<PAGE> 1
EXHIBIT  2.1  ZERO COUPON CONVERTIBLE SUBORDINATED DEBENTURE 
DATED JULY 24, 1997 IN THE PRINCIPAL AMOUNT OF $5 MILLION
                                               EXHIBIT A to
                                        Securities Purchase
                                                  Agreement

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"1933 ACT").  THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT
AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF 
AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
1933 ACT, OR AN OPINION OF COUNSEL IN FORM, SUBSTANCE AND SCOPE
REASONABLY ACCEPTABLE TO THE BORROWER THAT REGISTRATION IS NOT
REQUIRED UNDER THE 1933 ACT AND ANY APPLICABLE STATE SECURITIES
LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER THE 1933 ACT.

          ZERO COUPON CONVERTIBLE SUBORDINATED DEBENTURE

New York, New York
July 24, 1997                                      $5,000,000.00

           THIS DEBENTURE (this "Debenture") is one of a duly
authorized issue of subordinated debentures of AMERICAN BANKNOTE
CORPORATION, a corporation duly organized and existing under the
laws of the State of Delaware (the "Borrower"), designated as its
Zero Coupon Convertible Subordinated Debentures Due August 2,
2002, in an aggregate principal amount of Five Million Dollars
($5,000,000.00) (the "Debentures").

            FOR VALUE RECEIVED, the Borrower promises to pay to
the holder hereof, or its order (the "Holder"), the principal sum
of Six Million, Seven Hundred Sixty Thousand, Two Hundred Thirty
Dollars and Thirty Cents ($6,760,230.30) (the "Maturity Date
Principal Balance") on August 2, 2002 (the "Maturity Date").

            This Debenture has been issued at a purchase price of
$5,000,000 ("Purchase Price").  The Debenture shall be deemed to
accrete principal between the date hereof (the "Issue Date") and
the Maturity Date in accordance with the following formula:

                  P2 = P1 x [1 + (r/365)]n

            Where:

          "P1" is the principal amount of this Debenture at 
          the opening of the accretion period (i.e., the
          Purchase Price).  P1 may be reduced by conversions 
          or partial payments of this Debenture in accordance
          with Article I below.

<PAGE> 2
          "P2" is the principal amount of this Debenture as
          increased for accretion at any close of the 
          accretion period (i.e., the Maturity Date Principal
          Balance on the Maturity Date).

          "r" shall initially be .06, but is subject to 
          increase in accordance with the terms of this 
          Debenture and the Registration Rights Agreement 
          (as hereinafter defined).

          "n" is the number of days in the accretion period.

          The accreted amount of any conversions or redemptions
          will be calculated with respect to each converted or
          redeemed amount separately from any prior 
          converted or redeemed amount (and P1 will be 
          adjusted accordingly for any subsequent conversions
          or redemptions and further accretion).  

          The principal balance of this Debenture as accreted
          from time to time shall be referred to as the 
          "Accreted Principal Balance".  For example, based 
          upon a Purchase Price of $5,000,000, after 100 days 
          the Accreted Principal Balance would be $5,082,864
          (assuming no prior conversions or redemptions of the
          Debenture).

          To the extent not converted into Common Stock,
amounts due under this Debenture are payable in such coin or
currency of the United States of America as of the time of
payment is legal tender for payment of public and private debts,
at the address last appearing on the debenture register of the
Borrower as designated in writing by the Holder hereof from time
to time. If the payments set forth in Section 2(c) of the
Registration Rights Agreement of even date herewith among the
Holder, the other holders of the Debentures and the Borrower (the
"Registration Rights Agreement") are not paid when due, the
Holder may elect to add such cash default payment amounts, in
whole or in part, to the Accreted Principal Balance.  Any cash
default payments when so added to the Accreted Principal Balance
due under this Debenture shall, for purposes of this Debenture,
be deemed to have been part of the principal indebtedness
evidenced by this Debenture including, without limitation, for
purposes of determining accretions to principal thereafter and
amounts thereafter convertible into Common Stock hereunder.  For
purposes of determining the amount payable at the Maturity Date
or on redemption of this Debenture, and for purposes of
<PAGE>
<PAGE> 3
determining the number of shares issuable on conversion of this
Debenture, the Accreted Principal Balance shall accrete, from and
after the occurrence and during the continuance of a Redemption
Event hereunder (as set forth in Article III), at the rate (i.e.,
"r" in the formula above) equal to the lower of (i) Chase
Manhattan Bank's base lending rate plus two percent (2%) per
annum (but not less than the then applicable "r") or (ii) the
highest rate permitted by law.  The Holder has certain additional
rights, remedies and benefits as set forth in the Registration
Rights Agreement and in the Securities Purchase Agreement dated
as of the date hereof among the Holder, the other holders of the
Debentures and the Borrower (the "Purchase Agreement").

             As used in this Debenture, the term "business day"
shall mean any day other than a Saturday, Sunday or a day on
which commercial banks in the city of New York, New York are
authorized or required by law or executive order to remain
closed.  Each capitalized term used herein, and not otherwise
defined, shall have the meaning ascribed thereto in the Purchase
Agreement.  The Maturity Date is subject to extension pursuant to
Section 1.4(a) below.

            The following terms shall apply to this Debenture: 


                  ARTICLE I.  CONVERSION RIGHTS

            1.1      Conversion Right.  

                  (a) Subject to the conversion schedule set
forth in Section 1.1(b) and to the terms of Sections 1.1(d) and
1.7 below, the Holder shall have the right from time to time, and
at any time on or prior to the day that all of the Accreted
Principal Balance and other amounts payable hereunder are paid in
full, to convert at any time all or from time to time any part of
the outstanding and unpaid Accreted Principal Balance of this
Debenture of at least $25,000, or such lesser amount as shall
remain unpaid at the time of the conversion into fully paid and
non-assessable shares of Common Stock, as such Common Stock
exists on the date of issuance of this Debenture, or any shares
of capital stock of the Borrower into which such Common Stock
shall hereafter be changed or reclassified (the "Common Stock")
<PAGE>
<PAGE> 4
at the conversion price determined as provided herein (the
"Conversion Price"); provided, however, that unless the Holder
delivers a waiver in accordance with the immediately following
sentence, in no event (other than in connection with an Automatic
Conversion (as hereinafter defined) on the Maturity Date) shall
the Holder be entitled to convert any portion of this Debenture
in excess of that portion of this Debenture upon conversion of
which the sum of (1) the number of shares of Common Stock
beneficially owned by the Holder and its affiliates (other than
shares of Common Stock which may be deemed beneficially owned
through the ownership of the unconverted portion of this
Debenture) and (2) the number of shares of Common Stock issuable
upon the conversion of the portion of this Debenture with respect
to which the determination of this proviso is being made, would
result in beneficial ownership by the Holder and its affiliates
of more than 4.9% of the outstanding shares of Common Stock.  For
purposes of the proviso in the immediately preceding sentence,
(i) beneficial ownership shall be determined in accordance with
Section 13(d) of the Securities Exchange Act of 1934, as amended,
and Regulation 13 D-G thereunder, except as otherwise provided in
clause (1) of such proviso and (ii) the Holder may waive the
limitations set forth therein by written notice to the Borrower
upon not less than sixty-one (61) days prior notice (with such
waiver taking effect only upon the expiration of such 61-day
notice period).  

                  (b) The Holder may convert only up to that
percentage of the Accreted Principal Balance specified below
during the time period set forth opposite such percentage.  

     Percentage                 Time Period

        20%          1-90 days following Issue Date
        40%        91-150 days following Issue Date
        60%       151-210 days following Issue Date
        80%       211-300 days following Issue Date
       100%           301 days following Issue Date

; provided, however, that there shall be excluded from any
calculation of the foregoing percentage any conversion(s)
occurring on a Conversion Date on which the Closing Price (as
hereinafter defined) of the Common Stock (i) exceeds $6.50 or
(ii) is greater than 115% of the Closing Price of the Common
Stock on the immediately preceding Trading Day. 

<PAGE>
<PAGE> 5
                  (c) The number of shares of Common Stock to be
issued upon each conversion of this Debenture shall be determined
by dividing the Conversion Amount (as hereinafter defined) by the
Conversion Price in effect on the date a notice of conversion, in
the form attached hereto as Exhibit A (the "Notice of
Conversion"), is delivered to the Borrower by the Holder in
accordance with Section 1.4 below (the "Conversion Date").  The
term "Conversion Amount" means, with respect to any conversion of
this Debenture, the sum of (1) the Accreted Principal Balance of
this Debenture to be converted on such Conversion Date plus (2)
at the Holder's option, any amounts owed to the Holder pursuant
to Sections 1.3 and 1.4(g) hereof or pursuant to Section 2(c) of
the Registration Rights Agreement.  

                  (d) In the event that the Closing Price of the
Common Stock is below $3.50 per share on the Conversion Date, the
Borrower shall have the right, in lieu of issuing shares of
Common Stock to the Holder, to redeem the portion of this
Debenture submitted for conversion for an amount equal to the
number of shares that would have otherwise been issued upon
conversion of the Debenture, multiplied by the Redemption Market
Price (as hereinafter defined).  "Redemption Market Price" shall
be equal to the Closing Price of the Common Stock on the
Conversion Date.  From time to time following the Issue Date, the
Holder may request advance notice as to whether the Borrower will
issue shares of Common Stock or redeem the portion of this
Debenture submitted for conversion pursuant to this Section
1.1(d).  Such request shall be made in writing and the Borrower
shall respond in writing within three (3) business days of
receipt of the request.  The Borrower will be bound by such
response for a period of twenty (20) days from the date of its
response.  A failure to respond within three (3) business days
shall be deemed to be an election to issue Common Stock on
conversion.  Notwithstanding the foregoing, if the Borrower is
bound to issue Common Stock in lieu of a redemption pursuant
to this Section 1.1(d), it may by written notice to the Holder by
9:00 a.m. on the Trading Day immediately following the Conversion
Date elect to redeem the shares issuable upon conversion at the
Post-Conversion Redemption Price (as hereinafter defined).  The
"Post-Conversion Redemption Price" means the average Closing
Price of the Common Stock over the five consecutive (5) Trading
Days beginning on the Trading Day immediately following the
Conversion Date.  Any redemption amounts payable hereunder shall
be paid to the Holder within five (5) Trading Days of the
Conversion Date.  The "Closing Price" means, for any security as
of any date, the last sale price on the NYSE as reported by
<PAGE>
<PAGE> 6
Bloomberg Financial Markets ("Bloomberg") or an equivalent,
reliable reporting service mutually acceptable to and hereafter
designated by the Holders of a majority in interest of the
Debentures and the Borrower or, if the NYSE is not the principal
trading market for such security, the last sale price of such
security on the principal securities exchange or trading market
where such security is listed or traded as reported by Bloomberg,
or if the foregoing do not apply, the last sale price of such
security in the over-the-counter market on the electronic
bulletin board for such security as reported by Bloomberg, or, if
no last sale price is reported for such security by Bloomberg,
then the average of the bid and ask prices of all active market
makers for such security as reported in the "pink sheets" by the
National Quotation Bureau, Inc.  If the Closing Price cannot be
calculated for such security on such date on any of the foregoing
bases, the Closing Price of such security on such date shall be
the fair market value as mutually determined by the Borrower and
the Holders of a majority in interest of Debentures being
converted for which the calculation of the Closing Price is
required in order to determine the Conversion Price of such
Debentures.  "Trading Day" shall mean any day on which the Common
Stock is traded for any period on the NYSE, or on the principal
securities exchange or other securities market on which the
Common Stock is then being traded.  

            1.2      Conversion Price.  The Conversion Price
shall be the lesser of (i) the Market Price, where the Market
Price means the average of the daily Closing Prices of the Common
Stock on The New York Stock Exchange (the "NYSE"), or on the
principal securities exchange or other securities market on which
the Common Stock is then being traded, for the two (2)
consecutive Trading Days yielding the lowest average price during
the twenty-five (25) Trading Day period ending one (1) Trading
Day prior to the date the Conversion Notice is sent by the Holder
to the Borrower via facsimile or other reasonable means of
communication (the "Conversion Date"), and (ii) $6.00 (subject,
in each case, to equitable adjustments for stock splits, stock
dividends or rights offerings by the Borrower relating to the
Borrower's securities or relating to the securities of any
subsidiary of the Borrower, combinations, recapitalization,
reclassifications, extraordinary distributions and similar
events).  Notwithstanding the foregoing, no conversions shall be
permitted during the period beginning on the Issue Date and
ending twenty-five (25) Trading Days from the Issue Date at a
Conversion Price below the Closing Price on the Issue Date.
<PAGE>
<PAGE> 7
            1.3      Authorized Shares.  The Borrower covenants
that during the period the conversion right exists, the Borrower
will reserve from its authorized and unissued Common Stock a
sufficient number of shares to provide for the issuance of Common
Stock upon the full conversion of the Debentures.  As of the date
of issuance of this Debenture, 1,500,000 authorized and unissued
shares of Common Stock have been duly reserved for issuance upon
conversion of this Debentures (the "Reserved Amount").  The
Borrower represents that upon issuance following conversion, such
shares will be duly and validly issued, fully paid and
non-assessable.  The Borrower (i) acknowledges that it has
instructed its transfer agent to issue certificates for the
Common Stock issuable upon conversion of this Debenture upon the
procedures properly established for conversion and (ii) agrees
that its issuance of this Debenture shall constitute full
authority to its officers and agents who are charged with the
duty of executing stock certificates to execute and issue the
necessary certificates for shares of Common Stock in accordance
with the terms and conditions of this Debenture and the
Registration Rights Agreement.

            If, at any time the Holder of this Debenture submits
a Notice of Conversion, the Borrower does not have sufficient
authorized but unissued shares of Common Stock available to
effect such conversion in accordance with the provisions of this
Article I (a "Conversion Default"), subject to Section 6.8, the
Borrower shall issue to the Holder all of the shares of Common
Stock which are then available to effect such conversion.  The
portion of this Debenture which the Holder included in its
Conversion Notice and which exceeds the amount which is then
convertible into available shares of Common Stock (the "Excess
Amount") shall, notwithstanding anything to the contrary
contained herein, not be convertible into Common Stock in
accordance with the terms hereof until (and at the Holder's
option at any time after) the date additional shares of Common
Stock are authorized by the Borrower, at which time the
Conversion Price in respect thereof shall be the lower of (i) the
Conversion Price on the Conversion Default Date (as hereinafter
defined) and (ii) the Conversion Price on the Conversion Date
thereafter elected by the Holder in respect thereof.  The
Borrower shall pay to the Holder payments ("Conversion Default
Payments") for a Conversion Default in the amount of (N/365) x
 .18 x the Excess Amount on the Conversion Date in respect of the
Conversion Default (the "Conversion Default Date"), where (i) N =
the number of days from the Conversion Default Date to the date
(the "Authorization Date") that the Borrower authorizes a
sufficient number of shares of Common Stock to effect conversion
of the full outstanding principal balance of this Debenture.  The
Borrower shall use its best efforts to authorize a sufficient
number of shares of Common Stock as soon as practicable following
the earlier of (i) such time that the Holder notifies the
<PAGE> 8
Borrower or that the Borrower otherwise becomes aware that there
are or likely will be insufficient authorized and unissued shares
to allow full conversion thereof and (ii) a Conversion Default. 
The Borrower shall send notice to the Holder of the authorization
of additional shares of Common Stock, the Authorization Date and
the amount of the Holder's accrued Conversion Default Payments. 
The accrued Conversion Default Payments for each calendar month
shall be paid in cash or shall be convertible into Common Stock
(at such time as there are sufficient authorized shares of Common
Stock) at the Market Price, at the Borrower's option, as follows:

                  (a)      In the event the Borrower elects to
make such payment in cash, cash payment shall be made to the
Holder by the fifth (5th) day of the month following the month in
which it has accrued; and

                  (b)      In the event the Borrower elects to
make such payment in Common Stock, such amount shall be added to
the Accreted Principal Balance and the Holder may convert such
payment amount into Common Stock at the Conversion Price (as in
effect at the time of conversion) at any time after the fifth day
of the month following the month in which it has accrued (at such
time as there are sufficient authorized shares of Common Stock)
in accordance with the terms of this Article I.

            The Borrower's election shall be made in writing to
the Holder at any time prior to 8:00 p.m., New York City Time, on
the third day of the month following the month in which
Conversion Default payments have accrued.  If no election is
made, the Borrower shall be deemed to have elected to make
payment in cash.  Nothing herein shall limit the Holder's right
to pursue actual damages (to the extent in excess of the
Conversion Default Payments) due to the Borrower's failure to
maintain a sufficient number of authorized shares of Common
Stock.

            1.4      Method of Conversion.

                  (a)      The Accreted Principal Balance of this
Debenture may be converted by the Holder in whole or in part
(provided such partial conversion is at least $25,000, or such
lesser amount as shall remain unpaid at the time of the
conversion at any time from time to time after the Issue Date, by
(A) submitting to the Borrower a Notice of Conversion (by
facsimile or other reasonable means of communication dispatched
on the Conversion Date prior to 8:00 p.m., New York City Time)
and (B) subject to Section 1.4(b), surrendering this Debenture at
<PAGE>
<PAGE> 9
the principal office of the Borrower.  Each Debenture issued and
outstanding on the Maturity Date automatically shall be converted
into shares of Common Stock on such date at the then effective
Conversion Price in accordance with, and subject to, the
provisions of this Article I (the "Automatic Conversion"),
provided that no Redemption Event has occurred which is
continuing on the Maturity Date.  The Maturity Date shall be the
Conversion Date for purposes of determining the Conversion Price
and the time within which certificates representing the Common
Stock must be delivered to the holder.  Notwithstanding anything
to the contrary contained herein, the Maturity Date shall be
extended for the aggregate number of days comprising any Allowed
Delays under the Registration Rights Agreement and the Accreted
Principal Balance shall be adjusted accordingly.

                  (b)      Notwithstanding anything to the
contrary set forth herein, upon conversion of this Debenture in
accordance with the terms hereof, the Holder shall not be
required to physically surrender this Debenture to the Borrower
unless the entire unpaid principal amount of this Debenture is so
converted.  The Holder and the Borrower shall maintain records
showing the principal amount so converted and the dates of such
conversions or shall use such other method, reasonably
satisfactory to the Holder and the Borrower, so as not to require
physical surrender of this Debenture upon each such conversion. 
In the event of any dispute or discrepancy, such records of the
Borrower shall be controlling and determinative in the absence of
manifest error.  Notwithstanding the foregoing, if any portion of
this Debenture is converted as aforesaid, the Holder may not
transfer this Debenture unless the Holder first physically
surrenders this Debenture to the Borrower, whereupon the Borrower
will forthwith issue and deliver upon the order of the Holder a
new note of like tenor, registered as the Holder (upon payment by
the Holder of any applicable transfer taxes) may request,
representing in the aggregate the remaining unpaid principal
amount of this Debenture.  The Holder and any assignee, by
acceptance of this Debenture, acknowledge and agree that, by
reason of the provisions of this paragraph, following conversion
of a portion of this Debenture, the unpaid and unconverted
principal amount of this Debenture represented by this Debenture
may be less than the amount stated on the face hereof.
<PAGE>
<PAGE> 10
                  (c)      The Borrower shall not be required to
pay any tax which may be payable in respect of any transfer
involved in the issue and delivery of shares of Common Stock or
other securities or property on conversion of this Debenture in a
name other than that of the Holder (or in street name), and the
Borrower shall not be required to issue or deliver any such
shares or other securities or property unless and until the
person or persons (other than the Holder or the custodian in
whose street name such shares are to be held for the Holder's
account) requesting the issuance thereof shall have paid to the
Borrower the amount of any such tax or shall have established to
the satisfaction of the Borrower that such tax has been paid.

                  (d)      Upon receipt by the Borrower from the
Holder of a facsimile transmission (or other reasonable means of
communication) of a Notice of Conversion meeting the requirements
for conversion as provided in this Section 1.4, subject to the
Borrower's redemption rights as provided in Section 1.1(d) above,
the Borrower shall issue and deliver or cause to be issued and
delivered to the Holder certificates for the Common Stock
issuable upon such conversion within three (3) business days
after such receipt (and, solely in the case of conversion of the
entire unpaid principal amount hereof, surrender of this
Debenture) (such third business day being hereinafter referred to
as the "Deadline") in accordance with the terms hereof and the
Purchase Agreement (including, without limitation, in accordance
with the requirement that certificates for shares of Common Stock
issued on or after the effective date of the Registration
Statement (as defined in the Registration Rights Agreement) upon
conversion of this Debenture shall not bear any restrictive
legend).

                  (e)      Upon receipt by the Borrower of a
Notice of Conversion, subject to the Borrower's redemption rights
as provided in Section 1.1(d) above, the Holder shall be deemed
to be the holder of record of the Common Stock issuable upon such
conversion, the Accreted Principal Balance on this Debenture
shall be reduced to reflect such conversion, and, unless the
Borrower defaults on its obligations under this Article I, all
rights with respect to the portion of this Debenture being so
converted shall forthwith terminate except the right to receive
the Common Stock or other securities, cash or other assets, as
herein provided, on such conversion.  If the Holder shall have
given a Notice of Conversion as provided herein, the Borrower's
obligation to issue and deliver the certificates for Common
Stock, subject to the Borrower's redemption rights as provided in
Section 1.1(d) above, shall be absolute and unconditional,
<PAGE>
<PAGE> 11
irrespective of the absence of any action by the Holder to
enforce the same, any waiver or consent with respect to any
provision thereof, the recovery of any judgment against any
person or any action to enforce the same, any failure or delay in
the enforcement of any other obligation of the Borrower to the
holder of record, or any setoff, counterclaim, recoupment,
limitation or termination, or any breach or alleged breach by the
Holder of any obligation to the Borrower, and irrespective of any
other circumstance which might otherwise limit such obligation of
the Borrower to the Holder in connection with such conversion. 
The date of receipt of such Notice of Conversion shall be the
Conversion Date so long as it is received before 8:00 p.m., New
York City Time, on such date.

                  (f)      In lieu of delivering physical
certificates representing the Common Stock issuable upon
conversion, provided the Borrower's transfer agent is
participating in the Depository Trust Company ("DTC") Fast
Automated Securities Transfer ("FAST") program, upon the
effectiveness of the Registration Statement to be filed pursuant
to the Registration Rights Agreement and upon the request of the
Holder and its compliance with the provisions contained in
Section 1.1 and in this Section 1.4, the Borrower shall endeavor
to cause its transfer agent to electronically transmit the Common
Stock issuable upon conversion to the Holder by crediting the
account of the Holder's Prime Broker with DTC through its Deposit
Withdrawal Agent Commission ("DWAC") system.  Such transmission
shall not affect the manner in which the shares issuable upon
conversion can be sold in accordance with Section 1.5 below or
the Holder's obligation to comply with the applicable prospectus
delivery requirements.

                  (g)      Without in any way limiting the
Holder's right to pursue other remedies, including actual damages
and/or equitable relief, the parties agree that if delivery of
the Common Stock issuable upon conversion of this Debenture is
more than two (2) business day after the Deadline (other than a
failure due to the circumstances described in Section 1.3 above,
which failure shall be governed by such Section) the Borrower
shall pay to the Holder $500 per day in cash, for each of the
first two (2) days beyond the Deadline and $2,500 per day in cash
for each day thereafter that the Borrower fails to deliver such
Common Stock.  Such cash amount shall be paid to the Holder by
the fifth (5th) day of the month following the month in which it
has accrued or, at the option of the Holder (by written notice to
the Borrower by the first day of the month following the month in
<PAGE>
<PAGE> 12
which it has accrued), shall be added to the principal amount of
this Debenture, in which event interest shall accrue thereon in
accordance with the terms of this Debenture and such additional
principal amount shall be convertible into Common Stock in
accordance with the terms of this Debenture.

            1.5      Concerning the Shares.  The shares of Common
Stock issuable upon conversion of this Debenture may not be sold
or transferred unless either (i) such shares shall have been
included in an effective registration statement under the Act or
(ii) the Borrower or its transfer agent shall have been furnished
with an opinion or other similar letter of legal counsel
(reasonably acceptable to the Borrower) to the effect that such
sale or transfer is exempt from the registration requirements of
the Act or (iii) such shares are sold pursuant to Rule 144 under
the Act (or a successor rule).  Except as otherwise provided in
the Purchase Agreement (and subject to the removal provisions set
forth below), each physical certificate for shares of Common
Stock issuable upon conversion of this Debenture that has not
been so included in an effective registration statement or that
has not been sold pursuant to an effective registration statement
or an exemption that permits removal of the legend, shall bear a
legend substantially in the following form, as appropriate:

"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT").  THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY
NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER SAID
ACT, OR AN OPINION OF COUNSEL IN FORM, SUBSTANCE AND SCOPE
REASONABLY ACCEPTABLE TO THE BORROWER THAT REGISTRATION IS NOT
REQUIRED UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS
OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT."

            The legend set forth above shall be removed and the
Borrower shall issue to the Holder a new certificate therefor
free of any transfer legend if (i) the Borrower or its transfer
agent shall have received an opinion or other similar letter of
counsel, to the effect that a public sale or transfer of such
Common Stock may be made without registration under the Act and
any applicable state securities laws and the shares are so sold
or transferred, or the Common Stock issuable upon conversion of
this Debenture (to the extent such securities are deemed to have
been acquired on the same date) can be sold pursuant to Rule 144
<PAGE>
<PAGE> 13
(or a successor rule thereto) without any restriction as to the
number of shares of Common Stock acquired as of a particular date
that can then be immediately sold or (ii) in the case of the
Common Stock issuable upon conversion of this Debenture, a
registration statement under the Act covering such securities is
in effect.  Nothing in this Debenture (including the removal of
the foregoing legend from physical certificates or the electronic
transmission of Common Stock for the Holder's account pursuant to
Section 1.4(f)) shall (i) limit the Borrower's obligation under
the Registration Rights Agreement or (ii) affect in any way the
Holder's obligations to comply with applicable prospectus
delivery requirements upon the resale of the securities referred
to herein.

            1.6      Effect of Certain Events.  

                  (a)  If, at any time when this Debenture is
issued and outstanding, there shall be any merger, consolidation,
exchange of shares, recapitalization, reorganization, or other
similar event, as a result of which shares of Common Stock of the
Borrower shall be changed into the same or a different number of
shares of another class or classes of stock or securities of the
Borrower or another entity, or in case of any sale or conveyance
of all or substantially all of the assets of the Borrower other
than in connection with a plan of complete liquidation of the
Borrower, then the Holder of this Debenture shall thereafter have
the right to receive upon conversion of this Debenture, upon the
bases and upon the terms and conditions specified herein and in
lieu of the shares of Common Stock immediately theretofore
issuable upon conversion, such stock, securities or assets which
the Holder would have been entitled to receive in such
transaction had this Debenture been converted immediately prior
to such transaction, and in any such case appropriate provisions
shall be made with respect to the rights and interests of the
Holder of this Debenture to the end that the provisions hereof
(including, without limitation, provisions for adjustment of the
Conversion Price and of the number of shares issuable upon
conversion of the Debenture) shall thereafter be applicable, as
nearly as may be practicable in relation to any securities or
assets thereafter deliverable upon the exercise hereof.  The
above provisions shall similarly apply to successive
consolidations, mergers, sales, transfers or share exchanges.

                  (b)  Subject to Section 2.1, if the Borrower
<PAGE>
<PAGE> 14
shall declare or make any distribution of its assets (or rights
to acquire its assets) to holders of Common Stock as a dividend,
stock repurchase, by way of return of capital or otherwise
(including any dividend or distribution to the Borrower's
shareholders in cash or shares (or rights to acquire shares) of
capital stock of a subsidiary (i.e., a spin-off) (a
"Distribution"), the Holder of this Debenture shall be entitled,
upon any conversion of this Debenture after the date of record
for determining shareholders entitled to such Distribution, to
receive the amount of such assets which would have been payable
to the Holder with respect to the shares of Common Stock issuable
upon such conversion had the Holder been the holder of such
shares of Common Stock on the record date for the determination
of shareholders entitled to such Distribution.

                  (c)  Subject to Section 2.1, if, at any time
when any Debentures are issued and outstanding, the Borrower
issues any convertible securities or rights to purchase stock,
warrants, securities or other property (the "Purchase Rights")
pro rata to the record holders of Common Stock, then the Holder
of this Debenture will be entitled to acquire, upon the terms
applicable to such Purchase Rights, the aggregate Purchase Rights
which the Holder could have acquired if the Holder had held the
number of shares of Common Stock acquirable upon complete
conversion of this Debenture (without regard to any limitations
on conversion contained herein) immediately before the date on
which a record is taken for the grant, issuance or sale of such
Purchase Rights or, if no such record is taken, the date as of
which the record holders of Common Stock are to be determined for
the grant, issue or sale of such Purchase Rights.

                  (d)  Upon the occurrence of each adjustment or
readjustment of the Conversion Price as a result of the events
described in this Section 1.6, the Borrower, at its expense,
shall promptly compute such adjustment or readjustment and
prepare and furnish to the Holder of a certificate setting forth
such adjustment or readjustment and showing in detail the facts
upon which such adjustment or readjustment is based.  The
Borrower shall, upon the written request of the Holder, furnish
to the Holder a like certificate setting forth (i) such
adjustment or readjustment, (ii) the Conversion Price at the time
in effect and (iii) the number of shares of Common Stock and the
amount, if any, of other securities or property which at the time
would be received upon conversion of the Debenture.
<PAGE>
<PAGE> 15
            1.7      Certain Payments in Lieu of Conversion.  If
it is determined (upon written notice from the NYSE) that the
provisions of Rule 312.03(c) of the rules of the NYSE are
applicable to the issuance of Common Stock upon conversion of
this Debenture in accordance with this Article 1, then
notwithstanding anything to the contrary contained herein, in no
event shall the Borrower issue more than the Maximum Share Amount
(as hereinafter defined and subject to adjustment as provided
herein) upon conversion of this Debenture, unless the Borrower
shall have obtained Stockholder Approval (as hereinafter defined)
or a waiver of such requirement by the NYSE.  As used herein,
Stockholder Approval means approval by the stockholders of the
Borrower in accordance with Rule 312.03(c) of the rules of the
NYSE.  Once the Maximum Share Amount has been issued (the date of
which is hereinafter referred to as the "Maximum Conversion
Date"), unless the Borrower shall have obtained Stockholder
Approval or a waiver of such requirement by the NYSE, in lieu of
any further right to convert this Debenture, and in full
satisfaction of the Borrower's obligations under this Debenture,
the Borrower shall pay to the Holder, within fifteen (15)
business days of the Maximum Conversion Date, an amount equal to
the greater of (i) the sum of (a) 110% times the then Accreted
Principal Balance immediately following the Maximum Conversion
Date plus (b) any optional amounts that may be added thereto at
the Maximum Conversion Date by the Holder in accordance with the
terms hereof (the then Accreted Principal Balance of this
Debenture immediately following the Maximum Conversion Date plus
the amounts referred to in clause (b) above shall collectively be
referred to as the "Remaining Convertible Amount"), or (ii) the
Remaining Convertible Amount divided by the Conversion Price
(based on the twenty-five (25) Trading Day period ending one (1)
Trading Day prior to the date of payment) multiplied by the
Closing Price of the Common Stock on the Trading Day immediately
preceding the date of payment. The Maximum Share Amount shall
mean an aggregate of 3,997,770 shares of Common Stock (19.99% of
the Borrower's outstanding shares of Common Stock as of July 8,
1997), subject to equitable adjustment from time to time for
stock splits, stock dividends, combinations, capital
reorganizations and similar events relating to the Common Stock
occurring after the date hereof.  With respect to each Holder of
Debentures, the Maximum Share Amount shall refer to the Holder's
pro rata share thereof determined in accordance with Section 6.8
below.  In the event that the Borrower obtains Stockholder
Approval, the approval of the NYSE or otherwise concludes that it
is able to increase the number of shares to be issued above the
Maximum Share Amount (such increased number being the "New
Maximum Share Amount"), the references to Maximum Share Amount,
<PAGE>
<PAGE> 16
above, shall be deemed to be, instead, references to the greater
New Maximum Share Amount.  In the event that Stockholder Approval
is not obtained or a registration statement covering the
additional shares of Common Stock which constitute the New
Maximum Share Amount is not effective prior to the Maximum Share
Amount being issued (if such registration statement is necessary
to allow for the public resale of such securities), the Maximum
Share Amount shall remain unchanged; provided, however, that the
Holder may grant an extension of the effective date of such
registration statement.  In the event that (a) the aggregate
number of shares of Common Stock issued pursuant to the
Debentures represents at least fifty percent (50%) of the Maximum
Share Amount and (b) the sum of (x) the aggregate number of
shares of Common Stock issued pursuant to the Debentures plus (y)
the aggregate number of shares of Common Stock that remain
issuable pursuant to the Debentures represents at least one
hundred percent (100%) of the Maximum Share Amount (the
"Triggering Event"), unless the Borrower intends to exercise its
redemption election (and provides the Holder with written binding
notification to that effect, together with reasonable assurances
regarding the source of funds therefor), the Borrower will seek
and use its best efforts to obtain Stockholder Approval (or
obtain such other relief as will allow conversions hereunder in
excess of the Maximum Share Amount) as soon as practicable
following the Triggering Event and before the Maximum Conversion
Date.

                  ARTICLE II.  CERTAIN COVENANTS

            2.1      Distributions on Capital Stock.  So long as
the Borrower shall have any obligation under this Debenture, the
Borrower shall not without the Holder's written consent (a) pay,
declare or set apart for such payment, any dividend or other
distribution (whether in cash, property or other securities) on
shares of capital stock other than dividends on shares of Common
Stock solely in the form of additional shares of Common Stock
(unless at the time of declaration and payment such action is
permitted to be taken under all of the Borrower's indebtedness
senior to the Debenture).

            2.2      Restriction on Stock Repurchases.  So long
as the Borrower shall have any obligation under this Debenture,
the Borrower shall not without the Holder's written consent
redeem, repurchase or otherwise acquire (whether for cash or in
exchange for property or other securities or otherwise) in any
one transaction or series of related transactions any shares of
capital stock of the Borrower or any warrants, rights or options
to purchase or acquire any such shares (unless at the time of
declaration and payment such action is permitted to be taken
under all of the Borrower's indebtedness senior to the
Debenture).
<PAGE>
<PAGE> 17
            2.3      Trading Restrictions.  The Holder covenants
and agrees that, during any period during which a Conversion
Price is computed, neither Holder nor others acting on its behalf
shall be responsible for the low trading price of the Borrower's
Common Stock. 


                 ARTICLE III.  REDEMPTION EVENTS

            If any of the following redemption events (each, a
"Redemption Event") shall occur:

            3.1      Failure to Pay Principal Balance.  The
Borrower fails to pay the Accreted Principal Balance hereof when
due, whether at maturity, upon mandatory prepayment pursuant to
Section 1.7, upon acceleration or otherwise;

            3.2      Conversion and the Shares.  The Borrower
fails to issue shares of Common Stock to the Holder (or announces
that it will not honor its obligation to do so) upon exercise by
the Holder of the conversion rights of the Holder in accordance
with the terms of this Debenture (for a period of at least ninety
(90) days, if such failure is solely as a result of the
circumstances governed by Section 1.3 and the Borrower is using
its best efforts to authorize a sufficient number of shares of
Common Stock as soon as practicable), fails to transfer any
certificate for shares of Common Stock issued to the Holder upon
conversion of this Debenture and when required by this Debenture
or the Registration Rights Agreement, or fails to remove any
restrictive legend on any certificate for any shares of Common
Stock issued to the Holder upon conversion of this Debenture as
and when required by this Debenture, the Purchase Agreement or
the Registration Rights Agreement and any such failure shall
continue uncured (or any announcement not to honor conversions
shall not be rescinded) for ten (10) days after the Borrower
shall have been notified thereof in writing by the Holder.

            3.3      Failure to Effect Registration.  The
Borrower fails to obtain effectiveness with the Securities and
Exchange Commission of the Registration Statement prior to
December 31, 1997 or the Registration Statement lapses in effect
(or sales cannot otherwise be made thereunder) for more than
ninety (90) consecutive Trading Days or one hundred fifty (150)
Trading Days in any twelve month period after the Registration
Statement becomes effective;
<PAGE>
<PAGE> 18
            3.4      Breach of Covenants.  The Borrower breaches
any material covenant or other material term or condition
contained in Sections 1.3, 1.6, 1.7 or 4.1 of this Debenture, or
Sections 4(e), 4(h), 4(i) or 4(j) of the Purchase Agreement and
such breach continues for a period of ten (10) days after written
notice thereof to the Borrower from the Holder;

            3.5      Breach of Representations and Warranties. 
Any representation or warranty of the Borrower made herein or in
any agreement, statement or certificate given in writing pursuant
hereto or in connection herewith (including, without limitation,
the Purchase Agreement and the Registration Rights Agreement),
shall be false or misleading in any material respect when made
and the breach of which has (or with the passage of time will
have) a Material Adverse Effect (as defined in the Purchase
Agreement);

            3.6      Receiver or Trustee.  The Borrower shall
make an assignment for the benefit of creditors, or apply for or
consent to the appointment of a receiver or trustee for it or for
a substantial part of its property or business, or such a
receiver or trustee shall otherwise be appointed;

            3.7      Bankruptcy.  Bankruptcy, insolvency,
reorganization or liquidation proceedings or other proceedings
for relief under any bankruptcy law or any law for the relief of
debtors shall be instituted by or against the Borrower (which is
not being contested if commenced against the Borrower); or

            3.8      Delisting of Common Stock.  The Common Stock
is not listed on at least one of the NYSE, the Nasdaq National
Market, or the American Stock Exchange;

            then, upon the occurrence and during the continuation
of any Redemption Event specified in Section 3.1, 3.2, 3.3, 3.4,
3.5 or 3.9, at the option of the Holders of a majority of the
aggregate principal amount of the outstanding Debentures issued
pursuant to the Purchase Agreement, the Borrower shall, and upon
the occurrence of a Redemption Event specified in Section 3.6 or
3.7, the Debentures shall become immediately due and payable and
the Borrower shall pay to the Holder, in full satisfaction of its
obligations hereunder, an amount equal to the greater of (i) the
sum of (w) 110% times the then Accreted Principal Balance of this
Debenture plus (x) any amounts owed to the Holder pursuant to
Sections 1.3 and 1.4(g) hereof or pursuant to Section 2(c) of the
Registration Rights Agreement (the then outstanding principal
<PAGE>
<PAGE> 19
amount of this Debenture to the date of payment plus the amounts
referred to in clause (x) shall collectively be known as the
"Default Sum") or (ii) the Default Sum divided by the then
applicable Conversion Price (based on the twenty-five (25)
Trading Day period ending one (1) Trading Day prior to the date
the Holders exercise their option pursuant to this paragraph or
the date of the occurrence of an event referred to in Section 3.6
or 3.7) multiplied by the Closing Price of the Common Stock on
the date the Holders exercise their option pursuant to this
paragraph or the date of the occurrence of an event referred to
in Section 3.6 or 3.7 (the "Default Amount") and all other
amounts payable hereunder shall immediately become due and
payable, all without demand, presentment or notice, all of which
hereby are expressly waived, together with all costs, including,
without limitation, legal fees and expenses, of collection, and
the Holder shall be entitled to exercise all other rights and
remedies available at law or in equity.

            If the Borrower fails to pay the Default Amount
within five (5) business days of written notice that such amount
is due and payable, then the Holder shall have the right at any
time, so long as the Borrower remains in default (and so long and
to the extent that there are sufficient authorized shares), to
require the Borrower, upon written notice, to immediately issue,
in lieu of the Default Amount, the number of shares of Common
Stock of the Borrower equal to the Default Amount divided by the
Conversion Price then in effect as its sole and exclusive remedy.


                       ARTICLE IV.  REDEMPTION

            4.1      Redemption.  So long as no Redemption Event
shall have occurred and be continuing, beginning ninety (90) days
following the effectiveness of the Registration Statement to be
filed pursuant to the Registration Rights Agreement, in the event
the Closing Price of the Common Stock is greater than $6.50 per
share for ten (10) consecutive Trading Days, the Borrower may
redeem, in whole but not in part, this Debenture upon thirty (30)
days prior written notice (a "Redemption Notice") in accordance
with this Section 4.1.  Any notice of redemption (a "Redemption
Notice") shall be delivered to the Holder at its registered
address appearing on the records of the Borrower and shall state
(1) that the Borrower is exercising its right to redeem the
Debentures and (2) the date of redemption.  On the date fixed for
redemption (the "Redemption Date"), the Borrower shall make
payment of the Redemption Amount (as hereinafter defined) in cash
to or upon the order of the Holder as specified by the Holder in
writing to the Borrower at least one business day prior to the
<PAGE>
<PAGE> 20
Redemption Date.  The Redemption Amount shall be equal to the sum
of (a) 110% times the then Accreted Principal Balance of this
Debenture plus (b) any amounts owed to the Holder pursuant to
Sections 1.3 and 1.4(g) hereof or pursuant to Section 2(c) of the
Registration Rights Agreement.  In the event that the Borrower
redeems this Debenture pursuant to the immediately preceding
sentence, in addition to the Redemption Amount payable in cash
pursuant to the immediately preceding sentence, on the Redemption
Date the Borrower shall issue to the Holder, a number of warrants
to purchase Common Stock of the Borrower equal to the outstanding
Accreted Principal Balance being redeemed divided by 1,000
multiplied by 21, which warrants will have a five (5) year term,
an exercise price equal to 105% of the Closing Price of the
Common Stock on the date of redemption and shall otherwise be in
the form of the warrant attached as Exhibit "D" to the Purchase
Agreement.  Notwithstanding anything to the contrary contained in
this Section 4.1, the Holder shall at all times prior to the
Redemption Date under this Section 4.1 maintain the right to
convert all or any part of this Debenture in accordance with
Article I and any amounts so converted after receipt of a
Redemption Notice and prior to the Redemption Date set forth in
such notice which is otherwise subject to redemption pursuant to
the Redemption Notice.  


                      ARTICLE V.  SUBORDINATION

            5.1.  Agreement to Subordinate.  Except as otherwise
provided in Section 1.7, Article III and Article IV of this
Debenture, the Accreted Principal Balance of this Debenture is
payable solely in shares of Common Stock upon conversion in
accordance with Article I hereof.  Notwithstanding anything in
this Debenture to the contrary, the Borrower agrees, and by
accepting this Debenture the Holder agrees, that the indebtedness
evidenced by this Debenture is subordinate and subject in right
of payment, to the extent and in the manner expressly provided in
this Article V, to the prior payment in full of all Senior Debt,
and that the subordination is for the benefit of and enforceable
by the holders of Senior Debt.  This Debenture shall in all
respects rank at least pari passu with all other present and
future obligations of the Borrower, and only Senior Debt shall
rank senior to this Debenture.  

            5.2      Insolvency, Bankruptcy, Dissolution of
Borrower.  Upon any payment or distribution (whether in cash,
securities or other property) to creditors of the Borrower upon
any Insolvency Event (as hereinafter defined):
<PAGE>
<PAGE> 21
                (a)      all Senior Debt shall first be paid in
    full before the Holder shall be entitled to receive any
    payment or other distribution on or in respect of this
    Debenture; and

                (b)      until all Senior Debt is paid in full,
    any payment or distribution to which the Holder of this
    Debenture would be entitled but for this Article V shall be
    made to holders of Senior Debt as their interests may
    appear, except that the Holder may receive shares of the
    Borrower as reorganized or readjusted or securities of the
    Borrower or any other corporation if the payment of such
    securities is subordinate to Senior Debt to at least the
    same extent as this Debenture is subordinate to Senior Debt.

            5.3      Default on Senior Debt.  (a) The Borrower
may not pay the Accreted Principal Balance of this Debenture or
make any deposit in respect of this Debenture and may not
repurchase, redeem or otherwise retire this Debenture
(collectively, "pay this Debenture") if (i) the principal of or
interest on any Senior Debt is not paid when due or (ii) any
other default on Senior Debt occurs and the maturity of such
Senior Debt is accelerated in accordance with its terms unless,
in each case, the default has been cured or waived and any such
acceleration has been rescinded or such Senior Debt has been paid
in full.  During the continuance of any default (other than a
default described in clause (i) or (ii) of the preceding
sentence) with respect to any Senior Debt pursuant to which the
maturity thereof may be accelerated immediately without further
notice (except such notice as may be required to effect such
acceleration) or the expiration of any applicable grace periods,
the Borrower may not pay this Debenture for a period (a "Payment
Blockage Period") commencing upon the receipt by the Borrower and
the Holder of written notice of such default from a
representative of such Senior Debt specifying an election to
effect a Payment Blockage Period (a "Payment Blockage Notice")
and ending 179 days thereafter (or earlier if such Payment
Blockage Period is terminated (i) by written notice to the
Borrower from the representative which gave such Payment Blockage
Notice, (ii) by repayment in full of such Senior Debt or (iii)
because the default specified in such Payment Blockage Notice is
no longer continuing and the prior default has been waived). 
Notwithstanding the immediately preceding sentence (but subject
to the provisions contained in the first sentence of this
Section), unless the holders of such Senior Debt or the
representative of such holders shall have accelerated the
<PAGE>
<PAGE> 22
maturity of such Senior Debt, the Borrower shall resume payments
(including any missed payments) on this Debenture after the end
of such Payment Blockage Period unless such payment is otherwise
prohibited under this Article V.  Multiple Payment Blockage
Periods may be imposed so long as (x) the cumulative period
covered by all such Payment Blockage Periods does not exceed 179
days in any 365 consecutive day period and (y) no more than one
Payment Blockage Period may result from the same default.

                  (b)      The failure to make a payment or
distribution on this Debenture by reason of this Article V shall
not be construed or deemed to prevent the occurrence of a
Redemption Event hereunder; provided that any acceleration of
payment of this Debenture resulting therefrom shall be rescinded
if and when the following conditions shall be simultaneously
satisfied (x) each payment or distribution which gave rise to
such Redemption Event shall be made and (y) no other such
Redemption Event shall have occurred.

            5.4      Subordinated Acceleration; Standstill.  (a)
The Holder agrees to give the Borrower not less than five (5)
days' prior written notice of its intention to accelerate the
maturity of this Debenture pursuant to Article III hereof.  The
Borrower will promptly notify holders of Senior Debt of any
obligation to make payments to be made under Section 1.7.

                  (b)      The Holder will not for a period of
179 days following an acceleration of this Debenture pursuant to
Article III, including by reason of the Borrower's breach of its
covenants under Section 1.7 (other than if an Insolvency Event
shall have occurred or if the Senior Debt shall have been
accelerated) pursue or exercise any other right, power or remedy
arising under Article III of this Debenture.

            5.5.      Permitted Payments.  So as to eliminate any
doubt, except in the event of an Insolvency Event, or as provided
in the first sentence of Section 5.3(a) during any Payment
Blockage Period, as set forth in Sections 5.2 and 5.3,
respectively, accretion of principal, payments under 1.3, 1.4(g),
1.7 and 4.1 of this Debenture, and payments under Section 2(c) of
the Registration Rights Agreement (whether in cash or Common
Stock (as applicable)) (collectively, "Permitted Payments") shall
be credited or made by the Borrower on the terms of this
Debenture.

<PAGE>
<PAGE> 23
            5.6      Turnover.  If the Holder receives any
payment or other distribution on this Debenture (whether in cash,
property, securities or whatever) at a time when such payment or
distribution should not have been made to the Holder by reason of
this Article V, such payment or distribution shall be deemed to
have been received and held in trust for the benefit of the
holders of the Senior Debt, and shall be segregated from other
property of the Holder and be paid and delivered as promptly as
practicable to the holders of the Senior Debt, as their interests
may appear, for application to, or collateral for, the payment or
prepayment of the Senior Debt.

            5.7      Relative Rights.  This Article V defines the
relative rights of the Holder and the holders of Senior Debt. 
Nothing herein shall:

                (a)      impair, as between the Borrower and the
    Holder, the obligation of the Borrower, which is absolute
    and unconditional, to pay principal of, premium, if any, and
    interest on this Debenture in accordance with its terms and
    to fulfill its other obligations hereunder; or

                (b)      except as otherwise expressly provided
    herein, prevent the Holder from exercising its available
    remedies upon a default, subject to the rights of holders of
    Senior Debt to receive distributions otherwise payable to
    the Holder.

            5.8      Agreement to Cooperate.  In the event that a
payment may not be made on the Debentures as a result of the
provisions of this Article V, including without limitation, as a
result of an Insolvency Event or a default on any Senior Debt,
the Borrower shall, if requested by the Holder, reasonably assist
the Holder in attempting to purchase such Senior Debt or
otherwise cure such default so that the payment may be made on
the Debenture.  Nothing in this Section 5.8 shall obligate the
Holder to purchase such Senior Debt or to attempt to cure any
such default.  

<PAGE>
<PAGE> 24
            5.9      Conversion.  Notwithstanding anything to the
contrary contained in this Article V, nothing in this Article V
shall restrict the rights of the Holder to convert the Conversion
Amount in accordance with Article I, including, without
limitation, after an Insolvency Event and during the pendency of
a default on Senior Debt.  To the extent any Permitted Payments
would be payable, but for the provisions of this Article V, in
cash (whether at the Borrower's option or the Holder's option),
such Permitted Payments shall automatically be added to the
Accreted Principal Balance including after an Insolvency Event or
during the pendency of a default on Senior Debt and shall
thereafter and during such pendency be convertible into Common
Stock in accordance with Article I.

            5.10  Definitions.  

                  (a)      "Bankruptcy Code" means the Bankruptcy
Reform Act of 1978, 11 U.S.C. __ 101 et seq., or any successor
statute thereto.

                  (b)      "Insolvency Event" means (i) any
winding-up, insolvency, bankruptcy, liquidation or reorganization
of the Borrower, whether voluntary or involuntary, (ii) any
proceeding or case for reorganization, liquidation, bankruptcy,
dissolution or other winding-up of the Borrower or its assets,
whether or not involving insolvency or bankruptcy, (iii) any
assignment by the Borrower for the benefit of creditors or (iv)
any receivership or other similar proceeding or any marshalling
of assets of the Borrower. 

                  (c)      "Senior Debt" means (i) all
obligations and liabilities of the Borrower or any of its
subsidiaries, whether for or on account of principal,
reimbursement obligations, accrued and unpaid interest (including
without limitation all interest accruing on and after an
Insolvency Event), fees, expenses, indemnities and other amounts
payable under or in connection with any and all bank,
institutional or other financial transaction indebtedness
including, without limitation, under that certain bank agreement
dated January 29, 1996 among the Borrower, its subsidiaries, the
lenders named therein and The Chase Manhattan Bank, as agent, as
amended to date, the 10 3/8% senior secured indebtedness due June
1, 2002 and the 11 5/8% senior indebtedness due August 1, 2002,
and all documents or instruments executed in connection
therewith, as may be amended or restated thereunder, or any
similar replacement, successor or additional indebtedness,
whether outstanding on the date of issuance of this Debenture or
<PAGE>
<PAGE> 25
hereafter created, assumed or incurred and (ii) all obligations
of the Borrower or any of its subsidiaries for deferred purchase
price payments in connection with any business acquisitions by
Borrower or any of its subsidiaries.

                   ARTICLE VI.  MISCELLANEOUS

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

            6.2      Notices.  Any notice (including conversion
notices) herein required or permitted to be given shall be in
writing and may be personally served or delivered by courier or
sent by United States mail and shall be deemed to have been given
upon receipt if personally served (which shall include telephone
line facsimile transmission) or sent by courier or three (3) days
after being deposited in the United States mail, certified, with
postage pre-paid and properly addressed, if sent by mail.  For
the purposes hereof, the address of the Holder shall be as shown
on the records of the Borrower; and the address of the Borrower
shall be American Banknote Corporation, 200 Park Avenue, 49th
Floor, New York, New York  10166-4999, Attention:  Secretary,
facsimile number: (212) 338-0747, and a copy to the attention of
Patrick Reddy, Assistant Secretary, facsimile number: (212)
338-0728.  Both the Holder and the Borrower may change the    
address for service by service of written notice to the other as
herein provided.

            6.3      Amendments.  This Debenture and any
provision hereof may only be amended by an instrument in writing
signed by the Borrower and the Holder.  The term "Debenture" and
all reference thereto, as used throughout this instrument, shall
mean this instrument (and the other Debentures issued pursuant to
the Purchase Agreement) as originally executed, or if later
amended or supplemented, then as so amended or supplemented.
<PAGE>
<PAGE> 26
            6.4      Assignability.  This Debenture shall be
binding upon the Borrower and its successors and assigns, and
shall inure to be the benefit of the Holder and its successors
and assigns.  Each transferee of this Debenture must be an
"accredited investor" (as defined in Rule 501(a) of the 1933
Act).  As a condition to any assignment or transfer, the assignee
or transferee shall agree to be bound to the terms of this
Debenture.  This Debenture may be pledged as collateral in
connection with a bona fide margin account.

            6.5      Cost of Collection.  If default is made in
the payment of this Debenture, the Borrower shall pay the Holder
hereof costs of collection, including reasonable attorneys' fees.

            6.6      Governing Law.  This Debenture shall be
governed by the internal laws of the State of Delaware, without
regard to the principles of conflict of laws.

            6.7      Certain Amounts.  Whenever pursuant to this
Debenture the Borrower is required to pay an amount in excess of
the Accreted Principal Balance (or the portion thereof required
to be paid at that time), the Borrower and the Holder agree that
the actual damages to the Holder from the receipt of cash payment
on this Debenture may be difficult to determine and the amount to
be so paid by the Borrower represents stipulated damages and not
a penalty and is intended to compensate the Holder in part for
loss of the opportunity to convert this Debenture and to earn a
return from the sale of shares of Common Stock acquired upon
conversion of this Debenture at a price in excess of the price
paid for such shares pursuant to this Debenture.

            6.8      Allocations of Maximum Share Amount and
Reserved Amount.  The Maximum Share Amount and the Reserved
Amount (including any increases thereto) shall be allocated pro
rata among the Holders of Debentures based on the principal
amount of Debentures then held by the Holder relative to the
aggregate principal amount of the Debentures then outstanding.

            6.9      Damages Shares.  The shares of Common Stock
that may be issuable to the Holder pursuant to Sections 1.3 and
1.4(g) hereof and pursuant to Section 2(c) of the Registration
Rights Agreement ("Damages Shares") shall be treated as Common
Stock issuable upon conversion of this Debenture for all purposes
<PAGE>
<PAGE> 27
hereof and shall be subject to all of the limitations and
afforded all of the rights of the other shares of Common Stock
issuable hereunder, including without limitation, the right to be
included in the Registration Statement filed pursuant to the
Registration Rights Agreement. For purposes of calculating
interest payable on the outstanding principal amount hereof,
except as otherwise provided herein, amounts convertible into
Damages Shares ("Damages Amounts") shall not bear interest but
must be converted prior to the conversion of any outstanding
principal amount hereof, until the outstanding Damages Amounts is
zero.

            6.10      Denominations.  At the request of the
Holder, upon surrender of this Debenture, the Borrower shall
promptly issue new Debentures in the aggregate outstanding
principal amount hereof, in the form hereof, in such
denominations of at least $100,000 as the Holder shall request.

            6.11      Purchase Agreement.  By its acceptance of
this Debenture, the Holder agrees to be bound by the applicable
terms of the Purchase Agreement.

            6.12      Notice of Corporate Events.  Except as
otherwise provided below, the Holder of this Debenture shall have
no rights as the Holder of Common Stock unless and only to the
extent that it converts this Debenture into Common Stock.  The
Borrower shall provide the Holder with prior notification of any
meeting of the Borrower's shareholders (and copies of proxy
materials and other information sent to shareholders).  In the
event of any taking by the Borrower of a record of its
shareholders for the purpose of determining shareholders who are
entitled to receive payment of any dividend or other
distribution, any right to subscribe for, purchase or otherwise
acquire (including by way of merger, consolidation,
<PAGE>
<PAGE> 28
reclassification or recapitalization) any share of any class or
any other securities or property, or to receive any other right,
or for the purpose of determining shareholders who are entitled
to vote in connection with any proposed sale, lease or conveyance
of all or substantially all of the assets of the Borrower or any
proposed liquidation, dissolution or winding up of the Borrower,
the Borrower shall mail a notice to the Holder, at least twenty
(20) days prior to the record date specified therein (or thirty
(30) days prior to the consummation of the transaction or event,
whichever is earlier), of the date on which any such record is to
be taken for the purpose of such dividend, distribution, right or
other event, and a brief statement regarding the amount and
character of such dividend, distribution, right or other event to
the extent known at such time.  Subject to Allowed Delays (as
defined in Section 3(f) of the Registration Rights Agreement),
the Borrower shall make a public announcement of any event
requiring notification to the Holder hereunder substantially
simultaneously with the notification to the Holder in accordance
with the terms of this Section 6.12.

            IN WITNESS WHEREOF, the Borrower has caused this
Debenture to be signed in its name by its duly authorized officer
this 24th day of July, 1997.


                             AMERICAN BANKNOTE CORPORATION



                             By: s/ Harvey j. Kesner   
                             Name:  Harvey J. Kesner
                             Title:  Executive Vice
                                     President, General
                                     Counsel and Secretary<PAGE>
<PAGE> 29
                                                    Exhibit A

                      NOTICE OF CONVERSION
                    OF CONVERTIBLE DEBENTURE 

TO:   American Banknote Corporation
      200 Park Avenue, 49th Floor
      New York, New York  10166-4999
      Attention:  Secretary
      Facsimile:  (212) 338-0747

            (1) Pursuant to the terms of the attached Convertible
Debenture (the "Debenture"), the undersigned hereby elects to
convert $              Accreted Principal Balance of the
Debenture into shares of Common Stock of American Banknote
Corporation, a Delaware corporation (the "Borrower"). 
Capitalized terms used herein and not otherwise defined herein
have the respective meanings provided in the Debenture.

            (2) Please issue a certificate or certificates for
the number of shares of Common Stock into which such Accreted
Principal Balance of the Debenture is convertible (_____ shares,
based on the Holder's calculation attached hereto) in the name(s)
specified immediately below or, if additional space is necessary,
on an attachment hereto:

_____________________                  ______________________
Name                                   Name

_____________________                  _______________________
Address                                Address

_____________________________         ________________________
SS or Tax ID Number                    SS or Tax ID Number


            (3) The Holder acknowledges and affirms that the
Common Stock issued pursuant to this Notice of Conversion has
been or will be sold in accordance with the requirements of the
1933 Act, if applicable, or pursuant to an exemption under the
1933 Act.

            (4) Capitalized terms used in this Notice of
Conversion and not otherwise defined herein shall have the
respective meanings provided in the Debenture.

Date_________________         ____________________________
                              Signature of Registered Holder
                             (must be signed exactly as 
                              name appears in the Debenture).