EXHIBIT 10(bbb)











                       PALOMAR MEDICAL TECHNOLOGIES, INC.


                                       AND


                    AMERICAN STOCK TRANSFER & TRUST COMPANY,

                                                 as Trustee


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


                                    Indenture


                            Dated as of June 24, 1996



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


                                  SF 25,000,000


                    4.5% Convertible Subordinated Debentures
                                    due 2003










                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                              Page
                                                                                              ----
                                    ARTICLE I
                        DEFINITIONS AND OTHER PROVISIONS
                             OF GENERAL APPLICATION
<S>               <C>                                                                        <C>
Section 1.1.       Definitions...............................................................  2
Section 1.2.       Trust Indenture Act....................................................... 14
Section 1.3.       Rules of Construction..................................................... 14

                                   ARTICLE II
                               FORM OF DEBENTURES

Section 2.1.       Title and Terms........................................................... 15
Section 2.2.       Date of Debentures and Denominations; Payment of
                            Interest......................................................... 15
Section 2.3.       Ranking of Debentures..................................................... 18
Section 2.4.       Execution and Authentication of Debentures................................ 18
Section 2.5.       Form of Debentures and Trustee's Certificate.............................. 19
Section 2.6.       Registrar, Paying Agent, and Conversion Agent............................. 20
Section 2.7.       Paying Agent to Hold Money in Trust....................................... 22
Section 2.8.       Exchange, Registration and
                            Transfer of Debentures .........................................  22
Section 2.9.       Mutilated, Destroyed, Lost or Stolen Debentures........................... 25
Section 2.10.      Cancellation of Surrendered Debentures.................................... 26
Section 2.11.      Provisions of Indenture and Debentures for Sole
                            Benefit of Persons Identified.................................... 26
Section 2.12.      Temporary Debentures...................................................... 27
Section 2.13.      Appointment to Fill Vacancy in Office of Trustee.......................... 27



                                       i





                                   ARTICLE III
                            REDEMPTION OF DEBENTURES

Section 3.1.       Debentures Redeemable..................................................... 28
Section 3.2.       Mailing of Notice of Redemption; Selection of
                   Debentures in Case Less Than All
                            Debentures to be Redeemed........................................ 28
Section 3.3.       When Debentures Called for Redemption Become Due
                            and Payable...................................................... 31
Section 3.4.       Discharge of Company's Obligations Upon Deposit
                            of Redemption Moneys............................................. 31
Section 3.5.       Issuance of Debentures for Unredeemed Portions of
                            Debentures. ..................................................... 32
Section 3.6.       Sinking Fund.............................................................. 32

                                   ARTICLE IV
                            CONVERSION OF DEBENTURES

Section 4.1.       Right of Debentureholders to Convert Debenture
                            Into Common Stock of Company..................................... 34
Section 4.2.       Right of Company to Convert Debenture into Common
                            Stock of Company................................................. 36
Section 4.3.       Exercise of Conversion Privilege.......................................... 37
Section 4.4.       Issuance of Shares of Common Stock on Conversion.......................... 38
Section 4.5.       Adjustment of Antidilution Factor......................................... 39
Section 4.6.       No Fractional Shares to be Issued; Cash Payments
                            in Lieu Thereof.................................................. 43
Section 4.7.       Accountants' Certificate Evidence of Correctness
                            of Computation................................................... 43
Section 4.8.       Notice of Corporate Action................................................ 44




                                       ii





Section 4.9.       Covenant to Reserve Shares of Common Stock for
                            Issuance on Conversion of Debentures and
                            Exercise of Warrants............................................. 45
Section 4.10.      Issuance of Certificates for Shares of Common
                            Stock, in Name of, or in Name Directed
                            by, Debentureholder.............................................. 46
Section 4.11.      Mailing of Notice Upon Adjustment Pursuant to
                            Section 4........................................................ 46
Section 4.12.      Responsibility of Trustee................................................. 47

                                    ARTICLE V
                            COVENANTS OF THE COMPANY

Section 5.1.       Payment of Principal of and Interest on Debentures........................ 47
Section 5.2.       Taxes, Assessments, Governmental Charges and
                            Certain Claims................................................... 48
Section 5.3.       Reporting Requirements.................................................... 48
Section 5.4.       Books and Records......................................................... 48
Section 5.5.       Maintenance of Insurance.................................................. 49
Section 5.6.       Maintenance of Corporate Existence, Properties,
                            Etc.............................................................. 49
Section 5.7.       Type of Business.......................................................... 50
Section 5.8.       Merger or Sale of Assets.................................................. 50
Section 5.9.       Investments............................................................... 50
Section 5.10.      Transactions with Affiliates.............................................. 51
Section 5.11.      Use of Proceeds........................................................... 51
Section 5.12.      Dividends, Etc............................................................ 52
Section 5.13.      Limitation on Liens....................................................... 52
Section 5.14.      Compliance with Laws, Etc................................................. 52

                                   ARTICLE VI
                     DEBENTUREHOLDER'S LISTS AND REPORTS BY
                           THE COMPANY AND THE TRUSTEE




                                      iii




Section 6.1.       Company to Furnish Trustee Information as to
                            Names and Addresses of Debentureholders.......................... 53
Section 6.2.       Trustee to Preserve Information as to Names and
                            Addresses of Debentureholders.................................... 53
Section 6.3.       Reports from the Company.................................................. 55
Section 6.4.       Reports from the Trustee.................................................. 56

                                   ARTICLE VII
                  REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS
                               ON EVENT OF DEFAULT

Section 7.1.       Events of Default Defined................................................. 57
Section 7.2.       Covenant of Company to Pay to Trustee Whole
                            Amount Due on Debentures on Default in
                            Payment of Interest or Principal................................. 61
Section 7.3.       Application of Moneys Collected by Trustee................................ 63
Section 7.4.       Limitation on Suits by Holders of Debentures.............................. 64
Section 7.5.       Delay or Omission in Exercise of Rights Not
                            Waiver of Default................................................ 66
Section 7.6.       Rights of Holders of Majority in Principal Amount
                      of Debentures to Direct Trustee and
                            Waive Defaults................................................... 66
Section 7.7.       Trustee to Give Notice of Defaults Known to it,
                            but May Withhold in Certain Circumstances........................ 67
Section 7.8.       Requirement of an Undertaking to Pay Costs in
                            Certain Suits Under Indenture or Against
                            Trustee.......................................................... 68
Section 7.9.       Company Covenants......................................................... 68



                                       iv





                                  ARTICLE VIII
                             CONCERNING THE TRUSTEE

Section 8.1.       Duties of Trustee Prior to and After Event of
                            Default.......................................................... 69
Section 8.2.       Rights of Trustee......................................................... 70
Section 8.3.       Trustee Not Liable for Recitals in Indenture or
                            in Debentures.................................................... 72
Section 8.4.       Trustee, Paying Agent, Conversion Agent or
                            Debenture Registrar May Own Debentures........................... 72
Section 8.5.       Moneys Received by Trustee to be Held in Trust............................ 73
Section 8.6.       Trustee Entitled to Compensation, Reimbursement
                            and Indemnity.................................................... 73
Section 8.7.       Right of Trustee to Rely on Certificate of
                            Officers of Company Where no Other
                            Evidence Specifically Prescribed................................. 74
Section 8.8.       Conflict of Interest...................................................... 74
Section 8.9.       Requirements for Eligibility of Trustee................................... 75
Section 8.10.      Resignation or Removal of
                            Trustee.......................................................... 75
Section 8.11.      Acceptance by Successor to Trustee........................................ 77
Section 8.12.      Successor to Trustee by Merger, Consolidation or
                            Succession to Business........................................... 78
Section 8.13.      Trustee as a Creditor..................................................... 78

                                   ARTICLE IX
                         CONCERNING THE DEBENTUREHOLDERS

Section 9.1.       Evidence of Action by Debentureholders.................................... 84





                                       v





Section 9.2.       Proof of Execution of Instruments and of Holding
                            of Debentures.................................................... 85
Section 9.3.       Who May be Deemed Owners of Debentures.................................... 86
Section 9.4.       Debentures Owned by Company or Controlled or
                            Controlling Companies Disregarded for
                            Certain Purposes................................................. 86
Section 9.5.       Action by Debentureholders Binds Future Holders........................... 87

                                    ARTICLE X
                           DEBENTUREHOLDERS' MEETINGS

Section 10.1.      Purposes for Which Meetings May be Called................................. 87
Section 10.2.      Manner of Calling Meetings................................................ 88
Section 10.3.      Call of Meetings by Company or Debentureholders........................... 88
Section 10.4.      Who May Attend and Vote at Meetings....................................... 89
Section 10.5.      Regulations May be Made by Trustee........................................ 89
Section 10.6.      Manner of Voting at Meetings and Record to be Kept........................ 90
Section 10.7.      Exercise of Rights of Trustee or Debentureholders
                            May Not be Hindered or Delayed by Call
                            of Meeting of Debentureholders................................... 91
Section 10.8.      Notice to Debentureholders................................................ 92

                                   ARTICLE XI
                             SUPPLEMENTAL INDENTURES

Section 11.1.      Purposes for Which Supplemental Indentures May be
                            Entered into Without Consent of
                            Debentureholders................................................. 92




                                       vi




Section 11.2.      Modification of Indenture with Consent of Holders
                            of 66-2/3% in Principal Amount of
                            Debentures....................................................... 93
Section 11.3.      Effect of Supplemental Inden-
                            tures............................................................ 95
Section 11.4.      Debentures May Bear Notation of Changes................................... 95
Section 11.5.      Opinion of Counsel........................................................ 95

                                   ARTICLE XII
                             CONSOLIDATION OR MERGER

Section 12.1.      When Company May Merge, Etc............................................... 96
Section 12.2.      Successor Corporation..................................................... 97

                                  ARTICLE XIII
                           SUBORDINATION OF DEBENTURES

Section 13.1.      Agreement of Debentureholders that Debentures
                            Subordinate to All Senior Indebtedness........................... 97
Section 13.2.      Company Not to Make Payment with Respect to
                            Debentures in Certain Circumstances.............................. 98
Section 13.3.      Debentures Subordinated to Prior Payment of All
                            Senior Indebtedness on Dissolution,
                            Liquidation or Reorganization of the
                            Company.......................................................... 99
Section 13.4.      Debentureholders to be Subrogated to Right of
                            Holders of Senior Indebtedness................................... 101
Section 13.5.      Obligations of Company Unconditional...................................... 101
Section 13.6.      Trustee Entitled to Assume Payments Not
                            Prohibited in Absence of Notice.................................. 102




                                      vii




Section 13.7.      Application by Trustee of Monies Deposited................................ 103
Section 13.8.      Subordination Rights Not Impaired......................................... 104
Section 13.9.      Trustee to Effectuate Subordination....................................... 104
Section 13.10.     Rights of Trustee as Holder of Senior Indebtedness........................ 105
Section 13.11.     Article Thirteen Not to Prevent Event of Default.......................... 105

                                   ARTICLE XIV
                    SATISFACTION AND DISCHARGE OF INDENTURE;
                                DEPOSITED MONEYS

Section 14.1.      Satisfaction and Discharge of Indenture................................... 105
Section 14.2.               Application by Trustee of Funds Deposited for
                            Payment of Debentures............................................ 107
Section 14.3.               Repayment of Moneys Held by Paying Agent......................... 107
Section 14.4.      Moneys Deposited for Redemption of Debentures
                            Subsequently Converted to be Returned to
                            Company.......................................................... 107
Section 14.5.      Payment of Deposited Money to Company After Lapse
                            of Time.......................................................... 108

                                                                                              108

                                   ARTICLE XV
                    IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
                             OFFICERS AND DIRECTORS

Section 15.1.      Immunity of Incorporators, Stockholders, Officers
                            and Directors.................................................... 108

                                   ARTICLE XVI
                           RIGHT TO REQUIRE REPURCHASE
                                                                                              109



                                      viii




Section 16.1.      Right to Require Repurchase............................................... 109
Section 16.2.      Notice; Method of Exercising                
                            Repurchase Right 110
Section 16.3.      Deposit of Repurchase Price............................................... 112
Section 16.4.      Debentures Not Repurchased on Repurchase Date............................. 112
Section 16.5.      Debentures Repurchased in Part............................................ 112
Section 16.6.      Purchase of Warrants...................................................... 113

                                  ARTICLE XVII
                            MISCELLANEOUS PROVISIONS
                                                                                              113
Section 17.1.      Successors and Assigns of Company Bound by
                            Indenture........................................................ 113
Section 17.2.      Acts of Board, Committee or Officer of Successor
                            Corporation Valid................................................ 113
Section 17.3.      Surrender of Powers by Company............................................ 113
Section 17.4.      Required Notices or Demands May be Served by Mail......................... 114
Section 17.5.      Indenture and Debentures to be Construed in
                            Accordance with Laws of State of New York........................ 114
Section 17.6.      Officers' Certificate and Opinion of Counsel to
                        be Furnished upon Applications or
                            Demands by Company............................................... 114
Section 17.7.      Payments Due on Non-Business Days......................................... 116
Section 17.8.      Effect of Invalidity of Provisions........................................ 116
Section 17.9.      Execution of Counterparts................................................. 116

EXHIBIT A          FORM OF REGISTERED DEBENTURE
</TABLE>


                                       ix





                  INDENTURE,  dated as of June 24, 1996, between Palomar Medical
Technologies,  Inc. (the "Company"), a Delaware corporation having its principal
office at 66 Cherry Hill Drive, Beverly, Massachusetts 01915, and American Stock
Transfer & Trust Company, a New York corporation, as Trustee (the "Trustee").


                             RECITALS OF THE COMPANY


                  WHEREAS,  the Company is empowered to issue debentures for any
of the objects and purposes of the Company;

                  WHEREAS,  for its lawful corporate  purposes,  the Company has
duly  authorized the creation of an issue of its 4.5%  Convertible  Subordinated
Debentures  due 2003 (the  "Debentures")  of  substantially  the same  tenor and
amount  hereinafter  set forth,  and to provide  therefor  the  Company has duly
authorized the execution and delivery of this Indenture; and

                  WHEREAS,  all  acts  and  things  necessary  to be done by the
Company to make the Debentures,  when executed by the Company and  authenticated
and delivered  hereunder and duly issued by the Company upon payment therefor by
the purchasers thereof,  the valid obligations of the Company,  and to make this
Indenture a valid  agreement of the Company,  in  accordance  with their and its
terms, respectively have been done.

                   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 for and in consideration
of the premises and the purchase of the Debentures by the Holders thereof, it is
mutually  covenanted and agreed, for the equal and proportionate  benefit of all
Holders of the Debentures as follows:




                                       1





                                       I

                        DEFINITIONS AND OTHER PROVISIONS
                             OF GENERAL APPLICATION

                   I.1.        Definitions.

                  "Additional  Payments"  has the meaning  specified  in Section
2.2(b).

                  "Affiliate"  means,  when used with reference to any specified
Person, any other Person directly or indirectly  controlling,  controlled by, or
under direct or indirect  common control with,  such specified  Person.  For the
purposes  of this  definition,  "control"  when used with  respect to any Person
means the power to direct or cause the  direction of the  management or policies
of such Person, directly or indirectly,  whether through the ownership or voting
securities,   by  contract  or  otherwise,   and  the  terms  "controlling"  and
"controlled" have meanings correlative of the foregoing.

                  "Agent" has the meaning specified in Section 

2.6.

                  "Antidilution  Factor" means a number that is initially  equal
to one and that may be adjusted from time to time as provided in Section 4.5.

                  "Authorized  Newspaper"  means,  so long as the Debentures are
listed on a  securities  exchange  and such  exchange so  requires,  a newspaper
published  in the city in which such  securities  exchange is located;  provided
that for so long as the Debentures are listed on the Luxembourg  Stock Exchange,
"Authorized  Newspaper"  shall include the Luxembourg Wort;  provided,  further,
that if, because of temporary or permanent  suspension of publication or general
circulation  of any newspaper or for any other reason,  it is impossible  or, in
the opinion of the Trustee,  impracticable to make reasonable publication of any
notice  required  herein  in a  newspaper  published  in the city in  which  the
securities  exchange  is located,  then  "Authorized  Newspaper"  shall mean any
publication in an English language newspaper of general circulation.



                                       2




                  "Bankruptcy  Code"  means  the  Bankruptcy  Code of  1978,  as
amended (11 U.S.C. 101 et seq.).

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

                  "Business  Day" means any day other than a Saturday,  a Sunday
or a day on which  banking  institutions  are  authorized  or  obligated by law,
executive order or regulation to close, in the Borough of Manhattan, The City of
New York and,  with  respect  to any  payment on the  Debentures,  if there is a
Paying Agent in Luxembourg,  in Luxembourg  and, with respect to any other place
of payment, in such other place of payment.

                  "Capitalized  Lease  Obligations"  means,  with respect to any
Person, any Indebtedness of such Person represented by obligations under a lease
or other rental  agreement  that are required to be  capitalized  for  financial
reporting  purposes in accordance with GAAP, and the amount of such Indebtedness
for  purposes  hereof shall be the  capitalized  amount of such  obligations  as
determined in accordance with GAAP on a consolidated basis.

                  "Change of Control" has the meaning specified in Section 16.1.

                  "Closing Price" for any day means the last reported sale price
of the Common Stock,  regular way, on such day or, in case no such reported sale
takes  place on such day,  the  average of the  reported  closing  bid and asked
prices,  regular way, on such day, in either case on the New York Stock Exchange
or, if the Common  Stock is not listed or admitted to trading on such  Exchange,
on the  principal  national  securities  exchange  on which the Common  Stock is
listed or  admitted  to trading  or, if not listed or admitted to trading on any
national  securities  exchange,  on the Nasdaq National Market System or, if the
Common  Stock is not listed or  admitted to trading on any  national  securities
exchange or quoted on such National  Market  System,  the average of the closing
bid and asked prices in the over-the-counter market as furnished by any 




                                       3




New York Stock  Exchange  member firm  selected from time to time by the Company
for that  purpose.  If the Common  Stock is not listed or admitted to trading on
any national  securities  exchange,  quoted on such  National  Market  System or
listed  in any list of bid and  asked  prices  in the  over-the-counter  market,
"Closing  Price"  shall  mean  the fair  market  value  of the  Common  Stock as
determined in good faith by the Board of Directors of the Company.

                  "Commission" means the Securities and Exchange Commission,  as
from time to time  constituted,  created  under the Exchange  Act, or, if at any
time after the execution of this  instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.

                  "Common  Stock" or "Shares"  means the Common Stock,  $.01 par
value,   of  the  Company  as  presently   authorized  by  its   Certificate  of
Incorporation or any other stock of the Company into which such Common Stock may
hereafter be changed from time to time.

                  "Company"  means  the  Person  named  as  such  in  the  first
paragraph  of this  Indenture,  until a successor  Person shall have become such
pursuant  to  the  applicable  provisions  of  this  Indenture,  and  thereafter
"Company" shall mean such successor Person.

                  "Company   Conversion   Percentage  Factor"  has  the  meaning
specified in Section 4.2.

                  "Company  Conversion  Price"  has  the  meaning  specified  in
Section 4.2.

                  "Continuing  Director" means at any date a member of the Board
of Directors who (i) was a member of the Board of Directors for the period of 24
months prior to such date or (ii) was  nominated  for election or elected to the
Board of  Directors  with the  affirmative  vote of at least  two-thirds  of the
Continuing Directors.

                  "Contractual  Obligation" of any Person means any provision of
any  agreement,  instrument,  Security or  under-




                                       4



taking to which  such  Person  is a party or by which it or any of the  property
owned by it is bound.

                  "Conversion Agent" has the meaning specified in Section 2.6.

                  "Conversion Notice" has the meaning specified in Section 4.3.

                  "Conversion  Price" means Holder  Conversion Price and Company
Conversion Price, as applicable.

                  "Debenture  Conversion  Shares" has the meaning  specified  in
Section 4.1

                  "Debentures" has the meaning specified in the first recital of
this Indenture and more  particularly  means any of the Debenture  authenticated
and delivered under this Indenture.

                  "Default" means any event,  act or condition the occurrence of
which is, or after  notice or the  passage of time or both would be, an Event of
Default.

                  "Dollar,"  "U.S.$,"  "United  States  dollar"  or the sign "$"
means a Dollar or other  equivalent  unit in such coin or currency of the United
States as at the time  shall be legal  tender  for the  payment  of  public  and
private debts.

                  "Event of Default" has the meaning specified in Section 7.1.

                  "Exchange Act" means the United States Securities Exchange Act
of 1934, as amended from time to time, and the rules and regulations promulgated
thereunder, and any successor statute thereto.

                  "Exchange  Rate  Factor" has the meaning  specified in Section
4.1.

                  "Existing  Control Group" means the Principal  Shareholders as
of the date of this Indenture.




                                       5




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

                  "Guaranty"  means any  contractual  obligation,  contingent or
otherwise,  of a Person with respect to any  Indebtedness or other obligation or
liability  of  another   Person,   including   without   limitation,   any  such
Indebtedness,   obligation  or  liability  directly  or  indirectly  guaranteed,
endorsed,  co-made or  discounted  or sold with  recourse by that Person,  or in
respect  of which  that  Person is  otherwise  directly  or  indirectly  liable,
including Contractual  Obligations (contingent or otherwise) arising through any
agreement  to purchase,  repurchase,  or  otherwise  acquire such  Indebtedness,
obligation  or liability or any security  therefor,  or any agreement to provide
funds  for the  payment  or  discharge  thereof  (whether  in the form of loans,
advances, stock purchases,  capital contributions or otherwise),  or to maintain
solvency,  assets, level of income, or other financial condition, or to make any
payment other than for value received.

                  "Holder,"  "Debentureholder,"  "holder of Debentures" or other
similar terms mean any Person that is the registered  holder of any Debenture on
the books of the Company.

                  "Holder Conversion Price" has the meaning specified in Section
4.1.

                  "Indebtedness"  means (i) any  liability of any Person (A) for
borrowed  money,  or (B)  evidenced by a note,  debenture or similar  instrument
(including a purchase money obligation and a letter of credit) whether issued in
connection with the acquisition of any property, assets (other than inventory or
similar  property  acquired in the  ordinary  course of  business)  or 



                                       6





ties, or otherwise,  (ii) Capitalized Lease Obligations of any Person, (iii) any
Guaranty of any  liability of others  described in the  preceding  clause (i) or
(ii), and (iv) any amendment,  renewal,  extension or refunding of any liability
of the types referred to in clauses (i), (ii) and (iii) above.

                  "Indenture" means this instrument as originally executed or as
it may from time to time be  supplemented  or amended by one or more  indentures
supplemental  hereto entered into pursuant to the applicable  provisions hereof,
including,  for all  purposes  of this  instrument  and  any  such  supplemental
indenture,  the  provisions  of the Trust  Indenture Act that are deemed to be a
part  of and  govern  this  instrument  and  any  such  supplemental  indenture,
respectively.

                  "Independent  Director"  means a Person serving as a member of
the Board of  Directors  who is not an officer or  employee  of the Company or a
Subsidiary  or owner,  directly or through an Affiliate  of such  Person,  of in
excess of 5% of the  outstanding  Common Stock of the Company or a Subsidiary or
who has a  relationship  with the Company or a Subsidiary  that would  interfere
with the exercise of independent  judgment in carrying out the  responsibilities
of a Director, including, without limitation, any Person who is a party directly
or indirectly to a material  agreement or transaction or series of  transactions
with the Company or a Subsidiary.

                  "Initial  Closing  Date"  means  the  first  date on which the
offering of Debentures is closed.

                  "Interest  Expense" means,  for any period and for any Person,
the total interest  expense of such Person and its Subsidiaries for such period,
including,  without  limitation,  interest  expense  attributable to Capitalized
Lease  Obligations  in  accordance  with GAAP,  all  capitalized  interest,  all
commissions,  discounts and other fees and charges owed with respect to bankers'
acceptance  financing,  and total  interest  expense,  whether shown as interest
expense, all as determined on a consolidated basis in accordance with GAAP.



                                       7



                  "Interest  Payment Date" has the meaning  specified in Section
2.2.

                  "Lien" means any mortgage, pledge, security interest, security
deposit,  encumbrance,  lien or charge of any kind,  including  any agreement to
give  any of the  foregoing,  any  conditional  sale or  other  title  retention
agreement,  any lease in the nature  thereof,  and the filing of or agreement to
give any financing statement under the Uniform Commercial Code of any applicable
jurisdiction.

                  "Luxembourg Stock Exchange" means the Bourse de Luxembourg.

                  "Noon Buying Rate" means the exchange rate for one U.S. dollar
expressed in Swiss Francs,  based upon the noon buying rate in New York City for
cable  transfers  in Swiss  Francs,  as  certified  for customs  purposes by the
Federal Reserve Bank of New York.

                  "Offering  Memorandum"  means  the final  Offering  Memorandum
dated June 24, 1996 pursuant to which the Debentures were initially  offered and
sold.

                  "Officer"  means the Chairman of the Board of  Directors,  the
President,  any Vice President, the Chief Executive Officer, the Chief Financial
Officer, or the Treasurer of the Company.

                  "Officers'  Certificate"  means a  certificate  signed  by two
Officers  or by an Officer  and the  Secretary,  an  Assistant  Treasurer  or an
Assistant Secretary of the Company.

                  "Opinion of Counsel" means a written opinion from  independent
legal counsel who is acceptable to the Trustee.

                  "Outstanding"  means, with respect to the Debentures as of the
date of determination,  all Debentures  theretofore  authenticated and delivered
under this Indenture, except:



                                       8



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

                  (ii) Debentures,  or portions thereof, for whose payment money
or securities in the necessary  amount has been  theretofore  deposited with the
Trustee or any Paying  Agent  (other than the Company) in trust or set aside and
segregated  in trust by the Company (if the Company  shall act as its own Paying
Agent) for the Holders of such Debentures; provided that, if such Debentures are
to be redeemed (as provided in Article  Three),  notice of such  redemption  has
been duly given pursuant to this Indenture or provision therefor satisfactory to
the Trustee has been made; and

                  (iii)  Debentures  in  exchange  for or in lieu of which other
Debentures have been authenticated and delivered pursuant to this Indenture;
provided  that in  determining  whether the Holders of the  requisite  principal
amount of Outstanding Debentures have given any request, demand,  authorization,
direction, notice, consent or waiver hereunder,  Debentures owned by the Company
or any  Affiliate  of the  Company  shall be  disregarded  and  deemed not to be
Outstanding,  except that, in determining whether the Trustee shall be protected
in relying upon such request, demand, authorization,  direction, notice, consent
or waiver,  only  Debentures  that the Trustee  knows to be so owned shall be so
disregarded.  Debentures  so owned  that have been  pledged in good faith may be
regarded as Outstanding if the pledgee  establishes to the  satisfaction  of the
Trustee the pledgee's  right so to act with respect to such  Debentures and that
the pledgee is not the Company or any Affiliate of the Company.

                  "Paying Agent" has the meaning specified in Section 2.6.

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



                                       9



                  "Predecessor  Debenture"  of any  particular  Debenture  means
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 2.9 in
exchange for or in lieu of a  mutilated,  lost,  destroyed  or stolen  Debenture
shall be deemed to evidence the same debt as the mutilated,  lost,  destroyed or
stolen Debenture.

                  "Principal  Shareholders"  means all  Persons who are both (x)
members of, or enjoy representation on, the Board of Directors as of the date of
this  Indenture,  and  (y) as of the  date or this  Indenture  are the  ultimate
beneficial  owners of shares of the Company's  Common Stock,  until such time as
such Persons,  together,  cease to have beneficial  ownership of at least 25% of
the combined voting power of the Voting Stock of the Company.

                  "Record Date" has the meaning specified in Section 2.2(a).

                  "Register" has the meaning specified in Section 2.8.

                  "Registrar" has the meaning specified in Section 2.6.

                  "Regulation S" means Regulation S under the Securities Act and
any successor regulation thereto.

                  "Requirement  of Law" for any  Person  means the  articles  or
certificate of incorporation  and by-laws or other  organizational  or governing
documents  of  such  Person  and  any  law,  treaty,  rule  or  regulation,   or
determination of an arbitrator or a court or other  governmental  authority,  in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.

                  "Responsible  Officer" means, with respect to the Trustee, the
chairman or vice-chairman of the board of directors or trustees, the chairman of
the executive committee, the chairman of the trust committee, the presi-




                                       10



dent, any vice-president,  the secretary,  the treasurer, any trust officer, the
cashier,  any second or assistant  vice-president,  any assistant trust officer,
any assistant secretary,  any assistant treasurer, any assistant cashier, or any
other officer or assistant  officer of the Trustee  customarily  performing such
functions  similar to those  performed  by the  Persons who at the time shall be
such officers,  respectively,  or to whom any corporate trust matter is referred
because of his knowledge of and familiarity with the particular subject.

                  "Reset Date" has the meaning specified in Section 4.1.

                  "Securities  Act" means the United  States  Securities  Act of
1933, as amended, and any successor statute.

                  "Security"  shall have the same  meaning as in Section 2(1) of
the Securities Act.

                  "Senior Indebtedness" means all loans, advances, reimbursement
obligations  regarding  letters of  credit,  liabilities,  covenants  and duties
existing on the date hereof or arising from time to time hereafter and renewals,
extensions and refundings of any such  indebtedness,  that are secured,  whether
for principal,  premium or interest or otherwise,  of the Company to any bank or
other lending institution,  whether direct or indirect,  absolute or contingent,
due or to become due, including,  without limitation, (a) any debt, liability or
obligation  owing from the  Company to others  which such bank or other  lending
institution may have obtained by assignment, pledge, purchase, or otherwise, (b)
any overdraft or  overadvance  to the Company,  and (c) all  interest,  charges,
expenses and attorney's  fees for which the Company is now or hereafter  becomes
liable to any such bank or other lending  institution  under any agreement or by
law; unless the instrument or instruments  creating,  evidencing or securing any
such  indebtedness  or pursuant to which the same is  outstanding,  provide that
such indebtedness is not superior in right of payment to the Debentures.

                  "Sinking  Fund  Payment  Date" has the  meaning  specified  in
Section 3.6 (a).



                                       11




                  "Sinking Fund Redemption  Price" has the meaning  specified in
Section 3.6 (a).

                  "Stock Price Factor" has the meaning specified in Section 4.1.

                  "Subsidiary"  means,  with  respect  to any  Person,  (i)  any
corporation of which 50% of more of the combined voting power of the outstanding
Voting Stock is owned, directly or indirectly,  by such Person or by one or more
other Subsidiaries of such Person or by such Person and one or more Subsidiaries
thereof  or (ii) any other  Person  (other  than a  corporation)  in which  such
Person, or one or more other  Subsidiaries of such Person or such Person and one
or more other  Subsidiaries  thereof,  directly  or  indirectly,  has at least a
majority  ownership  and power to direct the  policies,  management  and affairs
thereof.  Unless  otherwise  specified,  "Subsidiary"  means a Subsidiary of the
Company.

                  "Swiss Franc" or the abbreviation  "SF" means a Swiss Franc or
other  equivalent  unit in such coin or currency of  Switzerland  as at the time
shall be legal tender for the payment of public and private debts.

                  "Taxes"  means any present or future taxes,  levies,  imposts,
duties, fees, assessments, deductions, withholdings or other charges of whatever
nature, including,  without limitation income, gross receipts, excise, property,
sales, transfer, license, payroll,  withholding,  social security, and franchise
taxes, now or hereafter imposed or levied by the United States of America or any
state,  local  or  foreign  government  or by any  department,  agency  or other
political  subdivision or taxing authority  thereof or therein and all interest,
penalties, additions to tax and other similar liabilities with respect thereto.

                  "Total Liabilities" means, as of any date, the amount at which
all of the liabilities of such Person should be shown in accordance with GAAP on
a balance sheet of such Person at such date, all as determined on a consolidated
basis.


                                       12



                  "Trust  Indenture Act" means the United States Trust Indenture
Act of 1939 including any successor act thereto,  as it may be amended from time
to time, and includes the rules and regulations of the Commission thereunder.

                  "Trustee" means the Person named as the "Trustee" in the first
paragraph of this  instrument  until a successor  Trustee shall have become such
pursuant  to  the  applicable  provisions  of  this  Indenture,  and  thereafter
"Trustee" shall mean such successor Trustee.

                  A "Unit" consists of SF 1,000  principal  amount of Debentures
and 24 Warrants.

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

                  "United  States  Alien" means any Person who, as to the United
States,  is  a  foreign   corporation,   a  non-resident  alien  individual,   a
non-resident  alien  fiduciary  of a  foreign  estate  or  trust,  or a  foreign
partnership  one or more of the members of which is, as to the United States,  a
foreign  corporation,  a non-resident  alien individual or a non-resident  alien
fiduciary of a foreign estate or trust.

                  "United States  Person" means (1) any natural person  resident
in  the  United  States,  (2)  any  partnership  or  corporation   organized  or
incorporated  under the laws of the United  States,  (3) any estate of which any
executor or administrator is a United States Person,  (4) any trust of which any
trustee is a United States Person,  (5) any agency or branch of a foreign entity
located  in the  United  States,  (6) any  non-discretionary  account or similar
account  (other  than an estate or  trust)  held by a dealer or other  fiduciary
organized,  incorporated or (if an individual) resident in the United States and
(7) any  partnership or corporation if (i) organized or  incorporated  under the
laws of any  foreign  jurisdiction  and (ii)  formed by a United  States  Person
principally for the purpose of investing in securities not registered  under the
Securi-



                                       13



ties Act,  unless it is  organized or  incorporated,  and owned,  by  accredited
investors (as defined in Rule 501(a) of the Securities  Act) who are not natural
persons, estates or trusts.

                  "Voting Stock" means the securities of any class or classes of
a  corporation  the  holders  of  which  are  ordinarily,   in  the  absence  of
contingencies,  entitled to elect a majority of the corporate  directors of such
corporation or Persons performing similar functions.

                  "Warrant" means the nondetachable  security issued pursuant to
a Warrant Agreement, dated as of June 24, 1996, between the Company and American
Stock Transfer & Trust Company and offered in lots of 24 Warrants per Unit, that
entitles the holder to purchase one share of Common Stock per Warrant.

                  I.2.     Trust Indenture Act.

                  This  Indenture  has not  been  registered  under,  and is not
subject to any of the protections of, the Trust Indenture Act of 1939.

                  I.3.     Rules of Construction.

                  For  all  purposes  of this  Indenture,  except  as  otherwise
expressly provided or unless the context otherwise requires:

                           (1) the  terms  defined  in  this  Article  have  the
meanings assigned to them in this Article, and include the plural as well as the
singular;

                           (2)  or is not exclusive;

                           (3) all other terms used herein  which are defined in
the Trust  Indenture  Act, or which are by  reference in such Act defined in the
Securities Act, have the meanings assigned to them therein;

                           (4) all accounting terms not otherwise defined herein
have the meaning assigned to them in accordance with GAAP;



                                       14



                           (5)  unless  the  context  otherwise  requires,   any
reference to an "Article" or a "Section"  refers to an Article or a Section,  as
the case may be, of this Indenture;

                           (6) the words "herein,"  "hereof" and "hereunder" and
other words of similar  import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision; and

                           (7)  provisions   apply  to  successive   events  and
transactions.

                                       II

                               FORM OF DEBENTURES

                  II.1.    Title and Terms.

                  The  Debentures  shall  be  designated  as  4.5%  Subordinated
Convertible  Debentures  due 2003 and shall not exceed the  aggregate  principal
amount of Twenty-Five Million Swiss Francs (SF 25,000,000).

                  The  Debentures  shall  be  issued  as  part  of  Units,  each
consisting of SF 1,000 principal amount of Debentures and 24 Warrants. A minimum
of 10,000 Units and a maximum of 25,000 Units shall be offered.


                  II.2.    Date of Debentures and Denomi
                           nations; Payment of Interest.

         (a) Denominations and Payment Generally.

         The  Debentures  shall be  issuable in fully  registered,  certificated
form,  without coupons,  in denominations of SF 1,000 and any integral multiples
thereof.

                  The Debentures shall be dated as of the date of authentication
and shall bear  interest  at the rate of 4.5% per annum,  payable  quarterly  in
arrears on March 31, June 30, September 30 and December 31 in each year (each an




                                       15





"Interest  Payment  Date"),  commencing  on September  30, 1996,  to the Holders
thereof as of the March 15, June 15,  September  15 or December  15, as the case
may be, next preceding such Interest Payment Date (each, a "Record Date").

                  The interest on the Debentures  shall be computed on the basis
of a 360-day year of twelve 30-day months and in any case where the date for any
payment on the Debentures is not a Business Day, such payment may be made on the
next  succeeding  Business  Day and have the same force and effect as if made on
such original payment date, and no interest shall accrue for the period from and
after such  original  payment  date.  The  principal,  or premium,  if any,  and
interest on the  Debentures  shall be payable in Swiss Francs.  At the option of
the  Company,  payment of interest may be made by check mailed to the address of
the person entitled thereto as such address shall appear in the Register.

                  The Person in whose name any  Debenture is  registered  at the
close of business on the Record Date with  respect to an 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  thereof subsequent to such Record Date and prior to such Interest
Payment  Date;  provided  that if and to the extent the Company shall default in
the payment of the interest due on such Interest  Payment Date,  such  defaulted
interest  shall  be paid to the  persons  in  whose  names  the  Debentures  are
registered on a subsequent record date established by notice given by mail by or
on behalf of the  Company  to the  Holders of  Debentures  not less than 15 days
preceding such subsequent record date, such Record Date to be not less than five
days preceding the date of payment of such defaulted  interest.  Notwithstanding
the  foregoing,  such  defaulted  interest  may be paid at any time in any other
lawful  manner  not  inconsistent  with  the  terms  of  the  Debentures  or the
requirements  of any securities  exchange on which the Debentures may be listed,
and upon such notice as may be required by such exchange.

                  If any Debenture or portion  thereof is called for  redemption
on a redemption date after the close of 




                                       16




business on the Record Date  preceding  an Interest  Payment  Date and notice of
such  redemption  has been mailed and funds for such  redemption  have been duly
provided,  interest  accrued to the redemption date on such Debenture or portion
so called shall be paid only against  surrender of the Debenture for  redemption
in accordance with said notice.

                  (b)Additional Payments. Subject to the Company's rights as set
forth in Section  3.1(b),  the Company  shall pay to any "United  States  Alien"
certain  customary  additional  amounts  in the event of  changes  in the United
States  income  tax laws  affecting  withholding  taxes on  payments  under  the
Debentures ("Additional Payments"), in order that every new payment of principal
and interest on such Debenture, after deduction or withholding for or on account
of any present or future tax,  assessment or governmental charge imposed upon or
as a result of such payment by the  government of the United States or any state
thereof or by any authority or agency  thereof shall not be less that the amount
provided for in such  Debenture  to be then due and payable,  subject to certain
customary  exceptions.  The Company shall provide customary  indemnification for
Holders affected by the foregoing.

                  If the  Company is  required  to make  additional  payments to
Holders thereof by reason of deductions or withholdings for or on account of any
taxes,  assessments or other governmental charges (the "withholding taxes"), the
Company  shall deliver to the Trustee for delivery to the Holders at the time of
any such  payment  a  statement  specifying  the  amount of taxes so paid by the
Company as additional interest. The Company covenants that if the Company or the
Trustee is required by law to make any deduction or  withholding  on payments of
principal of or interest on the Debentures for or on account of any  withholding
taxes,  the Company shall furnish to the Trustee and the Paying Agent,  at least
five  Business Days prior to the date on which the first payment of principal or
interest is due with  respect to the  Debentures  as to which such  deduction or
withholding  applies  (and at least  five  Business  Days  prior to each date of
payment of  principal or interest  thereafter  if there has been any change with
respect  to the  matters  set  forth  in  the  below-mentioned  




                                       17




certificate),  a certificate of an Officer of the Company giving instructions as
to whether  payment of the  amounts  due on such date shall be made  without any
such deduction or withholding and specifying the amount,  if any, so required to
be deducted or withheld and certifying that the Company shall pay such deduction
or  withholding;  the  Company  shall,  prior to the due  date  for the  payment
thereof,  pay any such withholding tax,  together with any penalties or interest
applicable  thereto;  and  within 15 days after  paying  such  withholding  tax,
penalties or interest,  the Company shall deliver to the Trustee the evidence of
such  payment  and of the  remittance  thereof to the  relevant  taxing or other
authority. In the absence of any such certification,  the Trustee and the Paying
Agent shall make payments to Holders of Debentures and coupons without deduction
or withholding.

                  The Company  hereby  agrees to  indemnify  the Trustee and the
Paying  Agent for, and to hold them  harmless  against,  any loss,  liability or
expense  reasonably  incurred  without  negligence  or bad faith on their  part,
arising out of or in connection  with actions taken or omitted by either of them
in reliance on any certificate  furnished pursuant to this Section 2.2(b) or the
failure of the Trustee for any reason (other than its own  negligence or willful
misconduct)  to receive  on a timely  basis such  Officer's  certificate  or any
information or documentation requested by it or otherwise required by applicable
law or regulations to be obtained,  furnished or filed in respect of withholding
tax  pursuant to the first  paragraph  of this  Section  2.2(b).  Any  Officer's
certificate  required by this Section 2.2(b) to be provided to the Trustee shall
be deemed to be duly provided if telecopied to the Trustee.

                  II.3     Ranking of Debentures.

                  The Debentures shall constitute general unsecured  obligations
of the Company and shall be subordinated as provided in Article XIII.

                  II.4     Execution and Authentication of Debentures.





                                       18



                  The Debentures shall be signed on behalf of the Company by, or
bear the facsimile  signature of its Chairman or President,  under its corporate
seal. Such facsimile  signatures may be imprinted or otherwise reproduced on the
Debentures.  In case any  officer  of the  Company  who shall  have  signed  any
Debenture  shall cease to be such officer  before the  Debenture so signed shall
have been authenticated and delivered by the Trustee or disposed of the Company,
such Debenture nevertheless may be authenticated and delivered or disposed of as
though the person who signed the  Debenture had not ceased to be such officer of
the  Company.  The seal of the Company may be in the form of a facsimile  of the
seal of the  Company  and may be  impressed,  affixed,  imprinted  or  otherwise
reproduced on the Debentures.

                  Only such  Debentures as shall bear thereon a  certificate  of
authentication  substantially  in the  form  set  forth  in  Exhibit  A to  this
Indenture,  executed by the  Trustee,  shall be entitled to the benefits of this
Indenture or be valid or obligatory  for any purpose.  Such  certificate  by the
Trustee upon any Debenture executed by the Company shall be conclusive  evidence
that the Debenture has been duly authenticated and delivered  hereunder and that
the Holder is entitled to the benefits of this Indenture.

                  The Trustee  shall,  upon  receipt of an Officer'  Certificate
directing  it  do  so,  authenticate  Debentures  for  original  issue  up to an
aggregate  principal  amount as stated in Section 2.1. The  aggregate  principal
amount of Debentures  outstanding at any time may not exceed such amount, except
as otherwise provided in this Indenture.

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




                                       19




                  Unless  otherwise  specifically  provided  herein  or  in  the
Debentures,  any  order,  certificate,   notice,  request,  direction  or  other
communication  from the Company made or given by the Company under any provision
of this Indenture shall be sufficient if signed by an Officer of the Company.

                  II.5.     Form of Debentures and Trustee's Certificate.

                  The Debentures and the Trustee's certificate of authentication
shall be engraved,  lithographed or printed,  and shall be  substantially as set
forth in Exhibit A to this  Indenture  and made a part  hereof and may have such
letters,  numbers  or other  marks of  identification  or  designation  and such
legends or endorsements printed, lithographed or engraved thereon as the Company
may deem  appropriate  and as are 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.

                  II.6.     Registrar, Paying Agent, and Conversion Agent.

                  The  Company  shall  maintain  an office  or agency  where the
Debentures  may be presented for  registration  of transfer or for exchange (the
"Registrar"),  an office or agency where Debentures may be presented for payment
(the "Paying  Agent"),  and an office  where  Debentures  may be  presented  for
conversion (the "Conversion  Agent"). The Registrar shall keep a register of the
Debentures  and of their  transfer and exchange.  The Company may appoint one or
more  co-registrars,  one or  more  additional  paying  agents,  and one or more
additional  conversion  agents.  The term "Paying Agent" includes any additional
paying agent and the term "Conversion Agent" includes any additional  conversion
agent.

                  The Registrar,  the Paying Agent, and the Conversion Agent are
sometimes  referred  to herein as the  "Agents."  The Agents have the powers and
authority  grant-




                                       20




ed to and  conferred  upon them herein and in the  Debentures  and such  further
powers  and  authority,  acceptable  to  them,  as  the  Company  may  hereafter
respectively  grant to or confer upon them.  The Company  reserves  the right to
vary or terminate the  appointment  of the Registrar or any Conversion or Paying
Agent,  or to appoint  additional  or other  registrars  or conversion or paying
agents,  or to approve any change in the office  through  which the Registrar or
any such agent acts,  provided  that there shall at all times be a Registrar  in
New York City and a Paying Agent and  Conversion  Agent in one or more  European
cities  which,  so long as the  Debentures  are listed on the  Luxembourg  Stock
Exchange and so long as the Luxembourg Stock Exchange so requires, shall include
Luxembourg.

                  The Company shall enter into an appropriate  agency  agreement
with any Agent not a party to this Indenture. Such agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall notify
the Trustee of the name and address of any Agent not a party to this  Indenture.
If the Company fails to maintain a Registrar, Paying Agent, or Conversion Agent,
the Trustee shall act as such.

                  The Company initially  appoints the Trustee as Registrar.  The
Company has initially  appointed  Banca  Commerciale  Lugano as Paying Agent and
Conversion Agent for the purposes set forth in this Indenture.  The Paying Agent
and Conversion  Agent in acting  hereunder  shall be subject at all times and in
all respects to the directions of the Trustee, subject to and in accordance with
applicable  laws,  and shall be  responsible  solely to the Trustee.  The Paying
Agent  and  Conversion  Agent  may  resign  and be  discharged  from its  duties
hereunder  by notice of such  resignation  delivered  to the Company at least 60
days prior to the date on which such  resignation  is to become  effective.  The
Company shall, promptly after receiving such notice, appoint a substitute paying
agent and  conversion  agent  which  shall  thereafter  be the Paying  Agent and
Conversion  Agent hereunder.  Whenever the Company in its discretion  determines
that it is in the best  interest  of the  Holders  to do so,  it may  appoint  a
substitute  paying agent and  conversion  agent,  which shall  thereafter be the
Paying Agent and Conversion Agent hereunder.  Each such 




                                      21




substitute  paying  agent and  conversion  agent  shall  deliver to the  Company
forthwith upon its appointment an acceptance of such appointment satisfactory in
form and substance to the Company. Immediately upon any such change, the Company
shall inform the Trustee,  which shall thereafter cause prompt notice thereof in
writing to be provided to all Holders.

                  Upon the appointment of any successor trustee  hereunder,  the
Paying Agent and Conversion Agent then acting hereunder shall forthwith  become,
without any further act or writing,  subject to the direction of such  successor
trustee and the appointment of such successor trustee shall in no way impair the
authority of the Paying Agent and Conversion Agent hereunder;  but the successor
trustee so appointed shall,  nevertheless,  on the written request of the Paying
Agent  and  Conversion  Agent,  execute  and  deliver  to the  Paying  Agent and
Conversion  Agent all such  instruments  as may be proper to give to the  Paying
Agent and  Conversion  Agent  full and  complete  power and  authority  as agent
hereunder of such successor trustee.

                  Each of the Agents  shall be  obligated to perform such duties
and only such duties as are herein and in the Debentures  specifically set forth
and as are required by applicable law and no implied duties or obligations shall
be read into this Indenture or the Debentures against the Agents. Upon notice to
the Company, none of the Agents shall be under any obligation to take any action
hereunder  which may tend to  involve  them in any  expense  or  liability,  the
payment of which within a reasonable time is not, in their  reasonable  opinion,
assured to them.



                                       22



                  II.7.     Paying Agent to Hold Money in Trust.

                  The Company  shall  require  each Paying  Agent other than the
Trustee to agree in writing  that,  subject to Article  XIII,  the Paying  Agent
shall hold in trust for the  benefit of Holders or the Trustee all money held by
the Paying Agent for the payment of principal of or interest on the  Debentures,
and shall notify the Trustee of any default by the Company or any other  obligor
upon  the  Debentures  in  making  any such  payment.  While  any  such  default
continues, the Trustee may require a Paying Agent to pay all money held by it to
the Trustee. The Company at any time may require a Paying Agent to pay all money
held by it to the Trustee.  Upon  payment over to the Trustee,  the Paying Agent
(if other than the Company)  shall have no further  liability for the money.  If
the Company or a Subsidiary acts as Paying Agent, it shall segregate and hold as
a separate trust fund all money held by it as Paying Agent.



                                       23




                  II.8.     Exchange, Registration and Transfer of Debentures.

                  The Company  shall keep, or cause to be kept, at the office or
agency to be  maintained by the Company as provided in Section 2.6, a "Register"
or  "Registers"  in which,  subject  to such  reasonable  regulations  as it may
prescribe,  it shall  register all  Debentures  and  transfers  and exchanges of
Debentures.  The Registrar shall keep records of the Debentures at its office in
New York City,  which records shall  indicate the dates on which any  Debentures
have been  redeemed or otherwise  paid,  canceled or, in the case of  mutilated,
defaced, destroyed,  stolen or lost Debentures,  replaced and the dates on which
interest on Debentures has been paid. Upon surrender at such office or agency of
any  Debentures  for  registration  of transfer,  the Company  shall execute and
register  and the  Trustee  shall  authenticate  and  deliver in the name of the
transferee or  transferees a new Debenture or Debentures  for the same aggregate
principal  amount,  and no registration  of transfer of any Debentures  shall be
valid as  against  the  Company or the  Trustee  unless  made at such  office or
agency.

                  The   authorized   denominations   of   Debentures   shall  be
interchangeable in equal aggregate principal amounts. Debentures to be exchanged
shall be surrendered at the office or agency to be maintained by the Company for
the purpose as  provided  in Section  2.6,  and the  Company  shall  execute and
register and the Trustee shall authenticate and deliver in exchange therefor the
Debenture or Debentures that the Holder making the exchange shall be entitled to
receive.

                  The  Registrar  may decline to effect any exchange or transfer
of  Debentures  during  the  period  of 15 days  preceding  the due date for any
payment of principal of, or premium,  if any, or interest on, the  Debentures or
the redemption of the Debentures.

                  The Debentures have not been  registered  under the Securities
Act in reliance upon Regulation S.



                                       24



                  Each Debenture issued under this Indenture (and all Debentures
issued  under the  transfer  thereof,  in exchange  therefor or in  substitution
thereof) shall bear a legend in substantially the following form:

THE DEBENTURE(S)  REPRESENTED HEREBY ARE EACH PART OF A NONDETACHABLE UNIT, EACH
UNIT CONSISTING OF ONE SF 1,000 PRINCIPAL AMOUNT 4.5%  CONVERTIBLE  SUBORDINATED
DEBENTURE AND 24 COMMON STOCK PURCHASE WARRANTS. SAID DEBENTURE AND WARRANTS MAY
NOT BE TRANSFERRED OR TRADED SEPARATELY, AND ANY PURPORTED TRANSFER OF EITHER OF
SUCH  SECURITIES  SEPARATELY  FROM THE  OTHER  SHALL BE VOID  AND  SHALL  NOT BE
RECORDED  ON THE  BOOKS  AND  RECORDS  OF THE  COMPANY.  DEBENTURES  MAY ONLY BE
CONVERTED  IN  THEIR  ENTIRETY;  AND  EACH  DEBENTURE  TO BE  CONVERTED  MUST BE
ACCOMPANIED  BY  THE  RELATED  24  WARRANTS  FOR  EXERCISE  OR  CANCELLATION  IN
ACCORDANCE WITH THE TERMS THEREOF.

THE SECURITIES  REPRESENTED  BY THIS  CERTIFICATE  HAVE BEEN ISSUED  PURSUANT TO
REGULATION S, AN EXEMPTION FROM  REGISTRATION  PURSUANT TO THE PROVISIONS  UNDER
THE UNITED STATES  SECURITIES  ACT OF 1933, AS AMENDED (THE  "SECURITIES  ACT").
THESE SECURITIES MAY NOT BE TRANSFERRED, OFFERED OR SOLD PRIOR TO THE END OF THE
FORTY (40)-DAY PERIOD (THE "RESTRICTED  PERIOD")  COMMENCING ON THE LATER OF (I)
THE DATE THE SECURITIES ARE FIRST OFFERED TO PERSONS OTHER THAN DISTRIBUTORS (AS
DEFINED IN  REGULATION  S) OR (II) THE DATE OF THE FINAL CLOSING OF THE OFFERING
OF THE  SECURITIES BY THE COMPANY,  UNLESS SUCH  TRANSFER,  OFFER OR SALE (I) IS
MADE IN AN  "OFFSHORE  TRANSACTION"  AND NOT TO A "U.S.  PERSON"  (OTHER  THAN A
"DISTRIBUTOR")  (AS SUCH  TERMS ARE  DEFINED  IN  REGULATION  S) OR (II) IS MADE
PURSUANT TO  REGISTRATION  OR AN APPLICABLE  EXEMPTION UNDER THE SECURITIES ACT.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE CANNOT BE SOLD EXCEPT PURSUANT TO
THE TERMS AND  CONDITIONS  OF THE  OFFSHORE  SECURITIES  SUBSCRIPTION  AGREEMENT
BETWEEN THE COMPANY AND THE  INITIAL  HOLDER OF THE SHARES  REPRESENTED  BY THIS
CERTIFICATE, A COPY OF WHICH IS ON FILE AT THE OFFICES OF THE COMPANY.

BY REQUESTING  THE TRANSFER OF THE SECURITIES  REPRESENTED  BY THIS  CERTIFICATE
AFTER THE RESTRICTED PERIOD,  THE HOLDER OF THIS CERTIFICATE  REPRESENTS THAT IF
SUCH  TRANSFER IS MADE TO A U.S.  PERSON,  THAT AT THE TIME OF SUCH TRANSFER



                                       25




THE HOLDER IS NOT AN  "AFFILIATE" OF THE COMPANY (AS SUCH TERM IS DEFINED IN THE
SECURITIES  ACT) OR AN  "UNDERWRITER"  OR "DEALER" (AS SUCH TERMS ARE DEFINED IN
THE  SECURITIES  ACT),  HAS NOT  ENGAGED  IN ANY SHORT  SALES OR  SIMILAR  HEDGE
TRANSACTIONS  WITH  RESPECT TO THE  COMPANY'S  SHARES OF COMMON STOCK DURING THE
RESTRICTED PERIOD, IS NOT A "DISTRIBUTOR" AND SUCH TRANSFER IS NOT BEING MADE AS
PART OF A PLAN OR SCHEME TO EVADE THE REGISTRATION  PROVISIONS OF THE SECURITIES
ACT.

                  All Debentures  presented or surrendered  for  registration of
transfer or  exchange,  shall (if so required by the Company or the  Trustee) be
duly endorsed by, or be  accompanied  by written  instrument or  instruments  of
transfer in form  satisfactory  to the Company and the Trustee duly executed by,
the registered Holder or his attorney duly authorized in writing.

                  For any exchange or  registration  of transfer of  Debentures,
the  Company,  at its option,  may require  the payment of a sum  sufficient  to
reimburse  it for any tax or other  governmental  charge  that may be imposed in
relation thereto. No service charge shall be made for any such transaction.

                  II.9.     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 shall  authenticate and deliver,  a new Debenture,  bearing a number
not  contemporaneously   outstanding,  in  exchange  and  substitution  for  the
mutilated  Debenture  or in  lieu  of and  substitution  for  the  Debenture  so
destroyed, lost or stolen.

                  In every case, the applicant for a substituted Debenture shall
furnish to the Company and to the Trustee  such  security or indemnity as may be
required by them to save each of them, and, if requested, any Paying Agents, any
Conversion  Agents and Debenture  Registrars  of the Company,  harmless from all
risk,  and the  applicant  shall also  furnish to the Company and to the Trustee
evidence to



                                       26




their  satisfaction  of  the  mutilation,  destruction,  loss  or  theft  of the
applicant's  Debenture  and of the ownership  thereof.  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,  including  counsel fees,  of the Company,  the
Trustee,  and any Paying Agent,  any  Conversion  Agent or Debenture  Registrar,
connected therewith.

                  In case any  Debenture,  the  principal  amount  of which  has
become due and payable, shall become mutilated or be destroyed,  lost or stolen,
the Company may, instead of issuing a substitute Debenture, pay or authorize the
payment of the same (without surrender thereof except in the case of a mutilated
Debenture)  if the  applicant  for such payment shall furnish to the Company and
the Trustee  such  security or  indemnity as it may require to save it harmless,
and evidence to the satisfaction of the Company of the mutilation,  destruction,
loss or theft of such Debenture and of the ownership thereof.

                  Every   Debenture   issued   pursuant   this  Section  2.9  in
substitution  for  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 found at any  time,  or be
enforceable  by  anyone,  and  shall be  entitled  to all the  benefits  of this
Indenture  equally and  proportionately  with any and all other  Debentures duly
issued  hereunder.  All  Debentures  shall be held and  owned  upon the  express
condition  that the  foregoing  provisions  are  exclusive  with  respect to the
replacement or payment of mutilated,  destroyed,  lost or stolen  Debentures and
shall preclude any and all other rights or remedies,  notwithstanding any law or
statute  existing or  hereinafter  enacted to the  contrary  with respect to the
replacement  or payment of negotiable  instruments or other  securities  without
their surrender.

                  II.10.     Cancellation of Surrendered Debentures.

                  All  Debentures   surrendered  for  the  purpose  of  payment,
redemption,  conversion,  exchange or  transfer,  in 




                                       27




whole or in part,  shall be  canceled  and  delivered  to the  Trustee,  or,  if
surrendered to the Trustee,  shall be canceled by it, and no Debentures shall be
issued in lieu thereof  except as expressly  required or permitted by any of the
provisions  of this  Indenture.  On request of the  Company,  the Trustee  shall
deliver to the Company canceled Debentures held by the Trustee. With the consent
of the  Company,  the  Trustee  may destroy  canceled  Debentures  and deliver a
certificate of  destruction 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 canceled and delivered to the Trustee or surrendered to the Trustee
for cancellation.

                  II.11.     Provisions of Indenture and Debentures for Sole 
                             Benefit of Persons Identified.

                  Nothing in this Indenture or in the  Debentures,  expressed or
implied, shall give or be construed to give to any Person other than the parties
hereto,  the Conversion  Agent, the Paying Agent, the Registrar,  the Holders of
the Debentures and, to the extent  provided in Article XIII hereof,  the holders
of Senior  Indebtedness,  any legal or equitable right, remedy or claim under or
in respect of this  Indenture,  or under any  covenant,  condition  or provision
herein contained,  all of covenants,  conditions and provisions herein being for
the benefit of the parties hereto,  the Conversion  Agent, the Paying Agent, the
Registrar,  the Holders of the Debentures and, to the extent provided in Article
XIII hereof, the holders of Senior Indebtedness.

                  II.12.     Temporary Debentures.

                  Pending the preparation of definitive Debentures,  the Company
may  execute,   and  upon  written  order  of  the  Company  the  Trustee  shall
authenticate and deliver,  temporary Debentures that are printed,  lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denomination,
substantially  of the tenor of the  definitive  Debentures in lieu of which they
are issued and



                                       28





with such appropriate insertions, omissions,  substitutions and other variations
as the officers  executing such Debentures may determine,  as evidenced by their
execution of such Debentures.

                  If temporary  Debentures  are issued,  the Company shall cause
definitive  Debentures  to be prepared  without  unreasonable  delay.  After the
preparation  of  definitive  Debentures,   the  temporary  Debentures  shall  be
exchangeable   for  definitive   Debentures  upon  surrender  of  the  temporary
Debentures at any office or agency of the Company designated pursuant to Section
2.6, without charge to the Holder. Upon surrender for cancellation of any one or
more  temporary  Debentures  the Company  shall  execute  and the Trustee  shall
authenticate  and  deliver  in  exchange  therefor  a like  principal  amount of
definitive  Debentures  of  authorized  denominations.  Until so  exchanged  the
temporary  Debentures  shall in all  respects be  entitled to the same  benefits
under this Indenture as definitive Debentures.

                  II.13.    Appointment to Fill Vacancy in Office of Trustee.

                  The Company,  whenever necessary to avoid or fill a vacancy in
the office or Trustee,  shall appoint, in the manner provided in Section 8.10, a
Trustee, so that there shall at all times be a Trustee hereunder.


                                      III

                            REDEMPTION OF DEBENTURES

                  III.1.   Debentures Redeemable.

                        (a)The Debentures  may be redeemed by the Company,  as a
whole  or from  time to  time  in  part,  at any  time  on or  after  the  third
anniversary of the Initial Closing Date and prior to maturity or conversion,  at
a redemption  price equal to 100% of the  principal  amount to be redeemed  plus
accrued and unpaid interest to the date fixed for redemption.



                                       29




                 (b)The Debentures may also be redeemed,  at any time as a whole
but not in part,  at a redemption  price equal to 100% of the  principal  amount
plus  accrued  and unpaid  interest to the date fixed for  redemption,  if, as a
result of any change in or amendment to the laws,  regulations  or published tax
rulings of the United States,  or any political  subdivision or taxing authority
thereof  or  therein,   affecting  taxation,  or  any  change  in  the  official
administration,  application  or  interpretation  of such laws,  regulations  or
published tax rulings either  generally or in relation to the Debentures,  which
change or amendment  becomes  effective on or after the Initial  Closing Date or
which change in official administration, application or interpretation shall not
have been  available  to the public  prior to such date and is  notified  to the
Company on or after such date,  it is determined by the Company that the Company
would be required to pay any Additional  Payments  pursuant to Section 2.2(b) of
this  Indenture or the terms of any Debenture in respect of interest on the next
succeeding Interest Payment Date. At the option of the Company,  such redemption
may be paid in cash or by  delivery  of  shares of  Common  Stock in the  manner
described under Article XVI.

                  III.2.                    Mailing  of  Notice  of  Redemption;
                                            Selection of Debentures in Case Less
                                            Than All Debentures to be Redeemed.

                  Debentures  may be redeemed  only in integral  multiples of SF
1,000,  except to the extent that all remaining  Debentures that are outstanding
are redeemed.

                  Notice  of  redemption  to the  Holders  of  Debentures  to be
redeemed,  in whole or in part, shall be given by providing  prompt notice,  not
later than on the  thirtieth day before the date fixed for  redemption,  to such
Holders  at their last  addresses  as they  shall  appear  upon the books of the
Company.  Any notice  that is provided in the manner  herein  provided  shall be
conclusively  presumed  to have been duly given,  whether or not the  registered
Holder  receives  the  notice.  In any  case,  failure  to duly  give  notice as
aforesaid,  or  any  defect  in  the  notice,  to the  Holder  of any  Debenture
designated  for  redemption  in 



                                       30





part, shall not affect the validity of the redemption of any other Debenture.

                  Each such  notice of  redemption  (i) shall  specify  the date
fixed  for  redemption,  the  aggregate  principal  amount of  Debentures  to be
redeemed and the redemption price at which  Debentures are to be redeemed,  (ii)
shall  specify  where  payment  of the  redemption  price  is to be  made,  upon
presentation  and surrender of such  Debentures,  (iii) shall state that accrued
and unpaid interest to the date fixed for redemption  shall be paid as specified
in said notice,  that from and after said date  interest  thereon shall cease to
accrue,  and that the right to convert the principal of the  Debentures so to be
redeemed  shall  terminate  at the  close  of  business  on the date  fixed  for
redemption,  (iv) shall state the  then-applicable  Holder Conversion Price, (v)
shall state the name and address of the Conversion  Agent,  (vi) shall state the
date and  time as of which  the  Debentures  being  redeemed  may no  longer  be
converted  pursuant to the  Indenture,  (vii) shall specify the paragraph of the
Indenture pursuant to which the Debentures are being redeemed,  and (viii) shall
state  that  interest  on the  Debentures  ceases  to  accrue  on and  after the
redemption  date  (unless  the  Company  shall  default  in the  payment  of the
redemption  price).  If less than all the  Debentures  are to be  redeemed,  the
notice to the Holders of Debentures to be redeemed  shall specify the particular
Debentures to be redeemed. In case any Debenture is to be redeemed in part only,
the  notice  shall  state the  portion  of the  principal  amount  thereof to be
redeemed and shall state that on and after the redemption  date,  upon surrender
of such Debenture,  a new Debenture or new Debentures in principal  amount equal
to  the  unredeemed   portion   thereof  shall  be  issued.   Any  notice  to  a
Debentureholder  designating  all or a portion of such Holder's  Debentures  for
redemption  may,  but need not,  specify the serial  number of the  Debenture or
Debentures  to be  redeemed,  and any failure so to specify or any error in such
specification  shall  not  affect  the  validity  of  such  designation.  If any
Debenture  selected  for partial  redemption  is converted in part for shares of
Common Stock before the termination of such conversion right with respect to the
portion of such Debenture so selected,  the converted  portion of such De-




                                       31




benture  shall  be  deemed  (so far as may be) to be the  portion  selected  for
redemption.

                  The  Company  shall  give the  Trustee  written  notice of any
proposed  redemption  (or such  lesser  notice  as shall  be  acceptable  to the
Trustee)  at least  thirty  days prior to the date fixed for  redemption,  which
notice  shall set forth  the  aggregate  principal  amount of  Debentures  to be
redeemed.  If less than all the Debentures are to be redeemed,  the Company,  in
its sole discretion,  shall select the particular Debentures or parts thereof so
to be  redeemed  according  to such  method  as the  Company  shall  in its sole
discretion deem fair and appropriate.

                  On or before the date fixed for redemption,  the Company shall
deposit with the Trustee or with a Paying Agent an amount of money sufficient to
pay the redemption price of, and the unpaid and accrued interest, if any, on all
the  Debentures  that are to be redeemed on such date.  The amount of money that
the Company is obligated to deposit with the Trustee  pursuant to the  preceding
sentence  shall be  reduced  automatically  by the  amount  attributable  to any
Debentures or portions thereof that have been called for redemption, repurchased
or converted.  Any money that has been deposited with the Trustee for redemption
of Debentures but that is not in fact required for that purpose  pursuant to the
foregoing  sentence shall (subject to any right of the  Debentureholder  of such
Debenture or  Predecessor  Debenture to receive  interest as provided in Section
2.2) be promptly  repaid to the Company,  and discharged  from such trust,  upon
delivery to the Trustee  (unless  already in its  possession)  of such redeemed,
repurchased or converted Debentures for cancellation.




                                       32



                  III.3.When Debentures Called for Redemption Become Due and 
                        Payable.

                  If a notice of redemption shall have been given as provided in
Section 3.2, the  Debentures or portions of Debentures  specified in such notice
shall  become due and payable on the date and at the place stated in such notice
at the redemption  price,  together with accrued and unpaid interest to the date
fixed for  redemption,  and on and after such date  (unless  the  Company  shall
default in the payment of such Debentures or portions  thereof at the redemption
price,  together  with  accrued  and  unpaid  interest  to the  date  fixed  for
redemption,  or unless such  Debentures  shall be duly  surrendered for total or
partial  conversion  and the  Company  shall  default in the  observance  of its
covenants in this Indenture contained in regard to such conversion), interest on
the Debentures or portions of Debentures so called for redemption shall cease to
accrue and any right to convert into Common  Stock of the Company the  principal
of the  Debentures  or portions of  Debentures  so called for  redemption  shall
terminate at the close of business on said date. On  presentation  and surrender
of such  Debentures on or after said date at the place specified in such notice,
such  Debentures  shall be paid and  redeemed by the  Company at the  applicable
redemption  price,  together with accrued and unpaid  interest to the date fixed
for  redemption.  Installments of interest due on or prior to the date fixed for
redemption shall continue to be payable to the Holders of such Debentures on the
relevant  Record Dates  according to their terms and the  provisions  of Section
2.2.

                  III.4.Discharge of Company's Obligations Upon Deposit of 
                        Redemption Moneys.

                  Anything   contained   in  this   Indenture  to  the  contrary
notwithstanding,  if notice of  redemption  shall have been given as provided in
Section 3.2, or if provision  satisfactory to the Trustee for the giving of such
notice shall have been made,  and if the Company shall have  deposited  with the
Trustee or with any Paying  Agent (other than the  Company),  for the benefit of
the Holders of any



                                       33



of the  Debentures  called  for  redemption  in whole or in part,  funds  (to be
immediately  available for payment)  sufficient  to redeem the  Debentures to be
redeemed on the date fixed for redemption,  at the applicable  redemption price,
together with accrued and unpaid interest to the date fixed for redemption, then
all obligations of the Company in respect of such Debentures  shall cease and be
discharged (except the obligation to issue shares of Common Stock of the Company
upon  conversion of Debentures on or prior to the redemption  date in accordance
with the terms of this  Indenture and the  Debentures),  and the Holders of such
Debentures shall thereafter be restricted  exclusively to such funds for any and
all claims of whatever nature on their part under this Indenture,  or in respect
of such  Debentures  (except with respect to any rights of  conversion  as above
stated).

                  III.5.Issuance of Debentures for Unredeemed Portions of 
                        Debentures.

                  Upon  presentation  of any Debenture that is to be redeemed in
part only,  the Company  shall execute and the Trustee  shall  authenticate  and
deliver 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 Debenture so presented.

                  III.6.Sinking Fund

                  (a) Dates and Amounts of Sinking Fund Payments.
                  As and for a mandatory sinking fund, the Company covenants and
agrees that it shall pay to the Trustee,  not less than one Business  Day, on or
before the  anniversary of the Initial Closing Date in each of the years 2000 to
2003 (each a "Sinking Fund Payment Date") an amount of money equal to 25% of the
aggregate  amount of  Debentures  originally  issued at 100% of their  principal
amount  together  with  accrued and unpaid  interest  thereon to the  applicable
Sinking Fund Payment Date.  The cash amount of any sinking fund payment shall be
subject to reduction as provided in Section 3.6(b). The Trustee shall apply cash
sinking fund payments to the redemption of Debentures on the applicable  Sinking
Fund Payment Date.



                                       34




                  (b)Right to Satisfy Sinking Fund Payments with  Debentures. In
lieu of making all or any part of any  mandatory  sinking  fund payment in cash,
the Company may at its option deliver to the Trustee any Debentures  theretofore
acquired by the Company or redeemed by the Company  (other than pursuant to this
Section 3.6) or converted  pursuant to Article IV, and the  principal  amount of
such Debentures  shall be credited  against the principal  amount portion of the
mandatory  sinking fund payment  (and the interest  portion  shall be reduced as
well, provided that the Company shall receive credit for any such Debenture only
once).

                  (c)Redemption of Debentures for the Sinking Fund. On or before
the sixtieth day prior to each Sinking  Fund  Payment  Date,  the Company  shall
deliver to the Trustee (i) a certificate signed by the treasurer or an assistant
treasurer of the Company specifying the portions of such sinking fund payment to
be satisfied by payment of cash and by delivery of Debentures so acquired by the
Company, and (ii) such Debentures,  and the Company shall deliver to the Trustee
any  Debentures for which it is seeking  credit.  On or before the thirtieth day
prior to each Sinking Fund Payment Date,  the Company,  in its sole  discretion,
shall  select the  Debentures  or  portions  thereof to be  redeemed on the next
Sinking Fund Payment  Date,  and the Trustee shall cause notice of redemption of
such Debentures on such Sinking Fund Payment Date to be given in the name of the
Company  and in the  manner  provided  in  Section  3.2  for the  redemption  of
Debentures  in part at the  option of the  Company,  except  that the  notice of
redemption shall state that such redemption is for sinking fund purposes, and on
and after such Sinking Fund Payment Date the Trustee  shall apply or cause to be
applied such  sinking  fund moneys in the manner  provided in Section 3.3 to the
redemption of the Debentures so selected.




                                       35




                    (d)Effect of Redemption on  Warrants. Holders of  Debentures
whose Debentures are redeemed through  operation of the sinking fund will not be
required to exercise  the Warrants  attached to such  Debentures.  However,  any
unexercised Warrants will expire upon such payment of the Debentures.

                                       IV

                            CONVERSION OF DEBENTURES

                  IV.1.Right of Debentureholders to Convert Debenture Into 
                       Common Stock of Company.

                  The  Debentures  may be converted  by Holders,  in whole or in
part,  from time to time,  commencing  ninety days following the Initial Closing
Date and on or before the close of business prior to the seventh  anniversary of
the Initial  Closing Date,  or the date of  redemption  (or if that day is not a
Business Day, on the preceding Business Day), at any time on at least five days'
written notice to the Company, at the conversion prices described herein (except
that, in respect of any Debenture or Debentures,  or portion thereof, called for
redemption  before such date pursuant to Article Three hereof,  such right shall
terminate at the close of business on the date fixed for such redemption  unless
the Company  shall default in payment due upon  redemption  thereof) to convert,
subject to the terms and provisions of this Article IV, the principal  amount of
any such Debenture or Debentures,  or portion  thereof as hereinafter  provided,
into (a) such whole number of duly  authorized,  validly issued,  fully paid and
non-assessable  shares of Common Stock (the  "Debenture  Conversion  Shares") as
determined by dividing (y) the principal amount of Debentures to be converted by
(z) the Holder  Conversion Price, (b) an amount of money payable in Swiss Francs
equal to the accrued and unpaid interest thereon to the date of conversion,  and
(c) an amount of money equal to the value of the fractional share remainder,  if
any, resulting from the calculation described in clause (a) above, to be paid in
Swiss Francs based on the Holder Conversion Price per share.




                                       36





                  "Holder  Conversion  Price"  means  the  product  of  (w)  the
applicable Stock Price Factor, (x) the applicable  Exchange Rate Factor, (y) the
applicable   Holder   Conversion   Percentage  Factor  and  (z)  the  applicable
Antidilution Factor.

                  "Stock Price Factor"  means a factor,  to be calculated by the
Company with respect to each December 15, February 15, April 15, June 15, August
15, and October 15 (each a "Reset  Date"),  and to be applicable in the two full
calendar months  following the Reset Date, and equal to the average daily Nasdaq
closing  price per Share (or,  if the Company is listed or quoted on an exchange
in the United States other than Nasdaq, the closing price on such exchange), for
the thirty  trading  days  immediately  preceding  the  applicable  Reset  Date;
provided that in no event shall the Stock Price Factor be less than U.S.  $12.00
(as adjusted, if required, as provided in Section 4.5), regardless of the actual
Stock Price Factor otherwise determined.

                  "Exchange Rate Factor" means a factor, to be calculated by the
Company with respect to each Reset Date,  and to be  applicable  in the two full
calendar  months  following the Reset Date, and equal to the average Noon Buying
Rate (as defined  below) for the thirty trading days  immediately  preceding the
applicable Reset Date;  provided that in no event shall the Exchange Rate Factor
be less than 1.1175.  "Noon  Buying  Rate" means the exchange  rate for one U.S.
dollar  expressed in Swiss  Francs,  based upon the noon buying rate in New York
City for cable transfers in Swiss Francs,  as certified for customs  purposes by
the Federal Reserve Bank of New York.

                  "Holder  Conversion  Percentage  Factor"  means  a  conversion
percentage, determined on the date notice of conversion is given, which shall be
(i) 100% until the day preceding the third  anniversary  of the Initial  Closing
Date, (ii) 95% from the third  anniversary of the Initial Closing Date until the
day preceding the fourth anniversary of the Initial Closing 




                                       37




Date;  (iii) 90% from the fourth  anniversary of the Initial  Closing Date until
the day preceding the fifth  anniversary of the Initial  Closing Date;  (iv) 85%
from the fifth  anniversary of the Initial  Closing Date until the day preceding
the sixth  anniversary  of the Initial  Closing Date; and (v) 80% from the sixth
anniversary  of the Initial  Closing Date until the seventh  anniversary  of the
Initial Closing Date.

                  Debentures  may be  converted  only  in the  principal  amount
thereof  consisting  of SF 1,000 or an  integral  multiple  of SF 1,000.  If any
Debenture is converted in part, the Company,  on surrender of such Debenture for
conversion,  shall execute such new Debenture or Debentures and shall deliver to
the Trustee (a) the surrendered Debenture for cancellation, or if such Debenture
has been duly cancelled by the Company, such duly cancelled Debenture,  (b) such
new Debenture or Debentures for authentication,  and (c) unless the Trustee is a
conversion  agent, a statement  signed by any officer of the Company,  or by any
agent  maintained by the Company for conversion of Debentures in accordance with
the provisions of Section 2.6,  stating the principal  amount of the surrendered
Debenture which has been converted and requesting the authentication of such new
Debenture or Debentures;  and thereupon the Trustee shall  authenticate  and the
Company shall deliver or cause to be delivered  such new Debenture or Debentures
to such Debentureholder.

                  IV.2.                     Right   of    Company   to   Convert
                                            Debenture   into  Common   Stock  of
                                            Company.

                  The  Debentures  may be converted by the Company,  in whole or
from time to time in part,  into (a) that whole number of  Debenture  Conversion
Shares  determined by dividing (y) the sum of the principal amount of Debentures
to be converted,  by (z) the Company  Conversion  Price,  (b) an amount of money
payable in Swiss Francs equal to the accrued and unpaid interest  thereon to the
date of  conversion,  and (c) an  amount  of  money  equal  to the  value of the
fractional share remainder,  if any, resulting from the calculation described in
clause (a) above,  to be paid in Swiss  Francs  based on the Company  Conversion
Price per share.


                                       38



                  "Company  Conversion  Price"  means  the  product  of (w)  the
applicable Stock Price Factor, (x) the applicable  Exchange Rate Factor, (y) the
applicable  Company   Conversion   Percentage  Factor  and  (z)  the  applicable
Antidilution Factor.

                  "Company  Conversion  Percentage  Factor"  means a  conversion
percentage, determined on the date notice of conversion is given, which shall be
(i) 100% until the day preceding the third  anniversary  of the Initial  Closing
Date,  (ii) 92.5% from the third  anniversary of the Initial  Closing Date until
the day  preceding the fourth  anniversary  of the Initial  Closing Date;  (iii)
87.5% from the fourth  anniversary  of the  Initial  Closing  Date until the day
preceding the fifth anniversary of the Initial Closing Date; (iv) 82.5% from the
fifth  anniversary of the Initial Closing Date until the day preceding the sixth
anniversary  of  the  Initial  Closing  Date;  and  (v)  77.5%  from  the  sixth
anniversary  of the Initial  Closing Date until the seventh  anniversary  of the
Initial Closing Date.

                   IV.3.                    Exercise of Conversion Privilege.

                  Debentures  may be  converted  only in units  of SF 1,000  and
integral  multiples  thereof.  A  holder  of  Debentures   desiring  to  convert
Debentures will not be required to exercise the attached Warrants.  However,  if
the  Warrants  are  unexercised,  they will expire upon such  conversion  by the
holder of  Debentures  or upon  conversion  or  redemption  at the option of the
Company.  In  addition,  during the period  beginning  90 days after the Initial
Closing  Date and  ending 119 days  following  the  Initial  Closing  Date,  any
conversion  of  Debentures  will  necessarily  result in the  expiration  of the
Warrants attached thereto.

                  A Holder may exercise the  conversion  privilege by completing
the Conversion  Notice that is a part of the Debenture and  surrendering  to the
Company, at the office or agency to be maintained by the Company for the purpose
in accordance with the provisions of Section 2.6, the Debenture or Debentures so
to be  converted.  The  Conver-



                                       39





sion Notice  shall also state the name or names  (together  with address and tax
identification number to the extent required), if different from the name of the
registered  Holder,  in which the certificate or certificates for such shares of
Common Stock shall be issued. Debentures surrendered for conversion shall (if so
required by the Company or the Trustee) be duly endorsed by, or  accompanied  by
instruments  of transfer in form  satisfactory  to the Company duly executed by,
the registered Holder or his duly authorized  attorney,  and be accompanied by a
signature  guaranty by a commercial  bank or trust company or other  institution
which may be required under  applicable laws or regulations,  and any Debentures
so  surrendered  during the period from the close of business on any Record Date
for the payment of interest on the  Debentures to the opening of business on the
interest  payment  date shall  (except  in the case of  Debentures  or  portions
thereof which have been called for  redemption on a redemption  date within such
period)  be  accompanied  by payment in funds  acceptable  to the  Company of an
amount equal to the interest  payable on such interest  payment  date;  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 the
quarterly  interest  payment due in respect of any Debenture  converted shall be
paid by the Company on the interest payment date to the  Debentureholder of such
converted  Debenture on such Record Date,  provided that if the Company defaults
in payment of interest on such interest payment date, the amount previously paid
by the  Debentureholder to the Company in respect of interest upon conversion of
Debentures shall be repaid to the Debentureholder. Except as expressly set forth
in this Section 4.3, no payment or adjustment shall be made on conversion of any
Debenture for interest  accrued  thereon or for  dividends on securities  issued
upon such conversion.

                  IV.4.                     Issuance  of Shares of Common  Stock
                                            on Conversion.

                  As  promptly  as  practicable   after  the  surrender  of  any
Debenture or  Debentures  for  conversion  in the manner  herein  provided,  the
Company shall deliver or cause to be delivered,  at its said office or agency at
which such  



                                       40





surrender is made,  to or upon the written  order of the Holder of the Debenture
or  Debentures  so  surrendered,  certificates  representing  the number of duly
authorized, validly issued, fully paid and non-assessable shares of Common Stock
of the Company  into which such  Debenture  or  Debentures  may be  converted in
accordance  with the  provisions of this Article IV and cash as provided in this
Article IV in respect of any accrued and unpaid  interest  and/or  fraction of a
share of Common Stock  issuable upon such  conversion.  Subject to the following
provisions  of this Section 4.4,  such  conversion  shall be deemed to have been
made  immediately  prior to the  close  of  business  on the date on which  such
Debenture or Debentures shall have been surrendered for conversion in the manner
herein provided accompanied by written notice and the funds, if any, required by
Section 4.10,  so that the rights of the Holder of such  Debenture or Debentures
as a Debentureholder shall cease at such time and the person or persons entitled
to receive  the shares of Common  Stock upon  conversion  of such  Debenture  or
Debentures  shall be treated for all purposes as having become the record holder
or holders of such shares of Common  Stock at such time;  provided  that no such
surrender  on any date when the stock  transfer  books of the  Company  shall be
closed  shall be  effective  to  constitute  the person or persons  entitled  to
receive shares of Common Stock, upon conversion of such Debenture or Debentures,
as the record holder or holders of such shares on such date,  but such surrender
shall be effective to constitute the person or persons  entitled to receive such
shares of Common Stock as the record holder or holders  thereof for all purposes
at the  opening  of  business  on the next  succeeding  day on which  such stock
transfer  books  are  open  and  such  conversion  shall  be at  the  applicable
Conversion Price in effect at such time.

                  Shares of Common Stock which are issuable upon the  conversion
of Debentures which have been duly surrendered for conversion as provided herein
shall be deemed to be issued to the  registered  Holder  thereof  on the date of
such surrender;  provided,  however, that no such surrender on any date when the
stock  transfer  books of the  Company  shall be closed  shall be  effective  to
constitute  the person  entitled to receive  such shares of Common  Stock as the
record holder  thereof on such date,  but such  surrender



                                       41




shall be effective to constitute  the person  entitled to receive such shares of
Common Stock as the record holder thereof for all purposes immediately after the
opening of  business  on the next  succeeding  day on which such stock  transfer
books are open.

                  IV.5.                    Adjustment of Antidilution Factor.

                  The Antidilution  Factor referred to in the calculation of the
Conversion  Prices Sections 4.1 and 4.2 shall be subject to adjustment from time
to time as follows:

                  (a) In the event that the Company  shall at any time after the
date hereof subdivide or combine the outstanding shares of Common Stock or issue
additional  shares of Common  Stock as a dividend or other  distribution  on the
Common  Stock,  the  Antidilution  Factor  in effect  immediately  prior to such
subdivision or combination of shares or share dividend or distribution  shall be
proportionately  adjusted  so that,  with  respect to each such  subdivision  of
shares or share  dividend  or  distribution,  the number of shares of the Common
Stock  deliverable  upon  conversion  of each SF 1,000  principal  amount of the
Debentures  shall be  increased in  proportion  to the increase in the number of
shares of the then  outstanding  Common Stock resulting from such subdivision of
shares  or share  dividend  or  distribution,  and  with  respect  to each  such
combination of shares, the number of shares of the Common Stock deliverable upon
conversion  of each  SF  1,000  principal  amount  of the  Debentures  shall  be
decreased  in  proportion  to the  decrease  in the number of shares of the then
outstanding  Common Stock  resulting from such  combination of shares.  Any such
adjustment in the Antidilution Factor shall become effective, in the case of any
such  subdivision  or  combination  of shares,  at the close of  business on the
effective  date  thereof,  and,  in the  case  of any  such  share  dividend  or
distribution,  at the  close  of  business  on the  record  date  fixed  for the
determination  of  shareholders  entitled  thereto or on the first  Business Day
during  which the stock  transfer  books of the Company  shall be closed for the
purpose of such determination, as the case may be.



                                       42




                  (b)Notwithstanding  anything  in  Sections  4.1 and 4.2 to the
contrary,  in the case of any capital  reorganization or any reclassification of
the Common Stock, or in the case of the  consolidation  or merger of the Company
with or into any other  corporation or in case of any sale or transfer of all or
substantially  all of the  assets  of the  Company  as may be  permitted  by the
provisions   hereof,  the  Company  and  each  Holder  of  the  Debentures  then
outstanding  shall have the right  thereafter to convert the principal amount of
each  such  Debenture  into the kind and  amount  of  shares  of stock and other
securities and property receivable upon such  reorganization,  reclassification,
consolidation,  merger,  sale or transfer by a holder of the number of shares of
Common Stock of the Company into which such Debenture  might have been converted
immediately  prior  to  such  reorganization,  reclassification,  consolidation,
merger,  sale or transfer;  and, in any such case,  appropriate  adjustment  (as
determined in good faith by the Board of Directors of the Company) shall be made
in the  application of the  provisions of this Article IV (including  provisions
with regard to the adjustment of the Conversion  Price) in order that the rights
and interests of the holders  thereafter shall be as nearly equivalent as may be
practicable to the rights and interests provided for in this Article IV.

                  In case of any  consolidation or merger of the Company with or
into any other  corporation  (other than a consolidation  or merger in which the
Company is the  continuing  corporation),  or in case of any sale or transfer of
all or substantially all of the assets of the Company, the corporation formed by
such  consolidation  or the  corporation  into which the Company shall have been
merged or the corporation which shall have acquired such assets, as the case may
be, shall execute and deliver to the Trustee a supplemental  indenture providing
for the rights of the holders as set forth in the preceding paragraph.

                  The Trustee shall not be under any responsibility to determine
the correctness of any provisions  contained in any such supplemental  indenture
relating  either  to the kind or amount  of  shares  of stock or  securities  or
property receivable by the holders upon the conversion of their Debentures after
any such consolidation, merger, 



                                       43




sale or transfer or to any adjustment to be made with respect thereto.  Upon the
delivery to the Trustee of any such  supplemental  indenture,  the Company shall
deliver or cause to be  delivered  to the Trustee a  resolution  of the Board of
Directors and the Trustee may accept such  resolution as conclusive  evidence of
the  correctness  of any such  provisions  and  shall be  protected  in  relying
thereon.  At the time of the delivery of such  resolution the Company shall also
deliver or cause to be  delivered to the Trustee an Opinion of Counsel as to the
compliance of any such provisions with the terms of this Indenture.

                  (c)Whenever  the  Company  shall  fix a  record  date  for the
holders of the Common Stock for the purpose of determining the holders  entitled
to  subscribe  for or purchase  shares of Common Stock at a price per share less
than  the  Closing  Price  of the  Common  Stock  as of such  record  date,  the
Antidilution Factor shall be adjusted so that the number of shares of the Common
Stock  into  which  each SF  1,000  principal  amount  of the  Debentures  shall
thereafter  be  convertible  shall be determined  by  multiplying  the number of
shares of the Common  Stock into  which  such SF 1,000  principal  amount of the
Debentures  was  theretofore  convertible  by a fraction of which the  numerator
shall be the number of shares of the Common Stock outstanding  immediately prior
to the  taking of such  record  plus the number of  additional  shares of Common
Stock offered for subscription or purchase and of which the denominator shall be
the number of shares of the Common Stock  outstanding  immediately  prior to the
taking of such  record  plus the number of shares of the Common  Stock which the
aggregate  offering  price  (without   deduction  of  any  expenses,   including
commissions  or  discounts) of the total number of shares of the Common Stock so
offered  would  purchase  at the  Closing  Price of the Common  Stock as of such
record  date.  In the  case of the  proposed  issuance  of  Common  Stock  for a
consideration in whole or in part other than cash, the consideration  other than
cash shall be deemed to be the fair value  thereof as determined by the Board of
Directors of the Company. This Section 4.5(c) shall not apply in the case of any
shares of Common Stock proposed to be issued by the Company as or as a result of
a stock  dividend  payable  in  shares  of  Common  Stock or as a




                                       44





result of any subdivision or split-up of the outstanding shares of Common Stock.

                  (d)Whenever  the  Company  shall  fix a  record  date  for the
holders of the Common Stock for the purpose of determining the holders  entitled
to receive any distribution of evidences of its  indebtedness,  capital stock or
assets (other than a regularly  scheduled cash dividend and dividends payable in
stock for which  adjustment  is made pursuant to Section  4.5(a)),  or rights to
subscribe for or purchase any evidences of the Company's  indebtedness or assets
(other  than  rights  referred  to  in  the  preceding   Section  4.5(c)),   the
Antidilution Factor shall be adjusted so that the number of shares of the Common
Stock  into  which  each SF  1,000  principal  amount  of the  Debentures  shall
thereafter  be  convertible  shall be determined  by  multiplying  the number of
shares of the Common  Stock into  which  such SF 1,000  principal  amount of the
Debentures was  theretofore  convertible  by a fraction,  of which the numerator
shall be the  Closing  Price of one share of Common  Stock as of the record date
and of which  the  denominator  shall be the  Closing  Price of one share of the
Common Stock as of the record date less the difference between (A) the aggregate
fair market value (as  determined in good faith by the Board of Directors of the
Company and as described  in a statement  filed with the Trustee) of the portion
of the assets,  capital stock or evidences of  indebtedness so distributed or of
such  subscription  or  purchase  rights,  and  (B) the  consideration,  if any,
received therefor, applicable to one share of Common Stock.

                  (e)Notwithstanding  anything to the contrary  provided herein,
no  adjustment  in  the  Antidilution  Factor  shall  be  required  unless  such
adjustment  would  result  in an  increase  or  decrease  of at  least 1% in the
Conversion  Price or the  Conversion  Price as last  adjusted  pursuant  to this
Section 4.5, as the case may be; provided that any  adjustments  which by reason
of this  Section  4.5(e) are not  required  to be made shall be carried  forward
until used and taken into account in any subsequent adjustment.

                  (f) The provisions of this Section 4.5 shall  similarly  apply
to successive  subdivisions,  combinations,  reorganizations,  reclassification,
consolidations,  merg-



                                       45




ers, sales or transfers.  Adjustments  made pursuant to Sections  4.5(c) and (d)
shall be made  successively  whenever  any record  date  referred  to therein is
fixed; and in the event that any rights offering or subscription  referred to in
such Sections is not made, the Antidilution Factor shall again be adjusted to be
the  Antidilution  Factor  which would then be in effect if such record date had
not been fixed.

                  IV.6.                     No  Fractional  Shares to be Issued;
                                            Cash Payments in Lieu Thereof.

                  No  fractional  shares shall be issued upon the  conversion of
the  Debentures.  If more than one Debenture shall be surrendered for conversion
at one time by the same holder, the number of full shares that shall be issuable
upon  conversion  thereof  shall  be  computed  on the  basis  of the  aggregate
principal amount of the Debentures (or specified  portions thereof to the extent
permitted  hereby) so  surrendered.  Instead of any  fractional  share of Common
Stock that would be issuable  upon  conversion of any Debenture or Debentures or
specified portions thereof,  the Company shall pay a cash adjustment as provided
in Section 4.1 or 4.2, as the case may be.

                  IV.7.                     Accountants' Certificate Evidence of
                                            Correctness of Computation.

                  The certificate of any firm of independent  public accountants
of recognized  standing  reasonably  acceptable  to the Company  selected by the
Board of  Directors  shall be  conclusive  evidence  of the  correctness  of any
computation made under this Article IV.

                  IV.8.                     Notice of Corporate Action.

                  In the event:

                  (a) the Company shall declare any dividend on the Common Stock
payable in shares of capital stock of the Company, cash or other property; or



                                       46



                  (b) The  Company  shall  authorize  the issue of any  options,
warrants or rights pro rata to all  holders of Common  Stock  entitling  them to
subscribe  for or purchase  any shares of stock of the Company or to receive any
other rights; or

                  (c)The Company shall  authorize the  distribution  pro rata to
all holders of Common Stock of a cash  dividend  payable  otherwise  than out of
earnings or surplus  legally  available  therefor under the laws of the State of
Delaware,  shares of its capital stock (other than Common Stock), stock or other
securities of other persons,  evidences of indebtedness issued by the Company or
other persons, assets (excluding cash dividends) or options or rights (excluding
options to purchase and rights to subscribe for Common Stock or other securities
of the Company convertible into or exchangeable for Common Stock); or

                  (d) There shall occur any reclassification of the Common Stock
or any  consolidation or merger of the Company with or into another  corporation
(other than a  consolidation  or merger in which the  Company is the  continuing
corporation  and which  does not  result in any  reclassification  of the Common
Stock) or a sale or transfer to another  corporation of all or substantially all
of the properties of the Company;

then the  Company  shall cause to be filed with the Trustee and at the office or
agency  maintained  for the  purpose of  conversion  of  Debentures  pursuant to
Section  2.6 and shall  cause to be  delivered  promptly to the holders at their
addresses as they shall appear in the Debenture  register,  at least 20 days (or
10 in any case  specified  in clause (a) or (b) above)  prior to the  applicable
date hereinafter  specified,  a notice stating (i) the date on which a record is
to be taken for the purpose of such dividend,  distribution or rights,  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  or  rights  are to be
determined,  or (ii) the date on which  such  reorganization,  reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding up is
expected  to  become  effective,  and the date as of which it is  expected  that
holders of Common Stock of record shall be



                                       47





entitled  to  exchange  their  shares of Common  Stock for  securities  or other
property deliverable upon such  reclassification,  consolidation,  merger, sale,
transfer, dissolution, liquidation or winding up.

                  IV.9.                     Covenant to Reserve Shares of Common
                                            Stock for Issuance on  Conversion of
                                            Debentures and Exercise of Warrants.

                  The Company  covenants  that it shall at all times reserve and
keep  available out of its  authorized  Common Stock,  solely for the purpose of
issue upon  conversion  of  Debentures,  as herein  provided,  and  exercise  of
Warrants,  such  number of shares of Common  Stock as shall from time to time be
issuable upon the conversion of all  outstanding  Debentures and exercise of all
outstanding Warrants.

                  If any shares  issuable  upon the  conversion of Debentures or
exercise of Warrants require  registration  with or approval of any governmental
authority  under any  federal  or state law  before  such  shares may be validly
issued upon conversion,  then the Company  covenants that it shall in good faith
and as  expeditiously  as  possible  endeavor  to secure  such  registration  or
approval, as the case may be.

                  The Company covenants that all shares of Common Stock that may
be issued upon  conversion  of  Debentures  and exercise of Warrants  shall upon
issue be duly authorized,  validly issued,  fully paid and  non-assessable  and,
except as provided in Section 4.10, free from all taxes,  liens and charges with
respect to the issue thereof.



                                       48



                  IV.10.                    Issuance of Certificates  for Shares
                                            of Common  Stock,  in Name of, or in
                                            Name Directed by, Debentureholder.

                  The issuance of  certificates  for shares of Common Stock upon
the  conversion of any Debenture  shall be made without charge to the converting
Debentureholder  for such  certificates or of any tax in respect of the issuance
of such  certificates,  and such certificates  shall be issued in the respective
names of, or in such names as may be  directed  by, the holder of the  Debenture
converted;  provided  that the Company shall not be required to pay any tax that
may be payable in respect of any transfer  involved in the issuance and delivery
of any such  certificates in a name other than that of the registered  holder of
the  Debenture  converted,  and the  Company  shall not be  required to issue or
deliver such certificates  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.

                  IV.11.                    Mailing  of Notice  Upon  Adjustment
                                            Pursuant to Section 4.5.

                  Whenever the Conversion Price shall be adjusted as a result of
a change in the  Antidilution  Factor pursuant to Section 4.5, the Company shall
forthwith  file at the  office  maintained  pursuant  to  Section  2.6  and,  if
different,  with the  Trustee a  statement  signed by an Officer of the  Company
specifying the adjusted  Conversion Price determined as provided in such Section
and a certificate  of a firm of  independent  public  accountants as provided in
Section  4.7.  Such  statement  shall  show in  reasonable  detail the method of
calculation of such  adjustment and the facts  requiring the adjustment and upon
which the  calculation is based. At such time, the Company shall forthwith cause
a notice setting forth the adjusted  Conversion Price to be delivered  promptly,
to each holder of Debentures at his address appearing on the registration  books
of the Company and to any  Conversion  Agent other than the Trustee.  Subject to
the provisions of Section 




                                       49




8.1,  the  Trustee  and any  such  Conversion  Agent  shall  be under no duty or
responsibility  with  respect to any such  statement or  certificate,  except to
exhibit  the same  from time to time  during  reasonable  business  hours to any
Debentureholder desiring an inspection thereof.

                  IV.12.                    Responsibility of Trustee.

                  The  Trustee  shall  not at any  time  be  under  any  duty or
responsibility to any Debentureholder to determine whether any facts exist which
may require any  adjustment  of the  Conversion  Price,  or with  respect to the
nature or extent 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  shall not be  accountable  with  respect to the
registration,  listing,  validity or value (or the kind or amount) of any shares
of Common Stock or of any securities or property which may at any time be issued
or delivered  upon the  conversion  of any  Debenture;  and the Trustee makes no
representation  with respect  thereto.  The Trustee shall not be responsible for
any  failure of the  Company to make any cash  payment or to issue,  transfer or
deliver any shares of Common Stock or stock  certificates or other securities or
property upon the surrender of any  Debentures for the purpose of conversion or,
subject to the provisions of Section 8.1, to comply with any of the covenants to
be  complied  with by the  Company or to  fulfill  any of the  conditions  to be
fulfilled by the Company contained in this Article IV.


                                       V
                            COVENANTS OF THE COMPANY

The Company covenants as follows:

                  V.1                       Payment of Principal of and Interest
                                            on Debentures.

                  The  Company  shall duly and  punctually  pay,  or cause to be
paid, the principal of, premium,  if any, and interest on each of the Debentures
at the time and place 




                                       50




and in the manner provided in the Debentures and in this Indenture.

                  V.2.                      Taxes,   Assessments,   Governmental
                                            Charges and Certain Claims.

                  The  Company  shall pay and  discharge,  and shall  cause each
Subsidiary to pay and discharge  before the same become in default (a) all Taxes
imposed  upon it or its  income or profits or upon any of its assets or any part
thereof and (b) all lawful claims  against it for labor,  materials and supplies
or  otherwise,  which if unpaid  might  become a Lien on such assets or any part
thereof or otherwise, excluding any such Tax or claim, the amount, applicability
or  validity of which is being  timely  contested  in good faith by  appropriate
proceedings,  provided  the  Company  or such  Subsidiary,  as  applicable,  has
established on its books adequate reserves in respect thereof in accordance with
GAAP,  provided  that  payment of any such Tax or claim shall be made before any
property of the  Company or such  Subsidiary  is seized or sold in  satisfaction
thereof.

                  V.3.                      Reporting Requirements.

                  The Company shall deliver to:

                  (a) the Trustee, copies of information, documents and reports 
as described in, and in accordance with, Section 6.3; and

                  (b) the Trustee, promptly upon the Company obtaining knowledge
of (x) an Event of Default or Default, an Officer's  Certificate  specifying  in
reasonable detail the nature and period of existence thereof and what action the
Company  proposes to take with respect thereto or (y) a material  adverse change
in the financial condition or operation of the Company and its Subsidiaries,  an
Officer's  Certificate  setting forth in reasonable detail the nature and amount
of such change and the action the Company proposes to take with respect thereto.

                  V.4.                          Books and Records.



                                       51



                  The Company  shall,  and shall cause each of its  Subsidiaries
to, keep its books,  records and accounts in  accordance  with GAAP applied on a
basis consistent with preceding years.

                  V.5.                      Maintenance of Insurance.

                  The Company shall maintain, and shall cause each Subsidiary to
maintain,  with  financially  sound and  responsible  insurers,  insurance  with
respect to its properties and business against such casualties and contingencies
(including worker's compensation and public liability,  larceny, embezzlement or
other criminal misappropriation) and in such amounts as is customary in the case
of similarly situated corporations engaged in the same or similar businesses and
not less than the following amounts of coverage: comprehensive general liability
insurance  with  limits  of not less  than  $1,000,000  for  injury or death per
occurrence and $3,000,000 umbrella liability  coverage.  From time to time, upon
written  request by the  Trustee at  reasonable  intervals,  the  Company  shall
deliver a Schedule of  Insurance  specifying  the details of such  insurance  in
effect.



                                       52



                  V.6.                      Maintenance of Corporate  Existence,
                                            Properties, Etc.

                  Except to the extent  otherwise  permitted by this  Indenture,
the Company shall,  and shall cause each Subsidiary to, (i) do or cause or cause
to be done all things reasonably  necessary to preserve,  renew and keep in full
force and effect its corporate  existence and the patents,  trademarks,  service
marks, trade names, service names, copyrights, licenses, permits, franchises and
other rights, including distributorship and franchise agreements,  that continue
to be  useful  in some  material  respect  to its  business,  (ii) at all  times
maintain,  preserve and protect all of its patents,  trademarks,  service marks,
trade names, service names, copyrights,  licenses, permits, franchises and other
rights, including distributorship and franchise agreements,  that continue to be
useful in some  material  respect to its  business,  and (iii)  preserve all the
remainder  of its  property  useful in the conduct of its  business and keep the
same in good  repair,  working  order  and  condition  (ordinary  wear  and tear
excepted),  and from time to time,  make,  or cause to be made,  all needful and
proper repairs, renewals, replacements,  betterments and improvements thereto so
that the  business  carried  on in  connection  therewith  may be  properly  and
advantageously conducted at all times.

                  V.7.                     Type of Business.

                  The Company shall,  and shall cause each Subsidiary to, remain
in  substantially  the same businesses in which the Company and its Subsidiaries
are  engaged  as of the  date  of  this  Indenture  or in such  other  types  of
businesses that are reasonably related or incidental thereto.




                                       53




                  V.8.                      Merger or Sale of Assets.

                  Unless approved by a majority of the Independent  Directors of
the Board of  Directors  of the  Company,  the Company  shall not, and shall not
permit any Subsidiary to, merge,  consolidate or exchange  shares with any other
corporation,  or sell,  lease or  transfer  or  otherwise  dispose of any of its
assets to any Person, other than sales, leases,  transfers or other dispositions
of inventory in the ordinary course of business or particular  items of obsolete
or unnecessary equipment in the ordinary course of business, except:

                  (a) any Subsidiary  may merge or consolidate  with the Company
(provided  that  Company  shall  be  the  surviving   corporation  in  any  such
transaction) or with any one or more other Subsidiaries;

                  (b) any  Subsidiary  may sell,  lease,  transfer or  otherwise
dispose of all or any  substantial  part of its assets to the Company or another
Subsidiary; and

                  (c) as otherwise expressly permitted by this Indenture.

                   V.9.                     Investments.

                  The Company shall not, and shall not permit any Subsidiary to,
make or have outstanding any loan or advance to, or own, purchase or acquire any
obligations (other than accounts receivable  generated in the ordinary course of
business) or Securities of, or any interest in, or make any capital contribution
to or acquire  all or  substantially  all of the  assets  of, any other  Person,
except that the Company and any Subsidiary  may: (i) acquire and own obligations
or Securities  received in settlement of debt created in the ordinary  course of
business that is owing to the Company or such Subsidiary;  (ii) own, purchase or
acquire (A) commercial  paper,  banker's  acceptances or certificates of deposit
issued by any United States commercial bank or enter into repurchase  agreements
with such banks with respect to  obligations  described in this clause (ii), (B)
commercial  paper of  reputable  issuers




                                       54




located in the United States,  which obligations have a short-term rating of A-1
or better by Standard & Poor's  Corporation or P-1 by Moody's Investors Service,
Inc., (C) obligations of the United States government or any agency thereof, (D)
obligations guaranteed by the United States government or any agency thereof, in
each case such  obligations  described  in this clause (ii) to be due within one
year and one day from the date of acquisition,  and (E) shares or obligations of
mutual  funds or money  market funds that invest  solely in  obligations  of the
types  described   earlier  in  this  clause  (ii);  (iii)  endorse   negotiable
instruments for collection or deposit in the ordinary  course of business;  (iv)
own stock of  Subsidiaries;  and (v) acquire all or any portion of the assets or
Securities of any other Person if such  acquisition is approved by a majority of
the Independent Directors of the Board of Directors of the Company.

                  V.10.                     Transactions with Affiliates.

                  The Company shall not, and shall not permit any Subsidiary to,
directly or indirectly  purchase,  acquire or lease any property  from, or sell,
transfer or lease any  property  to, or  otherwise  deal with,  in the  ordinary
course of  business  or  otherwise,  any  Affiliate,  except upon terms not less
favorable to Company or the Subsidiary  than if the Affiliate  relationship  did
not  exist and  provided  the  transaction  is  approved  by a  majority  of the
Independent Directors of the Board of Directors of the Company.

                  V.11.                     Use of Proceeds.

                  The  Company  shall  use the  proceeds  from  the  sale of the
Debentures  as  specified  in the  Offering  Memorandum  pursuant  to which  the
Debentures were offered for sale.



                                       55



                  V.12.                     Dividends, Etc.

                  The  Company  shall not  declare  or pay any  dividend  on its
capital  stock  (other than stock  dividends)  or make any payment to  purchase,
redeem,  retire or acquire any of its capital stock or the subordinated  debt of
the Company or any option,  warrant or other right to acquire such capital stock
unless, on the date immediately  following any such payment, the Company's total
stockholders'  equity, as would be reflected on a consolidated  balance sheet of
the Company  prepared in accordance  with GAAP,  equals or exceeds the aggregate
principal  amount of Debentures then  outstanding  (converted into U.S.  dollars
based upon the Noon Buying Rate in effect on such date of calculation).

                  V.13                      Limitation on Liens.

                  Except for Liens  arising in the ordinary  course of business,
if the Company or any  Subsidiary  shall at any time  create,  incur,  assume or
permit to exist any lien on any  property  or asset of the Company or any income
or profits therefrom,  then the Company shall,  prior to or simultaneously  with
the creation, incurrence,  assumption or commencement of existence of such lien,
secure or cause to be secured the due and punctual  payment of the  principal of
and interest on the Debentures  equally and ratably with any and all obligations
and indebtedness  secured by such lien;  provided,  however,  that this covenant
shall not apply in the case of Liens to secure Senior Indebtedness.

                  V.14                      Compliance with Laws, Etc.

                  The  Company  will   comply,   and  will  cause  each  of  its
Subsidiaries to comply, in all material  respects,  with all Requirements of Law
and Contractual  Obligations  applicable to or binding upon any of them,  except
where the failure to so comply would not have a material  adverse  effect on the
financial condition or operations of the Company and its Subsidiaries taken as a
whole.




                                       56



                                       VI

DEBENTUREHOLDER'S LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE

                  VI.1.                     Company    to    Furnish     Trustee
                                            Information    as   to   Names   and
                                            Addresses of Debentureholders.

                  The  Company  covenants  and agrees  that it shall  furnish or
cause to be furnished to the Trustee quarterly, promptly after each Record Date,
a list,  in such form as the Trustee may  reasonably  require,  of the names and
addresses of the holders of the  Debentures as of such Record Date.  The Company
also  covenants and agrees that it shall furnish or cause to be furnished to the
Trustee, at such other times as the Trustee may request in writing, upon receipt
by the Company of any such request, a list of similar form and content.  No such
list shall be  required  to be  furnished  as long as the  Trustee  shall be the
Registrar.

                  VI.2.                     Trustee to Preserve  Information  as
                                            to   Names    and    Addresses    of
                                            Debentureholders.

                  (a)The Trustee shall preserve,  in  as  current  a form  as is
reasonably  practicable,  all  information  as to the names and addresses of the
holders of  Debentures  contained  in the most  recent list  furnished  to it as
provided in Section 6.1 or  received  by it in the  capacity of Paying  Agent or
Registrar (if so acting).

                  The Trustee may destroy any list  furnished  to it as provided
in Section 6.1 upon receipt of a new list so furnished.

                  (b)In case three or more  holders of  Debentures  (hereinafter
referred to as "applicants") apply in writing to the Trustee, and furnish to the
Trustee  reasonable proof that each applicant has owned a Debenture for a period
of at  least  six  months  preceding  the  date of such  application,  and  such
application  states that the appli-



                                       57




cants desire to  communicate  with other holders of  Debentures  with respect to
their rights under this Indenture or under the Debentures, and is accompanied by
a copy of the form of proxy or other communication which such applicants propose
to transmit,  then the Trustee shall within five Business Days after the receipt
of such application, at its election, either

                             (i)  afford  to  such  applicants   access  to  the
                  information preserved at the time by the Trustee in accordance
                  with Section 6.2(a), or

                             (ii) inform such  applicants as to the  approximate
                  number of holders of Debentures and as to the approximate cost
                  of mailing to such Debentureholders the form of proxy or other
                  communications, if any, specified in such application.

                  If the  Trustee  shall  elect  not to afford  such  applicants
access to such information,  the Trustee shall, upon the written request of such
applicants,  mail to each Debentureholder  whose name and address appears in the
information  preserved  at the time by the Trustee in  accordance  with  Section
6.2(a), a copy of the form of proxy or other communication which is specified in
such request,  with reasonable  promptness  after a tender to the Trustee of the
material to be mailed and of  payment,  or  provision  for the  payment,  of the
reasonable  expenses of mailing,  unless within five days after such tender, the
Trustee shall mail to such  applicants,  and file with the Commission,  together
with a copy of the  material  to be mailed,  a written  statement  to the effect
that, in the opinion of the Trustee,  such mailing would be contrary to the best
interests of the holders of Debentures,  or, in the Opinion of Counsel, would be
in violation of applicable  law. Such written  statement shall specify the basis
of such opinion.  If said Commission,  after  opportunity for a hearing upon the
objections  specified in the written  statement  so filed,  shall enter an order
refusing to sustain any of such  objections,  or if, after the entry of an order
sustaining one or more of such  objections,  said Commission  shall find,  after
notice and  opportunity  for hearing,  that all the objections so sustained have
been met and shall




                                       58




enter an order so  declaring,  the Trustee shall mail copies of such material to
all such  Debentureholders  with reasonable  promptness  after the entry of such
order and the renewal of such tender; otherwise the Trustee shall be relieved of
any obligation or duty to such applicants respecting their application.

                  (c) Each and every holder of the Debentures,  by receiving and
holding the same,  agrees with the  Company  and the  Trustee  that  neither the
Company nor the Trustee nor any Paying Agent shall be held accountable by reason
of the  disclosure of any such  information as to the names and addresses of the
holders of  Debentures  in  accordance  with Section  6.2(b),  regardless of the
source from which such  information was derived,  and that the Trustee shall not
be held accountable by reason of mailing any material pursuant to a request made
under Section 6.2(b).

                   VI.3.                    Reports from the Company.

                  (a)Annual  and  Other  Reports  to be  Filed by  Company  with
Trustee.  The Company  covenants  and agrees to file with the Trustee  within 15
days after the date by which the  Company is  required to file the same with the
Commission  (including  any extension of time to which the Company is entitled),
copies of the annual reports and of the information, documents and other reports
(or copies of such portions of any of the foregoing as said  Commission may from
time to time by rules  and  regulations  prescribe)  which  the  Company  may be
required to file with said Commission pursuant to Section 13 or Section 15(d) of
the  Exchange  Act;  or, if the  Company is not  required  to file  information,
documents or reports pursuant to either of such sections,  then to file with the
Trustee and said Commission, in accordance with rules and regulations prescribed
from time to time by said  Commission,  such of the  supplementary  and periodic
information,  documents and reports which may be required pursuant to Section 13
of the Exchange Act in respect of a security listed and registered on a national
securities  exchange  as may be  prescribed  from time to time in such rules and
regulations.

                  (b)  Additional  Information  and  Reports  to be  Filed  with
Trustee and Securities and Exchange Commission.




                                       59




The Company covenants and agrees to file with the Trustee and the Commission, in
accordance with the rules and  regulations  prescribed from time to time by said
Commission,  such additional information,  documents and reports with respect to
compliance by the Company with the conditions and covenants provided for in this
Indenture as may be required from time to time by such rules and regulations.

                  (C) Summaries of Information  and Reports to be Transmitted by
Company  to  Debentureholders.  The  Company  covenants  and  agrees,  as may be
required  by  rules  and  regulations  prescribed  from  time  to  time  by  the
Commission,  to cause to be  transmitted  to the  holders of  Debentures  within
thirty days after the filing thereof with the Trustee,  in the manner and to the
extent  provided in Section  6.4(c),  the annual  reports  specified  in Section
6.3(a).

                  VI.4.                     Reports from the Trustee.

                  (a) Trustee to Transmit Annual Report to Debentureholders.  On
or before April 30, 1997,  and on or before April 30, in every year  thereafter,
as long as any Debentures are outstanding hereunder,  the Trustee shall transmit
to the Debentureholders, as hereinafter in this Section provided, a brief report
dated as of the preceding  December 31, that  complies with Trust  Indenture Act
Section 313(a).  The Trustee also shall comply with Trust Indenture Act Sections
313(b) and 313(c).

                  (b)   Trustee  to   Transmit   Certain   Further   Reports  to
Debentureholders.  The  Trustee  shall  transmit  to  the  Debentureholders,  as
hereinafter provided, a brief report with respect to the character and amount of
any  advances  (and  if  the  Trustee  elects  so to  state,  the  circumstances
surrounding  the making  thereof)  made by the Trustee as such since the date of
the last report transmitted pursuant to the provisions of subsection (a) of this
Section  (or if no such  report has yet been so  transmitted,  since the date of
execution of this  Indenture),  for the  reimbursement of which it claims or may
claim a lien or charge prior to that of the Debentures on property or funds held
or collected by it as Trustee, and which it has not previously reported pursuant
to this subsection, if such ad-




                                       60




vances  remaining  unpaid  at any time  aggregate  more than ten per cent of the
principal  amount of  Debentures  outstanding  at such time,  such  report to be
transmitted within ninety days after such time.

                  (c)  Debentureholders  Reports  to  be  Mailed  to  Registered
Holders.  Reports  pursuant to this Section 6.4 shall be  transmitted by mail to
all registered holders of Debentures, as the names and addresses of such holders
appear upon the registration books maintained by the Debenture Registrar.

                  (d) Copies of Reports to be Filed with Stock Exchanges. A copy
of each such report shall, at the time of such transmission to Debentureholders,
be filed by the Trustee with each stock  exchange upon which the  Debentures are
listed.  The  Company  agrees to notify the Trustee  when and as the  Debentures
become listed on any stock exchange.

                                      VII

                  REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS
                               ON EVENT OF DEFAULT

                  VII.1.                    Events of Default Defined.

                  In case one or more of the  following  Events of Default shall
have occurred and be continuing, that is to say:

                  (a) default for thirty days in the due and punctual payment of
any  installment  of interest  upon any of the  Debentures  as and when the same
shall  become due and payable,  whether  such default  arises as a result of the
provisions of Article XIII or otherwise; or

                  (b) default in the due and punctual  payment of the  principal
of, and premium,  if any, on, any of the  Debentures  as and when the same shall
become due and payable either at maturity,  upon  redemption,  by declaration as
authorized by this  Indenture,  or otherwise,  whether such default  arises as a
result of the provisions of Article XIII or otherwise; or



                                       61



                  (c)  failure  on the part of the  Company  duly to  observe or
perform any of the  covenants  or  agreements  on the part of the Company in the
Debentures or in this Indenture,  not otherwise referred to in another paragraph
of this Section 7.1,  after the date on which  written  notice of such  failure,
requiring  the same to be remedied,  shall have been given to the Company by the
Trustee or to the  Trustee  and the  Company  by the  Holders of at least 25% in
aggregate principal amount of the then outstanding Debentures; or

                  (d) a  material  default  shall  occur  under  (i)  any  bond,
debenture,  note or other  evidence of  Indebtedness  for money  borrowed by the
Company  or a  Subsidiary  or  (ii)  any  mortgage,  indenture,  credit  or loan
agreement or other  instrument under which there may be issued or by which there
may be secured or evidenced any  Indebtedness  for money borrowed by the Company
or  such  Subsidiary   (including  Capital  Lease  Obligations),   whether  such
Indebtedness  now exists or shall  hereafter  be created,  which  default  shall
constitute a failure to pay any portion of the  principal of,  premium,  if any,
and interest on such  Indebtedness  when due and payable after the expiration of
any applicable  grace period with respect  thereto,  or a default shall occur in
the  performance  of any  other  covenant  or  condition  contained  in any such
evidence of  Indebtedness  or mortgage,  indenture,  credit or loan agreement or
other  instrument  if the effect of such  default is to  entitle  (after  giving
effect to any  applicable  notice or applicable  cure rights) the holder of such
evidence  of  indebtedness  or  creditor  (or a  trustee  for  such  holders  or
creditors)  to then  cause such  Indebtedness  to become due prior to its stated
maturity,  or if such default shall have resulted in such indebtedness  becoming
or being declared due and payable prior to the date on which it would  otherwise
have become due and payable,  without such Indebtedness  having been discharged;
or

                  (e) a final  judgment  or final  judgments  for the payment of
money are  entered by a court or courts of  competent  jurisdiction  against the
Company and/or any Subsidiary and such judgment or judgments  remain unstayed or
undischarged for a period of sixty days, provided that the aggregate of all such
judgments exceeds $3,000,000; or



                                       62




                  (f) the Company or a Subsidiary shall (1) apply for or consent
to  the  appointment  of or  the  taking  of  possession  of  it by a  receiver,
custodian, trustee or liquidator of the Company or any such Subsidiary or of all
or a substantial part of the property of the Company or any such Subsidiary, (2)
admit in writing  the  inability  of the Company or any such  Subsidiary,  or be
generally  unable, to pay its debts as such debts become due, (3) make a general
assignment for the benefit of its creditors, (4) commence a voluntary case under
the Bankruptcy Code (as now or hereafter in effect), (5) file a petition seeking
to  take  advantage  of  any  other  law  relating  to  bankruptcy,  insolvency,
reorganization,  winding-up,  or composition or adjustment of debts, (6) fail to
controvert in a timely or  appropriate  manner,  or acquiesce in writing to, any
petition filed against such Person in an  involuntary  case under the Bankruptcy
Code or other  similar  law, or (7) take any action for the purpose of effecting
any of the foregoing; or

                  (g) a  proceeding  or case  shall be  commenced,  without  the
application  of  the  Company  or any  Subsidiary,  in any  court  of  competent
jurisdiction,   seeking  (1)  the  liquidation,   reorganization,   dissolution,
winding-up or  composition or  readjustment  of debts of the Company or any such
Subsidiary, (2) the appointment of a trustee, receiver, custodian, liquidator or
the like of the Company or any such Subsidiary or of all or any substantial part
of the assets of the Company or any such  Subsidiary,  or (3) similar  relief in
respect  of the  Company  or any  such  Subsidiary  under  any law  relating  to
bankruptcy, insolvency, reorganization, winding-up or composition and adjustment
of debts, and such proceeding or case shall continue  undismissed,  or an order,
judgment or decree  approving or ordering any of the foregoing  shall be entered
and  continue  in  effect,  for a period  of 60 days from  commencement  of such
proceeding or case or the date of such order,  judgment or decree,  or any order
for relief  against  the Company or any such  Subsidiary  shall be entered in an
involuntary case or proceeding under the Bankruptcy Code; or



                                       63




                  (h) any provision of any Debenture or this Indenture  shall at
any time for any reason  cease to be valid and  binding in  accordance  with its
terms on the Company, or the validity, enforceability, or priority thereof shall
be contested by the Company,  or the Company  shall  terminate or repudiate  (or
attempt to terminate or repudiate) any Debenture or this Indenture; or

                  (i) any  representation,  warranty  or  statement  made by the
Company  in any  certificate,  report,  financial  statement  or other  document
furnished to the Trustee or any Debentureholder  shall be false or misleading in
any material  respect on the date as of which made or deemed  made;  then and in
each and every such case  (other than an Event of Default  specified  in Section
7.1(g) and (h)),  unless the principal of all the Debentures  shall have already
become due and payable, either the Trustee or the holders of at least a majority
in aggregate principal amount of the Debentures then outstanding  hereunder,  by
notice  in  writing  to  the  Company  (and  to  the  Trustee  if  given  by the
Debentureholders),  may declare the principal of and interest accrued on all the
Debentures then outstanding 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 said  Debentures  contained to the contrary
notwithstanding.  If an Event of Default  specified  in  Sections  7.1(g) or (h)
occurs, all unpaid principal and interest on all the Debentures then outstanding
shall ipso facto  become and shall be  immediately  due and payable  without any
declaration  or other act on the part of the  Trustee  or any  Debentureholders.
This  provision  is  subject  to the  condition  that if, at any time  after the
principal of and interest  accrued on the Debentures shall have been so declared
due and payable,  but before the Debentures shall have become due by their terms
and before any  judgment  or decree for the payment of the moneys due shall have
been obtained or entered as hereinafter provided, the Company shall pay or shall
deposit  with  the  Trustee  a sum  of  money  sufficient  to  pay  all  matured
installments  of  interest  upon all the  Debentures  then  outstanding  and the
principal of any and all Debentures then  outstanding that shall have 




                                       64




become due otherwise than by declaration (with interest upon such principal and,
to the extent that payment of such interest is enforceable under applicable law,
upon overdue  installments  of interest,  at the rate per annum expressed in all
Debentures  to the date of such payment or deposit)  and all amounts  payable to
the Trustee  under  Section 8.6, and any and all defaults  under the  Indenture,
other  than  the  nonpayment  of  principal  and  interest  on  Debentures  then
outstanding  that  shall not have  become  due by their  terms,  shall have been
remedied or provision  shall have been made therefor to the  satisfaction of the
Trustee,  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 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 shall impair any right
consequent thereon.

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




                                       65




                  VII.2.                    Covenant   of   Company  to  Pay  to
                                            Trustee    Whole   Amount   Due   on
                                            Debentures  on Default in Payment of
                                            Interest or Principal.

                  The Company  covenants  that (1) in case default shall be made
in the payment of any installment of interest on any of the  Debentures,  as and
when the  same  shall  become  due and  payable,  and such  default  shall  have
continued  for a period of ten days, or (2) in case default shall be made in the
payment  of the  principal  of any of the  Debentures  when the same  shall have
become  due  and  payable,  whether  upon  maturity  of the  Debentures  or upon
redemption or upon  declaration  as  authorized by this  Indenture or otherwise,
then, upon demand of the Trustee,  the Company shall pay in cash to the Trustee,
for the benefit of the holders of the  Debentures  then  outstanding,  the whole
amount that then shall have become due and  payable on all such  Debentures  for
principal  or  interest,  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  overdue  installments  of  interest at the rate per annum
expressed in the Debentures;  and, in addition  thereto,  such further amount as
shall be  sufficient  to cover the costs and  expenses  of  collection,  and all
amounts payable to the Trustee under Section 8.6.

                  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 action or proceedings at
law or in  equity  for the  collection  of the sums so due and  unpaid,  and may
prosecute any such action or  proceedings  to judgment or final decree,  and may
enforce any such  judgment or final decree  against the Company or other obligor
upon the  Debentures  and  collect  in the  manner  provided  and to the  extent
permitted  by law out of  property  of the  Company  or other  obligor  upon the
Debentures wherever situated the moneys adjudged or decreed to be payable.




                                       66



                  The Trustee shall be entitled and empowered, either in its own
name or as trustee of an express trust, or as  attorney-in-fact  for the holders
of the Debentures,  or in any one or more of such capacities, to file such proof
of debt, amendment of proof of debt, claim, petition or other document as may be
necessary  or  advisable  in order to have the  claims  of the  Trustee  and the
holders  of the  Debentures  allowed  in any  equity  receivership,  insolvency,
bankruptcy,   liquidation,   readjustment,   reorganization  or  other  judicial
proceedings  relative to the Company or any other  obligor on the  Debentures or
their creditors,  or affecting their property. The Trustee is hereby irrevocably
appointed (and the successive respective holders of the Debentures by taking and
holding the same shall be conclusively  deemed to have so appointed the Trustee)
the  true  and  lawful   attorney-in-fact  of  the  respective  holders  of  the
Debentures,  with  authority  to make  and file in the  respective  names of the
holders of the  Debentures  or on behalf of the holders of the  Debentures  as a
class,  subject to  deduction  from any such claims of the amounts of any claims
filed by any of the  holders of the  Debentures  themselves,  any proof of debt,
amendment  of proof of  debt,  claim,  petition  or other  document  in any such
proceedings and to receive payment of any sums becoming distributable on account
thereof,  and to execute  any such  other  papers  and  documents  and to do and
perform  any and all such acts and things  for and on behalf of such  holders of
the Debentures as may be necessary or advisable in the opinion of the Trustee in
order to have the  respective  claims of the  Trustee  and of the holders of the
Debentures  against the Company or its property  allowed in any such proceeding,
and to receive  payment of or on account of such claims;  provided  that nothing
contained in this Indenture  shall be deemed to give to the Trustee any right to
accept or consent to any plan of  reorganization  or  otherwise by action of any
character in any such  proceeding to waive or change in any way any right of any
Debentureholder.

                  All  right  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 




                                       67




its own name as trustee of an express trust,  and any recovery of judgment shall
be for the  ratable  benefit of the  holders of the  Debentures,  subject to the
provisions of this  Indenture.  In any  proceedings  brought by the Trustee (and
also any proceedings in which a declaratory judgment of a court may be sought as
to the  interpretation  or construction  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.

                  VII.3.                    Application  of Moneys  Collected by
                                            Trustee.

                  Subject to the  provisions of Article XIII hereof,  any moneys
collected by the Trustee, pursuant to Section 7.2, shall be applied in the order
following,  at the date or dates fixed by the Trustee,  upon presentation of the
several  Debentures,  and the notation thereon of the payment, if only partially
paid, and upon surrender thereof if fully paid:

                  First: To the payment of costs and expenses of collection, and
                  of all amounts payable to the Trustee under Section 8.6;

                  Second:  In case the principal of the  outstanding  Debentures
                  shall not have  become  due and be unpaid,  to the  payment of
                  defaulted  interest  on the  Debentures,  in the  order of the
                  maturity of the  installments of such interest,  with interest
                  (so  far as may  be  lawful  and if  such  interest  has  been
                  collected by the Trustee) upon the defaulted  installments  of
                  interest at the rate per annum  expressed  in the  Debentures,
                  such  payments  to be made  ratably  to the  persons  entitled
                  thereto, without discrimination or preference;

                  Third:  In case the  principal of the  outstanding  Debentures
                  shall have become due, by  declaration  as  authorized by this
                  Indenture  or  otherwise,  to the  payment of  Debentures  for
                  principal (and




                                       68




                  premium,  if any) and  interest,  with interest on the overdue
                  principal  and  premium,  if any) and (so far as may be lawful
                  and if such  interest has been  collected by the Trustee) upon
                  overdue  installments  of  interest  at  the  rate  per  annum
                  expressed in the Debentures;  and in case such moneys shall be
                  insufficient to pay in full the whole amount so due and unpaid
                  upon the  Debentures,  then to the  payment of such  principal
                  (and  premium,  if any) and  interest,  without  preference or
                  priority of [principal]  (and premium,  if any) over interest,
                  or of interest over principal (and premium,  if any) 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 premium,  if
                  any) and accrued and unpaid interest; and

                  Fourth:  To the  payment  of the  remainder,  if  any,  to the
                  Company,  its  successors or assigns,  or to whomsoever may be
                  lawfully  entitled  to  receive  the  same,  or as a court  of
                  competent jurisdiction may direct.





                                       69



  
                  VII.4.                    Limitation  on Suits by  Holders  of
                                            Debentures.




                                       70




                  Except as otherwise expressly provided in this Section 7.4, no
holder of any Debenture  shall have any right by virtue of or by availing itself
of any provision of this Indenture or otherwise to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this  Indenture,
for the appointment of a receiver or trustee,  for the execution of any trust or
power  hereof,  or for any  other  remedy  hereunder,  unless  (a)  such  holder
previously  shall have given to the Trustee written notice of default and of the
continuance  thereof,  as  hereinbefore  provided,  (b)  the  holders  of 25% in
aggregate  principal amount of the Debentures then  outstanding  shall have made
written  request upon the Trustee to proceed to exercise the power  hereinbefore
granted or to  institute  such  action,  suit or  proceeding  in its own name as
Trustee  hereunder,  (c) such  holders  shall have  offered to the Trustee  such
reasonable  indemnity and security therefor as it may require against the costs,
expenses and liabilities to be incurred therein or thereby,  and (d) the Trustee
within a  reasonable  time  (which in no event  shall be less than sixty  days])
after its receipt of such notice,  request and offer of indemnity  and security,
shall have failed to proceed to exercise  such powers or to  institute  any such
action,  suit or  proceeding;  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  itself
of any provision of this Indenture to affect, disturb or prejudice the rights of
the  holders  of any  other of such  Debentures,  or 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 that all
proceedings in law or in equity shall be  instituted,  had and maintained in the
manner herein provided for the equal,  ratable and common benefit of all holders
of  Debentures.  For the  protection  and  enforcement of the provisions of this
Section 7.4, 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, nothing
contained  herein  shall  affect or impair  





                                       71




the right,  which is  absolute  and  unconditional,  of any  Debentureholder  to
receive,  and to institute  suit to enforce the payment of the  principal of and
interest on his  Debentures  at and after the  respective  due dates  (including
maturity by call for a redemption,  or by declaration pursuant to this Indenture
that has not been rescinded or annulled pursuant to Section 7.1 or otherwise) of
such  principal or interest,  or the  obligation  of the Company,  which is also
absolute and unconditional,  to pay the principal of and interest on each of the
Debentures  to the  respective  holders  thereof  at the times and places in the
Debentures expressed.

                  VII.5.                    Delay or  Omission  in  Exercise  of
                                            Rights Not Waiver of Default.

                  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 Event of Default
shall impair any such right or power or shall be construed to be a waiver of any
such default or an  acquiescence  therein;  and,  subject to the  provisions  of
Section  7.4,  every power and remedy given by this Article VII 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.

                  All  powers  and  remedies  given by this  Article  VII to the
Trustee or to the  Debentureholders  shall,  to the extent  permitted by law, be
deemed  cumulative  and not  exclusive of any thereof or of any other powers and
remedies  available  to  the  Trustee  or  the  Debentureholders,   by  judicial
proceedings  or  otherwise,  to enforce the  performance  or  observance  of the
covenants and agreements contained in this Indenture.

                  VII.6.                    Rights of  Holders  of  Majority  in
                                            Principal  Amount of  Debentures  to
                                            Direct Trustee and Waive Defaults.

                  Subject to the provisions of Sections 8.1 and 8.2, the Holders
of a  majority  in  aggregate  principal  amount of the  Debentures  at the time
outstanding,  deter-





                                       72




mined in accordance  with Section 9.4,  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 such direction  shall be in accordance  with law and the provisions of this
Indenture,  and the Trustee shall have the right,  subject to the  provisions of
Section 8.1, to decline to follow any such direction if the Trustee shall, being
advised by an opinion of counsel,  determine that the action so directed may not
be lawfully  taken,  or if the  Trustee in good faith  shall,  by a  Responsible
Officer of the  Trustee,  determine  that the  proceeding  so directed  would be
illegal or involve it in personal liability or that the action so directed would
be unduly  prejudicial  to the  Holders of  Debentures  not taking  part in such
direction;  and provided,  further,  that nothing in this Indenture shall impair
the right of the  Trustee to take any action  deemed  proper by the  Trustee and
that is not  inconsistent  with such direction by the Holders of the Debentures.
Prior to a declaration  that the  Debentures  are due and payable as provided in
Section  7.1,  the Holders of a majority in  aggregate  principal  amount of the
Debentures at the time  outstanding,  determined in accordance with Section 9.4,
may, on behalf of the Holders of all of the  Debentures,  waive any past default
hereunder and its consequences, except a default in the payment of the principal
of or interest on any of the  Debentures.  In the case of any such  waiver,  the
Company,  the  Trustee and the  Holders of the  Debentures  shall be restored to
their former positions and rights  hereunder,  respectively;  but no such waiver
shall extend to any  subsequent or other default or impair any right  consequent
thereon.

                  VII.7.                    Trustee to Give  Notice of  Defaults
                                            Known  to it,  but May  Withhold  in
                                            Certain Circumstances.

                  The Trustee shall give to the  Debentureholders  notice of all
defaults  within 90 days of same  becoming  known to the  Trustee,  unless  such
defaults  shall have been  cured  before  the  giving of such  notice  (the term
"defaults"  for the purposes of this  Section 7.7 being the events  specified in
Section 7.1 that, upon the passage of time or the giving of notice or both would
constitute 




                                       73





Events of Default; provided, however, that, except in the case of default in the
payment of the  principal  of (or  premium,  if any) or  interest  on any of the
Debentures,  the Trustee shall be protected in withholding such notice if and so
long as the board of directors, the executive committee, or a trust committee of
directors and/or responsible  officers,  of the Trustee in good faith determines
that the withholding of such notice is the interest of Debentureholders.

                  VII.8.                    Requirement of an Undertaking to Pay
                                            Costs   in   Certain   Suits   Under
                                            Indenture or Against Trustee.

                  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 the  posting of
such surety bond therefor as such court may require), and that such court may in
its discretion assess reasonable costs,  including  reasonable  attorney's fees,
against any party litigant in such suit, having due regard to claims or defenses
made by such party  litigant;  provided that the  provisions of this Section 7.8
shall not  apply (i) to any suit  instituted  by the  Trustee,  (ii) to any suit
instituted by any Debentureholder, or group of Debentureholders,  holding in the
aggregate more than ten per cent in aggregate principal amount of the Debentures
outstanding,  or (iii) 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.

                  VII.9.                     Company Covenants.

                  The Company  covenants  (to the extent that it may lawfully do
so) that it shall not at any time insist upon, or plead,  any manner  whatsoever
claim or take the benefit or advantage  of, any stay or  extension  law wherever
enacted,  now or at any time hereafter in force,  which may af-




                                       74



fect the covenants or the performance of this Indenture; and the Company (to the
extent  that it may  lawfully  do so) hereby  expressly  waives  all  benefit or
advantage  of any such law,  and  covenants  that it shall not 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 had been
enacted.





                             CONCERNING THE TRUSTEE

                  VIII.1. Duties of Trustee Prior to and After Event of Default.

                  The Trustee,  prior to the  occurrence  of an Event of Default
and  after  the  curing  of all  Events  of  Default  which  may have  occurred,
undertakes to perform such duties and only such duties as are  specifically  set
forth in this Indenture. In case an Event of Default has occurred (which has not
been cured or waived) the Trustee  shall  exercise such of the rights and powers
vested  in it by this  Indenture,  and use the same  degree of care and skill in
their exercise,  as a prudent man would exercise or use under the  circumstances
in the conduct of his own affairs.

                  The Trustee,  upon receipt of all  resolutions,  certificates,
statements,  opinions, reports, documents, orders or other instruments furnished
to the Trustee  pursuant to any provision of this Indenture,  shall examine them
to determine whether they conform to the requirements of this Indenture.

                  No provision of this  Indenture  shall be construed to relieve
the Trustee from  liability  for its own  negligent  action,  its own  negligent
failure to act, or its own wilful misconduct, except that

                  (a) prior to the  occurrence  of an Event of Default and after
          the  curing or waiving  of all such  Events of Default  which may have
          occurred:

                            (i) the duties and  obligations of the Trustee shall
                  be  determined  solely  by  the  ex-


                                       75


                  press provisions of this Indenture,  and the Trustee shall not
                  be  liable  except  for the  performance  of such  duties  and
                  obligations as are  specifically  set forth in this Indenture,
                  and no implied  covenants  or  obligations  shall be read into
                  this Indenture against the Trustee; and

                            (ii) subject to the third  paragraph of this Section
                  8.1, in the  absence of bad faith on the part of the  Trustee,
                  the  Trustee  may  conclusively  rely,  as to the truth of the
                  statements  and  the  correctness  of the  opinions  expressed
                  therein,  upon any  certificates or opinions  furnished to the
                  Trustee and conforming to the requirements of this Indenture;

                  (b) the Trustee  shall not be liable for any error of judgment
          made in good faith by a responsible officer or responsible officers of
          the Trustee,  unless it shall be proved that the Trustee was negligent
          in ascertaining the pertinent facts; and

                  (c) the Trustee shall not be liable with respect to any action
          taken or omitted to be taken by it in good  faith in  accordance  with
          the  direction of the Holders of not less than a majority in principal
          amount  of the  Debentures  at the  time  outstanding  (determined  as
          provided in Section  9.4)  relating  to the time,  method and place of
          conducting any proceeding for any remedy available to the Trustee,  or
          exercising any trust or power  conferred upon the Trustee,  under this
          Indenture.

                  No provision of this  Indenture  shall  require the Trustee to
expend or risk its own funds or otherwise  incur any financial  liability in the
performance  of any of its duties  hereunder,  or in the  exercise of any of its
rights or powers,  if there are reasonable  grounds for believing that repayment
of such funds or adequate indemnity (and security therefor) against such risk or
liability is not reasonably assured to it.

                  VIII.2. Rights of Trustee.



                                       76


                  Except as otherwise provided in Section 8.1:

                  (a) In the  absence  of bad faith on the part of the  Trustee,
          the Trustee may rely and shall be  protected  in acting or  refraining
          from acting upon any resolution, Officers' Certificate, certificate of
          independent public accountants,  or any other certificate,  statement,
          instrument,   opinion,   report,  notice,  request,   consent,  order,
          appraisal,  bond,  debenture or other paper or document believed by it
          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  instrument
          signed in the name of the Company by the President or a Vice President
          and the  Secretary  or an Assistant  Secretary or the  Treasurer or an
          Assistant  Treasurer  (unless  other  evidence  in respect  thereof be
          herein  specifically  prescribed);  and any resolution of the Board of
          Directors  of the  Company 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,  and an opinion of
          counsel  shall be full and complete  authorization  and  protection in
          respect of any action  taken or suffered or omitted by it hereunder in
          good faith and in accordance with such Opinion of Counsel;

                  (d) The Trustee  shall be under no  obligation to exercise any
          of the trusts or powers vested in it by this Indenture at the request,
          order or  direction  of any of the  Debentureholders,  pursuant to the
          provisions of this Indenture,  unless such Debentureholders shall have
          offered to the Trustee  reasonable  security and indemnity against the
          cost,  expenses  and  liabilities  which may be  incurred  therein  or
          thereby;

                  (e) The  Trustee  shall not be liable for any action  taken or
          omitted by it in good faith and  believed  by it to be  authorized  or
          within the  discre-

                                       77



          tion or rights or powers  conferred  upon it by this Indenture;

                  (f) Prior to learning of the occurrence of an Event of Default
          hereunder  and after the cure or waiver of all Events of Default which
          may  have  occurred,  the  Trustee  shall  not be  bound  to make  any
          investigation  into the facts or  matters  stated  in any  resolution,
          certificate,  statement, instrument, opinion, report, notice, request,
          consent, order, approval,  bond, debenture, or other paper or document
          unless requested in writing so to do by the Holders of not less than a
          majority  in  aggregate   principal  amount  of  the  Debentures  then
          outstanding;   provided,   however,  that  if  the  payment  within  a
          reasonable  time to the Trustee of the costs,  expenses or liabilities
          likely to be incurred by it in the making of such investigation is, in
          the opinion of the Trustee,  not reasonably  assured to the Trustee by
          the  security  afforded  to it by the  terms  of this  Indenture,  the
          Trustee may  require  reasonable  indemnity  (and  security  therefor)
          against such expense or liability as a condition to so proceeding. The
          reasonable  expense of every such  investigation  shall be paid by the
          Company  or, if paid by the  Trustee,  shall be repaid by the  Company
          upon demand; and

                  (g) 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.

                  VIII.3.  Trustee Not Liable for  Recitals in  Indenture  or in
                           Debentures.
                
                  The recitals  contained  herein and in the  Debentures  (other
than the certificate of  authentication on the Debentures) shall be taken as the
statements of the Company,  and the Trustee  assumes no  responsibility  for the
correctness or completeness of the same. The Trustee makes no representations as
to the validity,  sufficiency or enforceability  (except as against the Trustee)
of this Indenture or of the Debentures. The Trustee shall not be accountable for
the  use or  application  by the  Company  of  any of the  Debentures  or of the
proceeds of such  Deben-

                                       78



tures,  or for the use or  application of any moneys paid over by the Trustee in
accordance with any provision of this  Indenture,  or for the use or application
of any moneys received by any paying agent other than the Trustee.

                  VIII.4.  Trustee,  Paying Agent, Conversion Agent or Debenture
                           Registrar May Own Debentures.

                  The Trustee or any Paying Agent or any Conversion Agent or any
Debenture Registrar, in its individual or any other capacity, may buy, own, hold
and sell, as owner or pledgee,  Debentures with the same rights it would have if
it were not Trustee, paying agent, conversion agent or Debenture Registrar,  and
no such activity shall impair any of the Trustee's rights, remedies or defenses,
or enlarge any of its duties or liabilities under this Indenture.

                  VIII.5. Moneys Received by Trustee to be Held in Trust.

                  Subject  to the  provisions  of Article  Thirteen,  all moneys
received by the Trustee shall, until used or applied as herein provided, be held
in  trust  for the  purposes  for  which  they  were  received,  but need not be
segregated  from other funds  except to the extent  required by law. The Trustee
shall be under no liability for interest on any moneys received by it hereunder.

                  VIII.6.  Trustee Entitled to Compensation,  Reimbursement  and
                           Indemnity.

                  The Company  covenants  and agrees to pay to the Trustee  from
time to time,  and the Trustee  shall be entitled  to,  reasonable  compensation
(which  shall  not  be  limited  by  any  provision  of  law  in  regard  to the
compensation  of a trustee of an express trust) for all services  rendered by it
in the execution of the trusts hereby created or in the exercise and performance
of any of the powers and duties hereunder of the Trustee,  and the Company shall
advance  funds  to pay or  reimburse  the  Trustee  upon  its  request  for  all
reasonable  expenses,  disbursements  and  advances  incurred  or  made or to be
incurred or made by the

                                       79




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 the Trustee's  own  negligence or bad
faith. If any property other than cash shall at any time be subject to a lien in
favor of the Debentureholders, the Trustee, if and to the extent authorized by a
receivership   or  bankruptcy   court  of  competent   jurisdiction  or  by  the
supplemental instrument subjecting such property to such lien, shall be entitled
but shall not be obligated to make advances for the purpose of  preserving  such
property or discharging tax liens or other prior liens or encumbrances  thereon.
The Company also covenants to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without negligence or bad faith
on the  part of the  Trustee,  and  arising  out of or in  connection  with  the
acceptance or administration of this trust,  including the costs and expenses of
defending itself against any claim of liability in the premises. The obligations
of the Company under this Section to compensate and indemnify the Trustee and to
advance funds to pay or reimburse the Trustee for  expenses,  disbursements  and
advances shall constitute  additional  indebtedness  hereunder and shall survive
the satisfaction and discharge of this Indenture.  Such additional  indebtedness
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.  When the Trustee  incurs
expenses or renders services after an Event of Default  specified in Section 7.1
(f) or (g) occurs,  the expenses and the  compensation for services are intended
to constitute expenses of administration under any Bankruptcy Law.

                  VIII.7. Right of Trustee to Rely on Certificate of Officers of
                          Company Where no Other Evidence Specifically 
                          Prescribed.

                  Except as otherwise  provided in Section 8.1,  whenever in the
administration  of the trusts or the  performance  of this Indenture the Trustee
shall deem it  nec-


                                       80





essary or desirable  that a matter be proved or  established  prior to taking or
suffering or omitting any action  hereunder,  such matter (unless other evidence
in  respect  thereof  be  herein  specifically  prescribed)  may be deemed to be
conclusively  proved  and  established  by an  Officers'  Certificate,  and such
certificate  shall be full warrant of such action taken,  suffered or omitted by
it under the provisions of this Indenture upon the faith thereof.

                  VIII.8. Conflict of Interest.

                  (a)  Trustee  Acquiring   Conflicting  Interest  to  Eliminate
Conflict or Resign. If the Trustee has or shall acquire any conflicting interest
within the meaning of Trust  Indenture Act Section 310(b),  it shall,  within 90
days after ascertaining that it has such conflicting interest,  either eliminate
such conflicting  interest or resign,  such resignation to become effective upon
the appointment of a successor  trustee and such successor's  acceptance of such
appointment,  and the  Company  shall  take  prompt  steps  to have a  successor
appointed in the manner provided in Section 8.10.

                  (b)  Notice to  Debentureholders  in Case of Failure to Comply
with Subsection (a). In the event that the Trustee shall fail to comply with the
provisions of subsection (a) of this Section, the Trustee shall, within ten days
after the expiration of such ninety-day period,  transmit notice of such failure
to the  Debentureholders  in the manner and to the extent provided in subsection
(c) of Section 6.4 with respect to reports  pursuant to  subsection  (a) of said
Section 6.4.

                  VIII.9. Requirements for Eligibility of Trustee.

                  The  Trustee  hereunder  shall at all  times be a  corporation
organized and doing business under the laws of the United States or any State or
Territory or of the District of Columbia  authorized under such laws to exercise
corporate  trust powers,  having a combined  capital and surplus of at least one
million dollars ($1,000,000),  subject to supervision or examination by Federal,
State,  Territorial,  or  District of Columbia  authority.  If such 


                                       81





corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid  supervising or examining  authority,  then
for the  purposes  of this  Section,  the  combined  capital and surplus of such
corporation  shall be deemed to be its combined capital and surplus as set forth
in its most recent  report of  condition so  published.  In case at any time the
Trustee  shall cease to be eligible in  accordance  with the  provisions of this
Section,  the Trustee shall resign immediately in the manner and with the effect
specified in Section 8.10.

                  VIII.10. Resignation or Removal of Trustee.

                  (a)  Resignation  of Trustee.  The Trustee,  or any  successor
hereafter  appointed,  may at any time resign and be  discharged  from the trust
hereby created by giving  written notice thereof to the Company.  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 of the Company, one copy of which instrument shall be delivered to the
resigning Trustee and one copy to the successor trustee. If no successor trustee
shall have been so appointed  and have accepted  appointment  within thirty days
after the  giving of such  notice  of  resignation  the  resigning  Trustee  may
petition any court of competent  jurisdiction for the appointment of a successor
trustee,  or any  Debentureholder who has been a bona fide Holder of a Debenture
or Debentures for at least six months may,  subject to the provisions of Section
7.8, 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.

                  (b)   Removal   of   Trustee   by   Company  or  by  Court  on
Debentureholders'  Application.  In case any of the following shall occur at any
time:

                            (i) the  Trustee  shall  fail  to  comply  with  the
                  provisions  of  subsection  (a) of Section  8.8 after  written
                  request therefor by the Company or 

                                       82




                  by any  Debentureholder  who has been a bona fide  Holder of a
                  Debenture or Debentures for at least six months, or

                            (ii)  the  Trustee  shall  cease to be  eligible  in
                  accordance  with the  provisions of Section 8.9 and shall fail
                  to resign after written request  therefor by the Company or by
                  any such Debentureholder, or

                            (iii) 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  of the  Company,  one copy of  which  instrument  shall be
delivered to the Trustee so removed and one copy to the successor  trustee,  or,
subject to the  provisions  of Section 7.8, 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)  Removal of Trustee by Holders of  Majority  in  Principal
Amount of Debentures. The Holders of a majority in aggregate principal amount of
the  Debentures at the time  outstanding  may at any time remove the Trustee and
appoint a successor trustee by written instrument or instruments, in triplicate,
signed by such Holders or their attorneys-in-fact duly authorized,  one complete
set of which  instruments  shall be  delivered  to the  Company,  another to the
Trustee so removed and one complete set to the successor so appointed.

                                       83





                  (d) Time When Resignation or Removal of Trustee Effective. Any
resignation or removal of the Trustee and any appointment of a successor trustee
pursuant to any of the  provisions of this Section shall become  effective  upon
acceptance of appointment by the successor trustee as provided in Section 8.11.

                  (e) Notice to be Given by the Company.  The Company shall give
written  notice of each  resignation  and each  removal of the  Trustee and each
appointment  of a successor  trustee by mailing  written notice of such event by
first class mail or air mail, as  appropriate,  to the Holders of the Debentures
as their names and addresses  appear in the Debenture  register.  Each notice of
the appointment of a successor  trustee shall include the name of each successor
and the address of its corporate trust office.

                  VIII.11. Acceptance by Successor to Trustee.

                  Any  successor  trustee  appointed as provided in Section 8.10
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 fully vested with all the rights,  powers,  duties and obligations of its
predecessor  hereunder,  with like  effect  as if  originally  named as  trustee
herein. The predecessor trustee shall,  nevertheless,  at the written request of
the Company or the successor trustee, upon payment of any amount due it and then
unpaid,  pay over to the  successor  trustee  all  moneys at the time held by it
hereunder; and the Company and the predecessor trustee shall execute and deliver
such instruments and do such other things as may reasonably be required for more
fully and certainly  vesting and  confirming  in the successor  trustee all such
rights, powers, duties and obligations.

                  No successor  trustee shall accept  appointment as provided in
this Section unless at the time of such accep-

                                       84




tance such successor  trustee shall be qualified under the provisions of Section
8.8 and eligible under the provisions of Section 8.9.

                  VIII.12.  Successor  to Trustee by  Merger,  Consolidation  or
                            Succession to Business.

                  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 or  consolidation  to which the Trustee shall be a party, or any
corporation succeeding to the business of the Trustee, shall be the successor of
the Trustee  hereunder,  provided such corporation  shall be qualified under the
provisions  of Section 8.8 and  eligible  under the  provisions  of Section 8.9,
without the  execution  or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding.

                  VIII.13. Trustee as a Creditor.

                  (a)  Limitations  on Rights of Trustee as a Creditor to Obtain
Payment of Certain Claims Within Four Months Prior to Default or During Default,
or to Realize on Property as Such Creditor Thereafter. Subject to the provisions
of subsection  (b) of this Section,  if the Trustee in its  individual  capacity
shall  be or  shall  become a  creditor,  directly  or  indirectly,  secured  or
unsecured,  of the Company or of any other obligor on the Debentures within four
months prior to a default,  as defined in  subsection  (c) of this  Section,  or
subsequent  to such a default,  then,  unless and until  such  default  shall be
cured, the Trustee shall set apart and hold in a special account for the benefit
of the Trustee  individually,  the Holders of the  Debentures and the Holders of
other indenture securities (as defined in subsection (c) of this Section)

                            (i) an amount equal to any and all reductions in the
                  amount  due and  owing  upon  any  claim as such  creditor  in
                  respect of principal or interest, effected after the beginning
                  of such four  months'  period and valid as against the 

                                       85



                  Company  and its other  creditors,  except any such  reduction
                  resulting  from the  receipt or  disposition  of any  property
                  described in  paragraph  (2) of this  subsection,  or from the
                  exercise of any right of set-off  which the Trustee could have
                  exercised  if a petition  in  bankruptcy  had been filed by or
                  against the Company upon the date of such default; and

                            (ii) all property received by the Trustee in respect
                  of any claim as such creditor, either as security therefor, or
                  in satisfaction or composition  thereof,  or otherwise,  after
                  the beginning of such four months' period,  or an amount equal
                  to the proceeds of any such property, if disposed of, subject,
                  however,  to the rights,  if any, of the Company and its other
                  creditors in such property or such proceeds.

                  Nothing herein contained,  however,  shall affect the right of
the Trustee

                           (A) to retain for its own account (i)  payments  made
                  on account of any such  claim by any  person  (other  than the
                  Company) who is liable  thereon,  and (ii) the proceeds of the
                  bona fide  sale of any such  claim by the  Trustee  to a third
                  person, and (iii) distributions made in cash or other property
                  in respect of claims filed  against the Company in  bankruptcy
                  or receivership or in proceedings for reorganization  pursuant
                  to Federal bankruptcy law or applicable State law;

                           (B)  to  realize,  for  its  own  account,  upon  any
                  property  held by it as security  for any such claim,  if such
                  property  was so held  prior  to the  beginning  of such  four
                  months' period;

                           (C) to realize,  for its own account, but only to the
                  extent of the claim hereinafter  mentioned,  upon any property
                  held by it as security  for any such claim,  if such claim was
                  created  after the  beginning of such four months'


                                       86




                  period and such  property  was  received as security  therefor
                  simultaneously  with the creation thereof,  and if the Trustee
                  shall  sustain  the  burden of  proving  that at the time such
                  property was so received the Trustee had no  reasonable  cause
                  to believe  that a default,  as defined in  subsection  (C) of
                  this Section, would occur within four months; or

                           (D) to receive  payment on any claim  referred  to in
                  paragraph (B) or (C), against the release of any such property
                  held as security for such claim as provided in such  paragraph
                  (B) or (C),  as the case  may be,  to the  extent  of the fair
                  value of such property.

                  For the purpose of  paragraphs  (B),  (C),  and (D),  property
substituted after the beginning of such four months' period for property held as
security at the time of such substitution shall, to the extent of the fair value
of the property released, have the same status as the property released, and, to
the extent that any claim  referred to in any of such  paragraphs  is created in
renewal of or in  substitution  for or for the purpose of repaying or  refunding
any  pre-existing  claim of the Trustee as such creditor,  such claim shall have
the same status as such pre-existing claim.

                  If the Trustee  shall be  required  to account,  the funds and
property  held  in such  special  account  and the  proceeds  thereof  shall  be
apportioned  among the Trustee,  the  Debentureholders  and the Holders of other
indenture  securities in such manner that the Trustee,  the Debentureholders and
the Holders of other indenture  securities realize, as a result of payments from
such special  account and  payments of  dividends  on claims  filed  against the
Company in bankruptcy  or  receivership  or in  proceedings  for  reorganization
pursuant to Federal  bankruptcy law or applicable State law, the same percentage
of their respective claims, figured before crediting to the claim of the Trustee
anything  on  account  of the  receipt  by it from the  Company of the funds and
property in such special account and before  crediting to the respective  claims
of the  Trustee,  the  Debentureholders  and  the  Holders  of  other 

                                       87





indenture  securities,   dividends  on  claims  filed  against  the  Company  in
bankruptcy or  receivership  or in  proceeding  for  reorganization  pursuant to
Federal  bankruptcy  law or applicable  State law, but after  crediting  thereon
receipts on account of the indebtedness  represented by their respective  claims
from all sources other than from such  dividends and from the funds and property
so held in such special account. As used in this paragraph,  with respect to any
claim, the term "dividends"  shall include any distribution with respect to such
claim,  in bankruptcy  or  receivership  or in  proceedings  for  reorganization
pursuant  to  Federal  bankruptcy  law or  applicable  State law,  whether  such
distribution  is made in cash,  securities,  or other  property,  but  shall not
include any such  distribution  with respect to the secured portion,  if any, of
such claim. The court in which such  bankruptcy,  receivership or proceeding for
reorganization  is pending shall have  jurisdiction  (i) to apportion  among the
Trustee, the Debentureholders and the Holders of other indenture securities,  in
accordance with the provisions of this paragraph, the funds and property held in
such  special  account  and  the  proceeds  thereof,  or  (ii)  in  lieu of such
apportionment,  in whole or in part, to give to the provisions of this paragraph
due consideration in determining the fairness of the distributions to be made to
the Trustee,  the Debentureholders and the Holders of other indenture securities
with  respect  to  their  respective  claims,  in which  event  it shall  not be
necessary  to  liquidate  or to appraise  the value of any  securities  or other
property held in such special  account or as security for any such claim,  or to
make a specific  allocation  of such  distributions  as between  the secured and
unsecured  portions of such claims, or otherwise to apply the provisions of this
paragraph as a mathematical formula.

                  Any  Trustee  who has  resigned  or  been  removed  after  the
beginning of such four months' period shall be subject to the provisions of this
subsection (a) as though such  resignation  or removal had not occurred.  If any
Trustee has resigned or been removed prior to the beginning of such four months'
period, it shall be subject to the provisions of this subsection (a) if and only
if the following conditions exist:

  
                                     88




                            (iii) the receipt of property or  reduction of claim
                  which would have given rise to the  obligation to account,  if
                  such  Trustee had  continued  as trustee,  occurred  after the
                  beginning of such four months' period; and

                            (iv) such  receipt of property or reduction of claim
                  occurred within four months after such resignation or removal.

                  (b) Certain Creditor  Relationships  Excluded.  There shall be
          excluded  from the  operation of  subsection  (a) of this  Section,  a
          creditor relationship arising from


                            (i)  the  ownership  or  acquisition  of  securities
                  issued  under any  indenture,  or any  security or  securities
                  having  a  maturity  of  one  year  or  more  at the  time  of
                  acquisition by the Trustee;

                            (ii)  advances   authorized  by  a  receivership  or
                  bankruptcy  court  of  competent  jurisdiction,   or  by  this
                  Indenture,  for the purpose of preserving  any property  which
                  shall at any time be subject to the lien of this  Indenture or
                  of discharging  tax liens or other prior liens or encumbrances
                  thereon,  if notice of such  advance and of the  circumstances
                  surrounding    the   making    thereof   is   given   to   the
                  Debentureholders  at the time and in the  manner  provided  in
                  Section 6.4 of this Indenture;

                            (iii)  disbursements  made in the ordinary course of
                  business  in the  capacity  of  trustee  under  an  indenture,
                  transfer agent,  registrar,  custodian,  paying agent,  fiscal
                  agent or depositary, or other similar capacity;

                            (iv) an indebtedness created as a result of services
                  rendered or premises rented;  or an indebtedness  created as a
                  result of goods or securities  sold in a cash  transaction  as
                  defined in subsection (c) of this Section;


                                       89



                            (v) the ownership of stock or of other securities of
                  a corporation  organized under the provisions of Section 25(a)
                  of the Federal  Reserve Act, as amended,  which is directly or
                  indirectly a creditor of the Company; or

                            (i)  the  acquisition,   ownership,   acceptance  or
                  negotiation of any drafts,  bills of exchange,  acceptances or
                  obligations   which   fall   within  the   classification   of
                  self-liquidating  paper as defined in  subsection  (c) of this
                  Section.

                  (c) Definition of Certain Terms. As used in this Section:

                            (i) The term  "default"  shall  mean any  failure to
                  make payment in full of the principal of (or premium,  if any)
                  or  interest  upon any of the  Debentures  or upon  the  other
                  indenture  securities  when and as such  principal or interest
                  becomes due and payable.

                            (ii) The term  "other  indenture  securities"  shall
                  mean  securities  upon which the  Company  is an  obligor  (as
                  defined in the Trust Indenture Act of 1939)  outstanding under
                  any other  indenture  (A)  under  which  the  Trustee  is also
                  trustee, (B) which contains provisions  substantially  similar
                  to the provisions of subsection  (a) of this Section,  and (C)
                  under which a default exists at the time of the  apportionment
                  of the funds and property held in said special account.

                            (iii) The term  "cash  transaction"  shall  mean any
                  transaction in which full payment for goods or securities sold
                  is made  within  seven  days  after  delivery  of the goods or
                  securities  in currency or checks or other  orders  drawn upon
                  banks or bankers and payable upon demand.

                            (iv) The term  "self-liquidating  paper"  shall mean
                  any draft, bill of exchange, acceptance or obligation which is
                  made,  drawn,  nego-

                                       90



                  tiated or incurred by the Company for the purpose of financing
                  the purchase,  processing,  manufacture,  shipment, storage or
                  sale of goods,  wares or  merchandise  and which is secured by
                  documents  evidencing title to, possession of, or a lien upon,
                  the goods, wares or merchandise or the receivables or proceeds
                  arising  from  the  sale  [of]  goods,  wares  or  merchandise
                  previously constituting the security, provided the security is
                  received by the Trustee  simultaneously  with the  creation of
                  the creditor  relationship  with the Company  arising from the
                  making,  drawing,  negotiating or incurring of the draft, bill
                  of exchange, acceptance or obligation.

                            (v) The term  "Company"  shall mean any obligor upon
                  the Debentures.


                                       IX

                         CONCERNING THE DEBENTUREHOLDERS

                  IX.1 Evidence of 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  Debentureholders  in person or by
attorney or proxy  appointed in writing,  or (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 Ten, or (c) by a
combination  of such  instrument  or  instruments  and any such record of such a
meeting of Debentureholders.

                                       91




                  IX.2.  Proof of  Execution  of  Instruments  and of Holding of
                  Deben-tures.

                  Subject to the provisions of Sections 8.1, 8.2 and 10.5, proof
of the execution of any instrument by a Debentureholder or his attorney or proxy
and  proof  of the  holding  by any  person  of any of the  Debentures  shall be
sufficient for any purpose of this Indenture if made in the following manner:

                  (a) The fact and date of the  execution  by any such person of
          any  instrument  shall be  proved  by the  certificate  of any  notary
          public,  or other officer of any  jurisdiction of or within the United
          States of America  authorized to take  acknowledgments  or deeds, that
          the person executing such instrument acknowledged to him the execution
          thereof,  or by an affidavit of a witness to such  execution  sworn to
          before any such notary or other such officer.  Where such execution is
          by an  officer  of a  corporation  or  association  or a  member  of a
          partnership on behalf of such corporation, association or partnership,
          such  certificate or affidavit shall also constitute  sufficient proof
          of his authority.

                  (b)  The  ownership  of  Debentures  shall  be  proved  by the
          registers of such Debentures or by a certificate of any duly appointed
          registrar thereof.

                  The Trustee  shall not be bound to  recognize  any person as a
Debentureholder  unless  and until his  title to the  Debentures  held by him is
proved in the manner in this Article provided.

                  The record of any Debentureholders' meeting shall be proved in
the manner provided in Section 10.6.

                  The  Trustee  may  accept  such other  proof or  require  such
additional  proof of any  matter  referred  to in this  Section as it shall deem
appropriate.


                                       92



                  IX.3. Who May be Deemed Owners of Debentures.

                  The Company,  the Trustee,  any paying agent,  any  conversion
agent and any  Debenture  Registrar  may deem and treat the person in whose name
any Debenture  shall be registered upon the books of the Company as the absolute
owner of such  Debenture  (whether  or not such  Debenture  shall be overdue and
notwithstanding  any notice of ownership or writing thereon made by anyone other
than the  Company or any  Debenture  Registrar)  for the  purpose  of  receiving
payment of or on account of the principal of (and premium,  if any) and interest
on (subject to the  provisions of Section 2.2) 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 such  registered  Holder for the
time  being or upon his order  shall be valid  and,  to the extent of the sum or
sums so paid, effective to satisfy and discharge the liability for money payable
upon any such Debenture.

                                       93





                  IX.4. Debentures Owned by Company or Controlled or Controlling
                        Companies Disregarded for Certain Purposes.

                  In determining  whether the Holders of the requisite aggregate
principal  amount of  Debentures  have  concurred in any  direction,  consent or
waiver under this  Indenture,  Debentures  which are owned by the Company or any
other  obligor  on the  Debentures,  or by any  person  directly  or  indirectly
controlling or controlled by or under direct or indirect common control with the
Company or any other obligor on the Debentures,  shall be disregarded and deemed
not to be outstanding for the purpose of any such determination, except that for
the purpose of determining  whether the Trustee shall be protected in relying on
any such direction,  consent or waiver,  only Debentures which the Trustee knows
are so owned  shall be so  disregarded.  Debentures  so owned  which  have  been
pledged in good faith may be regarded as  outstanding  for the  purposes of this
Section,  if the pledgee shall establish to the  satisfaction of the Trustee the
pledgee's  right to vote such  Debentures  and that the  pledgee is not a person
directly or indirectly  controlling or controlled by or under direct or indirect
common control with the Company or any such other obligor.  In case of a dispute
as to such right,  any decision by the Trustee  taken upon an Opinion of Counsel
shall be full protection to the Trustee.

                                       95



                  IX.5. Action by Debentureholders Binds Future Holders.

                  Any demand, request,  waiver, consent or vote of 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  Debenture  issued in
exchange  therefor  or in place  thereof,  irrespective  of  whether  or not any
notation in regard thereto is made upon such Debenture.  Any action taken by the
Holders  of the  percentage  in  aggregate  principal  amount of the  Debentures
specified in this Indenture in connection with such action shall be conclusively
binding upon the Company, the Trustee and the Holders of all the Debentures.



                                       X

                           DEBENTUREHOLDERS' MEETINGS

                  X.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 for any of the
following purposes:

                            (a)  to  give  any  notice  to  the  Company  or 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 Seven; or

                            (b) to remove the  Trustee  and  appoint a successor
                  trustee pursuant to the provisions of Article Eight; or

                            (c) to consent to the  execution  of an indenture or
                  indentures  supplemental  hereto pursuant to the provisions of
                  Section 11.2; or

                                       95


                            (c) 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 provision
                  of this Indenture, or authorized or permitted by law.

                  X.2. Manner of Calling Meetings.

                  The Trustee may at any time call a meeting of Debentureholders
to take any action  specified  in Section  10.1,  to be held at such time and at
such place in New York,  New York,  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 delivered promptly by the Trustee,  not less than 10 days nor
more than 60 days prior to the date fixed for the  meeting,  to the  Company and
the Holders of the  Debentures at their last addresses as they shall appear upon
the register or registers.

                  Any meeting of Debentureholders  shall be valid without notice
if the Holders of all Debentures  then  outstanding  are present in person or by
proxy,  or if notice is waived before or after the meeting by the Holders of all
Debentures outstanding, and if the Company and the Trustee are either present by
duly authorized  representatives  or have,  before or after the meeting,  waived
notice.

                  X.3. Call of Meetings by Company or Debentureholders.

                  In case at any time the Company, pursuant to resolution of its
Board of Directors, or the Holders of at least 25% in aggregate principal amount
of the Debentures then  outstanding,  shall have requested the Trustee to call a
meeting of  Debentureholders,  by written  request  setting  forth in reasonable
detail the action proposed to be taken at the meeting, and the Trustee shall not
have  mailed the notice of such  meeting  within ten days after  receipt of such
request,  then the  Company or the  Holders of  Debentures  in the amount  above
specified may determine the time and the place,  in New York, New York, for such
meeting and may call such meeting to take any action authorized in

                                       96





Section 10.1, by mailing notice thereof as provided in Section 10.2.

                  X.4. Who May Attend and Vote at Meetings.

                  To be entitled to vote at any  meeting of  Debentureholders  a
person shall (a) be a registered  Holder of one or more  Debentures  or (b) be a
person appointed by an instrument in writing as proxy for the registered  Holder
or Holders of  Debentures.  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 any  representatives  of the Company and its  counsel.  Notwithstanding  the
foregoing,  the Trustee may fix, in advance, a Record Date for the determination
of the  Debentureholders  entitled  to  notice of or to vote at any  meeting  of
Debentureholders or any adjournment  thereof,  which date shall not be more than
60 days nor less than 10 days prior to the date fixed for the meeting.

                     X.5 Regulations May be Made by Trustee.

                  Notwithstanding  any other  provision of this  Indenture,  the
Trustee may make such  reasonable  regulations  as it may deem advisable for any
meeting of Debentureholders,  in regard of proving the holding of Debentures and
of the  appointment of proxies,  and in regard of the  appointment and duties of
inspectors of votes, and the submission and examination of proxies, certificates
and other evidence of the right to vote,  and such other matters  concerning the
conduct of the meeting as it shall think fit.  Except as otherwise  permitted or
required by any such  regulations,  the holding of Debentures shall be proved in
the manner  specified in Section 9.2 and the  appointment  of any proxy shall be
proved in the manner specified in said Section 9.2 or by having the signature of
the person  executing the proxy  witnessed or guaranteed by any bank,  banker or
trust company deemed by the Trustee to be satisfactory.

                                       97




                  The Trustee  shall,  by an  instrument  in writing,  appoint a
temporary chairman of the meeting,  unless the meeting shall have been called by
the Company or by  Debentureholders  as provided in Section  10.3, in which case
the Company or the  Debentureholders  calling the  meeting,  as the case may be,
shall (in like manner) appoint a temporary chairman.  A permanent chairman and a
permanent  secretary of the meeting shall be elected by vote of the Holders of a
majority in aggregate  principal  amount of the  Debentures  represented  at the
meeting and entitled to vote.

                  Subject  to the  provisions  of Section  9.4 and 10.4,  at any
meeting each  Debentureholder or proxy shall be entitled to one vote for each SF
1,000 principal amount of Debentures;  provided,  however, that no vote shall be
cast or counted at any meeting in respect of any  Debentures  challenged  as not
outstanding and ruled by the chairman of the meeting to be not outstanding.  The
chairman  of the  meeting  shall  have no right to vote  other than by virtue of
Debentures  held by him or instruments in writing as aforesaid duly  designating
him as the person to vote on behalf of other Debentureholders. At any meeting of
Debentureholders,  the presence of persons holding or representing Debentures in
an aggregate  principal amount sufficient to take action on the business for the
transaction  of which such  meeting was called shall  constitute  a quorum.  Any
meeting of  Debentureholders  duly called pursuant to the provisions of Sections
10.2 or 10.3 may be adjourned  from time to time by the vote of the Holders of a
majority in aggregate  principal  amount of the  Debentures  represented  at the
meeting and  entitled to vote,  whether or not  constituting  a quorum,  and the
meeting may be held as so adjourned without further notice.

                  X.6. 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 which shall be subscribed  the
signatures of the Holders of Debentures or of their representatives by proxy and
the  principal  amount of the  Debentures  voted by the  ballot.  The  permanent
chairman of the meeting shall appoint two

                                       98



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
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  10.2.  The record
shall be signed and verified by the  affidavits  of the  permanent  chairman and
secretary  of the meeting and one of the  duplicates  shall be  delivered to the
Company and the other to the Trustee to be preserved by the Trustee,  the latter
to have attached thereto the ballots voted at the meeting.

                  Any record so signed and verified shall be conclusive evidence
of the matters therein stated.

                  X.7. Exercise of Rights of Trustee or Debentureholders May Not
                       be Hindered or Delayed by Call of Meeting of
                       Debentureholders.

                  Nothing  in this  Article  Ten  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  hindrance  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.



                                       99




                  X.8. Notice to Debentureholders.

                  Any notice  required to be given,  mailed or  delivered by the
Trustee to Debentureholders  shall be sufficiently given, mailed or delivered if
mailed by first class mail to  Debentureholders  whose  addresses  of record are
within the  United  States or if mailed via  airmail to  Debentureholders  whose
addresses of record are outside the United States.



                                       XI

                             SUPPLEMENTAL INDENTURES

                  XI.1.  Purposes  for  Which  Supplemental  Indentures  May  be
                         Entered into Without Consent of Debentureholders.

                  The Company,  when  authorized by a resolution of its Board of
Directors,  and the Trustee,  subject to the conditions and restrictions in this
Indenture  contained,  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 evidence the  succession of another  corporation to the
          Company,  or  successive  successions,   and  the  assumption  by  the
          successor corporation of the covenants,  agreements and obligations of
          the Company pursuant to Article Twelve;

                  (b) to add to the covenants  and  agreements of the Company in
          this  Indenture,  to contain such  further  covenants  and  agreements
          thereafter  to be observed,  or to surrender any right or power herein
          reserved to or conferred upon the Company;

                  (c) to cure any  ambiguity  or to  correct or  supplement  any
          defective or inconsistent  provision contained in this Indenture or in
          any supplemental indenture;

                                      100




          to make  provisions  with respect to the conversion rights of Holders
          of Debentures pursuant to the requirements of Section 4.3(b);

                  (d) to  make  such  provisions  with  respect  to  matters  or
          questions  arising  under  this  Indenture  as  may  be  necessary  or
          desirable  and not  inconsistent  with this  Indenture  that shall not
          adversely effect the interests of the Debentureholders; and

                  (f) to evidence and provide for the  acceptance of appointment
          hereunder of a successor Trustee.

                  The Trustee is hereby  authorized  to join with the Company in
the execution of any supplemental indenture authorized or permitted by the terms
of  this  Indenture  and  to  make  any  further   appropriate   agreements  and
stipulations  which  may be  therein  contained,  but the  Trustee  shall not be
obligated  to enter  into any such  supplemental  indenture  which  affects  the
Trustee's own rights, duties or immunities under this Indenture or otherwise.

                  Any  supplemental  indenture  authorized by the  provisions of
this Section 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 11.2.

                  XI.2.  Modification  of  Indenture  with Consent of Holders of
                         66-2/3% in Principal Amount of Debentures.

                  With the consent (evidenced as provided in Section 9.1) of the
Holders (or persons  entitled to vote, or to give consents  respecting the same)
of not less than 66 2/3% in aggregate  principal amount of the Debentures at the
time outstanding,  the Company,  when authorized by a resolution of its Board of
Directors, 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 of any  supplemental  indenture or of modifying in any manner
the

                                      101





rights  and  obligations of the  Holders  of the  Debentures and of the Company;
provided  that,  without  the  consent  of the  Holders of all  Debentures  then
outstanding,  no such supplemental indenture shall (i) extend the fixed maturity
of any Debenture,  or reduce the principal amount thereof, or reduce the rate or
extend the time of payment of interest  thereon,  or reduce any premium  payable
upon the redemption  thereof,  or (ii) alter the provisions of Article IV hereof
respecting  conversion  of  the  Debentures  so  as  to  affect  the  Debentures
adversely,  or (iii) modify any of the provisions of this Indenture with respect
to the  subordination  of the  Debentures  in a manner  adverse  to the  Holders
thereof, or (iv) 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
resolution of its Board of Directors  certified by the Secretary or an Assistant
Secretary of the Company  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  to approve  the  particular  form of any
proposed  supplemental  indenture,  but it shall be  sufficient  if such consent
shall approve the substance thereof.

                  Promptly after the execution by the Company and the Trustee of
any  supplemental  indenture  pursuant to the  provisions of this  Section,  the
Company shall mail a notice, postage prepaid, setting forth in general terms the
substance of such supplemental  indenture, to all Debentureholders at their last
addresses  appearing upon the register or registers.  Any failure of the Company
to mail such  notice,  or any defect  therein,  shall not,  howev-

                                      102


er, in any way impair or affect the validity of any such supplemental indenture.

                  XI.3. Effect of Supplemental Indentures.

                  Upon  the  execution  of  any  supplemental  indenture  by the
Company and the Trustee  pursuant to the  provisions  of this Article or Article
Twelve,  this  Indenture  shall be and be deemed to be  modified  and amended in
accordance  therewith,  and  the  respective  rights,   limitations  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.

                  XI.4. Debentures May Bear Notation of Changes.

                  Debentures  authenticated and delivered after the execution of
any supplemental indenture pursuant to the provisions of this Article or Article
Twelve,  or after any action taken at a  Debentureholders'  meeting  pursuant to
Article  Ten,  may bear a notation  in form  approved  by the  Trustee as to any
matter provided for in such supplemental  indenture or as to any action taken at
any  such  meeting;  and,  in such  case,  suitable  notation  may be made  upon
outstanding  Debentures after proper  presentation and demand. If the Company or
the Trustee shall so determine, new Debentures so modified as to conform, in the
opinion  of the  Trustee  and the  Board of  Directors  of the  Company,  to any
modification of this Indenture  contained in any supplemental  indenture,  or to
any  action  taken  at any  such  meeting,  may  be  prepared  by  the  Company,
authenticated  by the Trustee and delivered in exchange for the Debentures  then
outstanding,  upon demand of, and  without  cost to, the  Holders  thereof  upon
surrender of such Debentures.

                  XI.5. Opinion of Counsel.

                                      103





                  The  Trustee,  subject to the  provisions  of Section 8.1, may
require  and  receive an Opinion of  Counsel  as  conclusive  evidence  that any
supplemental  indenture  executed  pursuant  to this  Article is  authorized  or
permitted  by the  terms  of this  Indenture  and  that  it is not  inconsistent
therewith.

                                      XII

                             CONSOLIDATION OR MERGER

                  XII.1. When Company May Merge, Etc.

                  The Company shall not  consolidate  with or merge with or into
any other Person or transfer (by lease,  assignment,  sale or otherwise)  all or
substantially  all of its  properties  and assets,  in a single  transaction  or
through a series of related transactions,  as an entirety or substantially as an
entirety to another Person or group of affiliated Persons unless:

                  (a) either the Company shall be the continuing  Person, or the
          Person (if other than the  Company)  formed by such  consolidation  or
          into which the Company is merged or to which the properties and assets
          of the  Company as an  entirety or  substantially  as an entirety  are
          transferred shall be a Person organized and existing under the laws of
          the United  States of America or any State  thereof or the District of
          Columbia and shall  expressly  assume,  by an  indenture  supplemental
          hereto, executed and delivered to the Trustee, in form satisfactory to
          the Trustee,  all the  obligations of the Company under the Debentures
          and this Indenture;  provided that a corporation at all times shall be
          a co-obligor  together with the continuing Person or transferee if the
          continuing Person or transferee is itself not a corporation;

                  (b) immediately  before and immediately after giving effect to
          such  transaction,  no Event of  Default  and no  Default  shall  have
          occurred and be continuing; and

                                      104



                 (c) the Company has delivered to the Trustee an
         Officers' Certificate and an Opinion of Counsel, each stating that such
         consolidation,   merger,   transfer  or  lease  and  such  supplemental
         indenture  comply  with  this  Article  XII  and  that  all  conditions
         precedent  herein  provided  relating  to such  transaction  have  been
         complied with.

                  The  foregoing  shall  not be  applicable  with  respect  to a
consolidation,  merger or transfer  that involves less than 25% of the assets of
the Company.

                  Notwithstanding   (a)  through   (c),   any   Subsidiary   may
consolidate  with,  merge into or  transfer  all or part of its  properties  and
assets to the Company or any other Subsidiary or Subsidiaries.

                  XII.2. Successor Corporation.

                  Upon any consolidation or merger, or any transfer of assets of
the Company in accordance with Section 12.1, the successor Person formed by such
consolidation  or into which the Company is merged or to which such  transfer is
made shall succeed to, and be substituted  for, and may exercise every right and
power of, the  Company  under  this  Indenture  with the same  effect as if such
successor  Person had been named as the Company herein.  When a successor Person
assumes  all  of  the  obligations  of  the  Company  hereunder  and  under  the
Debentures, the predecessor shall be released from such obligation.



                                      XIII

                           SUBORDINATION OF DEBENTURES

                  XIII.1.   Agreement  of   Debentureholders  that  Debentures
                            Subordinate to All Senior Indebtedness.

                  The Company, for itself, its successors and assigns, covenants
and agrees and each Holder of the Debentures by his acceptance  thereof likewise
covenants  and

                                      105




agrees that the payment of the principal,  premium, if any, and interest on each
and all of the Debentures is hereby expressly subordinated, to the extent and in
the manner  hereinafter  set forth,  to the prior  payment in full of all Senior
Indebtedness.  The provisions of this Article XIII shall constitute a continuing
offer to all persons who, in reliance upon such  provisions,  become Holders of,
or continue to hold, Senior  Indebtedness,  and such provisions are made for the
benefit of the Holders of Senior  Indebtedness  and such Holders are hereby made
obligees hereunder,  the same as if their names were written herein as such, and
they and/or each of them may proceed to enforce such provisions.

                  XIII.2. Company Not to Make Payment with Respect to Debentures
                          in Certain Circumstances.

                  (a) Upon the maturity of any Senior  Indebtedness  by lapse of
time,  acceleration or otherwise,  all principal thereof (and premium,  if any,)
and interest  thereon shall first be paid in full, or such payment duly provided
for in cash or in a manner  satisfactory to the Holder or Holders of such Senior
Indebtedness,  before  any  payment  by the  Company  is made on  account of the
principal of (and premium,  if any,) or interest on the Debentures or to acquire
any of the Debentures.

                  (b) Upon the  happening of an event of default with respect to
any Senior  Indebtedness,  as such event of default is defined therein or in the
instrument  under which it is outstanding,  permitting the Holders to accelerate
the  maturity  thereof,  and, if the default is other than default in payment of
the principal of (and premium, if any,) or interest on such Senior Indebtedness,
upon written  notice  thereof given to the Company and the Trustee by the Holder
or  Holders   of  such   Senior   Indebtedness   or  their   representative   or
representatives,  then  unless and until  such event of default  shall have been
cured or waived or shall have ceased to exist,  no payment  shall be made by the
Company with respect to the  principal  of or interest on the  Debentures  or to
acquire any of the Debentures, provided that within 180 days after the happening

                                      106





of such event of default the Holders of the Senior  Indebtedness  accelerate the
maturity thereof.

                  (c)  Notwithstanding any other provision of this Section 13.2,
if the  Company  shall  make any  payments  to the  Trustee  on  account  of the
principal  of (and  premium,  if any) or  interest on the  Debentures  after the
happening of a default in payment of the principal of (and  premium,  if any) or
interest on Senior Indebtedness, or after receipt by the Company and the Trustee
of written  notice as provided in Section 13.6 of this  Indenture of an event of
default with  respect to any Senior  Indebtedness,  then,  unless and until such
default or event of default shall have been cured or waived or shall have ceased
to exist,  such payment  (subject to the provisions of Sections 13.6 and 13.7 of
this Indenture)  shall be held by the Trustee,  in trust for the benefit of, and
shall  be  paid   forthwith  over  and  delivered  to,  the  Holders  of  Senior
Indebtedness (pro rata as to each of such Holders on the basis of the respective
amounts  of Senior  Indebtedness  held by them) or their  representative  or the
trustee  under the  indenture or other  agreement (if any) pursuant to which any
instruments  evidencing any 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 the terms of such Senior  Indebtedness
after giving  effect to any  concurrent  payment or  distribution  to or for the
Holders of Senior Indebtedness.

                  (d) The Trustee  shall be under no  obligation  to enforce the
Company's agreement, pursuant to Section 13.2 (a) and (b) of this Indenture, not
to make payments to acquire any of the Debentures or to take any action upon the
breach of such agreement.

                                      107



                  XIII.3. Debentures Subordinated to Prior Payment of All Senior
                          Indebtedness on Dissolution, Liquidation or 
                          Reorganization of the Company.

                  Upon  any  distribution  of  assets  of the  Company  upon any
dissolution,  winding up,  liquidation or reorganization of the Company (whether
in bankruptcy,  insolvency or receivership proceedings or upon an assignment for
the benefit of creditors or otherwise):

                  (a) The  Holders of all  Senior  Indebtedness  shall  first be
entitled  to receive  payment in full of the  principal  (and  premium,  if any)
thereof,  and  interest  due thereon  before the Holders of the  Debentures  are
entitled to receive any payment on account of the principal of (and premium,  if
any) or interest on the Debentures (other than payment in shares of stock of the
Company as reorganized or readjusted,  or securities of the Company or any other
corporation  provided for by a plan of  reorganization  or  readjustment,  which
stock and securities are subordinated to the payment of all Senior  Indebtedness
and securities  received in lieu thereof which may at the time be  outstanding);
and

                  (b) Any  payment or  distribution  of assets of the Company of
any kind of  character,  whether in cash,  property  or  securities  (other than
shares of stock of the Company as reorganized  or  readjusted,  or securities of
the Company or any other  corporation  provided for by a plan of  reorganization
readjustment,  which stock and securities are subordinated to the payment of all
Senior  Indebtedness  and  securities  received in lieu thereof which may at the
time be  outstanding),  to which the  Holders of the  Debentures  or the Trustee
would be entitled except for the provisions of this Article  Thirteen,  shall be
paid by the liquidating  trustee or agent or other person making such payment or
distribution, whether a trustee in bankruptcy, a receiver or liquidating trustee
or other  trustee or agent,  directly to the Holders of Senior  Indebtedness  or
their representative or representatives, or to the trustee or trustees under any
indenture under which any instruments evidencing any of such Senior Indebtedness
may have been  issued,  to the extent  necessary  to make payment in 

                                      109


full of all Senior  Indebtedness  remaining  unpaid,  after giving effect to any
concurrent  payment or distribution or provision therefor to the Holders of such
Senior Indebtedness.

                  (c) In the event that notwithstanding the foregoing provisions
of this Section 13.3,  any payment or  distribution  of assets of the Company of
any kind or  character,  whether in cash,  property  or  securities  (other than
shares of stock of the Company as reorganized  or  readjusted,  or securities of
the Company or any other corporation provided for by a plan of reorganization or
readjustment,  which stock and securities are subordinated to the payment of all
Senior  Indebtedness  and  securities  received in lieu thereof which may at the
time be  outstanding),  shall be  received  by the Trustee or the Holders of the
Debentures  on account of  principal  (and  premium,  if any) or interest on the
Debentures  before  all  Senior  Indebtedness  is paid  in  full,  or  effective
provision  made for its payment,  such payment or  distribution  (subject to the
provisions  of Sections 13.6 and 13.7 of this  Indenture)  shall be received and
held in  trust  for  and  shall  be  paid  over  to the  Holders  of the  Senior
Indebtedness  remaining  unpaid or  unprovided  for or their  representative  or
representatives,  or to the trustee or trustees under any indenture  under which
any instruments evidencing any of such Senior Indebtedness may have been issued,
for application to the payment of such Senior Indebtedness until all such Senior
Indebtedness shall have been paid in full, after giving effect to any concurrent
payment or  distribution  or  provision  therefor  to the Holders of such Senior
Indebtedness.

                  XIII.4.  Debentureholders to be Subrogated to Right of Holders
                           of Senior Indebtedness.

                  Subject to the payment in full of all Senior Indebtedness, the
Holders of the  Debentures  shall be  subrogated to the rights of the Holders of
Senior  Indebtedness  to  receive  payments  or  distributions  of assets of the
Company  applicable  to the Senior  Indebtedness  until all amounts owing on the
Debentures  shall be paid in full, and for the purpose of such  subrogation,  no
payments or  distributions  to the Holders of the Senior  Indebtedness  by o


                                       109


on behalf of the Company or by or on behalf of the Holders of the Debentures  by
virtue of this  Article  Thirteen  which  otherwise  would have been made to the
Holders of the Debentures, shall be deemed to be payment by the Company to or on
account of the Senior  Indebtedness,  it being understood that the provisions of
this Article  Thirteen  are and are intended  solely for the purpose of defining
the relative rights of the Holders of the  Debentures,  on the one hand, and the
Holders of the Senior Indebtedness, the other hand.

                  XIII.5. Obligations of Company Unconditional.

                  Nothing  contained  in this  Article  Thirteen or elsewhere in
this  Indenture or in the  Debentures  is intended to or shall impair as between
the Company and the Holders of the  Debentures,  the  obligation of the Company,
which is absolute and unconditional, to pay to the Holders of the Debentures the
principal of, premium, if any, and interest on the Debentures,  or make payments
in respect of the sinking fund, for the  Debentures,  as and when the same shall
become due and  payable in  accordance  with their  terms,  or is intended to or
shall affect the relative rights of the Holders of the Senior Indebtedness,  nor
shall  anything  herein or  therein  prevent  the  Trustee  or the Holder of any
Debenture  from  exercising  all  rights and  remedies  otherwise  permitted  by
applicable law upon default under this Indenture, subject to the rights, if any,
under this Article Thirteen of the Holders of Senior  Indebtedness in respect of
cash,  property,  or securities of the Company received upon the exercise of any
such remedy.  Upon any distribution of assets of the Company referred to in this
Article Thirteen, the Trustee,  subject to the provisions of Section 8.l of this
Indenture,  and the Holders of the Debentures shall be entitled to rely upon any
order  or  decree  made by any  court of  competent  jurisdiction  in which  any
dissolution,  winding up, liquidation or reorganization proceedings are pending,
or a certificate of the liquidating  trustee or agent or other person making any
distribution to the Trustee or to the Holders of the Debentures, for the purpose
of ascertaining the persons to participate in such distribution,  the Holders of
the  Senior  Indebtedness  and other  indebtedness  of the  Company, 

                                      111



the amount  thereof and all other  facts  pertinent  thereto or to this  Article
Thirteen.

                  XIII.6 Trustee  Entitled to Assume  Payments Not Prohibited in
                         Absence of Notice.

                  The Company shall give prompt written notice to the Trustee of
any default under any Senior  Indebtedness  or under any  agreement  pursuant to
which Senior  Indebtedness may have been issued.  Notwithstanding the provisions
of Section 13.1 of this Indenture or any other provision of this Indenture,  the
Trustee shall not at any time be charged with  knowledge of the existence of any
facts  which  would  prohibit  the making of any  payment of monies to or by the
Trustee,  unless and until the  Trustee  shall have  received  at the  principal
office of the Trustee,  written  notice  thereof from the Company or from one or
more Holders of Senior Indebtedness or from any trustee therefor;  and, prior to
the receipt of any such written notice,  the Trustee,  subject to the provisions
of Section 8.1 of this Indenture,  shall be entitled to assume conclusively that
no such facts exist.

                  The Trustee shall be entitled to rely on the delivery to it of
a  written  notice  by a person  representing  himself  to be a Holder of Senior
Indebtedness  (or a trustee  on behalf of such  Holder) to  establish  that such
notice has been given by a Holder of Senior  Indebtedness or a trustee on behalf
of any such Holder or Holders.  In the event that the Trustee determines in good
faith that further  evidence is required with respect to the right of any person
as a Holder of Senior Indebtedness to participate in any payment or distribution
pursuant to this Article  Thirteen the Trustee may, at its  discretion,  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  Thirteen,
and,  if such  evidence is not  furnished,  the Trustee may defer any payment to
such person  pending  judicial  determination  as to the right of such person to
receive  such  payment,  but the Trustee 

                                      111




shall not be obligated to institute a judicial proceeding for such purpose;  nor
shall the Trustee be charged with knowledge of the curing or waiver of any event
of default of the character  referred to in Section 13.2(b) of this Indenture or
that any  event or any  condition  preventing  any  payment  in  respect  of the
Debentures  shall have ceased to exist,  unless and until the Trustee shall have
received an Officers' Certificate to such effect.

                  XIII.7. Application by Trustee of Monies Deposited.

                  Anything in this  Indenture to the  contrary  notwithstanding,
any  deposit of moneys by the  Company  with the  Trustee  or any  paying  agent
(whether or not in trust) for the payment of the principal of (and  premium,  if
any) or  interest  on any  Debentures  shall be  subject  to the  provisions  of
Sections 13.1,  13.2,  13.3, and 13.4 of this Indenture except that, if not less
than one day prior to the date on which by the terms of this  Indenture any such
monies may become payable for any purpose (including,  without  limitation,  the
payment of either the principal of (and premium,  if any) or the interest on any
Debenture and any amounts  immediately due and payable upon the execution of any
instrument  acknowledging  satisfaction  and  discharge  of this  Indenture,  as
provided in Article  Fourteen)  the Trustee shall not have received with respect
to such monies the notice  provided for in Section 13.6,  then  anything  herein
contained to the contrary notwithstanding, the Trustee shall have full power and
authority  to receive such monies and to apply the same to the purpose for which
they were  received,  and shall not be  affected  by any notice to the  contrary
which may be received by it on or after such date.

                  XIII.8. Subordination Rights Not Impaired.

                  Nothing in this Indenture  shall:  (i) impair,  as between the
Company and Holders of  Debentures,  the  obligation  of the  Company,  which is
absolute and  unconditional,  to pay principal of and interest on the Debentures
in accordance  with their terms;  (ii) affect the relative  rights of Holders of
Debentures  and  creditors  of the  Company  ,  other  than  holders  of  Senior
Indebtedness;  or (iii) prevent any Holder of  Debentures  from  exercising  its
available  remedies  upon a default,  subject to the rights of holders of Senior
Indebtedness  to  receive   distributions   otherwise   payable  to  Holders  of
Debentures.  If the Company  fails because of this Section 13.8 to pay principal
of or interest on a Debenture on the due date,  such failure shall  nevertheless
be deemed a default.  For the purpose of this Section 13.8,  the term  "default"
means any event which is, or after notice or lapse of time or both would become,
an Event of Default as defined in Section 7.1.

                  The Trustee or any Paying Agent may continue to make  payments
on the  Debentures  and shall not at any time be charged  with  knowledge of the
existence of any facts which would prohibit the making of such payments until it
receives  notice  reasonably  satisfactory  to it that  payments may not be made
under  this  Section  13.8 and,  prior to the  receipt of any such  notice,  the
Trustee shall be entitled to assume conclusively that no such facts exist.

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                  XIII.9. Trustee to Effectuate Subordination.

                  Each  Holder  of  the  Debentures  by his  acceptance  thereof
authorizes  and expressly  directs the Trustee on his behalf to take such action
as may be necessary or appropriate to effectuate the  subordination  provided in
this Article Thirteen and irrevocably  appoints the Trustee his attorney-in-fact
for such  purpose,  including,  in the  event of any  dissolution,  winding  up,
liquidation or reorganization of the Company (whether in bankruptcy,  insolvency
or  receivership  proceedings or upon an assignment for the benefit of creditors
or  otherwise)  tending  towards  liquidation  of the business and assets of the
Company,  the  authority  to file a claim for the  unpaid  balance of its or his
Debentures in the form required in said  proceedings  and to cause said claim or
proof of debt to be approved.  If the Trustee does not exercise its authority to
file a proper  claim or proof of debt in the form  required  in such  proceeding
prior to thirty  days  before the  expiration  of the time to file such claim or
claims,  then the Holder or Holders of Senior Indebtedness are hereby authorized
to and have the right to file and are hereby  authorized to file an  appropriate
claim for an on behalf of the Holders of said Debentures.

                  XIII.10. Rights of Trustee as Holder of Senior Indebtedness.

                  The  Trustee  shall be entitled to all of the rights set forth
in this Article Thirteen in respect of any Senior Indebtedness, at any time held
by it to the same extent as any other Holder of Senior Indebtedness, and nothing
in Section  8.13 of this  Indenture  or  elsewhere  in this  Indenture  shall be
construed to deprive the Trustee or any of its rights as such Holder.

                  XIII.11. Article Thirteen Not to Prevent Event of Default.

                  The  failure  to  make a  payment  on  account  of  principal,
premium, if any, or interest by reason of any provision in this Article Thirteen
shall not be construed 

                                      114



as  preventing  the  occurrence  of an Event of Default under Section 7.1 of the
Indenture.


                                      XIV

                    SATISFACTION AND DISCHARGE OF INDENTURE;
                                DEPOSITED MONEYS

                 XIV.1. Satisfaction and Discharge of Indenture.

                  If the Company shall  deliver to the Trustee for  cancellation
all Debentures  theretofore  authenticated (other than any Debentures that shall
have been destroyed, lost or stolen and that shall have been replaced or paid as
provided in Section 2.9) and not theretofore cancelled, or if all the Debentures
not theretofore  delivered to the Trustee for cancellation shall have become due
and payable  (the date on which such  Debentures  become due and  payable  being
hereinafter in this Article XIV called the "maturity  date"), or shall have been
called for redemption pursuant to Article III hereof, or provision  satisfactory
to the Trustee  shall have been made for the giving of notice of  redemption  as
provided in said Article III, and the Company shall have deposited in trust with
the  Trustee or with any paying  agent  (other  than the  Company)  funds (to be
immediately  available  for  payment)  sufficient  to pay at  maturity  or  upon
redemption  all of the  Debentures  (other than any  Debentures  which have been
destroyed, lost or stolen and which shall have been replaced or paid as provided
in Section  2.7) not  theretofore  cancelled  or  delivered  to the  Trustee for
cancellation,  including  principal (and premium, if any) and interest due or to
become due to such maturity date or date fixed for  redemption,  as the case may
be, then:

                  (a) this Indenture shall cease to be of further effect (except
         as to any remaining rights of registration of transfer, of exchange and
         to convert  the  Debentures  prior to the close of business on the date
         fixed for  redemption  into Common Stock as provided in Article IV) and
         on or after such  maturity  date or date fixed for  redemption,  as the
         case may be, the Trustee,  on demand of the Company  accompanied  by an

                                      115


         Officers'  Certificate  and an Opinion of Counsel,  and at the cost and
         expense of the Company, shall execute proper instruments  acknowledging
         satisfaction of and discharging this Indenture; and

                  (b)  all   obligations  of  the  Company  in  respect  of  the
         Debentures  shall  cease and be  discharged,  and the  Holders  of such
         Debentures shall thereafter be restricted exclusively to such funds for
         any and all  claims of  whatsoever  nature  on their  part  under  this
         Indenture or with respect to such Debentures.

                  Notwithstanding   the   satisfaction  and  discharge  of  this
Indenture,  the rights,  remedies,  immunities and defenses of the Trustee under
this  Indenture,  including  but not limited to those  contained in Section 8.1,
with respect to actions taken or omitted to be taken  pursuant to this Indenture
and  events  occurring  prior  to  such  satisfaction  and  discharge,  and  the
obligations of the Company to the Trustee under Section 8.6, shall survive.

                  XIV.2.  Application by Trustee of Funds  Deposited for Payment
                          of Debentures.

                  All moneys deposited with the Trustee pursuant to Section 14.1
shall be held in trust and  applied by it to the  payment to the  Holders of the
particular  Debentures,  for the payment or redemption of which such moneys have
been deposited  with the Trustee,  of all sums due and to become due thereon for
principal (and premium, if any) and interest.

                  XIV.2. Repayment of Moneys Held by Paying Agent.

                  In  connection  with the  satisfaction  and  discharge of this
Indenture all moneys then held by any Paying Agent under the  provisions of this
Indenture  shall,  upon  demand of the  Company or the  Trustee,  be paid to the
Trustee  and  thereupon  such paying  agent  shall be released  from all further
liability with respect to such moneys.

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                  XIV.4.   Moneys Deposited for Redemption of Debentures
                           Subsequently Converted to be Returned to Company.

                  All moneys  deposited with the Trustee or any paying agent for
the payment or redemption of Debentures subsequently converted shall be returned
to the  Company  upon  its  written  request.  All  moneys  deposited  with  any
conversion  agent in connection  with the Debentures  surrendered for conversion
between the Record Date for the  payment of interest on the  Debentures  and the
interest  payment  date of such  interest  shall  be  paid  over to the  Company
promptly after such interest payment date.

                  XIV.5.  Payment of Deposited Money to Company After Lapse of
                          Time.

                  In case  the  Holder  of any  Debenture  entitled  to  payment
hereunder at any time  outstanding  hereunder  shall not, within two years after
the maturity date of such Debenture, or if such Debenture shall have been called
for  redemption,  then within two years after the date fixed for  redemption  of
such Debenture, claim the amount on deposit with the Trustee or other depositary
for the payment of such  Debenture,  the Trustee or other  depositary  shall pay
over to the Company the amount so deposited, upon receipt of a request signed by
the President,  a Vice President or the Treasurer of the Company,  and thereupon
the  Trustee or other  depositary  shall be  released  from any and all  further
liability with respect to the payment of such Debenture,  and the Holder of said
Debenture as an unsecured  creditor shall be entitled (subject to any applicable
statute of limitations) to look only to the Company for the payment thereof.

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                                       XV

                    IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
                             OFFICERS AND DIRECTORS

                  XV.1.  Immunity of Incorporators,  Stockholders, Officers and
                         Directors.

                  Except for  liabilities  arising under the Securities  Act, no
recourse shall be had for the payment of the principal of (and premium,  if any)
or the 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
hereby shall be had against any  incorporator,  stockholder,  officer,  trustee,
director,  past, present or future, as such of the Company or of any predecessor
or successor corporation, whether by virtue of any constitution, statute or rule
of law or  equity,  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 issue of the Debentures.

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                                      XVI
 
                           RIGHT TO REQUIRE REPURCHASE

                  XVI.1. Right to Require Repurchase.

                  (a) In the event of a Change of  Control,  each  Holder  shall
have the right to require  the  Company to  repurchase  all or a portion of such
Holder's  Debentures  at a purchase  price  equal to the  principal  amount plus
accrued  interest to the date of  repurchase.  Any such tender of Debentures for
repurchase  shall be accompanied by the attached  Warrants,  which may either be
exercised or, upon failure of such exercise,  shall expire upon such repurchase.
At the option of the  Company,  the  repurchase  price may be paid in cash or by
delivery of Shares having a Market Value equal to the repurchase price.  "Market
Value," on a per Share basis, means the amount determined by multiplying (x) the
applicable  Stock Price Factor on the date notice of  repurchase is given by (y)
the  applicable  Exchange  Rate Factor on such date  (provided  that in no event
shall the Exchange  Rate Factor be less than  1.1175),  and by  multiplying  the
product so achieved by 75%.

                  A "Change of Control"  shall be deemed to have occurred at the
time when persons  other than the Existing  Control  Group shall have become the
beneficial  owner  (within the meaning of Rule 13d-3 under the Exchange  Act) of
more  than  50% of the  aggregate  voting  power  of the  Company,  unless  such
acquisition  shall have been approved by a two-thirds  (66 2/3%) majority of the
Continuing Directors of the Company.

                  (b) In the event the Company does not cause the  Debentures to
be listed for trading on the Luxembourg  Stock Exchange  within ninety (90) days
after the Initial Closing Date, each Holder shall have the right,  during the 30
day period following receipt of the notice described in Section 16.2, to require
the Company to  repurchase  all or a portion of such  Holder's  Debentures  at a
purchase price equal to the principal  amount plus accrued  interest to the date
of repurchase. Any such tender of Debentures for repurchase shall be accompanied
by the attached Warrants,


                                      119

which may either be exercised  or, upon failure of such  exercise,  shall expire
upon such repurchase.  At the option of the Company, the repurchase price may be
paid in cash or by  delivery  of  Shares  having  a  Market  Value  equal to the
repurchase  price.  "Market  Value,"  on a per Share  basis,  means  the  amount
determined  by  multiplying  (x) the  applicable  Stock Price Factor on the date
notice of repurchase is given by (y) the applicable Exchange Rate Factor on such
date  (provided  that in no event  shall the  Exchange  Rate Factor be less than
1.1175),  and by  multiplying  the product so achieved by 75%. In the event that
the  Debentures  are  listed  for  trading  on  the  Luxembourg  Stock  Exchange
subsequent  to ninety  (90)  days  after  the date of  authentication,  then the
Holders will no longer have the right under this Section  16.1(c) to require the
Company to repurchase any Debentures not theretofore repurchased.

                  (c) The  right to  require  repurchase  at the  option  of the
Holder is subject to the  restriction  that the Company may not  repurchase  any
Debenture at any time when the subordination  provisions of this Indenture would
not permit the  Company to make a payment of  principal,  premium or interest on
the Debentures.  Except where  inconsistent  with the provisions of this Article
Sixteen,  the  redemption  provisions  of Article  Three shall be  applicable to
repurchase under this Article Sixteen.


                                      120


                  XVI.2. Notice; Method of Exercising Repurchase Right.

                  (a) On or before  the 30th  calendar  day after any  Change in
Control,  and after  the 90th day  following  the  Initial  Closing  Date if the
Debentures are not then listed on the  Luxembourg  Stock  Exchange,  the Company
shall  give  or  cause  to be  given  notice  of any  event  giving  rise to the
repurchase  right set forth herein arising as a result thereof to each Holder to
the Debentures as such Holder's address appearing in the Debenture Register. The
Company  shall  also  cause a copy of such  notice of a  repurchase  right to be
published once in an Authorized Newspaper.  The Company shall notify the Trustee
of the  occurrence of any event giving rise to the  repurchase  right  described
herein as promptly as practical after such occurrence.

                  Each notice of a repurchase right shall state:

                  (i) the Repurchase Date,

                  (ii) the Repurchase Price,

                  (iii)  the  date  by  which  the  repurchase   right  must  be
                  exercised, and

                  (iv) a description of the procedure which a Holder must follow
                  to exercise a repurchase right.

                  No failure of the Company to give the  foregoing  notice shall
limit any Holder's right to exercise a repurchase right.

                  (b) To exercise a repurchase  right, a Holder shall deliver to
the Company  (or an agent  designated  by the  Company  for such  purpose in the
notice  referred  to in (a)  above) and the  Trustee on or before the  thirtieth
calendar day after the date of the Company  notice  provided  under this Section
16.2 (1) written  notice of the  Holder's  exercise of such right,  which notice
shall set


                                      121


forth the name of the  Holder,  the  principal  amount of the  Debentures  to be
repurchased and a statement that the option to exercise the repurchase  right is
being made thereby;  and (2) the Debentures with respect to which the repurchase
right is being  exercised,  duly  endorsed  for  transfer to the  Company.  Such
written notice shall be  irrevocable.  If the Repurchase  Date falls between any
regular Record Date and the next succeeding Interest Payment Date, Debentures to
be  repurchased  must be  accompanied by payment from the Holder of an amount in
cash equal to the interest thereon which the registered  Holder is to receive on
such Interest  Payment Date.  Any tender of Debentures  for  repurchase  will be
accompanied  by the attached  Warrants,  which may either be exercised  or, upon
failure of such exercise, will expire upon such repurchase.

                  (c) In the event a  repurchase  right  shall be  exercised  in
accordance with the terms hereof,  the Company shall pay or cause to be paid the
price  payable  with  respect to the  Debenture  or  Debentures  as to which the
repurchase  right has been  exercised in cash to the Holder of such Debenture or
Debentures  on the  Repurchase  Date.  In the event that a  repurchase  right is
exercised with respect to less than the entire principal amount of a surrendered
Debenture,  the Company shall execute and deliver to the Trustee and the Trustee
shall  authenticate  for  issuance in the name of the Holder a new  Debenture or
Debentures,  with a Guarantee or Guarantees  endorsed thereon,  in the aggregate
principal amount of the unrepurchased portion of such surrendered Debenture.

                  (d) In the event that the  Holders  exercise  their  rights to
require the Company to repurchase  Debentures pursuant to the provisions of this
Article XVI, the Company  shall  comply with any  applicable  tender offer rules
under the Exchange Act,  including,  to the extent  applicable,  Rules 13e-4 and
14e-1, as then in effect, with respect to any such purchase.

                  XVI.3. Deposit of Repurchase Price.

                  Prior to the  Repurchase  Date, the Company shall deposit with
the  Trustee  or with a Paying  Agent (or,  if


                                       122


the Company is acting as its own Paying  Agent,  segregate  and hold in trust as
provided in Section  2.7) an amount of money  sufficient  to pay the  Repurchase
Price of the Debentures which are to be repaid on the Repurchase Date.

                  XVI.4. Debentures Not Repurchased on Repurchase Date.

                  If any Debenture  surrendered  for repurchase  shall not be so
paid on the Repurchase Date, the principal  shall,  until paid, bear interest to
the extent  permitted by applicable law from the  Repurchase  Date at a rate per
annum borne by such Debenture.

                  XVI.5. Debentures Repurchased in Part.

                  Any Debenture which is to be repurchased only in part shall be
surrendered  at any office or agency of the Company  designated for that purpose
pursuant  to  Section  2.6  (with,  if the  Company or  Debenture  Registrar  so
requires,  due  endorsement  by,  or  written  instrument  of  transfer  in form
satisfactory  to the Company and the Debenture  Registrar  duly executed by, the
Holder  thereof or his attorney  duly  authorized  in writing),  and the Company
shall execute,  and the Trustee shall  authenticate and deliver to the Holder of
such Debenture  without  service charge,  a new Debenture or Debentures,  with a
Guarantee or Guarantees  endorsed  thereon,  of any authorized  denomination  as
requested by such Holder, in aggregate principal amount equal to and in exchange
for the unrepurchased portion of the principal of the Debenture so surrendered.

                  XVI.6. Purchase of Warrants.

                  Any  repurchase of  Debentures by the Company  pursuant to the
provisions  of this  Article  XVI shall be  automatically  deemed to include the
repurchase  by  the  Company  of  the  related   Warrants   without   additional
consideration,  and all such Warrants shall be surrendered by the Holder thereof
for  cancellation  at the same  time,  and in the same  manner,  as the  related
Debentures.


                                      123


                            MISCELLANEOUS PROVISIONS

                  XVII.1. Successors and Assigns of Company Bound by Indenture.

                  All the  covenants,  stipulations,  promises and agreements in
this  Indenture  contained  by or in  behalf  of  the  Company  shall  bind  its
successors and assigns, whether so expressed or not.

                  XVII.2.Acts  of  Board,  Committee  or  Officer  of  Successor
                         Corporation Valid.

                  Any act or  proceeding  by any  provision  of  this  Indenture
authorized  or  required  to be done or  performed  by any board,  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 successor of the Company.

                  XVII.3. Surrender of Powers by Company.

                  The Company by instrument in writing  executed by authority of
its Board of Directors  and  delivered to the Trustee may  surrender  any of the
powers  reserved to the Company and thereupon  such power so  surrendered  shall
terminate both as to the Company and as to any successor corporation.


                                      124


                  XVII.4. Required Notices or Demands May be Served by Mail.

                  Except to the extent otherwise provided in this Indenture, any
notice or  demand  which by any  provision  of this  Indenture  is  required  or
permitted  to be given or served by the Trustee or by the Holders of  Debentures
to or on the Company may be given or served by being deposited, postage prepaid,
first class mail, in a post-office letterbox addressed (until another address is
filed in writing by the Company  with the Trustee) as follows:  Palomar  Medical
Technologies,  Inc.,  Attention:  President,  66  Cherry  Hill  Drive,  Beverly,
Massachusetts 01915. Any notice,  election,  request or demand by the Company or
any  Debentureholder  to or upon  the  Trustee  shall  be  deemed  to have  been
sufficiently given or made, for all purposes,  if given or made at the principal
office of the Trustee at 6201 15th Avenue, 3rd Floor, Brooklyn, New York 10005.

                  XVII.5.Indenture and  Debentures to be Construed in Accordance
                         with Laws of State of New York.

                  This  Indenture  and each  Debenture  shall be  deemed to be a
contract  made  under the laws of the State of New  York,  and for all  purposes
shall be governed by and construed in accordance  with the internal laws of said
State. Under the Judiciary Law of the State of New York, a judgment or decree in
an action based upon an  obligation  denominated  in a currency  other than U.S.
dollars shall be rendered in the foreign  currency of the underlying  obligation
and converted into U.S. dollars at a rate of exchange  prevailing on the date of
the entry of the judgment or decree.


                                      125


                  XVII.6.Officers'  Certificate  and  Opinion  of  Counsel to be
                         Furnished upon Applications or Demands by Company.

                  Upon any  application  or demand by the Company to the Trustee
to take  or  omit  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 or  omission  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 and such action or omission does
not violate the terms of this Indenture or the provisions of any applicable law.

                  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 statements or opinions  contained in such  certificate or opinion
are 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.

                  Any  certificate,  statement  or  opinion of an officer of the
Company  may  be  based,  insofar  as  it  relates  to  legal  matters,  upon  a
certificate,  an opinion of or representations  by counsel,  unless such officer
knows that the  certificate  or opinion or  representations  with respect to the
matters  upon  which  his  certificate,  statement  or  opinion  may be based as
aforesaid are erroneous. Any certificate, statement or Opinion of Counsel may be
based  (insofar as it relates to factual  matters,  information  with respect to
which is in the  possession of the


                                      126


Company) upon the certificate, statement or opinion of or representations by any
officer or  officers  of the  Company  with  direct  knowledge  of such  factual
matters, unless such counsel knows that the certificate, statement or opinion or
representations  with  respect  to  the  matters  upon  which  his  certificate,
statement or opinion may be based as aforesaid are erroneous.

                  Any  certificate,  statement  or  opinion of an officer of the
Company or of counsel may be based, insofar as it relates to accounting matters,
upon a certificate or opinion of or  representations by an accountant or firm of
accountants,  unless such officer or counsel, as the case may be, knows that the
certificate or opinion or representations with respect to the accounting matters
upon which his  certificate,  statement or opinion may be based as aforesaid are
erroneous.

                  XVII.7. Payments Due on Non-Business Days.

                  In any case  where  the date of  maturity  of  interest  on or
principal of the  Debentures or the date fixed for  redemption of any Debenture,
or the last day on which the Holder of any  Debenture  has the right to exercise
the right of  conversion  thereof,  shall not be a Business Day, then payment of
interest or principal  (or premium,  if any) or the exercise of such  conversion
right,  may be made on the next succeeding  Business Day with the same force and
effect as if made on the  nominal  date,  and no interest  shall  accrue for the
period after such nominal date until such next succeeding Business Day.

                  XVII.8. Effect of Invalidity of Provisions.

                  In case any one or more of the  provisions  contained  in this
Indenture  or in the  Debentures  shall for any  reason  be held to be  invalid,
illegal  or  unenforceable  in  any  respect,  such  invalidity,  illegality  or
unenforceability  shall not affect any other  provisions of this Indenture or of
such Debentures, but this Indenture and such Debentures shall be construed as if
such  invalid


                                       127


or  illegal  or  unenforceable  provision  had never  been  contained  herein or
therein.



                  XVII.9. Execution of 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.

                  American  Stock  Transfer  & Trust  Company,  the party of the
second part, hereby accepts the trusts in this Indenture  declared and provided,
upon the terms and conditions hereinabove set forth.


                  IN WITNESS WHEREOF,  Palomar Medical  Technologies,  Inc., the
party of the first part, has caused this Indenture to be signed in its corporate
name and  acknowledged  by Steven  Georgiev,  its Chief  Executive  Officer  and
Chairman  of the  Board,  and its  corporate  seal to be affixed  hereunto;  and
American  Stock  Transfer & Trust  Company,  the party of the second  part,  has
caused this Indenture to be signed and  acknowledged by its Chairman/CEO and its
corporate  seal to be affixed  hereunto,  all as of the day and year first above
written.

                          PALOMAR MEDICAL TECHNOLOGIES,
                                                      INC.

                          By: /s/ Steven Georgiev
                              ---------------------            
                          Name: Steven Georgiev

                          AMERICAN STOCK TRANSFER &
                            TRUST COMPANY


                          By: /s/ Herbert J. Lemmer
                              ---------------------
                          Name: Herbert J. Lemmer
                          Title: Vice President

                                      128


STATE OF                       )
                               :  ss.:
COUNTY OF                      )



                  On this ___ day of _________ 1996,  before me, the subscriber,
a Notary  Public  within  and for the County of  ______________  in the State of
________,  personally  appeared  to  me  _____________________________,   to  me
personally  known,  who,  being by me duly  sworn,  did say that he  resides  in
_______________________   and  is  the   ______________   of   Palomar   Medical
Technologies,  Inc., one of the corporations described in and which executed the
foregoing  instrument;  that he knows the corporate seal of the said corporation
and that the seal  affixed  to said  instrument  is the  corporate  seal of said
corporation;  and that said  instrument  was signed and sealed in behalf of said
corporation  by authority of its Board of Directors and that he  subscribed  his
name thereto by like authority.


(Seal)
                                            ________________________________
                                            Notary Public


                                      129


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



                  On this ____ day of ______, 1996, before me, the subscriber, a
Notary  Public  within  and for the County of New York in the State of New York,
personally appeared ___________________ to me personally known, who, being by me
duly  sworn,  did say that he resides  at_______________________________________
and is the  ___________________  of American Stock  Transfer & Trust Company,  a
company described in and which executed the foregoing instrument;  that he knows
the seal of said entity and that the seal affixed to said instrument is the seal
of said entity; and that said instrument was signed and sealed in behalf of said
entity by authority of its Board of Directors  and that he  subscribed  his name
thereto by like authority.



(Seal)
                             -----------------------------
                             Notary Public

                                      130

                                                                       EXHIBIT A

                     [FORM OF FACE OF REGISTERED DEBENTURE]

THE DEBENTURE(S)  REPRESENTED HEREBY ARE EACH PART OF A NONDETACHABLE UNIT, EACH
UNIT CONSISTING OF ONE SF 1,000 PRINCIPAL AMOUNT 4.5%  CONVERTIBLE  SUBORDINATED
DEBENTURE AND 24 COMMON STOCK PURCHASE WARRANTS. SAID DEBENTURE AND WARRANTS MAY
NOT BE TRANSFERRED OR TRADED SEPARATELY, AND ANY PURPORTED TRANSFER OF EITHER OF
SUCH  SECURITIES  SEPARATELY  FROM THE  OTHER  SHALL BE VOID  AND  SHALL  NOT BE
RECORDED  ON THE  BOOKS  AND  RECORDS  OF THE  COMPANY.  DEBENTURES  MAY ONLY BE
CONVERTED  IN  THEIR  ENTIRETY;  AND  EACH  DEBENTURE  TO BE  CONVERTED  MUST BE
ACCOMPANIED  BY  THE  RELATED  24  WARRANTS  FOR  EXERCISE  OR  CANCELLATION  IN
ACCORDANCE WITH THE TERMS THEREOF.

THE SECURITIES  REPRESENTED  BY THIS  CERTIFICATE  HAVE BEEN ISSUED  PURSUANT TO
REGULATION S, AN EXEMPTION FROM  REGISTRATION  PURSUANT TO THE PROVISIONS  UNDER
THE UNITED STATES  SECURITIES  ACT OF 1933, AS AMENDED (THE  "SECURITIES  ACT").
THESE SECURITIES MAY NOT BE TRANSFERRED, OFFERED OR SOLD PRIOR TO THE END OF THE
FORTY (40)-DAY PERIOD (THE "RESTRICTED  PERIOD")  COMMENCING ON THE LATER OF (I)
THE DATE THE SECURITIES ARE FIRST OFFERED TO PERSONS OTHER THAN DISTRIBUTORS (AS
DEFINED IN  REGULATION  S) OR (II) THE DATE OF THE FINAL CLOSING OF THE OFFERING
OF THE UNITS BY THE COMPANY, UNLESS SUCH TRANSFER,  OFFER OR SALE (I) IS MADE IN
AN  "OFFSHORE   TRANSACTION"   AND  NOT  TO  A  "U.S.   PERSON"  (OTHER  THAN  A
"DISTRIBUTOR")  (AS SUCH  TERMS ARE  DEFINED  IN  REGULATION  S) OR (II) IS MADE
PURSUANT TO  REGISTRATION  OR AN APPLICABLE  EXEMPTION UNDER THE SECURITIES ACT.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE CANNOT BE SOLD EXCEPT PURSUANT TO
THE TERMS AND  CONDITIONS  OF THE  OFFSHORE  SECURITIES  SUBSCRIPTION  AGREEMENT
BETWEEN THE COMPANY AND THE  INITIAL  HOLDER OF THE SHARES  REPRESENTED  BY THIS
CERTIFICATE, A COPY OF WHICH IS ON FILE AT THE OFFICES OF THE COMPANY.

BY REQUESTING  THE TRANSFER OF THE SECURITIES  REPRESENTED  BY THIS  CERTIFICATE
AFTER THE RESTRICTED PERIOD,  THE HOLDER OF THIS CERTIFICATE  REPRESENTS THAT IF
SUCH  TRANSFER IS MADE TO A U.S.  PERSON,  THAT AT THE TIME OF SUCH TRANSFER THE
HOLDER IS NOT AN  "AFFILIATE"  OF THE  COMPANY  (AS SUCH TERM IS  DEFINED IN THE
SECURITIES  ACT) OR AN  "UNDERWRITER"  OR "DEALER" (AS SUCH TERMS ARE DEFINED IN
THE ACT), HAS NOT ENGAGED IN ANY SHORT SALES OR SIMILAR HEDGE  TRANSACTIONS WITH
RESPECT TO THE COMPANY'S SHARES OF COMMON STOCK DURING THE RESTRICTED PERIOD, IS
NOT A  "DISTRIBUTOR"  AND SUCH  TRANSFER  IS NOT BEING MADE AS PART OF A PLAN OR
SCHEME TO EVADE THE REGISTRATION PROVISIONS OF THE SECURITIES ACT.

                                      A-1


                       PALOMAR MEDICAL TECHNOLOGIES, INC.
                       ----------------------------------

                        THIS SECURITY CANNOT BE EXCHANGED
                              FOR A BEARER SECURITY

                4.5% SUBORDINATED CONVERTIBLE DEBENTURE DUE 2003

No.____________                                                    SF___________

                                                          Unit CUSIP U69636 AA 3
                                                     Debenture CUSIP U69636 AB 1


                  PALOMAR  MEDICAL   TECHNOLOGIES,   INC.,  a  corporation  duly
organized and existing under the laws of the State of Delaware (the  "Company"),
for      value      received,      hereby      promises      to      pay      to
_____________________________________,  or registered assigns, the principal sum
of SF  ________  , on or  prior  to  June ,  2003,  at its  office  in  Beverly,
Massachusetts,  or at its  agency in  Luxembourg,  in such coin or  currency  of
Switzerland  as at the time of payment  shall be legal tender for the payment of
public and  private  debts,  and to pay  interest  thereon at the rate per annum
specified  in the title of this  Debenture,  in like coin or  currency,  at said
office  in  Beverly,  Massachusetts,  or  agency of the  Company  in  Luxembourg
quarterly in arrears on March 31, June 30,  September 30 and December 31 in each
year (each an "Interest Payment Date"), commencing on September 30, 1996, to the
Holders thereof as of the March 15, June 15, September 15 or December 15, as the
case may be, next preceding such Interest Payment Date (each, a "Record Date").

                  The interest on the Debentures  shall be computed on the basis
of a 360-day year of twelve 30-day months and in any case where the date for any
payment on the Debentures is not a Business Day, such payment may be made on the
next  succeeding  Business  Day and have the same force and effect as if made on
such original payment date, and no interest shall accrue for the period from and
after such  original  payment  date.  The  principal,  or premium,  if any,  and
interest on the  Debentures  shall be payable in Swiss Francs.  At the option of
the  Company,  payment of interest may be made by check mailed to the address of
the person entitled thereto as such address shall appear in the Register.

                  The Person in whose name any  Debenture is  registered  at the
close of business on the Record Date with  respect to an 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  thereof subsequent to


                                      A-2


such Record Date and prior to such Interest  Payment Date;  provided that if and
to the extent the Company  shall  default in the payment of the  interest due on
such Interest Payment Date, such defaulted interest shall be paid to the persons
in whose  names the  Debentures  are  registered  on a  subsequent  record  date
established  by  notice  given by mail by or on  behalf  of the  Company  to the
Holders of Debentures  not less than 15 days preceding  such  subsequent  record
date,  such  Record  Date to be not less than five  days  preceding  the date of
payment  of  such  defaulted  interest.   Notwithstanding  the  foregoing,  such
defaulted  interest  may be paid at any  time in any  other  lawful  manner  not
inconsistent  with  the  terms  of the  Debentures  or the  requirements  of any
securities  exchange on which the Debentures may be listed, and upon such notice
as may be required by such exchange.

                  If any Debenture or portion  thereof is called for  redemption
on a redemption date after the close of business on the Record Date preceding an
Interest  Payment Date and notice of such  redemption  has been mailed and funds
for such redemption have been duly provided,  interest accrued to the redemption
date on such Debenture or portion so called shall be paid only against surrender
of the Debenture for redemption in accordance with said notice.

                  Subject to the terms of the  Indenture,  the Company shall pay
to any "United States Alien" certain customary  additional  amounts in the event
of changes in the United States income tax laws affecting  withholding  taxes on
payments under the Debentures ("Additional  Payments"),  in order that every new
payment  of  principal  and  interest  on such  Debenture,  after  deduction  or
withholding  for or on  account  of any  present or future  tax,  assessment  or
governmental  charge  imposed  upon  or as a  result  of  such  payment  by  the
government  of the United  States or any state  thereof or by any  authority  or
agency thereof shall not be less that the amount  provided for in such Debenture
to be then due and payable, subject to certain customary exceptions. The Company
shall provide customary indemnification for Holders affected by the foregoing.

                  If the  Company is  required  to make  additional  payments to
Holders thereof by reason of deductions or withholdings for or on account of any
taxes,  assessments or other governmental charges (the "withholding taxes"), the
Company  shall deliver to the Trustee for delivery to the Holders at the time of
any such  payment  a  statement  specifying  the  amount of taxes so paid by the
Company as additional interest.


                                      A-3


                  REFERENCE  IS HEREBY  MADE TO THE FURTHER  PROVISIONS  OF THIS
DEBENTURE SET FORTH BELOW,  WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE
THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.

                  Unless  the  certificate  of  authentication  hereon  has been
executed  by  the  Trustee  by the  manual  signature  of one of its  authorized
officers,  this  Debenture  shall  not be  entitled  to any  benefit  under  the
Indenture or be valid or obligatory for any purpose.

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

Dated:

                                    PALOMAR MEDICAL TECHNOLOGIES,
                                      INC.


                                    By:________________________________
Attest:                             Title:


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

                          CERTIFICATE OF AUTHENTICATION

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

                                    AMERICAN STOCK TRANSFER & TRUST
                                     COMPANY, as Trustee


                                    By:________________________________
                                    Title:


                                      A-4


                              [FURTHER PROVISIONS]

                       PALOMAR MEDICAL TECHNOLOGIES, INC.

                4.5% SUBORDINATED CONVERTIBLE DEBENTURE DUE 2003


                  This Debenture is one of a duly authorized issue of Debentures
of the Company  designated as its 4.5% Subordinated  Convertible  Debentures due
2003  (the   "Debentures"),   limited  to  the  aggregate  principal  amount  of
Twenty-five  Million  Swiss Francs (SF  25,000,000),  all issued or to be issued
under and pursuant to an indenture dated as of June 24, 1996 (the  "Indenture"),
duly executed and delivered by the Company and American  Stock  Transfer & Trust
Company,  a corporation  duly organized and existing under the laws of New York,
as trustee (the "Trustee"),  to which Indenture and all indentures  supplemental
thereto  reference is hereby made for a description of the rights,  obligations,
duties and immunities  thereunder of the Trustee, the Company and the Holders of
the Debentures.

                  The indebtedness evidenced by the Debentures is, to the extent
and in the manner set forth in the Indenture, expressly subordinated and subject
in right of payment to the prior payment in full of all Senior Indebtedness,  as
defined  in the  Indenture,  and  this  Debenture  is  issued  subject  to  such
provisions,  and each Holder of this Debenture, by accepting the same, agrees to
and shall be bound by such provisions,  and authorizes the Trustee on his behalf
to take  such  action as may be  necessary  or  appropriate  to  acknowledge  or
effectuate  such  subordination  as provided in the  Indenture  and appoints the
Trustee his attorney-in-fact for any and all such purposes.

                  Transfer  of  Debentures.  Upon  surrender  at such  office or
agency of any Debentures for registration of transfer, the Company shall execute
and register and the Trustee shall  authenticate  and deliver in the name of the
transferee or  transferees a new Debenture or Debentures  for the same aggregate
principal  amount,  and no registration  of transfer of any Debentures  shall be
valid as  against  the  Company or the  Trustee  unless  made at such  office or
agency.

                  The   authorized   denominations   of   Debentures   shall  be
interchangeable in equal aggregate principal amounts. Debentures to be exchanged
shall be surrendered at the office or agency to be maintained by the Company,

                  Redemption  at  Option  of  Company.  The  Debentures  may  be
redeemed by the Company, as a whole or from time to


                                      A-5


time in part,  at any time on or after  the  third  anniversary  of the  Initial
Closing Date and prior to maturity or conversion, at a redemption price equal to
100% of the principal  amount to be redeemed plus accrued and unpaid interest to
the date fixed for redemption.

                  The  Debentures  may also be redeemed,  at any time as a whole
but not in part,  at a redemption  price equal to 100% of the  principal  amount
plus  accrued  and unpaid  interest to the date fixed for  redemption,  if, as a
result of any change in or amendment to the laws,  regulations  or published tax
rulings of the United States,  or any political  subdivision or taxing authority
thereof  or  therein,   affecting  taxation,  or  any  change  in  the  official
administration,  application  or  interpretation  of such laws,  regulations  or
published tax rulings either  generally or in relation to the Debentures,  which
change or amendment  becomes  effective on or after the Initial  Closing Date or
which change in official administration, application or interpretation shall not
have been  available  to the public  prior to such date and is  notified  to the
Company on or after such date,  it is determined by the Company that the Company
would be required to pay any  Additional  Payments  pursuant to the Indenture or
the  terms of any  Debenture  in  respect  of  interest  on the next  succeeding
Interest Payment Date. At the option of the Company, such redemption may be paid
in cash or by delivery of shares of Common Stock in the manner  described in the
Indenture.

                  Discharge of Company's  Obligations Upon Deposit of Redemption
Moneys. If proper notice of redemption shall have been given, and if the Company
shall have  deposited  with the Trustee or with any Paying Agent (other than the
Company),  for the  benefit of the Holders of any of the  Debentures  called for
redemption in whole or in part, funds (to be immediately  available for payment)
sufficient  to  redeem  the  Debentures  to be  redeemed  on the date  fixed for
redemption, at the applicable redemption price, together with accrued and unpaid
interest to the date fixed for  redemption,  then all obligations of the Company
in  respect  of such  Debentures  shall  cease  and be  discharged  (except  the
obligation  to issue shares of Common Stock of the Company  upon  conversion  of
Debentures on or prior to the  redemption  date in accordance  with the terms of
this Indenture and the  Debentures),  and the Holders of such  Debentures  shall
thereafter  be  restricted  exclusively  to such funds for any and all claims of
whatever  nature  on their  part  under the  Indenture,  or in  respect  of such
Debentures (except with respect to any rights of conversion as above stated).

                  Sinking Fund. As and for a mandatory sinking fund, the Company
shall pay to the  Trustee,  not less than


                                      A-6


one Business Day, on or before the  anniversary  of the Initial  Closing Date in
each of the years 2000 to 2003 2 (each a "Sinking Fund Payment  Date") an amount
of money equal to 25% of the aggregate amount of Debentures originally issued at
100% of their principal amount together with accrued and unpaid interest thereon
to the applicable Sinking Fund Payment Date, subject to reduction as provided in
the  Indenture.  The  Trustee  shall  apply cash  sinking  fund  payments to the
redemption of Debentures on the applicable Sinking Fund Payment Date.


                                      A-7


                  Right of  Debentureholders  to Convert  Debenture  Into Common
Stock.  The  Debentures may be converted by Holders,  in whole or in part,  from
time to time,  commencing  ninety days following the Initial Closing Date and on
or before the close of business prior to the seventh  anniversary of the Initial
Closing Date,  or the date of redemption  (or if that day is not a Business Day,
on the  preceding  Business  Day),  at any time on at least five  days'  written
notice to the Company, at the conversion prices described below (except that, in
respect  of  any  Debenture  or  Debentures,  or  portion  thereof,  called  for
redemption  before  such  date  pursuant  to the  Indenture,  such  right  shall
terminate at the close of business on the date fixed for such redemption  unless
the Company  shall default in payment due upon  redemption  thereof) to convert,
subject to the terms and  provisions of the Indenture,  the principal  amount of
any such Debenture or Debentures,  or portion  thereof as hereinafter  provided,
into (a) such whole number of duly  authorized,  validly issued,  fully paid and
non-assessable  shares of Common Stock (the  "Debenture  Conversion  Shares") as
determined by dividing (y) the principal amount of Debentures to be converted by
(z) the Holder  Conversion Price, (b) an amount of money payable in Swiss Francs
equal to the accrued and unpaid interest thereon to the date of conversion,  and
(c) an amount of money equal to the value of the fractional share remainder,  if
any, resulting from the calculation described in clause (a) above, to be paid in
Swiss Francs based on the Holder Conversion Price per share.

                  "Holder  Conversion  Price"  means  the  product  of  (w)  the
applicable Stock Price Factor, (x) the applicable  Exchange Rate Factor, (y) the
applicable   Holder   Conversion   Percentage  Factor  and  (z)  the  applicable
Antidilution Factor.

                  "Stock Price Factor"  means a factor,  to be calculated by the
Company with respect to each December 15, February 15, April 15, June 15, August
15, and October 15 (each a "Reset  Date"),  and to be applicable in the two full
calendar months  following the Reset Date, and equal to the average daily Nasdaq
closing  price per Share (or,  if the Company is listed or quoted on an exchange
in the United States other than Nasdaq, the closing price on such exchange), for
the thirty  trading  days  immediately  preceding  the  applicable  Reset  Date;
provided that in no event shall the Stock Price Factor be less than U.S.  $12.00
(subject to adjustment),  regardless of the actual Stock Price Factor  otherwise
determined.

                  "Exchange Rate Factor" means a factor, to be calculated by the
Company with respect to each Reset Date,  and to be  applicable  in the two full
calendar  months


                                      A-8


following the Reset Date,  and equal to the average Noon Buying Rate (as defined
below) for the thirty trading days  immediately  preceding the applicable  Reset
Date;  provided  that in no event  shall the  Exchange  Rate Factor be less than
1.1175. "Noon Buying Rate" means the exchange rate for one U.S. dollar expressed
in Swiss  Francs,  based  upon the noon  buying  rate in New York City for cable
transfers  in Swiss  Francs,  as certified  for customs  purposes by the Federal
Reserve Bank of New York.

                  "Holder  Conversion  Percentage  Factor"  means  a  conversion
percentage, determined on the date notice of conversion is given, which shall be
(i) 100% until the day preceding the third  anniversary  of the Initial  Closing
Date, (ii) 95% from the third  anniversary of the Initial Closing Date until the
day preceding the fourth anniversary of the Initial Closing Date; (iii) 90% from
the fourth  anniversary of the Initial  Closing Date until the day preceding the
fifth  anniversary  of the  Initial  Closing  Date;  (iv)  85%  from  the  fifth
anniversary  of the  Initial  Closing  Date  until the day  preceding  the sixth
anniversary of the Initial Closing Date; and (v) 80% from the sixth  anniversary
of the Initial Closing Date until the seventh anniversary of the Initial Closing
Date.

                  If any  Debenture  is  converted  in  part,  the  Company,  on
surrender of such Debenture for conversion,  shall execute such new Debenture or
Debentures  and shall deliver to the Trustee (a) the  surrendered  Debenture for
cancellation,  or if such Debenture has been duly cancelled by the Company, such
duly   cancelled   Debenture,   (b)  such  new  Debenture  or   Debentures   for
authentication,  and (c) unless the Trustee is a conversion  agent,  a statement
signed by any officer of the Company,  or by any agent maintained by the Company
for conversion of Debentures,  stating the principal  amount of the  surrendered
Debenture which has been converted and requesting the authentication of such new
Debenture or Debentures;  and thereupon the Trustee shall  authenticate  and the
Company shall deliver or cause to be delivered  such new Debenture or Debentures
to such Debentureholder.

                  Right of Company to Convert  Debenture  into  Common  Stock of
Company.  The Debentures may be converted by the Company,  in whole or from time
to time in part,  into (a) that  whole  number of  Debenture  Conversion  Shares
determined by dividing (y) the sum of the  principal  amount of Debentures to be
converted,  by (z) the Company  Conversion Price, (b) an amount of money payable
in Swiss Francs equal to the accrued and unpaid interest  thereon to the date of
conversion,  and (c) an  amount of money  equal to the  value of the  fractional
share remainder,  if any, resulting from the calculation described in clause (a)


                                      A-9


above,  to be paid in Swiss  Francs  based on the Company  Conversion  Price per
share.

                  "Company  Conversion  Price"  means  the  product  of (w)  the
applicable Stock Price Factor, (x) the applicable  Exchange Rate Factor, (y) the
applicable  Company   Conversion   Percentage  Factor  and  (z)  the  applicable
Antidilution Factor.

                  "Company  Conversion  Percentage  Factor"  means a  conversion
percentage, determined on the date notice of conversion is given, which shall be
(i) 100% until the day preceding the third  anniversary  of the Initial  Closing
Date,  (ii) 92.5% from the third  anniversary of the Initial  Closing Date until
the day  preceding the fourth  anniversary  of the Initial  Closing Date;  (iii)
87.5% from the fourth  anniversary  of the  Initial  Closing  Date until the day
preceding the fifth anniversary of the Initial Closing Date; (iv) 82.5% from the
fifth  anniversary of the Initial Closing Date until the day preceding the sixth
anniversary  of  the  Initial  Closing  Date;  and  (v)  77.5%  from  the  sixth
anniversary  of the Initial  Closing Date until the seventh  anniversary  of the
Initial Closing Date.

                  Exercise of Conversion Privilege.  Debentures may be converted
only in units of SF 1,000 and integral multiples thereof. A holder of Debentures
desiring to convert  Debentures  will not be required to exercise  the  attached
Warrants.  However, if the Warrants are unexercised,  they will expire upon such
conversion by the holder of  Debentures or upon  conversion or redemption at the
option of the Company.  In addition,  during the period  beginning 90 days after
the Initial Closing Date and ending 119 days following the Initial Closing Date,
any conversion of Debentures  will  necessarily  result in the expiration of the
Warrants attached thereto.

                  A Holder may exercise the  conversion  privilege by completing
the Conversion  Notice below and  surrendering to the Company,  at the office or
agency to be  maintained  by the  Company for that  purpose,  the  Debenture  or
Debentures so to be converted.  The Conversion  Notice shall also state the name
or names  (together  with  address and tax  identification  number to the extent
required),  if different  from the name of the registered  Holder,  in which the
certificate  or  certificates  for such shares of Common  Stock shall be issued.
Debentures  surrendered  for conversion  shall (if so required by the Company or
the Trustee) be duly endorsed by, or  accompanied  by instruments of transfer in
form  satisfactory to the Company duly executed by, the registered Holder or his
duly  authorized  attorney,  and be  accompanied  by a  signature  guaranty by a
commercial  bank or trust  company or other  institution  which may be


                                      A-10


required under applicable laws or regulations, and any Debentures so surrendered
during the period  from the close of business on any Record Date for the payment
of interest on the Debentures to the opening of business on the interest payment
date shall (except in the case of Debentures or portions thereof which have been
called for redemption on a redemption date within such period) be accompanied by
payment in funds  acceptable  to the Company of an amount  equal to the interest
payable on such  interest  payment  date;  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 the quarterly  interest  payment
due in respect of any  Debenture  converted  shall be paid by the Company on the
interest payment date to the Debentureholder of such converted Debenture on such
Record  Date,  provided  that if the Company  defaults in payment of interest on
such interest payment date, the amount previously paid by the Debentureholder to
the Company in respect of interest upon conversion of Debentures shall be repaid
to the  Debentureholder.  Except as expressly  set forth in this  paragraph,  no
payment or adjustment  shall be made on conversion of any Debenture for interest
accrued thereon or for dividends on securities issued upon such conversion.

                  Adjustment of Antidilution  Factor.  The  Antidilution  Factor
referred to above in the  calculation of the Conversion  Prices shall be subject
to adjustment from time to time as follows:

                  (a) In the event that the Company  shall at any time after the
date hereof subdivide or combine the outstanding shares of Common Stock or issue
additional  shares of Common  Stock as a dividend or other  distribution  on the
Common  Stock,  the  Antidilution  Factor  in effect  immediately  prior to such
subdivision or combination of shares or share dividend or distribution  shall be
proportionately  adjusted  so that,  with  respect to each such  subdivision  of
shares or share  dividend  or  distribution,  the number of shares of the Common
Stock  deliverable  upon  conversion  of each SF 1,000  principal  amount of the
Debentures  shall be  increased in  proportion  to the increase in the number of
shares of the then  outstanding  Common Stock resulting from such subdivision of
shares or share dividend or distribution.

                  (b)  Notwithstanding  anything in Sections  4.1 and 4.2 to the
contrary,  in the case of any capital  reorganization or any reclassification of
the Common Stock, or in the case of the  consolidation  or merger of the Company
with or into any other  corporation or in case of any sale or transfer of all or
substantially  all of the  assets  of the  Company  as may be  permitted  by the
provisions   hereof,


                                      A-11


the Company and each Holder of the Debentures  then  outstanding  shall have the
right thereafter to convert the principal amount of each such Debenture into the
kind and amount of shares of stock and other securities and property  receivable
upon  such  reorganization,  reclassification,  consolidation,  merger,  sale or
transfer by a holder of the number of shares of Common Stock of the Company into
which  such  Debenture  might  have  been  converted  immediately  prior to such
reorganization, reclassification,  consolidation, merger, sale or transfer; and,
in any such case,  appropriate  adjustment  (as  determined in good faith by the
Board of Directors  of the  Company)  shall be made in order that the rights and
interests  of the holders  thereafter  shall be as nearly  equivalent  as may be
practicable to the rights and interests provided for in the Indenture.

                  (c)  Whenever  the  Company  shall  fix a record  date for the
holders of the Common Stock for the purpose of determining the holders  entitled
to  subscribe  for or purchase  shares of Common Stock at a price per share less
than  the  Closing  Price  of the  Common  Stock  as of such  record  date,  the
Antidilution Factor shall be adjusted so that the number of shares of the Common
Stock  into  which  each SF  1,000  principal  amount  of the  Debentures  shall
thereafter  be  convertible  shall be determined  by  multiplying  the number of
shares of the Common  Stock into  which  such SF 1,000  principal  amount of the
Debentures  was  theretofore  convertible  by a fraction of which the  numerator
shall be the number of shares of the Common Stock outstanding  immediately prior
to the  taking of such  record  plus the number of  additional  shares of Common
Stock offered for subscription or purchase and of which the denominator shall be
the number of shares of the Common Stock  outstanding  immediately  prior to the
taking of such  record  plus the number of shares of the Common  Stock which the
aggregate  offering  price  (without   deduction  of  any  expenses,   including
commissions  or  discounts) of the total number of shares of the Common Stock so
offered  would  purchase  at the  Closing  Price of the Common  Stock as of such
record date.

                  (d)  Whenever  the  Company  shall  fix a record  date for the
holders of the Common Stock for the purpose of determining the holders  entitled
to receive any distribution of evidences of its  indebtedness,  capital stock or
assets (other than a regularly  scheduled cash dividend and dividends payable in
stock for which  adjustment  is made  pursuant to the  Indenture),  or rights to
subscribe for or purchase any evidences of the Company's  indebtedness or assets
(other than rights  referred to in the preceding  paragraph),  the  Antidilution
Factor shall be appropriately adjusted.


                                      A-12


                  Events of Default.  In case an Event of Default, as defined in
the Indenture,  shall have occurred and be  continuing,  the principal of all of
the Debentures may be declared,  and upon such declaration shall become, due and
payable,  in the manner,  with the effect and subject to the conditions provided
in the Indenture, by either the Trustee or the holders of at least a majority in
aggregate principal amount of the Debentures then outstanding.

                  Registered Holder as Absolute Owner. The Company, the Trustee,
any paying agent, any conversion agent and any Debenture  Registrar may deem and
treat the person in whose name any Debenture  shall be registered upon the books
of the  Company as the  absolute  owner of such  Debenture  (whether or not such
Debenture  shall be  overdue  and  notwithstanding  any notice of  ownership  or
writing  thereon  made  by  anyone  other  than  the  Company  or any  Debenture
Registrar)  for  the  purpose  of  receiving  payment  of or on  account  of the
principal of (and premium, if any) and interest on (subject to the provisions of
the  Indenture)  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.

                  Modification  of Indenture  with Consent of Holders of 66-2/3%
in Principal  Amount of Debentures.  With the consent of the Holders (or persons
entitled to vote, or to give consents  respecting  the same) of not less than 66
2/3% in aggregate  principal  amount of the Debentures at the time  outstanding,
the Company, when authorized by a resolution of its Board of Directors,  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 the Indenture or
of any  supplemental  indenture  or of  modifying  in any  manner the rights and
obligations of the Holders of the Debentures and of the Company;  provided that,
without the consent of the Holders of all Debentures then  outstanding,  no such
supplemental indenture shall (i) extend the fixed maturity of any Debenture,  or
reduce the principal  amount  thereof,  or reduce the rate or extend the time of
payment of interest  thereon,  or reduce any premium payable upon the redemption
thereof, or (ii) alter the provisions of Article IV hereof respecting conversion
of the Debentures so as to affect the Debentures adversely,  or (iii) modify any
of the  provisions of this Indenture  with respect to the  subordination  of the
Debentures  in a manner  adverse  to the  Holders  thereof,  or (iv)  reduce the
aforesaid percentage of Debentures, the Holders of which are required to consent
to any such supplemental indenture.


                                      A-13


                  Immunity  of   Incorporators,   Stockholders,   Officers   and
Directors.  Except for liabilities arising under the Securities Act, no recourse
shall be had for the payment of the  principal of (and  premium,  if any) or the
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 the Indenture or in any supplemental  indenture,  or
in any  Debenture  or because of the  creation of any  indebtedness  represented
hereby shall be had against any  incorporator,  stockholder,  officer,  trustee,
director,  past, present or future, as such of the Company or of any predecessor
or successor corporation, whether by virtue of any constitution, statute or rule
of law or  equity,  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 the Indenture and the issue of the Debentures.

                  Right to  Require  Repurchase.  In the  event  of a Change  of
Control,  each Holder shall have the right to require the Company to  repurchase
all or a portion of such Holder's  Debentures  at a purchase  price equal to the
principal  amount  plus  accrued  interest to the date of  repurchase.  Any such
tender  of  Debentures  for  repurchase  shall be  accompanied  by the  attached
Warrants, which may either be exercised or, upon failure of such exercise, shall
expire upon such repurchase.  At the option of the Company, the repurchase price
may be paid in cash or by delivery of Shares  having a Market Value equal to the
repurchase  price.  "Market  Value,"  on a per Share  basis,  means  the  amount
determined  by  multiplying  (x) the  applicable  Stock Price Factor on the date
notice of repurchase is given by (y) the applicable Exchange Rate Factor on such
date  (provided  that in no event  shall the  Exchange  Rate Factor be less than
1.1175), and by multiplying the product so achieved by 75%.

                  A "Change of Control"  shall be deemed to have occurred at the
time when persons  other than the Existing  Control  Group shall have become the
beneficial  owner  (within the meaning of Rule 13d-3 under the Exchange  Act) of
more  than  50% of the  aggregate  voting  power  of the  Company,  unless  such
acquisition  shall have been approved by a two-thirds  (66 2/3%) majority of the
Continuing Directors of the Company.

                  In the event the Company does not cause the  Debentures  to be
listed for trading on the  Luxembourg  Stock  Exchange  within  ninety (90) days
after the Initial Closing Date, each Holder shall have the right,  during the 30
day period following receipt of the notice described in


                                      A-14


Section  16.2,  to require  the Company to  repurchase  all or a portion of such
Holder's  Debentures  at a purchase  price  equal to the  principal  amount plus
accrued interest to the date of repurchase in a manner similar to that set forth
in the second preceding paragraph.

                  The right to require repurchase at the option of the Holder is
subject to the restriction  that the Company may not repurchase any Debenture at
any time when the subordination provisions of the Indenture would not permit the
Company to make a payment of principal, premium or interest on the Debentures.

                  Indenture and  Debentures  to be Construed in Accordance  with
Laws of State of New York. The Indenture and each  Debenture  shall be deemed to
be a contract made under the laws of the State of New York, and for all purposes
shall be governed by and construed in accordance  with the internal laws of said
State. Under the Judiciary Law of the State of New York, a judgment or decree in
an action based upon an  obligation  denominated  in a currency  other than U.S.
dollars shall be rendered in the foreign  currency of the underlying  obligation
and converted into U.S. dollars at a rate of exchange  prevailing on the date of
the entry of the judgment or decree.

                  No reference herein to the Indenture and no provisions 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
premium, if any) and interest on this Debenture at the time and place and at the
rate and in the manner herein prescribed.

                  All terms  used in this  Debenture  which are  defined  in the
Indenture shall have the meanings assigned to them in the Indenture.


                                      A-15


                                CONVERSION NOTICE

                  The undersigned  holder of this Debenture  hereby  irrevocably
exercises the option to convert this Debenture, or portion hereof (which is SF )
below  designated,  into  Common  Shares  in  accordance  with the  terms of the
Indenture  referred  to in this  Debenture,  delivers  herewith  the  amount  of
interest  payable on the next Interest  Payment Date if this  conversion is made
between the Record Date for such Interest Payment Date and such Interest Payment
Date,  and directs  that such shares,  together  with a check in payment for any
fractional  share and any  Debentures  representing  any  unconverted  principal
amount hereof,  be delivered to and be registered in the name of the undersigned
unless a different name has been indicated below. If the Common Shares are to be
registered in the name of a person other than the  undersigned,  the undersigned
will pay all transfer taxes payable with respect thereto.

Dated:

                                                 ______________________________
                                                 (Signature  must  be guaranteed
                                                 by a bank or stockbroker who is
                                                 a  member  of  a national stock
                                                 exchange)

If shares or Debentures                          If only a portion of the      
are to be registered in                          Debentures is to be converted,
the  name  of a  Person                          please indicate:              
other      than     the     
Debentureholder, please                          1.  Principal  Amount to
print   such   Person's                              be converted:       
name and  address,  and                              SF                  
taxpayer identification                          
number,  if applicable:                          2.  Amount and denomination
                                                     of Registered  Debentures
                                                     representing  unconverted
                                                     principal amount to be
_______________________                              issued:

_______________________                          Amount:  SF

_______________________                          Denominations:  SF
                                                 (SF 1,000)




                                      A-16


                                   CERTIFICATE

                  This is to certify  that as of the date hereof with respect to
SF ________  principal  amount of the  above-captioned  debentures  presented or
surrendered on the date hereof (the  "Surrendered  Debentures") for registration
of transfer,  or for exchange or conversion  where the securities  issuable upon
such  exchange or  conversion  are to be registered in a name other than that of
the  undersigned  Holder  (each  such  transaction  being  a  "transfer"),   the
undersigned Holder (as defined in the Indenture)  certifies that the transfer of
Surrendered  Debentures  complies with the  restrictive  legend set forth on the
face of the Surrendered Debentures for the reason checked below:

_______                    The transfer of the Surrendered  Debentures  complies
                           with Rule 144 under the U.S.  Securities Act of 1933,
                           as amended (the "Securities Act"); or

_______                    The transfer of the Surrendered  Debentures  complies
                           with Rule 144A under the Securities Act; or

_______                    The transfer of the Surrendered  Debentures  complies
                           with  Rule  903 or  904 of  Regulation  S  under  the
                           Securities Act.

                                [Name of Holder]




Dated:   __________, ___*
                  *  To be dated the date
                     of presentation or
                     surrender


                                      A-17