or
transferee  person (the  "Successor  Company")  (if not the  Company)  expressly
assumes by a supplemental  indenture,  executed and delivered to the Trustee, in
form satisfactory to the Trustee,  all the obligations of the Company under this
Indenture  and the  Debentures,  including  the rights  pursuant  to Article XIV
hereof,  (ii) immediately after giving effect to such  transaction,  no Event of
Default has happened  and is  continuing  and (iii) the Company  delivers to the
Trustee an Officers'  Certificate  and an Opinion of Counsel,  each stating that
such consolidation,  merger or transfer and such supplemental indenture (if any)
comply with this Indenture.

                  Section 11.2 Successor  Company To Be Substituted.  In case of
any such consolidation, merger, sale, conveyance, transfer or lease and upon the
assumption by the Successor  Company,  by supplemental  indenture,  executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the due and
punctual  payment of the principal of and interest on all of the  Debentures and
the due and punctual  performance of all of the covenants and conditions of this
Indenture to be performed by the Company,  such Successor  Company shall succeed
to and be  substituted  for the Company,  with the same effect as if it had been
named herein as the party hereto.  When a Successor Company duly assumes all the
obligations of the Company  pursuant to this Indenture and the  Debentures,  the
predecessor shall be released from all such obligations.

                  Section  11.3  Opinion of Counsel To Be Given to Trustee.  The
Trustee, subject to Sections 7.1 and 7.2, shall receive an Officers' Certificate
and an Opinion of Counsel as conclusive  evidence  that any such  consolidation,
merger,  sale,  conveyance,  transfer or lease and any such assumption  complies
with the provisions of this Article XI.


                                   ARTICLE XII

                    SATISFACTION AND DISCHARGE OF INDENTURE;
                                UNCLAIMED MONEYS


                  Section 12.1 Termination of Obligations  upon  Cancellation of
the  Debentures.  The Company may  terminate all of its  obligations  under this
Indenture (subject to Section 12.2) when:

                                       37
<PAGE>

                  (a) (1) all Debentures theretofore authenticated and delivered
         (other than  Debentures  that have been  destroyed,  lost or stolen and
         that have been replaced,  converted or paid as provided in Section 2.6)
         have been delivered to the Trustee for cancellation; and

                           (2) the  Company  has paid or  caused  to be paid all
         other sums payable  hereunder and under the  Debentures by the Company;
         or

                  (b) (1) the Debentures not previously delivered to the Trustee
         for  cancellation  shall have  become  due and  payable or are by their
         terms to become due and payable within one year or are to be called for
         redemption under arrangements satisfactory to the Trustee upon delivery
         of notice,  (ii) the Company shall have irrevocably  deposited with the
         Trustee, as trust funds, cash, in an amount sufficient to pay principal
         of  and  interest  on  the  outstanding  Debentures,   to  maturity  or
         redemption,  as the case may be, (iii) such deposit shall not result in
         a breach or violation of, or constitute a default under,  any agreement
         or  instrument  pursuant to which the Company is a party or by which it
         or its  property  is bound and (iv) the Company  has  delivered  to the
         Trustee  an  Officers'  Certificate  in form and  substance  reasonably
         satisfactory to the Trustee,  each stating that all conditions  related
         to such discharge have been complied with.

                  Section 12.2 Survival of Certain Obligations.  Notwithstanding
the satisfaction and discharge of this Indenture and of the Debentures  referred
to in Section 12.1,  the  respective  obligations of the Company and the Trustee
under  Sections 2.3,  2.4,  2.5,  2.6, 3.1, 4.2, 5.1, 6.4, 6.9, 7.5, 7.8,  12.4,
12.5, 12.6, Articles XIV and XV shall survive until the Debentures are no longer
outstanding,  and  thereafter,  the  obligations  of the Company and the Trustee
under Sections 6.9, 7.5, 12.4, 12.5 and 12.6 shall survive. Nothing contained in
this Article XII shall abrogate any of the rights,  obligations or duties of the
Trustee under this Indenture.

                  Section 12.3  Acknowledgment of Discharge by Trustee.  Subject
to Section 12.6,  after (i) the conditions of Section 12.1 have been  satisfied,
(ii) the Company has paid or caused to be paid all other sums payable  hereunder
by the Company and (iii) the Company has  delivered  to the Trustee an Officers'
Certificate  stating  that all  conditions  precedent  referred to in clause (i)
above  relating to the  satisfaction  and discharge of this  Indenture have been
complied with, the Trustee upon written request shall acknowledge in writing the
discharge of the Company's  obligations  under this  Indenture  except for those
surviving obligations specified in Section 12.2.

                  Section 12.4  Application  of Trust Assets.  The Trustee shall
hold any cash deposited with it in the irrevocable trust established pursuant to
Section 12.1. The Trustee shall apply the deposited cash in accordance with this
Indenture and the terms of the irrevocable trust agreement  established pursuant
to Section 12.1, as the case may be, to the payment of principal of and interest
on the  Debentures.  The cash so held in trust and deposited with the Trustee in
compliance  with  Section  12.1 shall not be part of the trust estate under this
Indenture,  but shall  constitute  a separate  trust fund for the benefit of all
holders entitled thereto.  Except as specifically  provided herein,  the Trustee
shall not be  requested  to invest any amounts held by it for the benefit of the
holders or pay interest on uninvested amounts to any holder.

                                       38
<PAGE>


                  Section  12.5  Repayment  to  the  Company;  Unclaimed  Money.
Subject  to  applicable  laws  governing  escheat  of such  property,  and  upon
termination  of the trust  established  pursuant  to Section  12.1  hereof,  the
Trustee shall  promptly pay to the Company upon written  request any excess cash
held by them. Additionally,  if amounts for the payment of principal or interest
remains  unclaimed for two years, the Trustee shall,  upon written request,  pay
such amounts back to the Company  forthwith.  Thereafter,  all  liability of the
Trustee with respect to such amounts shall cease.  After payment to the Company,
holders  entitled to such  payment  must look to the Company for such payment as
general creditors unless an applicable abandoned property law designates another
person.

                  Section 12.6 Reinstatement.  If the Trustee is unable to apply
any cash in accordance with Section 12.1 by reason of any legal proceeding or by
reason  of  any  order  or  judgment  of any  court  or  governmental  authority
enjoining,  restraining or otherwise prohibiting such application, the Company's
obligations  under  this  Indenture  and the  Debentures  shall be  revived  and
reinstated as though no deposit had occurred pursuant to Section 12.1 until such
time as the  Trustee  is  permitted  to apply all such cash in  accordance  with
Section 12.1;  provided that if the Company makes any payment of principal of or
interest on any Debentures  following the reinstatement of its obligations,  the
Company shall be  subrogated to the rights of the holders of such  Debentures to
receive such payment from the amounts held by the Trustee.


                                  ARTICLE XIII

                    IMMUNITY OF INCORPORATORS, SHAREHOLDERS,
                             OFFICERS AND DIRECTORS


                  Section  13.1  Indenture  and  Debentures   Solely   Corporate
Obligations.  No recourse for the payment of the principal of or interest on any
Debenture,  or for any claim based thereon or otherwise in respect thereof,  and
no recourse under or upon any  obligation,  covenant or agreement of the Company
in this  Indenture  or in any  supplemental  indenture or in any  Debenture,  or
because of the creation of any indebtedness  represented  thereby,  shall be had
against any  incorporator,  shareholder,  officer or  director,  as such,  past,
present or future, of the Company or of any successor entity, either directly or
through  the  Company  or  any  successor  entity,  whether  by  virtue  of  any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise;  it being expressly  understood that all such liability is
hereby  expressly  waived and released as a condition of, and as a consideration
for, the execution of this Indenture and the issuance of the Debentures.

                                       39
<PAGE>


                                   ARTICLE XIV

                            CONVERSION OF DEBENTURES


                  Section 14.1 Right to Convert.  Subject to and upon compliance
with the provisions of this  Indenture,  the holder of any Debenture  shall have
the  one-time  right,  at the option of such  holder,  at any time after 90 days
following the latest date of original  issuance of the  Debentures  and prior to
the close of business on December  28, 2001  (except  that,  with respect to any
Debenture  or portion of a  Debenture  that  shall be called for  redemption  or
delivered for  repurchase,  such right shall  terminate at the close of business
one  Business  Day  immediately  preceding  the date  fixed  for  redemption  or
repurchase of such Debenture or portion of a Debenture  unless the Company shall
default in payment due upon redemption  thereof) to convert the principal amount
of any such Debenture, or any portion of such principal amount that is $1,000 or
an integral multiple thereof, of such holder's  outstanding  principal amount of
Debentures,  into that number of fully paid and nonassessable shares (calculated
as to each  conversion to the nearest 1/100 of a share) of Common Stock (as such
shares shall then be constituted)  obtained by dividing the aggregate  principal
amount of the Debentures or portion  thereof  surrendered  for conversion by the
Conversion Price in effect at such time as such amount shall be certified by the
Company as provided in an Officers'  Certificate,  by surrender of the Debenture
so to be converted in whole or in part in the manner provided in Section 14.2. A
holder of  Debentures  is not entitled to any rights of a holder of Common Stock
until such holder has  converted  such  holder's  Debentures to Common Stock and
only to the extent such  Debentures  are deemed to have been converted to Common
Stock under this Article XIV.

                  Section 14.2  Exercise of  Conversion  Privilege;  Issuance of
Common Stock on Conversion; No Adjustment for Interest or Dividends. In order to
exercise the  conversion  privilege  with respect to any Debenture in definitive
form, the holder of any such Debenture to be converted in whole or in part shall
surrender such Debenture,  duly endorsed,  at an office or agency  maintained by
the Company pursuant to Section 4.2,  accompanied by the funds, if any, required
by the penultimate paragraph of this Section 14.2, and shall give written notice
of  conversion  in the form  provided  on the form of  Debenture  (or such other
notice  that is  acceptable  to the  Company)  to the office or agency  that the
holder elects to convert such Debenture or the portion thereof specified in said
notice. Such notice shall state the name,  telephone number and facsimile number
of the contact person for the Conversion Notice and shall also state the name or
names (with  address) in which the  certificate  or  certificates  for shares of
Common Stock that shall be issuable on such conversion shall be issued and shall
be accompanied by transfer  taxes,  if required  pursuant to Section 14.7.  Each
such Debenture  surrendered for conversion shall,  unless the shares issuable on
conversion  are to be issued in the name of the holder of such  Debenture  as it
appears on the Debenture  register,  be duly endorsed by, or be  accompanied  by
instruments  of transfer in form  satisfactory  to the Company duly executed by,
the holder or his duly authorized attorney.

                  As  promptly  as  practicable   after   satisfaction   of  the
requirements  for conversion set forth above,  subject to Section 14.1(b) and in
compliance with any restrictions on transfer

                                       40
<PAGE>

if shares  issuable on conversion  are to be issued in a name other than that of
the  Debentureholder  (as if such  transfer  were a transfer of the Debenture or
Debentures (or portion thereof) so converted), the Company shall issue and shall
deliver to such  holder at the office or agency  maintained  by the  Company for
such purpose  pursuant to Section 4.2, a  certificate  or  certificates  for the
number of full shares  issuable upon the conversion of such Debenture or portion
thereof in  accordance  with the  provisions  of this Article XIV and a check or
cash in respect of any fractional  interest in respect of a Common Stock arising
upon such  conversion,  as provided in Section  14.3. In case any Debenture of a
denomination  greater than $1,000 shall be surrendered  for partial  conversion,
and subject to Section  2.3,  the Company  shall  execute and the Trustee  shall
authenticate  and make  available for delivery to the holder of the Debenture so
surrendered,  without charge to him, a new Debenture or Debentures in authorized
denominations in an aggregate  principal amount equal to the unconverted portion
of the surrendered Debenture.

                  Each  conversion  shall be deemed to have been  effected as to
any such  Debenture (or portion  thereof) on the date on which the  requirements
set forth above in this  Section 14.2 have been  satisfied as to such  Debenture
(or portion thereof),  and, subject to Section 14.1(b), the person in whose name
any  certificate  or  certificates  for shares of Common Stock shall be issuable
upon such  conversion  shall be deemed to have become on said date the holder of
record of the shares  represented  thereby;  provided that any such surrender on
any date when the stock  transfer  books of the  Company  shall be closed  shall
constitute  the  person in whose name the  certificates  are to be issued as the
record holder thereof for all purposes on the next  succeeding day on which such
stock transfer books are open,  but such  conversion  shall be at the Conversion
Price  in  effect  on the  date  upon  which  such  Debenture  shall  have  been
surrendered.

                  Any Debenture or portion  thereof  surrendered  for conversion
during the period from the close of business on the record date for any interest
payment date to the opening of business on the next succeeding  interest payment
date shall (unless such Debenture or portion  thereof being converted shall have
been called for redemption on a redemption date during the period from the close
of business on or after any record date for the payment of interest to the close
of business on the business day following  the  corresponding  interest  payment
date) be  accompanied  by payment,  in funds  acceptable  to the Company,  of an
amount equal to the interest payable on such succeeding interest payment date on
the principal amount being converted; provided that no such payment need be made
if there  shall  exist at the time of  conversion  a default  in the  payment of
interest on the Debentures. An amount equal to such payment shall be paid by the
Company  on the  corresponding  interest  payment  date  to the  holder  of such
Debenture  at the close of business on such record  date;  provided  that if the
Company shall default in the payment of interest on such interest  payment date,
such  amount  shall be paid to the person who made such  required  payment.  The
interest  payment with respect to a Debenture  called for  redemption  on a date
between  the close of business on any record date for the payment of interest to
the close of business on the business day following the  corresponding  interest
payment date and surrendered for conversion  during that period shall be payable
on the corresponding interest payment date to the registered holder at the close
of  business  on  that  record  date  (notwithstanding  the  conversion  of such
Debenture  before  the  corresponding  interest  payment  date) and a holder who
elects to  convert  during  that  period  need not  include  funds  equal to the
interest  paid.  Except as provided  above in this Section  14.2,  no adjustment
shall be made

                                       41
<PAGE>

for interest  accrued on any Debenture  converted or for dividends on any shares
issued upon the conversion of such Debenture as provided in this Article XIV.

                  Section 14.3 Cash  Payments in Lieu of Fractional  Shares.  No
fractional shares of Common Stock or scrip representing  fractional shares shall
be issued upon  conversion of  Debentures.  If more than one Debenture  shall be
surrendered  for conversion at one time by the same holder,  the number of fully
paid and  nonassessable  shares of Common Stock  issuable  upon  conversion of a
Debenture shall be determined by dividing the aggregate principal amount of such
Debentures or portion thereof surrendered for conversion by the Conversion Price
in effect at such time. The aggregate  number of shares of Common Stock issuable
upon  conversion  shall be rounded to the nearest  1/100th of a share (with .005
being rolled  upward).  If any fractional  share of stock would be issuable upon
the  conversion  of any  Debenture  or  Debentures,  the  Company  shall make an
adjustment  therefor in cash determined by multiplying  the fractional  share by
the Conversion Price.

                  Section 14.4 Conversion  Price.  The Conversion Price shall be
equal to the $5.50 per share (herein called the "Conversion Price"),  subject to
adjustment as provided in this Article XIV.

                  Section 14.5  Adjustment of Conversion  Price.  The Conversion
Price shall be adjusted from time to time by the Company as follows:

                  (a) In case the  Company  shall (i) pay a  dividend  or make a
         distribution  on its  outstanding  Common Stock in shares of its Common
         Stock,  (ii)  subdivide  or split its  outstanding  Common Stock into a
         greater number of shares,  (iii) combine its  outstanding  Common Stock
         into a smaller  number of shares or (iv)  issue any  shares of  capital
         stock by  reclassification of its Common Stock, the conversion price in
         effect  immediately  prior thereto shall be adjusted so that the holder
         of any  Debentures  thereafter  surrendered  for  conversion  shall  be
         entitled to receive the number of shares of Common Stock of the Company
         which such  holder  would have owned or have been  entitled  to receive
         after the  occurrence  of any of the  events  described  above had such
         Debentures  been  surrendered for conversion  immediately  prior to the
         occurrence  of such event or the record  date  therefor,  whichever  is
         earlier.  An  adjustment  made  pursuant to this  subsection  (a) shall
         become effective  immediately after the close of business on the record
         date  for  determination  of  shareholders  entitled  to  receive  such
         dividend  or  distribution  in the case of a dividend  or  distribution
         (except as  provided in Section  14.5(e))  and shall  become  effective
         immediately  after the close of business on the  effective  date in the
         case of a subdivision, split, combination or reclassification.

                  (b) In case the  Company  shall,  by  dividend  or  otherwise,
         distribute property or assets to all holders of its Common Stock (other
         than any dividends or distributions  of the Company's  Capital Stock to
         which  Section  14.5(a)   applies),   and  excluding  any  dividend  or
         distribution  (x) in connection  with the  liquidation,  dissolution or
         winding-up of the Company,  whether  voluntary or  involuntary,  (y) in
         cash or (z)  referred  to in  Section  14.5(a)  (any  of the  foregoing
         hereinafter in this Section 14.5(b) called the

                                       42
<PAGE>


         "Property")),  then,  in each such case,  the Company shall make proper
         provision so that each Debentureholder who converts a Debenture (or any
         portion thereof) after the date fixed for determination of shareholders
         entitled to receive such distribution shall be entitled to receive upon
         such  conversion,  in addition to the shares of Common  Stock  issuable
         upon such conversion,  the amount and kind of Property that such holder
         would have been  entitled to receive if such  holder  had,  immediately
         prior to such determination date,  converted such Debenture into Common
         Stock.

                  (c) The Company  may make such  reductions  in the  Conversion
         Price, in addition to those required by Sections 14.5(a),  as the Board
         of Directors  considers to be advisable to avoid or diminish any income
         tax to  holders  of Common  Stock or rights to  purchase  Common  Stock
         resulting  from any  dividend  or  distribution  of stock (or rights to
         acquire  stock)  or from  any  event  treated  as such for  income  tax
         purposes.  To the extent  permitted by applicable law, the Company from
         time to time may  reduce  the  Conversion  Price by any  amount for any
         period of time if the  period  is at least 20 days,  the  reduction  is
         irrevocable  during the period  and the Board of  Directors  shall have
         made a determination that such reduction would be in the best interests
         of the Company,  which  determination shall be conclusive and described
         in a  Board  Resolution.  Whenever  the  Conversion  Price  is  reduced
         pursuant  to the  preceding  sentence,  the  Company  shall mail to all
         holders of record of the  Debentures a notice of the reduction at least
         15 days prior to the date the reduced  Conversion  Price takes  effect,
         and such notice shall state the reduced Conversion Price and the period
         it shall be in effect.

                  (d) No  adjustment in the  Conversion  Price shall be required
         unless  such  adjustment  would  require an  increase or decrease of at
         least 1% in such price; provided that any adjustments that by reason of
         this  Section  14.5(d)  are not  required  to be made  shall be carried
         forward  and taken  into  account  in any  subsequent  adjustment.  All
         calculations  under this  Article  XIV shall be made by the Company and
         shall be made to the nearest 1/100 (with 0.005 being rolled upward).

                  No adjustment  need be made for a change in the par value,  or
to or from no par value, of the Common Stock.

                  To the extent the  Debentures  become  convertible  into cash,
         assets,  property  or  securities  (other  than  Common  Stock  of  the
         Company), no adjustment need be made thereafter as to the cash, assets,
         property or such securities (except as such securities may otherwise by
         their terms provide), and interest shall not accrue on such cash.

                  (e)  Whenever  the  Conversion  Price is  adjusted  as  herein
         provided,  the  Company  shall  promptly  file with the Trustee and any
         conversion  agent  other  than the  Trustee  an  Officers'  Certificate
         setting forth the  Conversion  Price after such  adjustment and setting
         forth  a  brief  statement  of the  facts  requiring  such  adjustment.
         Promptly after delivery of such certificate,  the Company shall prepare
         a notice of such  adjustment of the Conversion  Price setting forth the
         adjusted Conversion Price and the date on which each adjustment becomes
         effective and shall mail such notice of such adjustment of the

                                       43
<PAGE>

         Conversion  Price to the holder of each  Debenture  at his last address
         appearing on the Debenture register provided for in Section 2.5, within
         20 days after execution  thereof.  Failure to deliver such notice shall
         not effect the legality or validity of any such adjustment.

                  Section 14.6 Effect of Reclassification, Consolidation, Merger
or Sale. If any of the following events occur,  namely (i) any  reclassification
or change of  outstanding  shares of Common  Stock  (other  than a change in par
value, or to or from no par value, as a result of a subdivision or combination),
(ii) any  consolidation,  merger or  combination  of the  Company  with  another
corporation  as a result of which  holders of Common  Stock shall be entitled to
receive  stock,  securities or other  property or assets  (including  cash) with
respect to or in exchange for such Common Stock or (iii) any sale or  conveyance
of the properties and assets of the Company as, or substantially as, an entirety
(determined  on a  consolidated  basis) to any other  corporation as a result of
which holders of Common Stock shall be entitled to receive stock,  securities or
other  property or assets  (including  cash) with  respect to or in exchange for
such Common Stock, then the Company or the successor or purchasing  corporation,
as the case may be,  shall  execute  with the Trustee a  supplemental  indenture
providing that the Debentures  shall be convertible  into the kind and amount of
shares of stock and other  securities  or  property or assets  (including  cash)
receivable   upon  such   reclassification,   change,   consolidation,   merger,
combination,  sale or  conveyance  by a holder  of a number  of shares of Common
Stock issuable upon conversion of such Debentures (assuming,  for such purposes,
a sufficient  number of authorized  shares of Common Stock  available to convert
all  such  Debentures)  immediately  prior  to  such  reclassification,  change,
consolidation,  merger, combination, sale or conveyance, assuming such holder of
Common Stock did not exercise his rights of election,  if any, as to the kind or
amount   of   securities,   cash  or  other   property   receivable   upon  such
reclassification, change, consolidation, merger, combination, sale or conveyance
(provided  that,  if the kind or amount of  securities,  cash or other  property
receivable   upon  such   reclassification,   change,   consolidation,   merger,
combination,  sale or  conveyance is not the same for each share of Common Stock
in  respect  of which  such  rights of  election  shall not have been  exercised
("non-electing  share"), then for the purposes of this Section 14.6 the kind and
amount   of   securities,   cash  or  other   property   receivable   upon  such
reclassification, change, consolidation, merger, combination, sale or conveyance
for each  non-electing  share  shall be  deemed  to be the  kind and  amount  so
receivable  per  share  by  a  plurality  of  the  non-electing   shares).  Such
supplemental  indenture  shall provide for  adjustments  that shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Article
XIV.

                  The  Company  shall  cause  notice  of the  execution  of such
supplemental indenture to be mailed to each holder of Debentures, at his address
appearing on the Debenture  register provided for in Section 2.5, within 20 days
after  execution  thereof.  Failure to deliver  such notice shall not affect the
legality or validity of such supplemental indenture.

                  The above  provisions  of this  Section  14.6 shall  similarly
apply  to  successive  reclassifications,   changes,  consolidations,   mergers,
combinations, sales and conveyances.

                                       44
<PAGE>

                  Section  14.7 Taxes on Shares  Issued.  The  issuance of stock
certificates  on conversions  of Debentures  shall be made without charge to the
converting  Debentureholder  for any  transfer  or similar tax in respect of the
issue thereof.  The Company shall not, however,  be required to pay any tax that
may be payable in respect of any transfer  involved in the issue and delivery of
stock in any name other than that of the holder of any Debenture converted,  and
the Company shall not be required to issue or deliver any such stock certificate
unless and 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.

                  Section 14.8  Reservation of Shares;  Shares to Be Fully Paid.
The Company shall provide,  free from preemptive  rights,  out of its authorized
but unissued shares or shares held in treasury, sufficient shares to provide for
the  conversion  of the  Debentures  from  time to time as such  Debentures  are
presented for conversion.

                  Before  taking  any  action  that  would  cause an  adjustment
reducing the Conversion Price below the then par value, if any, of the shares of
Common Stock issuable upon conversion of the Debentures,  the Company shall take
all  corporate  action that may, in the opinion of its counsel,  be necessary in
order that the Company may validly and legally issue shares of such Common Stock
at such adjusted Conversion Price.

                  The Company covenants that all shares of Common Stock that may
be issued upon conversion of Debentures shall, upon issuance,  be fully paid and
nonassessable  by the  Company and free from all taxes,  liens and charges  with
respect to the issuance thereof.

                  Section 14.9  Responsibility  of Trustee.  The Trustee and any
other conversion agent shall not at any time be under any duty or responsibility
to any  holder of  Debentures  to  determine  whether  any facts  exist that may
require  any  adjustment  of the  Conversion  Price or notice  thereof,  or with
respect to the nature,  accuracy or extent or calculation of any such adjustment
when  made,  or  with  respect  to the  method  employed,  or  herein  or in any
supplemental  indenture provided to be employed, in making the same. The Trustee
and any other  conversion  agent shall not be  accountable  with  respect to the
validity or value (or the kind or amount) of any shares of Common  Stock,  or of
any securities or property, that may at any time be issued or delivered upon the
conversion of any Debenture; and the Trustee and any other conversion agent make
no  representations  with respect thereto or actions or omissions by the Company
in connection  with this Article XIV.  Subject to the provisions of Section 7.1,
neither the  Trustee  nor any  conversion  agent  shall be  responsible  for any
failure of the Company to issue,  transfer or deliver any shares of Common Stock
or stock certificates or other securities or property or cash upon the surrender
of any  Debenture  for the  purpose of  conversion  or to comply with any of the
duties,  responsibilities  or covenants of the Company contained in this Article
XIV. Without  limiting the generality of the foregoing,  neither the Trustee nor
any conversion agent shall be under any  responsibility  to determine  whether a
supplemental  indenture under Section 14.6 hereof need to be entered into or the
correctness of any provisions  contained in any supplemental  indenture  entered
into pursuant to Section 14.6 relating either to the kind or amount of shares of
stock or securities or property (including cash) receivable by

                                       45
<PAGE>

Debentureholders  upon  the  conversion  of their  Debentures  after  any  event
referred to in such  Section 14.6 or to any  adjustment  to be made with respect
thereto,  and may accept as conclusive  evidence of the  correctness of any such
provisions,  and shall be protected in relying upon,  the Officers'  Certificate
(which the Company  shall be  obligated  to file with the  Trustee  prior to the
execution of any such supplemental indenture) with respect thereto.

                  Section 14.10 Notice to Holders Prior to Certain  Actions.  In
case:

                  (a) the Company makes any  distribution or dividend that would
         require an adjustment in the Conversion Price pursuant to Section 14.5;
         or

                  (b)  the  Company  takes  any  action  that  would  require  a
         supplemental indenture pursuant to Section 14.6; or

                  (c) of the voluntary or involuntary  dissolution,  liquidation
         or winding-up of the Company,

the  Company  shall  cause to be filed with the Trustee and to be mailed to each
holder of Debentures  at his address  appearing on the  Debenture  register,  as
promptly as possible  but in any event at least 15 days prior to the  applicable
date hereinafter specified, a notice stating (x) the date on which a record date
is to be taken for the purpose of such dividend,  distribution,  rights, options
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,
rights,  options or warrants are to be  determined or (y) the date on which such
reclassification,  change,  consolidation,  merger, sale, conveyance,  transfer,
dissolution,  liquidation or winding-up is expected to become effective or occur
and the date as of which it is expected  that  holders of record of Common Stock
shall be  entitled  to  exchange  their  Common  Stock for  securities  or other
property deliverable upon such reclassification,  change, consolidation, merger,
sale, conveyance, transfer, dissolution,  liquidation or winding-up. Neither the
failure to give such notice nor any defect  therein shall affect the legality or
validity  of the  proceedings  referenced  in clauses  (a)  through  (c) of this
Section 14.10.


                                   ARTICLE XV

                                  SUBORDINATION


                  Section 15.1 Agreement to Subordinate. The Company agrees, and
each  Debentureholder  by accepting a Debenture  agrees,  that the  indebtedness
evidenced by the Debentures is subordinated  in right of payment,  to the extent
and in the manner  provided in this Article XV, to the prior  payment in full of
all Senior  Indebtedness  and that the  subordination  is for the benefit of the
holders of Senior Indebtedness.

                                       46
<PAGE>

                  Section 15.2 Certain Definitions. For purposes of this Article
XV, the following terms shall have the meaning indicated:

                  (1)  "Representative"  shall mean a duly authorized  indenture
         trustee  or other  trustee,  agent  or  representative  for any  Senior
         Indebtedness.

                  (2) "Senior Indebtedness" with respect to the Debentures means
         the principal of, premium, if any, and interest (including any interest
         accruing subsequent to a bankruptcy or other similar proceeding whether
         or not such  interest is an allowed claim  enforceable  in a bankruptcy
         case)  on,  and  any  fees,  costs,  expenses  and  any  other  amounts
         (including  indemnity  payments)  related  to  the  following,  whether
         outstanding  on the date hereof or hereafter  incurred or created:  (a)
         indebtedness,  matured or unmatured,  whether or not contingent, of the
         Company  to   NationsCredit   Commercial   Corporation,   through   its
         NationsCredit   Commercial  Funding  Division,   its  affiliates,   its
         successors or its assigns,  regardless of whether evidenced by notes or
         other written  obligations,  (b)  indebtedness  of others of any of the
         kinds  described in the  preceding  clause (a) assumed or guaranteed by
         the Company,  (c)  indebtedness,  matured or unmatured,  whether or not
         contingent,  of the Company to the trustee,  paying agent or holders of
         the Company's 8.5% Subordinated  Redeemable  Debentures due 2000 issued
         pursuant  to an  Indenture  dated as of  September  30,  1997,  and (d)
         renewals, extensions, modifications, amendments, and refundings of, and
         indebtedness  and obligations of a successor  person issued in exchange
         for or in  replacement  of,  indebtedness  or  obligations of the kinds
         described  in the  preceding  clauses  (a),  (b) and  (c),  unless  the
         agreement pursuant to which any such indebtedness  described in clauses
         (a) through (d) is created,  issued,  assumed or  guaranteed  expressly
         provides that such  indebtedness  is not senior or superior in right of
         payment  to the  Debentures;  provided  that the  following  shall  not
         constitute Senior  Indebtedness:  (i) any indebtedness or obligation of
         the Company in respect of the Debentures,  (ii) any indebtedness (other
         than the debentures  described in clause (c)) that is  subordinated  or
         junior in any respect to any other  indebtedness  of the Company  other
         than Senior Indebtedness;  and (iii) any indebtedness  incurred for the
         purchase of goods or materials in the ordinary course of business.

                  For the purposes of this Indenture,  Senior Indebtedness shall
not be  deemed  to have  been  paid in full  until  the  holders  of the  Senior
Indebtedness  shall have  indefeasibly  received  payment in full in cash of all
Senior  Indebtedness;  provided that if any holder of Senior Indebtedness agrees
to accept payment in full of such Senior  Indebtedness for  consideration  other
than cash, such holder shall be deemed to have indefeasibly  received payment in
full of such  Senior  Indebtedness.  The  provisions  of this  Article  XV shall
continue to be  effective or be  reinstated,  as the case may be, if at any time
any payment of any of the Senior  Indebtedness is rescinded or must otherwise be
returned by any holder of Senior Indebtedness upon the insolvency, bankruptcy or
reorganization  of the Company or otherwise,  all as though such payment had not
been made.

                  A  distribution  may  consist  of  cash,  securities  or other
property, by set-off or otherwise.

                                       47
<PAGE>


                  Section 15.3 Liquidation;  Dissolution;  Bankruptcy.  Upon any
distribution  to creditors of the Company in a liquidation or dissolution of the
Company or in a bankruptcy, reorganization,  insolvency, receivership or similar
proceeding  relating to the Company or its property,  in an  assignment  for the
benefit of creditors or any marshalling of the Company's assets and liabilities,
(a)  holders of all  Senior  Indebtedness  shall  first be  entitled  to receive
payment  in  full  of  all  amounts   due  or  to  become  due  thereon   before
Debentureholders  shall be entitled to receive any payment  with  respect to the
principal of or interest on the  Debentures  (except that  Debentureholders  may
receive  securities  that are  subordinated  to at least the same  extent as the
Debentures  to Senior  Indebtedness  and any  securities  issued in exchange for
Senior  Indebtedness)  and (b) until all Senior  Indebtedness  (as  provided  in
clause (a) above) is paid in full, any  distribution  to which  Debentureholders
would be  entitled  but for this  Article  shall be made to  holders  of  Senior
Indebtedness  (except  that  Debentureholders  may receive  securities  that are
subordinated  to at least  the  same  extent  as the  Debentures  to (x)  Senior
Indebtedness and (y) any securities issued in exchange for Senior Indebtedness),
as their interests may appear.

                  Section 15.4 Default on Senior  Indebtedness.  The Company may
not make any  payment  upon or in  respect  of the  Debentures  (except  in such
subordinated   securities)   and  may  not  acquire  from  the  Trustee  or  any
Debentureholder  any Debenture for cash or property  (other than securities that
are  subordinated  to at least the same  extent as the  Debenture  to (i) Senior
Indebtedness and (ii) any securities issued in exchange for Senior Indebtedness)
until all Senior Indebtedness has been paid in full if:

                  (a) a default in the payment of the principal of, premium,  if
         any, or interest on Senior Indebtedness occurs and is continuing beyond
         any applicable period of grace (a "Payment Default"); or

                  (b)  a  default,  other  than  a  Payment  Default  on  Senior
         Indebtedness  occurs  and is  continuing  that  permits  holders of the
         Senior  Indebtedness as to which such default relates to accelerate its
         maturity  (a  "Nonpayment  Default")  and the  Trustee  or the  Company
         receives  a  notice  of  the  default   from  the   Representative   or
         Representatives  of holders of at least a majority in principal  amount
         of Senior Indebtedness then outstanding.

                  The Company may and shall resume payments on and distributions
in respect of the  Debentures  and may  acquire  them upon the date on which the
default is cured or waived, in writing, if this Article XV otherwise permits the
payment, distribution or acquisition at the time of such payment or acquisition.

                  Section 15.5 When Distribution Must Be Paid Over. In the event
that  the  Trustee  (or  paying   agent  if  other  than  the  Trustee)  or  any
Debentureholder  receives any payment of  principal or interest  with respect to
the Debentures at a time when such payment is prohibited by Section 15.3 or 15.4
hereof, such payment shall be held by the Trustee (or paying agent if other than
the  Trustee)  or such  Debentureholder,  in  trust  for  the  benefit  of,  and
immediately  shall be paid over and  delivered,  upon written  request,  to, the
holders  of  Senior   Indebtedness  as  their  interests  may  appear  or  their
Representative under the indenture or other agreement (if

                                       48
<PAGE>

any)  pursuant  to which  Senior  Indebtedness  may have been  issued,  as their
respective  interests may appear,  for  application to the payment of all Senior
Indebtedness  remaining  unpaid  to  the  extent  necessary  to pay  all  Senior
Indebtedness  in full in accordance  with its terms,  after giving effect to any
concurrent payment or distribution to or for the holders of Senior Indebtedness.

                  With  respect  to the  holders  of  Senior  Indebtedness,  the
Trustee  undertakes to perform only such  obligations on the part of the Trustee
as are  specifically  set forth in this Article XV, and no implied  covenants or
obligations  with  respect to the holders of Senior  Indebtedness  shall be read
into this Indenture against the Trustee.  The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness and shall not be liable
to any such holders if the Trustee  shall pay over or distribute to or on behalf
of  Debentureholders or the Company or any other person money or assets to which
any holders of Senior  Indebtedness  shall be entitled by virtue of this Article
XV,  except if such  payment is made as a result of the  willful  misconduct  or
gross negligence of the Trustee.

                  Section  15.6 Notice by Company.  The Company  shall  promptly
notify the  Trustee  and the paying  agent in writing of any facts  known to the
Company that would cause a payment of any  principal or interest with respect to
the Debentures to violate this Article XV, but failure to give such notice shall
not affect the  subordination  of the Debentures to the Senior  Indebtedness  as
provided in this Article XV.

                  Section 15.7  Subrogation.  Until all Senior  Indebtedness  is
paid in full and until the Debentures are paid in full,  Debentureholders  shall
be subrogated  (equally and ratably with all other  indebtedness pari passu with
the Debentures) to the rights of holders of Senior Indebtedness (but subordinate
to the rights of the holders of Senior  Indebtedness)  to receive  distributions
applicable to Senior  Indebtedness  to the extent that  distributions  otherwise
payable  to the  Debentureholders  have been  applied  to the  payment of Senior
Indebtedness.  A  distribution  made under this  Article XV to holders of Senior
Indebtedness that otherwise would have been made to  Debentureholders is not, as
between  the  Company  and  Debentureholders,  a payment  by the  Company on the
Debentures.

                  Section  15.8  Relative  Rights.  This  Article XV defines the
relative rights of Debentureholders and holders of Senior Indebtedness.  Nothing
in this Indenture shall:

                  (a) impair,  as between the Company and the  Debentureholders,
         the obligation of the Company, which is absolute and unconditional,  to
         pay  principal of and interest on the  Debentures  in  accordance  with
         their terms;

                  (b)  affect  the  relative  rights  of  Debentureholders   and
         creditors of the Company other than their rights in relation to holders
         of Senior Indebtedness; or

                  (c) prevent the Trustee or any Debentureholder from exercising
         its available  remedies upon a default or Event of Default,  subject to
         the rights of  holders  and  owners of Senior  Indebtedness  to receive
         distributions and payments otherwise payable to Debentureholders.

                                       49
<PAGE>


                  If  the  Company  fails  because  of  this  Article  XV to pay
principal of or interest on a Debenture on the due date,  the failure is still a
default or Event of Default.

                  Section 15.9 Subordination May Not Be Impaired by Company.  No
right of any holder of Senior  Indebtedness to enforce the  subordination of the
indebtedness evidenced by the Debentures shall be impaired by any act or failure
to act by the  Company  or any  holder of  Debentures  or by the  failure of the
Company or any holder of Debentures to comply with this Indenture.

                  Section  15.10   Distribution  or  Notice  to  Representative.
Whenever  a  distribution  is to be made or a notice  given to holders of Senior
Indebtedness,  the  distribution  may be made  and the  notice  given  to  their
Representative.

                  Upon any  payment  or  distribution  of assets of the  Company
referred to in this  Article XV, the Trustee and the  Debentureholders  shall be
entitled  to rely  upon  any  order or  decree  made by any  court of  competent
jurisdiction  or  upon  any  certificate  of  such   Representative  or  of  the
liquidating  trustee or agent or other  person  making any  distribution  to the
Trustee or to the  Debentureholders  for the purpose of ascertaining the persons
entitled  to  participate  in  such  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 XV.

                  Section   15.11   Rights  of   Trustee   and   Paying   Agent.
Notwithstanding the provisions of this Article XV or any other provision of this
Indenture,  the Trustee shall not be charged with  knowledge of the existence of
any facts that would prohibit the making of any payment or  distribution  by the
Trustee,  and the Trustee and the paying agent may continue to make  payments on
the  Debentures,  unless the Trustee  shall have actual  knowledge or shall have
received at its Corporate Trust Office at least three Business Days prior to the
date of such payment written notice of facts that would cause the payment of any
principal  and interest  with respect to the  Debentures to violate this Article
XV. Only the Company or a  Representative  may give the notice.  Nothing in this
Article XV shall  impair the claims of, or  payments  to, the  Trustee  under or
pursuant to Section 7.6 hereof.

                  The Trustee shall be entitled to rely on the delivery to it of
a written notice by a person  representing  such person to be a holder of Senior
Indebtedness  (or a trustee or agent on behalf of such holder) to establish that
such notice has been given by a holder of Senior  Indebtedness  (or a trustee or
agent on behalf of any such holder). In the event that the Trustee determines in
good faith that  further  evidence is required  with respect to the right of any
person as a holder of Senior  Indebtedness  to  participate  in any  payment  or
distribution pursuant to this Article XV, the Trustee may request such person to
furnish evidence to the reasonable  satisfaction of the Trustee 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  XV, and if such
evidence is not  furnished,  the  Trustee may defer any payment  which it may be
required to make for the

                                       50
<PAGE>

benefit of such person pursuant to the terms of this Indenture  pending judicial
determination as to the rights of such person to receive such payment.

                  The Trustee in its  individual or any other  capacity may hold
Senior  Indebtedness  with the same rights it would have if it were not Trustee.
Any paying agent, any authenticating  agent, any conversion agent, any Debenture
registrar and their successors may do the same with like rights.

                  Section  15.12  Authorization  to Effect  Subordination.  Each
holder of a Debenture by the holder's  acceptance thereof authorizes and directs
the Trustee on the  holder's  behalf to take such action as may be  necessary or
appropriate to effectuate the  subordination  as provided in this Article XV and
appoints  the Trustee to act as the  holder's  attorney-in-fact  for any and all
such purposes.  Without limiting the foregoing,  each  Representative  is hereby
irrevocably  authorized  and  empowered  (in its own  name or in the name of the
Debentureholders or the Trustee or otherwise),  but shall have no obligation, to
demand,  sue for, collect and receive every payment or distribution  referred to
in  Section  15.3 above and give  acquittance  therefor  and to file  claims and
proofs of claim and take such other action as it may deem necessary or advisable
for the exercise or enforcement of any of the rights or interests of the holders
or owners of the Senior  Indebtedness  hereunder;  provided that for purposes of
this Section 15.12 holders or owners of Senior Indebtedness may act only through
such Representative.

                  Section 15.13 Conversions Not Deemed Payment. For the purposes
of this  Article  XV only,  the  issuance  and  delivery  of Common  Stock  upon
conversion of the Debentures in accordance  with Article XIV shall not be deemed
to  constitute  a payment or  distribution  on account  of the  principal  of or
interest on the Debentures or on account of the purchase or other acquisition of
Debentures.  Nothing contained in this Article or elsewhere in this Indenture or
in the  Debentures  is intended to or shall  impair,  as among the Company,  its
creditors other than holders of Senior Indebtedness and the holders,  the right,
which is absolute and  unconditional,  of the holder of any Debenture to convert
such Debenture in accordance with Article XIV.

                  Section 15.14  Amendments.  The  provisions of this Article XV
shall not be amended or modified  without the written  consent of the holders of
Senior Indebtedness or their Representative.


                                   ARTICLE XVI

                            MISCELLANEOUS PROVISIONS


                  Section 16.1 Provisions Binding on Company's  Successors.  All
the covenants,  stipulations,  promises and agreements in this Indenture made by
the Company shall bind its successors and assigns whether so expressed or not.

                                       51
<PAGE>

                  Section 16.2  Official Acts by Successor  Company.  Any act or
proceeding by any provision of this Indenture  authorized or required to be done
or  performed  by any board  (including  the Board of  Directors),  committee or
officer of the Company shall and may be done and  performed  with like force and
effect by the like board,  committee or officer of any corporation that shall at
the time be the lawful sole successor of the Company.

                  Section 16.3 Addresses for Notices,  Etc. Any notice or demand
that by any provision of this  Indenture is required or permitted to be given or
served by the Trustee or by the holders of  Debentures  on the Company  shall be
deemed to have been  sufficiently  given or made,  for all  purposes if given or
served by being sent by prepaid  overnight  delivery or being deposited  postage
prepaid by  registered  or certified  mail in a post office letter box addressed
(until  another  address is filed by the  Company  with the  Trustee)  to Fields
Aircraft Spares, Inc., 4175 Guardian Street, Simi Valley, California 93063-3382,
Attention:  President,  with a copy to Richard  T.  Beard,  Callister  Nebeker &
McCullough, Gateway Tower East, Suite 900, 10 East South Temple, Salt Lake City,
Utah 84133.  Any notice,  direction,  request or demand hereunder to or upon the
Trustee  shall be  deemed  to have  been  sufficiently  given  or made,  for all
purposes,  if given or served by being sent by  prepaid  overnight  delivery  or
being deposited postage prepaid by registered or certified mail in a post office
letter box addressed to the Corporate Trust Office of the Trustee,  which office
is, at the date as of which this  Indenture is dated,  located at  Gartenstrasse
10, CH-8002, Zurich, Switzerland, Attention: Dr. Dieter Wicki.

                  The  Trustee,   by  notice  to  the  Company,   may  designate
additional or different addresses for subsequent notices or communications.

                  Any notice or communication mailed to a Debentureholder  shall
be mailed to him by first class mail,  postage  prepaid,  at the address of such
Debentureholder   as  it  appears  on  the  Debenture   register  and  shall  be
sufficiently  given  to  such  Debentureholder  if so  mailed  within  the  time
prescribed.

                  Failure to mail a notice or communication to a Debentureholder
or any  defect in it shall not  affect  its  sufficiency  with  respect to other
Debentureholders.  If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.

                  Section 16.4 Governing Law. This Indenture  shall be deemed to
be a contract made under the substantive laws of Utah and for all purposes shall
be construed in accordance with the  substantive  laws of Utah without regard to
conflicts of laws principles thereof.

                  Section 16.5 Evidence of Compliance with Conditions Precedent;
Certificates  to Trustee.  Upon any  application or demand by the Company to the
Trustee to take any action under any of the  provisions of this  Indenture,  the
Company shall furnish to the Trustee an Officers'  Certificate  stating that all
conditions  precedent,  if any,  provided for in this Indenture  relating to the
proposed action have been complied with, and an Opinion of Counsel stating that,
in the opinion of such counsel, all such conditions precedent have been complied
with.

                                       52
<PAGE>

                  Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture  shall  include:  (1) a statement that the person
making such  certificate  or opinion has read such covenant or condition,  (2) a
brief statement as to the nature and scope of the  examination or  investigation
upon which the statement or opinion  contained in such certificate or opinion is
based,  (3) a statement  that,  in the opinion of such person,  he has made such
examination  or  investigation  as is  necessary  to enable  him to  express  an
informed  opinion as to  whether  or not such  covenant  or  condition  has been
complied  with and (4) a statement  as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.

                  Section  16.6 Legal  Holidays.  In any case where any interest
payment date,  date fixed for redemption or stated  maturity of any Debenture or
the last date on which a holder has the right to convert  his  Debentures  shall
not be a  Business  Day,  then  (notwithstanding  any  other  provision  of this
Indenture or of the  Debentures)  payment of interest or principal or conversion
of the  Debentures  need not be made on such  date,  but may be made on the next
succeeding  Business  Day with  the  same  force  and  effect  as if made on the
Interest Payment Date, date fixed for redemption,  or at the stated maturity, or
on such last day for conversion,  provided that no interest shall accrue for the
period from and after such interest  payment date,  date fixed for redemption or
stated maturity, as the case may be.

                  Section 16.7 Benefits of Indenture.  Nothing in this Indenture
or in the Debentures, expressed or implied, shall give to any person, other than
the parties hereto, any paying agent, any  authenticating  agent, any conversion
agent, any Debenture registrar and their successors hereunder and the holders of
Debentures,  any benefit or any legal or equitable right,  remedy or claim under
this Indenture.

                  Section  16.8 Table of  Contents,  Headings  Etc. The table of
contents  and the titles and  headings  of the  articles  and  sections  of this
Indenture have been inserted for  convenience  of reference  only, are not to be
considered  a part  hereof,  and shall in no way modify or  restrict  any of the
terms or provisions hereof.

                  Section 16.9 Authenticating  Agent. The Trustee may appoint an
authenticating  agent that shall be  authorized to act on its behalf and subject
to its direction in the  authentication and delivery of Debentures in connection
with the original  issuance  thereof and  transfers  and exchanges of Debentures
hereunder,  including under Sections 2.4, 2.5, 2.6, 2.7 and 3.3, as fully to all
intents  and  purposes  as though the  authenticating  agent had been  expressly
authorized by this  Indenture  and those  Sections to  authenticate  and deliver
Debentures.  For all purposes of this Indenture, the authentication and delivery
of Debentures by the  authenticating  agent shall be deemed to be authentication
and  delivery  of  such  Debentures  "by  the  Trustee"  and  a  certificate  of
authentication  executed  on behalf of the  Trustee by an  authenticating  agent
shall be deemed to satisfy any  requirement  hereunder or in the  Debentures for
the Trustee's certificate of authentication.

                  Any  corporation  into which any  authenticating  agent may be
merged or converted  or with which it may be  consolidated,  or any  corporation
resulting from any merger,

                                       53
<PAGE>

consolidation or conversion to which any authenticating  agent shall be a party,
or  any   corporation   succeeding  to  the  corporate  trust  business  of  any
authenticating  agent,  shall  be  the  successor  of the  authenticating  agent
hereunder,  if such successor company is otherwise  eligible under this Section,
without the  execution  or filing of any paper or any further act on the part of
the parties hereto or the authenticating agent or such successor company.

                  Any  authenticating  agent  may at any time  resign  by giving
written notice of resignation to the Trustee and to the Company. The Trustee may
at any time terminate the agency of any  authenticating  agent by giving written
notice of  termination  to such  authenticating  agent and to the Company.  Upon
receiving such a notice of resignation or upon such a termination, or in case at
any time any authenticating agent shall cease to be eligible under this Section,
the Trustee shall promptly appoint a successor  authenticating  agent (which may
be the Trustee),  shall give written  notice of such  appointment to the Company
and shall mail notice of such  appointment  to all holders of  Debentures as the
names and addresses of such holders appear on the Debenture register.

                  The  Company  agrees to pay to the  authenticating  agent from
time to time reasonable compensation for its services.

                  The provisions of Sections 7.2, 7.3, 7.4, 8.3 and this Section
16.9 shall be applicable to any authenticating agent.

                  Section 16.10 Execution in Counterparts. This Indenture may be
executed in any number of counterparts,  each of which shall be an original, but
such counterparts shall together constitute but one and the same instrument.

                                       54
<PAGE>


                  EPP  Finanz AG hereby  accepts  the  trusts in this  Indenture
declared and provided, upon the terms and conditions hereinabove set forth.

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

                                            FIELDS AIRCRAFT SPARES, INC.


                                            By:    /s/ Peter Frohlich  
                                               ----------------------------
                                            Name:  Peter Frohlich
                                 Title: Chairman
Attest:

/s/ S.H. Carrington-Green                            
------------------------------


                                 EPP FINANZ AG,
                                   as Trustee


                                            By:    /s/ Herbert Towning 
                                               ------------------------------
                                            Name: Herbert Towning
                                            Title:
Attest:

/s/ Judith White                                     
-----------------------------


                                       55
<PAGE>



                          EXHIBIT A - FORM OF DEBENTURE


                           [FORM OF FACE OF DEBENTURE]

No.
                                                              $-----------------
                                                               CUSIP 316572 AB 2

                          FIELDS AIRCRAFT SPARES, INC.

          8.5% Subordinated Convertible Redeemable Debentures Due 2001


         THE DEBENTURE  EVIDENCED  HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
         SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
         SECURITIES  LAWS, AND MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN
         THE  FOLLOWING   SENTENCE.   BY  ACQUISITION  HEREOF,  THE  HOLDER  (1)
         REPRESENTS THAT (A) IT IS AN "ACCREDITED  INVESTOR" (AS DEFINED IN RULE
         501(a) UNDER THE SECURITIES ACT) ("ACCREDITED  INVESTOR") AND (B) IT IS
         ACQUIRING THE DEBENTURE  EVIDENCED HEREBY FOR INVESTMENT  PURPOSES ONLY
         AND NOT WITH A VIEW TOWARDS  DISTRIBUTION;  (2) AGREES THAT IT WILL NOT
         RESELL OR OTHERWISE  TRANSFER  THE  DEBENTURE  EVIDENCED  HEREBY OR THE
         COMMON STOCK ISSUABLE UPON  CONVERSION OF SUCH DEBENTURE  EXCEPT (A) TO
         THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL
         BUYER IN COMPLIANCE  WITH RULE 144A UNDER THE SECURITIES ACT, (C) TO AN
         ACCREDITED  INVESTOR  THAT,  PRIOR TO SUCH  TRANSFER,  FURNISHES TO EPP
         FINANZ   AG  AS   TRUSTEE,   A   SIGNED   LETTER   CONTAINING   CERTAIN
         REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER
         OF THE  DEBENTURE  EVIDENCED  HEREBY  (THE FORM OF WHICH  LETTER CAN BE
         OBTAINED  FROM  SUCH  TRUSTEE),  (D)  PURSUANT  TO THE  EXEMPTION  FROM
         REGISTRATION  PROVIDED  BY  RULE  144  UNDER  THE  SECURITIES  ACT  (IF
         AVAILABLE) OR (E) PURSUANT TO A REGISTRATION  STATEMENT  WHICH HAS BEEN
         DECLARED  EFFECTIVE  UNDER THE  SECURITIES  ACT; AND (3) AGREES THAT IT
         WILL DELIVER TO EACH PERSON TO WHOM THE DEBENTURE  EVIDENCED  HEREBY IS
         TRANSFERRED  A NOTICE  SUBSTANTIALLY  TO THE EFFECT OF THIS LEGEND.  IN
         CONNECTION  WITH ANY TRANSFER OF THE DEBENTURE  EVIDENCED  HEREBY,  THE
         HOLDER MUST CHECK THE  APPROPRIATE  BOX SET FORTH ON THE REVERSE HEREOF
         RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS  CERTIFICATE TO
         EPP FINANZ AG, AS  TRUSTEE.  IF THE  PROPOSED  TRANSFER  IS PURSUANT TO
         CLAUSE  (C) OR (D)  ABOVE,  THE HOLDER  MUST,  PRIOR TO SUCH  TRANSFER,
         FURNISH TO EPP FINANZ AG, AS

                                       A-1
<PAGE>


         TRUSTEE,  SUCH  CERTIFICATIONS,  LEGAL OPINIONS OR OTHER INFORMATION AS
         THE COMPANY MAY  REASONABLY  REQUIRE TO CONFIRM  THAT SUCH  TRANSFER IS
         BEING MADE  PURSUANT TO AN  EXEMPTION  FROM,  OR IN A  TRANSACTION  NOT
         SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

                  FIELDS AIRCRAFT SPARES, INC., a corporation duly organized and
validly existing under the laws of the State of Utah (the "Company"), which term
includes any Successor  Company  under the Indenture  referred to on the reverse
hereof,     for    value     received     hereby     promises    to    pay    to
___________________________,   or  registered  assigns,  the  principal  sum  of
______________________________________  Dollars on  December  31,  2001,  at the
Corporate  Trust Office of the  Trustee,  in such coin or currency of the United
States  of  America  as at the time of  payment  shall be legal  tender  for the
payment of public and private debts, and to pay interest,  semi-annually on June
30 and December 31 of each year (each an "Interest  Payment  Date"),  commencing
June 30, 1999, on said  principal sum at said office or agency,  in like coin or
currency,  at the rate per annum specified in the title of this Debenture,  from
the original  issue date of this Debenture or the most recent  Interest  Payment
Date,  as the case may be, next  preceding  the date of this  Debenture to which
interest has been paid or duly provided for, unless the date hereof is a date to
which  interest has been paid or duly  provided for, in which case from the date
of this  Debenture,  or unless no interest has been paid or duly provided for on
the  Debentures,  in which case from the original  issue date of this  Debenture
until  payment of said  principal  sum has been made or duly  provided  for. The
interest  so payable on any June 30 or December 31 will be paid to the person in
whose name this Debenture (or one or more Predecessor  Debentures) is registered
at the close of  business  on the  record  date,  which  shall be the June 15 or
December  15  (whether  or not a Business  Day) next  preceding  such June 30 or
December 31,  respectively;  provided that any such interest not punctually paid
or duly  provided  for shall be payable as provided in the  Indenture.  Interest
shall be paid by check mailed to the registered holder at the registered address
of such  person  unless  other  arrangements  are  made in  accordance  with the
provisions of the Indenture.

                  Reference is made to the further  provisions of this Debenture
set forth on the  reverse  hereof,  including,  without  limitation,  provisions
giving the holder of this Debenture the right to convert the principal amount of
this  Debenture into Common Stock of the Company on the terms and subject to the
limitations referred to on the reverse hereof and as more fully specified in the
Indenture.  Such further  provisions shall for all purposes have the same effect
as though fully set forth at this place.

                  This Debenture shall not be valid or become obligatory for any
purpose until the certificate of authentication  hereon shall have been manually
signed by the  Trustee,  or a duly  authorized  authenticating  agent  under the
Indenture.

                                       A-2
<PAGE>


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

                                                FIELDS AIRCRAFT SPARES, INC.



                                                By:                     
                                                    ---------------------------
                                      Name:
                                     Title:


Attest:


---------------------------
        Secretary



                          CERTIFICATE OF AUTHENTICATION

Dated:

                  This is one of the  Debentures  described in the  within-named
Indenture.




                                    By:                                 
                                       ---------------------------------- 
                                           Authorized Signatory


                                       A-3
<PAGE>


                         [FORM OF REVERSE OF DEBENTURE]

                          FIELDS AIRCRAFT SPARES, INC.

          8.5% Subordinated Convertible Redeemable Debentures Due 2001

                  This Debenture is one of a duly authorized issue of Debentures
of the  Company,  designated  as its 8.5%  Subordinated  Convertible  Redeemable
Debentures Due 2001 (herein called the  "Debentures"),  limited to the aggregate
principal  amount of $2,000,000 all issued or to be issued under and pursuant to
an  Indenture  dated as of  December  22,  1998 (the  "Indenture"),  between the
Company and EPP Finanz AG, as trustee (the  "Trustee"),  to which  Indenture and
all  indentures  supplemental  thereto  reference  is hereby made for a complete
description  of the  rights,  limitations  of  rights,  obligations,  duties and
immunities  thereunder  of the  Trustee,  the  Company  and the  holders  of the
Debentures.  Each  Debenture is subject to, and  qualified by, all such terms as
set forth in the  Indenture  certain  of which are  summarized  hereon  and each
holder  of a  Debenture  is  referred  to the  corresponding  provisions  of the
Indenture  for a complete  statement of such terms.  To the extent that there is
any inconsistency between the summary provisions set forth in the Debentures and
the Indenture,  the provisions of the Indenture shall govern.  Capitalized terms
used but not defined in this Debenture shall have the meanings  ascribed to them
in the Indenture.

                  In case an Event of  Default,  as  defined  in the  Indenture,
shall have occurred and be continuing,  the principal of and accrued interest on
all Debentures may be declared,  and upon said declaration shall become, due and
payable,  in the manner,  with the effect and subject to the conditions provided
in the Indenture.

                  The payment of  principal  of and  interest on the  Debentures
will,  to the extent set forth in the  Indenture,  be  subordinated  in right of
payment to the prior payment in full of all Senior  Indebtedness  (as defined in
the  Indenture).  Upon  any  distribution  to  creditors  of  the  Company  in a
liquidation or  dissolution  of the Company or in a bankruptcy,  reorganization,
insolvency,  receivership  or similar  proceeding  related to the Company or its
property,  in an assignment  for the benefit of creditors or any  marshalling of
the Company's  assets and  liabilities,  the holders of all Senior  Indebtedness
will first be  entitled  to receive  payment  in full of all  amounts  due or to
become due  thereon  before the  holders of the  Debentures  will be entitled to
receive any payment in respect of the principal of or interest on the Debentures
(except that holders of Debentures 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).

                  The Company  also may not make any payment  upon or in respect
of the Debentures  (except in such subordinated  securities) and may not acquire
from the Trustee or the holder of any Debenture for cash or property (other than
securities  subordinated to at least the same extent as the Debenture to (i) all
Senior  Indebtedness  and (ii) any  securities  issued in  exchange  for  Senior
Indebtedness)  until  all  Senior  Indebtedness  has been  paid in full if (a) a
default in the  payment of the  principal  of,  premium,  if any, or interest on
Senior Indebtedness

                                       A-4
<PAGE>

occurs and is continuing  beyond any applicable period of grace or (b) any other
default  occurs  and is  continuing  with  respect to Senior  Indebtedness  that
permits  holders of the Senior  Indebtedness as to which such default relates to
accelerate  its maturity and the Trustee  receives a notice of such default from
the  representative  or  representatives  of holders  of at least a majority  in
principal  amount of  Senior  Indebtedness  then  outstanding.  Payments  on the
Debentures may and shall be resumed upon the date on which such default is cured
or waived.

                  In the event that the Trustee  (or paying  agent if other than
the Trustee) or any holder of the  Debentures  receives any payment of principal
or  interest  with  respect  to the  Debentures  at a time when such  payment is
prohibited  under the  Indenture,  such  payment  shall be held in trust for the
benefit of, and immediately  shall be paid over and delivered to, the holders of
Senior  Indebtedness or their  representative as their respective  interests may
appear.  After all Senior  Indebtedness is paid in full and until the Debentures
are paid in full, the holders of the Debentures shall be subrogated (equally and
ratably  with all other  Indebtedness  pari  passu with the  Debentures)  to the
rights of holders of Senior Indebtedness to receive distributions  applicable to
Senior  Indebtedness to the extent that  distributions  otherwise payable to the
holders  of  the  Debentures   have  been  applied  to  the  payment  of  Senior
Indebtedness.

                  The Indenture contains  provisions  permitting the Company and
the  Trustee,  with the  consent of the  holders of not less than a majority  in
aggregate principal amount of the Debentures at the time outstanding,  evidenced
as in the Indenture  provided,  to execute  supplemental  indentures  adding any
provisions to or changing in any manner or eliminating  any of the provisions of
the  Indenture or of any  supplemental  indenture or modifying in any manner the
rights of the  holders of the  Debentures;  provided  that no such  supplemental
indenture  shall (i) extend the fixed maturity of any  Debenture,  or reduce the
rate or extend the time of payment of interest thereon,  or reduce the principal
amount thereof, or reduce any amount payable on redemption thereof, or impair or
affect  the  right of any  Debentureholder  to  institute  suit for the  payment
thereof,  or make the principal  thereof or interest thereon payable in any coin
or currency other than that provided in the Debentures, modify the subordination
provisions in a manner adverse to the holders of the  Debentures,  or impair the
right to convert the Debentures into Common Stock subject to the terms set forth
in the Indenture without the consent of the holder of each Debenture so affected
or (ii) reduce the aforesaid percentage of Debentures,  the holders of which are
required to consent to any such supplemental  indenture,  without the consent of
the holders of all Debentures then outstanding.  The Company and the Trustee may
amend or supplement the Indenture  without notice to or consent of any holder of
Debentures in certain events specified in the Indenture.  It is also provided in
the Indenture that,  prior to any declaration  accelerating  the maturity of the
Debentures,  the  holders of a majority  in  aggregate  principal  amount of the
Debentures  at the time  outstanding  may on behalf of the holders of all of the
Debentures  waive any past default or Event of Default  under the  Indenture and
its consequences except a default in the payment of interest or the principal of
any of the  Debentures,  a failure by the Company to convert any Debentures into
Common Stock of the Company,  unless otherwise  excused pursuant to the terms of
the  Indenture,  or a default  in  respect of a  covenant  or  provision  of the
Indenture that under Article X thereof cannot be modified or amended without the
consent of the holders of all Debentures then  outstanding.  Any such consent or
waiver by the holder of this Debenture (unless revoked as provided in the

                                       A-5
<PAGE>

Indenture)  shall be conclusive and binding upon such holder and upon all future
holders and owners of this  Debenture and any  Debentures  that may be issued in
exchange or  substitution  hereof,  irrespective  of whether or not any notation
thereof is made upon this Debenture or such other Debentures.

                  No reference  herein to the Indenture and no provision of this
Debenture  or of the  Indenture  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 place,  at the respective  times,  at the rate
and in the coin or currency herein prescribed.

                  Interest on the Debentures shall be computed on the basis of a
360-day year composed of twelve 30-day months.

                  The Debentures are issuable in registered form without coupons
in denominations of $1,000 principal amount and integral multiples  thereof.  At
the office or agency of the Company  referred to on the face hereof,  and in the
manner and subject to the limitations provided in the Indenture, without payment
of any service  charge but with payment of a sum  sufficient to cover any tax or
other   governmental   charge  that  may  be  imposed  in  connection  with  any
registration  or exchange of Debentures,  Debentures may be exchanged for a like
aggregate principal amount of Debentures of other authorized denominations.

                  The Debentures are not redeemable at the option of the Company
prior to December 31, 1999.  At any time on or after that date,  the  Debentures
may be  redeemed  at the  Company's  option,  upon  notice  as set  forth in the
Indenture,  in whole at any time or in part  from  time to time,  at 100% of the
principal  amount,  together  with  accrued  interest  to  the  date  fixed  for
redemption; provided that if the date fixed for redemption is a date on or after
the record date and on or before the next following  Interest Payment Date, then
the  interest  payable on such date shall be paid to the holder of record on the
next preceding June 15 or December 15, respectively.

                  Subject to the provisions of the Indenture,  the holder hereof
has the right,  at its option,  at any time after 90 days  following  the latest
date of original  issuance of the  Debentures and prior to the close of business
on December 28, 2001,  subject to prior redemption or repurchase,  or, as to all
or any portion hereof called for redemption,  prior to the close of business one
business  day before the date fixed for  redemption  (unless the  Company  shall
default in payment due upon redemption thereof), to convert the principal hereof
or any portion of such principal that is $1,000 or an integral multiple thereof,
into that number of fully paid and non-assessable shares of the Company's Common
Stock,  as said shares shall be constituted at the date of conversion,  obtained
by dividing the  principal  amount of this  Debenture  or portion  thereof to be
converted by the conversion price (the "Conversion  Price") equal to the greater
of $5.50 per share or such  conversion  price as  adjusted  from time to time as
provided in the  Indenture,  upon surrender of this  Debenture,  together with a
conversion notice as provided in the Indenture,  to the Company at the Corporate
Trust Office of the Trustee,  and,  unless the shares issuable on conversion are
to be issued in the same name as this Debenture, duly

                                       A-6
<PAGE>

endorsed by, or accompanied by instruments of transfer in form  satisfactory  to
the Company duly executed by, the holder or by his duly authorized attorney.

                  Except as described in the  Indenture,  no adjustment  will be
made on  conversion  of any  Debentures  for  interest  accrued  thereon  or for
dividends  paid on any Common Stock issued.  A Holder of Debentures at the close
of business on a record date will be entitled to receive the interest payable on
such Debentures on the corresponding interest payment date. However,  Debentures
surrendered  for  conversion  during the period  from the close of business on a
record date to the opening of business on the next succeeding  interest  payment
date  must be  accompanied  by  funds  equal  to the  interest  payable  on such
succeeding  interest payment date on the principal  amount so converted  (unless
such Debenture or portion  thereof being converted is called for redemption on a
redemption  date  during the period  from the close of  business on or after any
record  date  to the  close  of  business  on the  business  day  following  the
corresponding  interest  payment date).  The interest  payment with respect to a
Debenture  called for  redemption on a date between the close of business on any
record date for the payment of interest to the close of business on the business
day  following  the  corresponding  interest  payment date and  surrendered  for
conversion  during  that period  will be payable on the  corresponding  interest
payment  date to the  registered  Holder at the close of business on that record
date  (notwithstanding the conversion of such Debenture before the corresponding
interest payment date). A Holder of Debentures who elects to convert during that
period need not include  funds equal to the  interest  paid.  The Company is not
required  to  issue  fractional  shares  of  Common  Stock  upon  conversion  of
Debentures  and,  in lieu  thereof,  will pay a cash  adjustment  based upon the
conversion price.

                  Upon due  presentment  for  registration  of  transfer of this
Debenture  at the  Corporate  Trust Office of the  Trustee,  a new  Debenture or
Debentures of authorized  denominations for an equal aggregate  principal amount
will be issued to the transferee in exchange thereof,  subject to the conditions
and limitations provided in the Indenture,  without charge except for any tax or
other governmental charge imposed in connection therewith.

                  The Company, the Trustee, any authenticating agent, any paying
agent, any conversion  agent and any Debenture  registrar may deem and treat the
registered holder hereof as the absolute owner of this Debenture (whether or not
this Debenture shall be overdue and notwithstanding any notation of ownership or
other  writing  hereon made by anyone  other than the  Company or any  Debenture
registrar),  for the purpose of receiving  payment hereof, or on account hereof,
for the conversion  hereof and for all other  purposes,  and neither the Company
nor the Trustee nor any other  authenticating agent nor any paying agent nor any
other  conversion  agent nor any  Debenture  registrar  shall be affected by any
notice  to the  contrary.  All  payments  made  to or  upon  the  order  of such
registered  holder  shall,  to the extent of the sum or sums paid,  satisfy  and
discharge liability for monies payable on this Debenture.

                  No recourse for the payment of the principal of or interest on
this  Debenture,  or for any claim based hereon or otherwise in respect  hereof,
and no  recourse  under or upon any  obligation,  covenant or  agreement  of the
Company  in  the  Indenture  or any  indenture  supplemental  thereto  or in any
Debenture, or because of the creation of any indebtedness

                                      A-7
<PAGE>

represented thereby, shall be had against any incorporator, shareholder, officer
or  director,  as such,  past,  present  or  future,  of the  Company  or of any
Successor  Company,  either  directly or through  the  Company or any  Successor
Company, whether by virtue of any constitution, statute or rule of law or by the
enforcement of any assessment or penalty or otherwise, all such liability being,
by the acceptance  hereof and as part of the consideration for the issue hereof,
expressly waived and released.

                                       A-8
<PAGE>


                                  ABBREVIATIONS


                  The following  abbreviations,  when used in the inscription of
the face of this  Debenture,  shall be construed as though they were written out
in full according to applicable laws or regulations:

TEN COM -         as tenants in common                UNIF GIFT MIN ACT -
TEN ENT -         as tenants by the entireties        ______________ Custodian
JT TEN -          as joint tenants with right of          (Cust)
                  survivorship and not as tenants     ______________ under 
                  in common                               (Minor)

                                                      Uniform Gifts to
                                                      Minors Act _______________
                                     (State)


                    Additional  abbreviations may also be used though not in the
                          above list.

                                       A-9

<PAGE>


                           [FORM OF CONVERSION NOTICE]

                                CONVERSION NOTICE


To:      Fields Aircraft Spares, Inc.

                  The  undersigned  registered  owner of this  Debenture  hereby
irrevocably  exercises  the option to convert  this  Debenture,  or the  portion
hereof (which is $1,000 principal amount or an integral  multiple thereof) below
designated,  into  Common  Shares,  par value $.05 per share,  of the Company in
accordance with the terms of the Indenture  referred to in this  Debenture,  and
directs that the shares issuable and deliverable upon such conversion,  together
with any check in payment for fractional shares and any Debentures  representing
any  unconverted  principal  amount  hereof,  be  issued  and  delivered  to the
registered  holder hereof unless a different name has been indicated  below.  If
shares or any portion of this  Debenture  not  converted are to be issued in the
name of a person  other than the  undersigned,  the  undersigned  will check the
appropriate  box below and pay all transfer taxes payable with respect  thereto.
Any  amount  required  to be paid to the  undersigned  on  account  of  interest
accompanies this Debenture.


Dated:_______________________              Contact Person: ____________________
                                           Fax Number:_________________________
_____________________________              Telephone Number:___________________

-----------------------------
Signature(s)




Signature(s)  must be guaranteed by an eligible  Guarantor  Institution  (banks,
stock brokers,  savings and loan associations and credit unions) with membership
in an approved signature  guarantee medallion program pursuant to Securities and
Exchange  Commission  Rule  17Ad-15  if  Common  Shares  are  to be  issued,  or
Debentures  to be  delivered,  other  than to and in the name of the  registered
holder.


--------------------------------
Signature Guarantee


                                      A-10
<PAGE>


Fill in for  registration  of shares if to be issued,  and  Debentures  if to be
delivered, other than to and in the name of the registered holder:


------------------------------------------------------------
(Name)

------------------------------------------------------------
(Street Address)

------------------------------------------------------------
(City, State and Zip Code)

Please print name and address


Principal amount to be converted (if less than all) $_______



Social Security or
Other Taxpayer Identification Number _______________________


                                 A-11
<PAGE>


                              [FORM OF ASSIGNMENT]


                  For  value   received   _____________________________   hereby
sell(s), assign(s) and transfer(s) unto _________________________ (Please insert
social security or other  identifying  number of assignee) the within Debenture,
and hereby irrevocably constitutes and appoints ________________________________
attorney to transfer the said  Debenture on the books of the Company,  with full
power of substitution in the premises.

                  In connection with any transfer of the within  Debenture,  the
undersigned confirms that such Debenture is being transferred:

|_|      To Fields Aircraft Spares, Inc. or a subsidiary thereof; or

|_|      Pursuant to and in compliance with Rule 144A under the Securities Act 
         of 1933, as amended; or

|_|      To an accredited investor pursuant to and in compliance with the 
         Securities Act of 1933, as amended; or

|_|      Pursuant to and in compliance with Rule 144 under the Securities Act 
         of 1933, as amended.

                  The  Trustee  may  refuse  to  register   any  of  the  within
Debentures in the name of any person other than the  registered  holder  thereof
(or hereof); unless the Trustee has received such certifications, legal opinions
and/or other information as the Company has reasonably requested to confirm that
such transfer is being made  pursuant to an exemption  from, or in a transaction
not subject to, the registration  requirements of the Securities Act of 1933, as
amended.

                  In addition, if the transferee is an accredited investor,  the
holder  must  furnish to the  Trustee  (i) a signed  letter  containing  certain
representations  and agreements  relating to the restrictions on transfer of the
security  evidenced  hereby  in  substantially  the  form  of  Exhibit  B to the
Indenture  and  (ii)  such  other   certifications,   legal  opinions  or  other
information as it may reasonably  require to confirm that such transfer is being
made  pursuant to an exemption  from,  or in a  transaction  not subject to, the
registration requirements of the Securities Act of 1933, as amended.

                                      A-12
<PAGE>




Dated: _______________________ 

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

------------------------------
Signature(s)

Signature(s)  must be guaranteed by an eligible  Guarantor  Institution  (banks,
stock brokers,  savings and loan associations and credit unions) with membership
in an approved signature  guarantee medallion program pursuant to Securities and
Exchange Commission Rule 17Ad-15.



--------------------------------------------------
Signature Guarantee

NOTICE: The signature on the conversion notice or the assignment must correspond
with the name as  written  upon the face of the  Debenture  in every  particular
without alteration or enlargement or any change whatever.

                                      A-13
<PAGE>

            EXHIBIT B - FORM OF TRANSFEREE CERTIFICATE FOR DEBENTURES
                      TO BE ISSUED TO ACCREDITED INVESTORS



EPP Finanz AG
as Trustee
Gartenstrasse 10
CH-8002
Zurich, Switzerland
Attention:  Corporate Trust Administration

                  Re:      Fields Aircraft Spares, Inc.
                           8.5% Subordinated Convertible Redeemable
                     Debentures Due 2001 (the "Debentures")

                  Reference is hereby made to the Indenture dated as of December
22, 1998 (as  supplemented  from time to time, the  "Indenture")  between Fields
Aircraft Spares, Inc. and EPP Finanz AG, as Trustee.  Capitalized terms used but
not defined herein shall have the meanings given to them in the Indenture.

                  The  undersigned is delivering  this letter in connection with
the transfer of Debentures to the  undersigned,  which Debentures are to be held
by the undersigned in definitive registered form.

                  The undersigned hereby confirms that:

                  (i) the  undersigned  is an "accredited  investor"  within the
meaning  of Rule  501(a)  under the  Securities  Act of 1933,  as  amended  (the
"Securities Act"), or an entity in which all of the equity owners are accredited
investors  within  the  meaning  of Rule  501(a)  under the  Securities  Act (an
"Accredited Investor");

                  (ii) (A) any purchase of Debentures by the undersigned will be
for the  undersigned's  own  account  or for the  account  of one or more  other
Accredited Investors or as fiduciary for the account of one or more trusts, each
of which is an "accredited  investor" within the meaning of Rule 501(a)(7) under
the Securities Act and for each of which we exercise sole investment  discretion
or (B) we are a "bank," within the meaning of Section  3(a)(2) of the Securities
Act, or a "savings  and loan  association"  or other  institution  described  in
Section  3(a)(5)(A)  of the  Securities  Act  that is  acquiring  Debentures  as
fiduciary for the account of one or more institutions for which we exercise sole
investment discretion;

                  (iii) the  undersigned  has such  knowledge and  experience in
financial and business matters that the undersigned is capable of evaluating the
merits and risks of purchasing Debentures;

                                       B-1
<PAGE>


                  (iv) the  undersigned is not acquiring  Debentures with a view
to  distribution  thereof or with any present  intention  of offering or selling
Debentures  or the Common Stock  issuable  upon  conversion  thereof,  except as
permitted below; provided that the disposition of the undersigned's property and
property of any accounts for which the  undersigned is acting as fiduciary shall
remain at all times within the undersigned's control; and

                  (v) the  undersigned  acknowledges  that it has had  access to
such  financial and other  information  as the  undersigned  deems  necessary in
connection with the undersigned's decision to purchase Debentures.

                  The  undersigned  understands  that the  Debentures  have been
issued in a  transaction  not involving  any public  offering  within the United
States within the meaning of the  Securities Act and that the Debentures and the
shares of Common Stock  issuable  upon  conversion  thereof  (collectively,  the
"Securities")  have  not  been  registered  under  the  Securities  Act  or  any
applicable  state  securities   laws,  and  the  undersigned   agrees,   on  the
undersigned's own behalf and on behalf of each account for which the undersigned
acquires any Securities, that if in the future the undersigned decides to resell
or  otherwise  transfer  such  Securities,  such  Securities  may be  resold  or
otherwise  transferred only (a) to the Company or any subsidiary thereof, (b) to
a person who is a "qualified institutional buyer" (as defined in Rule 144A under
the Securities Act) in a transaction  meeting the requirements of Rule 144A, (c)
to an Accredited Investor that, prior to such transfer, furnishes to the trustee
(or transfer  agent,  as the case may be) for such  Securities  a signed  letter
containing certain  representations  and agreements relating to the restrictions
on transfer of such  Securities  (the form of which letter can be obtained  from
such  trustee,  or  transfer  agent,  as the case may be),  (d)  pursuant to the
exemption  from  registration  provided by Rule 144 under the Securities Act (if
applicable) or (e) pursuant to a registration  statement which has been declared
effective  under  the  Securities  Act.  The  undersigned  agrees  that any such
transfer of Securities referred to in this paragraph shall be in accordance with
applicable  securities  laws of any  State of the  United  States  or any  other
applicable  jurisdiction  and in  accordance  with the  legends set forth on the
Securities.  The undersigned further agrees to provide any person purchasing any
of the  Securities  from the  undersigned a notice  advising such purchaser that
resales of such  Securities  are restricted as stated  herein.  The  undersigned
understands that the registrar and transfer agent for the Securities will not be
required to accept for  registration  or transfer  any  Securities,  except upon
presentation  of  evidence  satisfactory  to  the  Company  that  the  foregoing
restrictions  on transfer  have been  complied  with.  The  undersigned  further
understands  that  any  Securities  will be in the form of  definitive  physical
certificates and that such  certificates  will bear a legend (unless the sale of
the Securities has been  registered  under the  Securities  Act)  reflecting the
substance of this paragraph.

                                       B-2
<PAGE>


                  The undersigned  acknowledges that the Transferor,  others and
you  will  rely  upon  the  undersigned's   confirmation,   acknowledgments  and
agreements set forth herein,  and the undersigned  agrees to notify you promptly
in writing if any of the  undersigned's  representations  or  warranties  herein
ceases to be accurate and complete.


Dated:  __________, ____


                                      ---------------------------------
                                           (Name of Transferee)


                                   By:_________________________________
                                      Name:
                                     Title:
                                    Address:


                                       B-3