EXH10-28

                    CONVERTIBLE DEBENTURE PURCHASE AGREEMENT

THIS CONVERTIBLE DEBENTURE PURCHASE AGREEMENT (this "Agreement") is entered into
effective  as of  this  17th  day  of  April,  1995,  by and  between  FiberCore
Incorporated,  a Nevada  corporation  (hereinafter  the  "Corporation")  and AMP
INCORPORATED, a Pennsylvania corporation (hereinafter the "Purchaser").

                                    RECITALS

A.   The  Corporation  desires  to  raise  money  by  the  sale  of a  debenture
     convertible   into  shares  of  Common  Stock  of  the   Corporation   (the
     "Debenture") to the Purchaser.

B.   The Purchaser  desires to purchase the Debenture from the  Corporation  and
     the Corporation desires to issue and sell the Debenture to the Purchaser on
     the terms and conditions hereinafter set forth.

                                    AGREEMENT

         NOW, THEREFORE,  In consideration of the mutual agreements,  covenants,
representations and warranties  contained in this Agreement,  the parties hereto
hereby agree as follows:

         1.       Authorization and Sale of Debenture.

                  a. Authorization.  The Corporation will authorize on or before
the Closing (as defined  below) the issuance of a  convertible  debenture in the
principal amount of $5,000,000  convertible into the Corporation's  Common Stock
in the form attached hereto as Exhibit A (the  "Debenture")  and the sale of the
Debenture to the Purchaser.

                  b. Sale of  Convertible  Debenture.  Subject  to the terms and
conditions hereof, the Corporation will issue and sell to the Purchaser, and the
Purchaser will purchase from the Corporation at the "Closing" (as defined below)
the Debenture.

         2.       Issuance and Payment.

                  a. Closing.

                           i) Subject to the terms and  conditions  hereof,  the
closing of the purchase and sale of the Debenture (the "Closing")  shall be held
(via facsimile  transmittal  and wire transfer) on April 17, 1995 at the offices
of Cadwalader,  Wickersham & Taft, 100 Maiden Lane, New York, New York, at 10:00
a.m., local time, or at such other time and place upon which the Corporation and
the Purchaser shall agree (the date of the Closing is hereinafter referred to as
the "Closing Date").



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                  b.  Purchaser's  Closing  Conditions.  The  obligation  to the
Purchaser to purchase the Debenture is subject to the  satisfaction  on or prior
to the Closing of the following conditions:

                           i) The  Corporation  shall  have duly  performed  and
complied  with each of the terms,  agreements  and  conditions  required by this
Agreement to be performed or complied with by it prior to or at the Closing, and
the Corporation shall have delivered a certificate, executed by the President or
Vice President of the Corporation, to such effect;

                           ii) Each of the representations and warranties of the
Corporation  contained herein or in any other documents delivered at or prior to
the Closing  shall be true and  accurate on and as of the Closing  with the same
effect as  though  made on and as of such date and the  Corporation  shall  have
delivered a certificate of the Corporation executed by its President or any Vice
President to such effect;

                           iii) All instruments and documents  required to carry
out this Agreement or incidental  thereto,  shall be reasonable  satisfactory to
the Purchaser, and the Purchaser shall have been furnished with certified copies
of all corporate  actions and proceeding  taken by the  Corporation to authorize
the execution, delivery and performance of all relevant documents to be executed
and delivered by the Corporation;

                           iv) No action,  suit,  proceeding or investigation by
or before any court, administrative agency or other governmental authority shall
have been  instituted  or threatened  to restrain,  prohibit or  invalidate  the
transactions contemplated by this Agreement;

                  c.  Corporation's  Closing  Conditions.  The obligation of the
Corporation to participate in the Closing is subject to the  satisfaction  on or
prior to the Closing of the following conditions:

                           i)  The  Purchaser  shall  have  duly  performed  and
complied  with in all  material  respects  each of the  terms,  agreements,  and
conditions  required by this  Agreement to be  performed or complied  with by it
prior to or at the Closing and the Purchaser  shall have delivered a certificate
of the Purchaser  executed by a duly authorized officer of the Purchaser to such
effect;

                           ii) Each of the representations and warranties of the
Purchaser  contained herein and in any other documents  delivered at or prior to
each  Closing  shall be true and accurate on and as of the Closing with the same
effect  as  though  made on and as of such  date and the  Purchaser  shall  have
delivered a certificate,  executed by the Purchaser or a duly authorized officer
of the Purchaser to such effect;

                           iii) All instruments and documents  required to carry
out this Agreement or incidental  thereto,  shall be reasonably  satisfactory to
the  Corporation  and the  Corporation  shall have been furnished with certified
copies of all corporate actions and


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proceedings  taken by the  Purchaser to authorize  the  execution,  delivery and
performance  of all  relevant  documents  to be executed  and  delivered  by the
Purchaser; and

                           iv) No action,  suit,  proceeding or investigation by
or before any court, administrative agency or other governmental authority shall
have been  instituted  or threatened  to restrain,  prohibit or  invalidate  the
transactions contemplated by this Agreement.

                  d. Closing Sale. At the Closing,  the Purchaser  shall deliver
to the Corporation the purchase price for its Convertible  Debenture in cash, by
certified check , or bank wire transfer and upon receipt thereof the Corporation
will deliver to the Purchase a duly executed Convertible Debenture.

         3. Corporation's Representations and Warranties. Except as set forth in
Exhibit C attached  hereto,  the  Corporation  hereby  represents  and  warrants
effective as of the Closing as follows:

                  a. Corporate  Organization and Standing.  The Corporation is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Nevada.  The  Corporation  has the requisite  corporate power to
carry on its business as presently  conducted and as proposed or contemplated to
be  conducted  in the future and to enter into and carry out the  provisions  of
this Agreement and the  transactions  contemplated  hereby.  The  Corporation is
presently  qualified to do business as a foreign corporation in any jurisdiction
where the failure to be so qualified would have a material adverse affect on the
Company's business.

                  b.  Subsidiaries.  The Corporation has no subsidiaries,  other
than  FiberCore  Glassfibre  Jena GmbH,  and does not  otherwise own or control,
directly or indirectly,  any equity interest in any corporation,  association or
business, other than FiberCore Glassfibre Jena GmbH.

                  c.       Corporate Capitalization.

                           i)  The   Corporation's   authorized   capital  stock
consists only of 20,000,000 shares of Common Stock. The Corporation has not more
than 6,594,264  shares of Common Stock  outstanding.  The Corporation has issued
warrants,  rights or options to purchase or acquire not more than 400,000 shares
of Common Stock and will  reserve not more than  400,000  shares of Common Stock
for  issuance  under a stock  option  plan.  There are no other shares of Common
Stock that are subject to purchase or acquisition from the Corporation  pursuant
to any  rights,  options,  warrants,  convertible  securities  (other  than  the
Debentures) or agreements.  All issued and  outstanding  shares of capital stock
are duly authorized, validly issued, fully paid and nonassessable.  No person or
entity  has  any  preemptive  right  to  acquire  any  unissued  shares  of  the
corporation.

                           ii) As of the date hereof,  the Corporation  does not
have any declared and unpaid dividends  (whether payable in cash,  securities or
other consideration).



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                  d.  Authorization.  All  corporate  action  on the part of the
Corporation,  its directors and  shareholders  necessary for the  authorization,
execution,  delivery and performance of this Agreement by the  Corporation,  the
authorization,  sale, issuance, and delivery of the Debenture, the capital stock
issuable  upon  conversion of the Debenture  (the  "Conversion  Shares") and the
performance of all of the Corporation's  obligations hereunder has been taken or
will be taken  prior to the  Closing.  This  Agreement,  and when  executed  and
delivered by the  Corporation,  the Debenture,  shall continue valid and binding
obligations of the Corporation,  enforceable in accordance with their respective
terms, subject to laws of general application relating to bankruptcy, insolvency
and the  relief of  debtors  and rules of law  governing  specific  performance,
injunctive relief or other equitable  remedies.  The Conversion Shares have been
duly and validly  reserved and, when issued in compliance with the provisions of
the Debenture,  will be validly issued,  fully paid and  nonassessable;  and the
Debenture and the  Conversion  Shares will be free of any liens or  encumbrance;
provided,  however,  that the Debenture and the Conversion Shares may be subject
to restrictions on transfer under state and/or federal securities laws.

                  e.   Litigation.   There  are  no  actions,   proceedings   or
investigations  pending  or, to the  Corporation's  best  knowledge,  threatened
against or  affecting  the  Corporation  which,  either  individually  or in the
aggregate,  might  result  in any  material  adverse  change  in  the  business,
prospects,  condition, affairs or operations of the Corporation or in any of its
properties or assets,  or in any material  impairment of the right or ability of
the  Corporation to carry on its business as proposed to be conducted,  or which
questions  the validity of this  Agreement or any action taken or to be taken in
connection herewith.

                  f.  Governmental  Consents.  No  consent,   approval,   order,
authorization or registration,  qualification, designation, license, declaration
or filing with any Federal or State  governmental  authority  is required on the
part of the Corporation in connection with the  consummation of the transactions
contemplated herein, except those that have been obtained or made.

                  g. Title to Properties and Assets; Liens, etc. The Corporation
has good and marketable  title to is properties and assets and good title so its
leasehold  estates,  in each case subject to no mortgage,  pledge,  lien, lease,
encumbrance, or charge, other than (I) those resulting from taxes which have not
yet become delinquent, (ii) minor liens and encumbrances which do not materially
detract from the value of the property subject thereto or materially  impair the
operation of the corporation,  and (iii) those that have otherwise arisen in the
ordinary course of business.

                  h. Patents and Trademarks.  To the best of its knowledge,  the
Corporation has sufficient trade names, copyrights, trade secrets,  information,
proprietary  title and  ownership of all  patents,  trademarks,  service  marks,
rights and processes  necessary for its business as now  conducted,  without any
conflict with or infringement of the rights of others.  There are no outstanding
options,  licenses, or agreements of any kind relating to the foregoing,  nor is
the  Corporation  bound by or a party to any options,  licenses or agreements of
any kind with respect to the patents,  trademarks,  service marks,  trade names,
copyrights, trade secrets, licenses,


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proprietary  rights and  processes of any other person or entity other than such
licenses or agreements  arising from the purchase of "off the shelf" or standard
products.  The  Corporation  is not aware that any of its employees is obligated
under any contract (including licenses,  covenants or commitments of any nature)
or other agreement, or subject to any judgment,  decree or order of any court or
administrative agency, that would interfere with their duties to the Corporation
or that  would  conflict  with the  Corporation's  business  as  proposed  to be
conducted.

                  i. Compliance with Other  Instruments.  The Corporation is not
in  violation of any term of its Articles or Bylaws,  any  mortgage,  indenture,
contract, agreement,  instrument,  judgment, decree, order or, to its knowledge,
any statute,  rule or regulation  applicable to the Corporation  which violation
would  materially  and  adversely  affect  the  business,  assets,  liabilities,
financial condition,  operations or prospects of the Corporation. The execution,
delivery,  and  performance  of, and  compliance  with,  this  Agreement and the
issuance and sale of the Debenture  pursuant hereto and of the Conversion Shares
pursuant to the Debenture, will not result in any such material violation, or be
in conflict  with or  constitute a default under any such term, or result in the
creation of any mortgage,  pledge, lien, encumbrance,  or charge upon any of the
properties or assets of the Corporation.  To the  Corporation's  knowledge,  all
material   instruments,   licenses,   contracts,   leases  or  other  agreements
(collectively  "Contracts")  to which the  Corporation  is a party are valid and
binding  and  in  full  force  and  effect  in all  material  respects  and  the
Corporation  has not been  notified  by any party  thereto  of any such  party's
intention or desire to  terminate or modify in any material  respect any of such
Contracts,  or of any claim or threat that the  Corporation  has breached any of
such Contracts.

                  j.  Compliance  with Laws. The Corporation is not in violation
of any  applicable  statute,  rule,  regulation,  order  or  restriction  of any
domestic  or foreign  government  or any  instrumentality  or agency  thereof in
respect of the conduct of its business of the ownership of its properties  which
violation  would   materially  and  adversely   affect  the  business,   assets,
liabilities, financial condition, operations or prospects of the Corporation. To
the  best of its  knowledge,  no  governmental  orders,  permissions,  consents,
approvals or authorizations  are required to be obtained and no registrations or
declarations  are  require  to be filed in  connection  with the  execution  and
delivery of this Agreement,  and the issuance of the Debenture or the Conversion
Shares,  except as such has been duly and  validly  obtained  or filed,  or with
respect to any filings that must be made after the Closing,  as will be filed in
a timely manner.

         4. Purchaser's Representations and Warranties. The Purchaser represents
and warrants to the Corporation that:

                  a.  Investment.  The  Purchaser is acquiring the Debenture and
any Conversion Shares (hereinafter collectively the "Securities") for investment
for its own account,  and not with a view to, or for resale in connection  with,
any  distribution  thereof,  and it has  no  present  intention  of  selling  or
distributing any such Securities.  The Purchaser understands that the Securities
have not been  registered  under the  Securities  Act by  reason  of a  specific
exception from the  registration  provisions of the Securities Act which depends
upon,  among other things,  the bona fide nature of the  investment as expressed
herein.



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                  b. Rule 144.  the  Purchaser  acknowledges  that  because  the
Securities  have not been  registered  under the Securities  Act, the Securities
must be held indefinitely  unless  subsequently  registered under the Securities
Act or an exemption from such registration is available.  The Purchaser is aware
of the provisions of Rule 144 promulgated under the Securities Act which permits
limited  resale  of  shares  purchased  in a  private  placement  under  certain
circumstances.

                  c. No Public Market. The Purchaser  understands that no public
market now exists for any securities  issued by the  Corporation  and that it is
uncertain whether a public market will ever exist for any such securities.

                  d. Access to Data.  The  Purchaser has had an  opportunity  to
discuss the  Corporation's  business,  management and financial affairs with its
management and to obtain any additional information necessary or appropriate for
deciding whether or not to purchase the Securities.  The Purchaser  acknowledges
that no  representations  or warranties have been made by the Corporation or any
agent thereof except as set forth in this Agreement.

                  e.  Investment  Experience.  The  Purchaser is an  "accredited
Purchaser" as that term is defined in Regulation D promulgated by the Securities
and Exchange commission.

                  f.  Previous  Investments.  The  Purchaser  is a purchaser  in
securities of companies in the  development  stage and  acknowledges  that it is
able to fend for itself,  can bear the economic risk of its  investment  and has
such  knowledge  and  experience  in financial  and business  matters that it is
capable  of  evaluating  the  merits  and risks of the  investment  contemplated
herein.

                  g. Risks. The Purchaser  understands that an investment in the
Corporation  involves a high degree of risk and is suitable  only for  investors
who can  afford  a loss of  their  entire  investment  and who  have no need for
liquidity from their investment.

                  h. Governmental  Consents.  To the Purchaser's  knowledge,  no
consent,   approval,  order,   authorization  or  registration,   qualification,
designation,  license,  declaration or filing with any governmental authority is
required on the part of the Purchaser in connection with the consummation of the
transactions contemplated herein.

         5. Restrictive Legends. Each certificate or other written documentation
representing  any of the  Securities  which the  Purchaser is  purchasing or may
purchase  hereunder  any other  securities  issued upon any stock  split,  stock
dividend,  recapitalization,  merger,  consolidation or similar event (unless no
longer  required in the opinion of the  counsel  for the  Corporation)  shall be
stamped or otherwise imprinted with legends  substantially in the following form
where applicable:

               "THE  SECURITIES  REPRESENTED BY THIS  CERTIFICATE  HAVE NOT BEEN
               REGISTERED  UNDER THE  SECURITIES  ACT OF 1933,  AS  AMENDED,  OR
               QUALIFIED UNDER ANY STATE SECURITIES LAW, AND


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               MAY NOT BE SOLD,  TRANSFERRED,  ASSIGNED OR  HYPOTHECATED  UNLESS
               THERE  IS AN  EFFECTIVE  REGISTRATION  STATEMENT  UNDER  SUCH ACT
               COVERING SUCH  SECURITIES,  OR THE HOLDER TO THE  CORPORATION  AN
               OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION,  STATING THAT
               SUCH SALE,  TRANSFER,  ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM
               THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT
               AND THE QUALIFICATION REQUIREMENTS UNDER STATE LAW."

         The Corporation shall be entitled to enter stop transfer notices on its
stock books with respect to the Securities.

         6. Registration Rights.  Purchaser is hereby granted the same rights to
registration  of the Conversion  shares under the Securities Act of 1933 and any
applicable  state  securities  laws  as  has  heretofore  been  granted  to  any
shareholder of the Corporation.

         7.  Collateral.  Payment of unpaid  principal sum and accrued  interest
under the Debenture shall be secured by a first perfected  security  interest as
provided in the Collateral  Assignment,  Patent Mortgage and Security  Agreement
attached  hereto as  Exhibit B (the  "Interim  Collateral")  until  such time as
Purchaser is granted a first  perfected  security  interest in and to all of the
Intended  Collateral as described in Exhibit D hereto.  Promptly upon the pledge
by the Corporation of the Intended Collateral in the manner set forth in Exhibit
D hereto,  the Purchaser  shall release all of its right,  title and interest in
the Interim  Collateral and shall execute and deliver to the Corporation any and
all  instruments  as may be  requested  by the  Corporation  for the  purpose of
effecting a release of all of the Purchaser's  right,  title and interest in and
to the Interim Collateral.

         8. Miscellaneous.

                  a. Survival.  The representations,  warranties,  covenants and
agreements made herein shall survive the Closing.

                  b.  Successors  and  Assigns.  Except as  otherwise  expressly
provided  herein,  the  provisions  hereof shall inure to the benefit of, and be
binding upon, the successors, and assigns the parties hereto.

                  c. Entire Agreement.  This Agreement and the Exhibits attached
hereto and the other documents delivered pursuant hereto constitute the full and
entire  understanding and agreement between and among the parties with regard to
the subject matter hereof and thereof.

                  d. Notice. Any notice,  payment, report or other communication
required  or  permitted  to be  given  by one  part to any  other  party by this
Agreement  shall be in  writing  and  shall be deemed  received  (i) at the time
served personally on the other party; (ii) two business days after being sent by
express, registered or certified first class mail, postage prepaid, addressed to
the other party or parties at its or their  address or  addresses  as  indicated
next to their


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signatures  below,  or to  such  other  address  as  any  addressee  shall  have
theretofore  furnished to the other parties by like notice;  (iii) one day after
being delivered to a recognized  commercial courier for next day delivery to the
other party at the address described in clause (ii); or (iv) one day after being
sent by  facsimile  with the  original  sent by first  class mail to the address
described in clause (ii).

                  e. Finder's and Broker's  Fees.  Each party hereto  represents
and  warrants  that it has retained no finder or broker in  connection  with the
transactions  contemplated by this Agreement, and hereby agrees to indemnify and
to hold the other  harmless  from any liability for any finder's or broker's fee
to any broker or other  person or firm (and the costs and  expenses of defending
against  such  liability  or  asserted  liability)  for which such  indemnifying
person, or any of its employees or representatives, are responsible.

                  f.  Titles  and  Subtitles.  The  titles of the  Sections  and
subsections of this Agreement are for the  convenience of reference only and are
not to be considered in construing this Agreement.

                  g. Counterparts.  This Agreement may be executed in any number
of counterparts,  each of which shall be an original,  but all of which together
shall constitute one instrument.

                  h.  Applicable  Law. This  Agreement  shall be governed by and
construed in  accordance  with the laws of the  Commonwealth  of  Massachusetts,
without regard to principals of conflicts of laws.

                  i. Use of Proceeds.  The  Corporation  may use the proceeds of
this  financing  for general  working  capital  purposes and for the purchase of
equipment.

                  j. Financial  Statements.  The Corporation  shall deliver from
time to time to the  Purchaser,  as  promptly as  practicable  after the date of
preparation  thereof,  copies of its monthly and quarterly  unaudited  financial
statements prepared in accordance with generally accepted accounting principles,
and within 4 months following the end of each fiscal year,  copies of its annual
audited  balance  sheet,  income  statement  and statement of cash flows and the
report thereon rendered by the Corporation's independent accountants.


<PAGE>



                  IN WITNESS  WHEREOF,  the parties  hereto have  executed  this
Agreement as of the day and year herinabove first written.

                                         AMP INCORPORATED
                                         470 Friendship Road, Mail Stop 176-034
                                         Harrisburg, PA  17111
                                         Attention:  Corporate Development

                                         By:  _____________________________
                                                  (signature)
                                         Print Name:_______________________
                                         Title:____________________________


                                         FiberCore Incorporated
                                         174 Charlton Road
                                         Sturbridge, MA  01566

                                         By:  ___/S/_______________________
                                                  (signature)
                                         Print Name:       Mohd Aslami
                                         Title:            President


<PAGE>



                  IN WITNESS  WHEREOF,  the parties  hereto have  executed  this
Agreement as of the day and year herinabove first written.

                                       AMP INCORPORATED
                                       470 Friendship Road, Mail Stop 176-034
                                       Harrisburg, PA  17111
                                       Attention:  Corporate Development

                                       By:  ____/s/_______________________
                                                (signature)
                                       Print Name:       James E. Marley
                                       Title:            Chairman of the Board


                                       FiberCore Incorporated
                                       174 Charlton Road
                                       Sturbridge, MA  01566

                                       By:  _____________________________
                                                (signature)
                                       Print Name:       Mohd Aslami
                                       Title:            President


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                                INDEX OF EXHIBITS


Exhibit A       Debenture

Exhibit B       Collateral Assignment, Patent Mortgage and Security Agreement

Exhibit C       Exceptions to Corporation's Warranties

Exhibit D       Intended Collateral


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                                    EXHIBIT A

                  THIS DEBENTURE AND THE SECURITIES  ISSUABLE UPON CONVERSION OF
                  THIS DEBENTURE HAVE NOT BEEN  REGISTERED  UNDER THE SECURITIES
                  ACT  OF  1933,  AS  AMENDED,  OR  QUALIFIED  UNDER  ANY  STATE
                  SECURITIES  LAW,  AND MAY NOT BE OFFERED,  SOLD,  TRANSFERRED,
                  ASSIGNED  OR   HYPOTHECATED   UNLESS  THERE  IS  AN  EFFECTIVE
                  REGISTRATION  STATEMENT UNDER SUCH ACT COVERING THIS DEBENTURE
                  AND/OR SUCH SECURITIES,  OR THE HOLDER FURNISHES AN OPINION OF
                  COUNSEL  SATISFACTORY  TO THE  CORPORATION  STATING  THAT SUCH
                  SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE
                  REGISTRATION AND PROSPECTUS DELIVERY  REQUIREMENTS OF SUCH ACT
                  AND THE QUALIFICATION REQUIREMENTS UNDER STATE LAW.

                             FIBERCORE INCORPORATED

                              Convertible Debenture

$5,000,000.00                                                    April 17, 1995

         1. Obligation.  FOR VALUE RECEIVED,  FiberCore  Incorporated,  a Nevada
corporation (the "Corporation"), hereby promises to pay to AMP INCORPORATED (the
"Holder"),  on  April  17,  2005  the  principal  sum of  Five  Million  Dollars
($5,000,000.00),  together  with  interest on such  principal  sum from the date
hereof  until  payment in full of the  principal  computed  as set forth  below.
Interest  shall be due at  maturity  and  shall be  computed  by  adding  simple
interest at the  Applicable  Rate for each Interest  Period.  The first Interest
Period  shall  commence  on the  date  hereof  and end on June  30,  1995.  Each
successive  Interest  Period  shall  commence  on the first day of the  calendar
quarter  (i.e.,  January 1, April 1, July 1, and  October 1) and end on the last
day of such calendar quarter;  provided however, the final Interest Period shall
end on the date of payment in full of the principal sum hereof.  The  Applicable
Rate for each  Interest  Period shall be  determined  by adding 1% to the London
Interbank  Offered Rate  (LIBOR) for three month  deposits as quoted in The Wall
Street Journal dated the business day immediately  preceding the commencement of
such Interest Period.

         2.  Prepayment.  Upon not less than 30 days prior written notice to the
Holder,  the  Corporation may prepay this Debenture at any time and from time to
time, in whole or in part without  penalty by payment of the principal sum to be
prepaid together with interest on such sum to the date of such  prepayment.  The
Corporation  shall be  required to prepay the entire  principal  sum and accrued
interest  of this  Debenture  upon not less than  thirty  day's  notice from the
Holder demanding such prepayment, which notice may be given only after the right
of conversion of this  Debenture  terminates  pursuant to the fifth  sentence of
Section 3 hereof.


<PAGE>




         3. Conversion.  All outstanding  principal and accrued interest on this
Debenture is  convertible,  at the option of the Holder,  at any time into fully
paid  and  nonassessable  shares  of  the  Corporation's  Common  Stock  at  the
conversion  rate  (the  "Conversion  Rate") of $4.25 per share for the five year
period from the date hereof,  thereafter  at the price per share paid by a third
party investor in the private sale of shares of Common Stock by the  Corporation
immediately  preceding any such conversion.  Any such conversion shall be in the
minimum  amount of  $1,000,000  and integral  multiples  of $250,000;  provided,
however,  the final  conversion  may be for all of the  remaining  principal and
accrued  interest.  Any partial  conversion of this Debenture  shall be deemed a
conversion  of the  principal  sum hereof until the entire  principal  amount is
converted.  Thereafter,  any  conversion  shall be of accrued  interest.  If the
Corporation  is the  issuer of  securities  to be sold by it under an  effective
registration  statement pursuant to the Securities Act of 1933, as amended,  the
Corporation  will  provide  no less than ten days  prior  notice  thereof to the
Holder and all  conversion  rights  hereunder will terminate upon the closing of
the sale by the  Corporation  of the  securities  covered  by said  registration
statement  unless the Holder shall have  converted  this  Debenture  before said
date.  In the event the  Common  Stock is split,  subdivided  or  combined,  the
Conversion  Rate  thereafter  in effect shall be  appropriately  adjusted by the
Corporation to provide the Holder with the number of shares of Common Stock upon
conversion  such  Holder  would have  received  on such  split,  subdivision  or
combination if it had converted this Debenture immediately prior thereto. In the
event the Common Stock is  reclassified  or the  Corporation  merges or combines
with  another  entity in a  transaction  in which the  holders  of Common  Stock
receive  securities or other  consideration in respect of such Common Stock, the
Holder  shall be entitled  after such event to convert this  Debenture  into the
kind and type of securities it would have received had the Holder converted this
Debenture immediately prior to such event.

         4. Surrender and  Cancellation  of Debenture.  Upon written notice of a
conversion  by the  Holder  together  with  delivery  of this  Debenture  to the
Corporation  or  its  transfer  agent,  the  applicable  amount  of  outstanding
principal  and  accrued  interest  on this  Debenture  shall be  converted.  The
Corporation shall not be obligated to issue  certificates  evidencing the shares
of the securities  issuable upon such conversion unless this Debenture is either
delivered to the  Corporation or its transfer  agent, or the Holder notifies the
Corporation or its transfer  agent that this Debenture has been lost,  stolen or
destroyed and executes an agreement satisfactory to the Corporation to indemnify
the Corporation  from any loss incurred by it in connection with this Debenture.
The  Corporation  shall,  as soon as practicable  after such  delivery,  or such
agreement and indemnification, issue and deliver at such office to the Holder of
this  Debenture,  a certificate  for the securities to which the Holder shall be
entitled. Such conversion shall be deemed to have been made immediately prior to
the  close  of  business  on the  date of  closing  of the  transaction  causing
conversion or the date of receipt of written notice by the Corporation  from the
Holder  causing  conversion.  The  person  entitled  to receive  the  securities
issuable  upon such  conversion  shall be treated for all purposes as the record
holder or holders of such securities on such date.

         5.  Collateral.  This  Debenture is issued to the Holder  pursuant to a
Convertible  Debenture  Purchase  Agreement dated the date hereof (the "Purchase
Agreement").  Pursuant to the Purchase  Agreement,  this Debenture is secured by
certain collateral.


<PAGE>





         6.  Debenture  Confers No Rights As  Shareholder.  The Holder shall not
have any rights as a shareholder  of the  Corporation  with regard to the shares
issuable hereunder prior to actual conversion hereunder.

         7.  Waivers.  The  Corporation  hereby waives  presentment,  demand for
performance, notice of non-performance, protest, notice of protest and notice of
dishonor. No delay on the part of Holder in exercising any right hereunder shall
operate as a waiver of such right or any other right.

         8. Assignment.  The Holder shall not assign this Debenture  without the
prior  written  consent of the  Corporation  which consent shall not be withheld
except for valid business reasons.

         9. Applicable Law. This Debenture shall be governed by and construed in
accordance  with the laws of the  Commonwealth  of  Massachusetts  applicable to
contracts  between  Massachusetts  residents  entered  into and to be  performed
entirely within the State of Massachusetts.

                                                      FiberCore Incorporated

                                                      By:_______________________
                                                               President


<PAGE>



                                    EXHIBIT B

                     COLLATERAL ASSIGNMENT, PATENT MORTGAGE
                             AND SECURITY AGREEMENT

         THIS COLLATERAL  ASSIGNMENT,  PATENT MORTGAGE AND SECURITY AGREEMENT is
made as of the 17th day of April 1995, by and between FiberCore Incorporated,  a
Nevada corporation ("Assignor"), and AMP Incorporated a Pennsylvania corporation
("Assignee").

         A.  Assignee  is  willing  to  purchase a  convertible  debenture  (the
"Convertible Debenture"),  from the Assignor pursuant to a Convertible Debenture
Purchase Agreement dated the date hereof (the "Purchase Agreement") and Assignor
desires to sell the  Convertible  Debenture  to the  Assignee.  The  Convertible
Debenture  is or will be secured in part  pursuant to the terms of the  Purchase
Agreement.

         B. In order to induce Assignee to purchase the  Convertible  Debenture,
Assignor  has agreed to assign  certain  intangible  property  to  Assignee  for
purposes  of  securing  the  obligations  of  Assignor  to  Assignee  under  the
Convertible Debenture.

         NOW, THEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS:

         1.  Assignment,  Patent  Mortgage  and Grant of Security  Interest.  As
collateral  security for the prompt and complete  payment and performance of all
of Assignor's  indebtedness,  obligations  and liabilities to Assignee under the
convertible Debenture,  Assignor hereby assigns, transfers, conveys and grants a
security interest and mortgage to Assignee, as security, but not as an ownership
interest in and to Assignor's entire right,  title and interest in, to and under
the following (all of which shall collectively be called the "Collateral"):

               (a)  All  patents,   patent   application  and  like  protections
          including, without limitation, improvements, divisions, continuations,
          renewals,  reissues,  extensions and  continuous-in-part  of the same,
          including without  limitation the patents and patent  applications set
          forth on Exhibit A attached hereto (collectively, the "Patents");

               (b) Any and all claims for  damages by way of past,  present  and
          future  infringements  of any of the rights included  above,  with the
          right, but not the obligation, to sue for and collect such damages for
          said  use  or  infringement  of  the   intellectual   property  rights
          identified above;

               (c) All  licenses  or other  rights to use any of the Patents and
          all license  fees and  royalties  arising  from such use to the extent
          permitted by such license or rights; and

               (d) All amendments, extensions, renewals and extensions of any of
          the Patents: and


<PAGE>




               (e) All proceeds and products of the foregoing, including without
          limitation all payments  under  insurance or any indemnity or warranty
          payable in respect of any of the foregoing.

THE INTEREST IN THE COLLATERAL,  BEING ASSIGNED HEREUNDER SHALL NOT BE CONSTRUED
AS A CURRENT  ASSIGNMENT,  BUT AS A CONTINGENT  ASSIGNMENT TO SECURE  ASSIGNOR'S
OBLIGATIONS TO ASSIGNEE UNDER THE PURCHASE AGREEMENT.

         2. Authorization and Request. Assignor authorizes and requests that the
Commissioner of Patents and Trademarks record this conditional assignment.

         3. Covenants and Warranties.  Assignor represents,  warrants, covenants
and agrees as follows:

                  (a) Assignor is now the sole owner of the  Collateral,  except
for non-exclusive  licenses granted by Assignor to its customers in the ordinary
course of business.

                  (b)  Performance of this  Assignment does not conflict with or
result  in a breach  of any  agreement  to  which  Assignor  is  bound  and this
Assignment constitutes an assignment.

                  (c)  During  the  term of this  Agreement,  Assignor  will not
transfer  or  otherwise  encumber  any  interest in the  Collateral,  except for
non-exclusive  licenses  granted by Assignor in the ordinary  course of business
set forth in this Assignment.

                  (d)  To its  knowledge,  each  of the  Patents  is  valid  and
enforceable,   and  no  part  of  the  Patents   has  been  judged   invalid  or
unenforceable,  in whole or in part, and no claim has been made that any part of
the Patents violates the rights of any third part.

                  (e) Assignor  shall promptly  advise  Assignee of any material
adverse change in the composition of the  Collateral,  including but not limited
to any  subsequent  ownership  right of the  Assignor  in or to any  Patent  not
specified in this Assignment.

                  (f)  Assignor  shall (I)  protect,  defend  and  maintain  the
validity and  enforceability  of the patents (ii) use its best efforts to detect
infringements of the Patents and promptly advise Assignee in writing of material
infringements  detected  and  (iii)  not  allow  any  Patents  to be  abandoned,
forfeited or dedicated  to the public  without the written  consent of Assignee,
which  shall  not be  unreasonable  withheld  unless  Assignor  determines  that
reasonable business practices suggest that abandonment is appropriate.

                  (g) This assignment creates, and in the case of after acquired
Collateral, this Assignment will create at the time Assignor first has rights in
such after acquired Collateral, in favor of Assignee a valid and perfected first
priority security interest in the collateral in the


<PAGE>



United States securing the payment and performance of the obligations  evidenced
by the Debenture upon making the filings referred to in Section 3(h) below.

                  (h) To its  knowledge,  except for, and upon,  the filing with
the United States Patent and Trademark  Office necessary to perfect the security
interests and assignment  created  hereunder and except as has been already made
or obtained, no authorization,  approval or other action by, and no notice to or
filing with, any U.S. governmental authority of U.S. regulatory body is required
either (I) for the grant by Assignor of the security  interest granted hereby or
for the execution, delivery or performance of this Assignment by Assignor in the
United  States,  or (ii) for the perfection in the United States or the exercise
by Assignee of its right and remedies thereunder.

                  (i) All information  heretofore,  herein or hereafter supplied
to  Assignee  by or on behalf of  Assignor  with  respect to the  Collateral  is
accurate and complete in all material respects.

                  (j)  Assignor  shall not enter into any  agreement  that would
materially  impair or conflict with  Assignor's  obligations  hereunder  without
Assignee's  prior  written  consent,  which  consent  shall not be  unreasonable
withheld.  Assignor  shall not permit the inclusion in any material  contract to
which  its  become  a party  of any  provisions  that  could or might in any way
prevent the creation of a security interest in Assignor's rights and interest in
any property  included  within the definition of the  collateral  acquired under
such  contracts,  except that  certain  contracts  may  contain  anti-assignment
provisions that could in effect prohibit the creation of a security  interest in
such contracts.

                  (k) Upon the  Assignor  obtaining  actual  knowledge  thereof,
Assignor will promptly  notify  Assignee in writing of any event that materially
adversely affects the value of any material Collateral,  the ability of Assignor
to dispose of any material  Collateral of the rights and remedies of Assignee in
relation  thereto,  including the levy of any legal  process  against any of the
Collateral.

         4.  Assignee's  Rights.  Assignee  shall  have the  right,  but not the
obligation,  to take, at Assignor's  sole expense,  any actions that Assignor is
required under this  Assignment to take but which Assignor fails to take,  after
fifteen (15) days' notice to Assignor.  Assignor  shall  reimburse and indemnify
Assignee  for all  reasonable  costs and  reasonable  expenses  incurred  in the
reasonable exercise of its rights under this Section 4.

         5.  Inspection  Rights.  Assignor  hereby  grants to  Assignee  and its
employees,  representatives  and  agents the right to visit,  during  reasonable
hours upon prior  reasonable  written notice to Assignor,  and any of Assignor's
plants and facilities that manufacture,  install or store products (or that have
done so during the prior  six-month  period) that are sold  utilizing any of the
collateral,  and to inspect the products and quality  control  records  relating
thereto  upon  reasonable  written  notice  to  Assignor  and as often as may be
reasonably  requested,  but not more than one (1) in every  twelve (12)  months;
provided,  however,  nothing herein shall entitle Assignee success to Assignor's
trade secrets and other proprietary information.


<PAGE>




         6.       Further Assurances; Attorney in Fact.

                  (a) On a continuing basis, Assignor will, subject to any prior
licenses, encumbrances and restrictions and prospective licenses, make, execute,
acknowledge and deliver,  and file and record in the proper filing and recording
places  in the  United  States,  all  such  instruments,  including  appropriate
financing and continuation statements and collateral agreements and filings with
the United States patent and  Trademarks  Office and take all such action as may
be reasonable be deemed necessary or advisable,  or as requested by Assignee, to
perfect  Assignee's  security interest in the Patents and otherwise to entry out
this intent and  purposes of this  Collateral  Assignment,  or for  assuring and
confirming  to Assignee the grant or  perfection  of a security  interest in all
Collateral.

                  (b)  Assignor   hereby   irrevocably   appoints   Assignee  as
Assignor's  attorney-in-fact,  with  full  authority  in the  place and stead of
Assignor and in the name of Assignor,  Assignee or otherwise,  from time to time
in Assignee's  discretion,  upon Assignor's failure or inability to do so, so to
take any action and to execute any instrument  which Assignee may deem necessary
or advisable to accomplish the purpose of this Collateral Assignment, including:

                  (i)  To  modify,  in  its  sole  discretion,  this  Collateral
         Assignment without first obtaining  Assignor's approval of or signature
         to such modification by amending Exhibit A hereof,  as appropriate,  to
         include  reference  to any  right,  title or  interest  in any  Patents
         acquired  by  Assignor  after the  execution  hereof  or to delete  any
         reference  to any  right,  title or  interest  in any  Patents in which
         Assignor no longer has or claims any right, title or interest; and

                  (ii) To file, in its sole discretion, one or more financing or
         continuation statements and amendments thereto,  relative to any of the
         Collateral without the signature of Assignor where permitted by law.

         7. Events of Default.  The  occurrence  of any of the  following  shall
constitute an Event or Default under the Assignment.

                  (a) The  Assignor  fails to pay,  within  ten (10) days  after
         notice thereof from the Assignee, any amounts due under the Convertible
         Debenture at maturity or upon mandatory prepayment;

                  (b) Assignor  commits any  material  breach of any warranty or
         agreement  made by Assignor in this  Assignment  and fails to cure such
         breach within 30 days after notice thereof from the Assignee; or

                  (c) The Assignor  shall (i) commence  any  proceeding  seeking
         relief under any bankruptcy, insolvency,  reorganization or similar law
         or seeking the appointment of a receiver,  trustee,  custodial or other
         similar  official for it or a substantial  portion of its assets,  (ii)
         make a general  assignment  for the benefit of creditors,  (iii) become
         the subject


<PAGE>



of       any  proceeding  referred to in clauses (i) or (ii) above which results
         in the entry of an order for  relief or any such  appointment  or which
         proceeding remains undismissed for 60 days.

         8.  Remedies.  Upon  the  occurrence  and  continuance  of an  Event of
Default, Assignee shall have the right to exercise all the remedies of a secured
party  under  the  Massachusetts  Uniform  Commercial  Code,  including  without
limitation  the right to require  Assignor to assemble  the  Collateral  and any
tangible  property  in which  Assignee  has a security  interest  and to make it
available to Assignees at a place designated by Assignee.  Assignee shall have a
nonexclusive,  royalty free license to use the Patents to the extent  reasonably
necessary  to permit  Assignee  to  exercise  its rights and  remedies  upon the
occurrence  of an Event of Default.  Assignor  will pay any expenses  (including
reasonable attorney's fees) incurred by Assignee in connection with the exercise
of any of Assignee's rights hereunder,  including without limitation any expense
incurred in disposing of the Collateral.  All of Assignee's  rights and remedies
with respect to the Collateral shall be cumulative.

         9. Indemnity.  Assignor  agrees to defend,  indemnify and hold harmless
Assignee and its officers,  employees,  and agents against; (a) all obligations,
demands,  claims,  and  liabilities  claimed or  asserted  by any other party in
connection with the  transactions  contemplated  by this Agreement,  and (b) all
losses or expenses in any way suffered, incurred, or paid by Assignee during the
continuance  of an Event of Default as a result of or in any-way  arising out of
the  exercise by the  Assignor  of its rights and  remedies  whether  under this
Assignment or otherwise (including without limitation, reasonable attorneys fees
and  reasonable  expenses),  except for losses arising form or out of Assignee's
gross negligence or willful misconduct.

         10. Reassignment.  At the earlier to occur of (i) such time as Assignor
shall completely satisfy all of the obligations  secured hereunder,  or (ii) the
Convertible  Debenture is secured by the Intended  Collateral as provided for in
the  Purchase  Agreement,  Assignee  shall  execute and deliver to Assignor  all
deeds,  assignments,  and other  instruments  as may be  necessary  or proper to
reinvest in Assignor full title to the property assigned  hereunder,  subject to
my disposition thereof which may have been made by Assignee pursuant hereto.

         11.  Course of  Dealing.  No  course of  dealing,  nor any  failure  to
exercise,  nor any delay in exercising any right,  power or privilege  hereunder
shall operate as a waiver thereof.

         12.  Attorneys'  Fees.  If any action  relating to this  Assignment  is
brought by either party hereto  against the other party,  the  prevailing  party
shall be entitled to recover reasonable attorneys fees, costs and disbursements.

         13.  Amendments.  This  Assignment  may be  amended  only by a  written
instrument signed by both parties hereto.

         14.  Counterparts.  This  Assignment  may be  executed  in two or  more
counterparts,  each of  which  shall  be  deemed  an  original  but all of which
together shall constitute the same instrument.


<PAGE>




         15. Law and Jurisdiction. This Assignment shall be governed by the laws
of  the  Commonwealth  of  Massachusetts,  without  regard  for  choice  of  law
provisions. Assignor and Assignee commit to the nonexclusive jurisdiction of any
state or federal court located in Massachusetts.

         16. Confidentiality. In handling any confidential information, Assignee
shall exercise the same degree of care that it exercises with respect to its own
proprietary information of the same types to maintain the confidentiality of any
non-public  information thereby received or received pursuant to this Assignment
except that the disclosure of this information may be made (I) to the affiliates
of the Assignee,  (ii) to prospective transferee or purchasers of an interest in
the obligations secured hereby,  provided that they have entered into comparable
confidentiality  agreement  in favor of  Assignor  and  have  deliver  a copy to
Assignor, (iii) as required by law, regulation, rule or order, subpoena judicial
order or  similar  order  and (iv) as may be  required  in  connection  with the
examination, audit or similar investigation of Assignee.


<PAGE>



         IN WITNESS WHEREOF, the parties hereto have executed this Assignment on
the day and year first above written.

Address of Assignees:                      Assignor:

                                           FiberCore Incorporated

P.O. Box 206
174 Charlton Road
Sturbridge, MA  01566
                                           By:____________________________
                                           Name:   Mohd Aslami
                                           Title:  President


Address of Assignee:                       Assignee:

                                           AMP Incorporated

470 Friendship Road, Mail Stop 176-034
Harrisburg, Pennsylvania 17111

Attention:  Corporate Development

                                           By:____________________________
                                           Name:   James E. Marley
                                           Title:  Chairman of the Board


<PAGE>



                                    EXHIBIT A


<TABLE>
<CAPTION>

United States Patent (19)      (11)     Patent Number:             4,596,589
Perry                          (45)     Date of Patent:        June 24, 1986
---------------------------------------------------------------------------------
<S>                                                          <C>
[54] METHOD FOR PRODUCING A SINGLE                           Attorney, Agent, or Firm - Howard A. Kenyon
        MODE FIBER PREFORM
[76] Inventor:  Gregory A. Perry, 2693 Wood [57]              ABSTRACT
                Hollow Dr., Dorsville, GA  30360
                                                             A method for fabricating a single mode fiber
[21] Appl. No.: 378,484                                      preform is described.  The method consists of
                                                             placing a core rod in a glass lathe, sliding a
[22] Filed:         February 9, 1984                         barrier tube over the core rod, partially attaching
                                                             the barrier tube to the core rod, rotating and heating
[51] 1st Cl4.....................C03B 37/018: C03B 37/012    the barrier tube, and traversing the heat sources until
[52] U.S. Cl.............................68/3.12; 65/3.11    the barrier tube collapses onto the core rod.  A second
[58] Field of Search...............65/3.11, 13. 3.12, 3.2    tube of high purity quartz called a primary jacket tube
                                                             is then slipped over the combination fabricated from
[56]              Reference Cited                            the core rod and barrier tube, rotating and heating the
                                                             primary jacket tube, and traversing the heat source
         U.S. PATENT DOCUMENTS                               until the primary jacket tube collapses onto the barrier
                                                             tube.  A third tube of high purity quartz called a
   3,711,262  1/1973 Keck et al...................65/3.11    secondary jacket tube is then slipped over the comb-
   3,826,560  7/1974 Schultz.....................65/212 %    ination fabricated from the core, barrier tube and
   3,901,474  8/1975 Strsck et al.................65/3.11    primary jacket tube, partially attaching the secondary
   3,933,454  1/1976 DeLuca.......................65/3.12    jacket tube to the primary jacket tube, rotating and
   4,062,665 12/1977 Isawa et al..................65/13 %    heating the secondary jacket tube, and traversing the
   4,089,586  5/1978 French et al...............350/94.30    heat source until the secondary jacket tube collapses
   4,154,891  5/1979 French et al...............65/3.11 %    over the primary jacket tube to form a single mode
                                                             fiber preform.
         FOREIGN PATENT DOCUMENTS
                                                                       16 Claims, 5 Drawing Figures
  54.131043 10/1979 Japan.........................65/3.11
    57.92334  6/1982  Japan.......................65/3.11

Primary Examiner - Kenneth M. Schor

                                     DIAGRAM

</TABLE>
<PAGE>



                                    EXHIBIT C

           EXCEPTIONS TO CORPORATION'S WARRANTIES AND REPRESENTATIONS

Section

         3c(i)             The  Corporation  has  executed  a terms  sheet  with
                           Middle  East   Specialized   Cables   Company  for  a
                           prospective  joint venture which  includes  among its
                           terms the  purchase by the joint  venture  partner of
                           286,000  shares of Common Stock.  The  Corporation is
                           presently   negotiating  to  reduce  this  number  of
                           shares.

                           Subject to approval of the boards of directors of the
                           Corporation  and Automated  Light  Technologies,  the
                           Corporation  anticipates  acquiring  Automated  Light
                           Technologies Inc.
                           for approximately 1,400,000 shares of Common Stock.


<PAGE>



                                    EXHIBIT D

                               INTENDED COLLATERAL

         The  Intended  Collateral  shall  consist  of  one  or  more,  and  any
combination of (such number and  combination to be determined by the Corporation
in its sole  discretion),  items of Eligible  Equipment (as defined  below) that
together  shall  have,  as of the  date on  which  such  items  are  pledged  as
contemplated  under the  agreement  of which  this  Exhibit D forms a part (such
agreement,  the "Purchase  Agreement") an aggregate Collateral Value (as defined
below) of not less than $5,000,000.

         "Eligible  Equipment"  shall  include  any of the  following  types  of
equipment: (a) preform lathe with delivery systems, (b) draw tower; (c) strength
tester;  (d)  tube  cleaning  system;  (e) over  jacketing  lathe;  (f)  etching
facility; (g) scrubber; (h) glass shaft lathe; (i) profile analyzer; (j) optical
time delay  refractometer;  (k) fiber physical geometry  measuring  device;  (l)
optical tester;  and (m) any equipment that is  substantially  similar to any of
the  foregoing  items or is an  attachment or other item that may be attached or
related  thereto;  provided,  however,  that in each  case,  such item  shall be
related to the creation,  manufacturing  or production of preforms or fiberoptic
fibers or cables from such preforms.

         With  respect  to one or more  items of  Intended  Collateral  that are
acquired by the Corporation on or after the date of the Purchase Agreement,  the
"Collateral Value" shall be an amount equal to the sum of (I) the purchase price
of such item(s),  (ii) the costs of any engineering  study or other  evaluations
commissioned  or obtained by the  Corporation  in connection  with the purchase,
transportation or installation of such item(s),  (iii) to the extent paid by the
Company,  the costs of the transportation  and/or  installation of such item(s),
(iv) the costs of preparing such item(s) for  continuous and regular  operation,
(v) all other costs  associated  with the  start-up of such item(s) and (vi) any
other costs  associated with the acquisition and installation of such item(s) as
have  been  paid by or on  behalf of the  Corporation  and are  permitted  to be
capitalized  and amortized as acquisition  costs under the customary  accounting
and financial practices of the Corporation in valuing similar items of equipment
and are so  capitalized  and  amortized in a manner  consistent  with  generally
accepted accounting principles.

         With respect to one or more items of Eligible Equipment that were owned
by the Corporation prior to the date of the Purchase Agreement,  or are acquired
by the  Corporation  from an affiliate and were owned by such affiliate prior to
the date of the Purchase  Agreement,  the "Collateral  Value" shall mean the net
book  value on the books of the  Corporation  or such  affiliate  at the time of
transfer determined in accordance with generally accepted accounting principles.

         Simultaneously with its pledge of the items of Intended Collateral, the
Corporation  shall deliver to the Purchaser a written  schedule  setting for the
Collateral Value of each such item.

         After the date on which the items of Intended Collateral are pledged as
contemplated by the Agreement,  the  Corporation  shall be entitled from time to
time to substitute in place of one or


<PAGE>



more items then subject to such pledge (such item(s), "Replaced Collateral") one
or more  other  items of  Eligible  Equipment  (whether  now owned or  hereafter
acquired by the Corporation) (such items, "Substitute Collateral"),  provided in
each case that (a) the Collateral Value of the Substitute  Collateral (as of the
date on which such  substitution  is made) shall be not less than the Collateral
Value of the Replaced  Collateral  (such Collateral Value being calculated as of
the date on which such  Replaced  Collateral  was earlier  pledged)  and (b) the
Corporation shall deliver to the Purchaser a schedule identifying the item(s) of
Replaced Collateral and the Collateral  Value(s) thereof . In addition,  in each
case of substitution,  simultaneously  with such  substitution,  the Corporation
shall  execute and deliver to the Purchaser an  instrument  confirming  that the
Substitute  Collateral  is subject to the lien of the  Purchase  Agreement,  and
shall  file or  caused to be filed on or  before  the date of such  substitution
appropriate financing statements under applicable law relating to the Substitute
Collateral,  and the Purchaser shall execute any instrument reasonable requested
by the Corporation for the purpose of releasing such item of Replaced Collateral
from all liens thereon in favor of the Purchaser.

         All  determinations  of Collateral Value as reported by the Corporation
to the Purchaser shall be binding upon the Purchaser absent manifest error.