ELECTROSOURCE, INC.


THE  SECURITIES  OFFERED HEREBY HAVE NOT BEEN  AND  WILL  NOT  BE
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND  THE
RULES  AND  REGULATIONS PROMULGATED THEREUNDER (THE "1933  ACT"),
AND MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO  OR
FOR  THE  ACCOUNT OR BENEFIT OF U.S. PERSONS (AS SUCH  TERMS  ARE
DEFINED  IN  REGULATION S UNDER THE 1933 ACT), FOR  A  PERIOD  OF
FORTY  (40)  DAYS  AFTER COMPLETION OF THE OFFERING  PURSUANT  TO
WHICH  THESE DEBENTURES WERE ISSUED, AND THEREAFTER MAY  ONLY  BE
OFFERED  OR  SOLD PURSUANT TO REGISTRATION UNDER OR AN  EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE 1933 ACT.

          8% CONVERTIBLE DEBENTURE DUE November 9, 1997
                                
$_______                                      November 10,1995
Number ________

       FOR   VALUE  RECEIVED,  Electrosource,  Inc.,  a  Delaware
corporation   (the  "Company"),  hereby  promises   to   pay   to
_________________  or  registered  assigns  (the   "Holder")   on
November  9, 1997 (the "Maturity Date"), the principal amount  of
_________________________ Dollars ($_______)  U.S.,  and  to  pay
interest on the principal amount hereof, in such amounts, at such
times and on such terms and conditions as are specified herein.

Article 1.  Interest

      The  Company  shall  pay interest on the  unpaid  principal
amount of this Debenture (this "Debenture") at the rate of  Eight
Percent  (8%)  per year, payable quarterly in arrears  until  the
principal hereof is paid in full or has been converted.  Interest
on this Debenture shall accrue from the most recent date to which
interest  has  been paid or, if no interest has been  paid,  from
November 10, 1995.  Interest shall be computed on the basis of  a
360-day  year  of 12 30-day months.  If the Holder shall  convert
this  Debenture during any quarter, the Company shall pay to  the
Holder, upon conversion, the pro-rata portion of accrued interest
payable through the conversion date.

Article 2.  Method of Payment

      This  Debenture must be surrendered to the Company in order
for the Holder to receive payment of the principal amount hereof.
The  Company  shall  pay the principal of and  interest  on  this
Debenture in United States dollars.  However, the Company may pay
principal  and  interest by a check payable in such  money.   The
Company may draw a check for the payment of interest to the order
of the Holder of this Note and mail it to the Holder's address as
shown  on  the  Register  (as  defined  in  Section  7.2  below).
Interest  and principal payments shall be subject to  withholding
under  applicable United States Federal Internal Revenue  Service
Regulations.

Article 3.  Conversion

     Section 3.1.  Conversion Privilege

      (a)  The Holder of this Debenture shall have the right,  at
its  option, to convert it into shares of common stock, par value
$0.10  per  share, of the Company ("Common Stock")  at  any  time
which  is  before  the close of business on  the  Maturity  Date,
except  as  set  forth in Section 3.1(c) below.   The  number  of
shares  of  Common  Stock issuable upon the  conversion  of  this
Debenture  is determined by dividing the principal amount  hereof
to  be  converted  plus all accrued interest  thereon  minus  any
required  withholding by the conversion price in  effect  on  the
conversion date (as defined in paragraph (b) of this Section  3.1
below) and rounding the result to the nearest 1/100th of a share.
On  conversion,  no  payment  of or  adjustment  (other  than  as
provided in the previous sentence) for accrued interest shall  be
made whether or not such conversion occurs before, on or after an
interest payment date.

      (b)  The conversion price is Seventy Five Percent (75%)  of
the  current  market price of the Common Stock on the  conversion
date.

     (c)  Less than all of the principal amount of this Debenture
may  be  converted into Common Stock if the portion converted  is
$10,000 or a whole multiple of $10,000 and the provisions of this
Article  3  that apply to the conversion of all of the  Debenture
also  apply  to the conversion of a portion of it.   All  accrued
interest on this Debenture shall be added to the amount converted
if  less  than  all of the principal amount of this Debenture  is
converted and shall be deemed to be paid and discharged  thereby.
This  Debenture  may  not  be converted  until  Sixty  (60)  days
following the closing of the purchase of this Debenture.

      (d)  In the event any Debentures remain outstanding on  the
second anniversary of the date hereof, the unconverted portion of
such  Debentures will automatically be converted into  shares  of
Common Stock on such date in the manner set forth in this Section
3.1.

       Section  3.2.   Conversion  Procedure.   To  convert  this
Debenture  into  Common Stock, the Holder must (a)  complete  and
sign the Notice of Conversion attached hereto, (b) surrender  the
Debenture  to  the Company, (c) furnish appropriate  endorsements
and  transfer  documents if so requested by the Company  and  (d)
subject  to  Section  3.4  pay any transfer  or  similar  tax  if
required  by  the  Company.   The date  upon  which  all  of  the
foregoing  requirements  are satisfied is  the  conversion  date.
Within five business days thereafter, the Company shall deliver a
certificate  for  the  number  of full  shares  of  Common  Stock
issuable  upon the conversion and a check for any fraction  of  a
share.  The person in whose name the certificate of Common  Stock
is  to  be registered shall be treated as a shareholder of record
on and after the conversion date.  No payment or adjustment shall
be made for accrued interest on a converted Debenture whether the
conversion date is on, at or after an interest payment date.   If
one person converts more than one Debenture at the same time, the
number of full shares issuable upon the conversion shall be based
on  the  total  principal amount of Debentures  converted.   Upon
surrender  of  a Debenture that is to be converted in  part,  the
Company  shall  issue  to  the Holder a new  Debenture  equal  in
principal  amount  to the unconverted portion  of  the  Debenture
surrendered.

      Section  3.3.   Fractional Shares.  The Company  shall  not
issue  a fractional share of Common Stock upon the conversion  of
this  Debenture.  Instead, the Company shall pay in lieu  of  any
fractional  share  the cash value thereof  at  the  then  current
market price of the Common Stock as determined under Section  3.7
below.

      Section  3.4.  Taxes on Conversion.  The Company shall  pay
any  documentary, stamp or similar issue or transfer tax  due  on
the  issue of shares of Common Stock upon the conversion of  this
Debenture.  However, the Holder shall pay any such tax  which  is
due because the shares are issued in a name other than its name.

      Section 3.5.  Company to Reserve Stock.  The Company  shall
reserve out of its authorized but unissued Common Stock or Common
Stock  held in treasury enough shares of Common Stock  to  permit
the  conversion  of this Debenture.  All shares of  Common  Stock
which  may  be issued upon the conversion hereof shall  be  fully
paid and nonassesssable.

      Section 3.6.  Restrictions on Transfer.  This Debenture and
the  Common  Stock issuable upon the conversion hereof  have  not
been registered under the Securities Act of 1933 (the "Act")  and
have   been  sold  pursuant  to  Regulation  S  under   the   Act
("Regulation  S").   The  Debentures may not  be  transferred  or
resold  in the United States, or to a U.S. Person, or to  or  for
the account or benefit of a U.S. Person (as defined in Regulation
S)  for  a  period  of Forty (40) days from the date  hereof  and
thereafter  may only be offered or sold pursuant to  registration
under or an exemption from the Act.

     Section 3.7.  Current Market Price.

      (a)  In Sections 3.1 and 3.3, the current market price  per
share  of  Common Stock on any date is the average of the  quoted
prices  of  the  Common Stock for five consecutive  trading  days
ending on the trading day before the date in question.

      (b)   As  used  in this Section 3.7, the term quoted  price
shall mean (i) the closing bid prices thereof on any such trading
date,  as  reported by Bloomberg, L.P. or (ii) in the  event  the
Common  Stock  is  not reported on such system, the  fair  market
value of the Common Stock as determined by the Board of Directors
of the Company in its good faith judgment.

      Section  3.8.   Mergers, Etc.  If  the  Company  merges  or
consolidates  with another corporation or sells or transfers  all
or  substantially  all of its assets to another  person  and  the
holders  of  the  Common  Stock are entitled  to  receive  stock,
securities  or property in respect of or in exchange  for  Common
Stock, then as a condition of such merger, consolidation, sale or
transfer,  the  Company  and  any such  successor,  purchaser  or
transferee  shall  amend this Debenture to provide  that  it  may
thereafter  be  converted  on  the  terms  and  subject  to   the
conditions  set  forth above into the kind and amount  of  stock,
securities    or   property   receivable   upon   such    merger,
consolidation,  sale or transfer by a holder  of  the  number  of
shares of Common Stock into which this Debenture might have  been
converted immediately before such merger, consolidation, sale  or
transfer,  subject  to  adjustments  which  shall  be  as  nearly
equivalent as may be practicable to the adjustments provided  for
in this Article 3.

Article 4.  Mergers

     The Company shall not consolidate or merge into, or transfer
all  or  substantially all of its assets to, any  person,  unless
such  person  assumes the obligations of the Company  under  this
Debenture  and  immediately after such transaction  no  Event  of
Default exists.  Any reference herein to the Company shall  refer
to  such  surviving or transferee corporation and the obligations
of the Company shall terminate upon such assumption.

Article 5.  Reports

     The Company will mail to the Holder hereof at its address as
shown  on the Register a copy of any annual, quarterly or current
report  that it files with the Securities and Exchange Commission
promptly  after  the  filing thereof and a copy  of  any  annual,
quarterly or other report or proxy statement that it gives to its
shareholders  generally at the time such report or  statement  is
sent to shareholders.

Article 6.  Defaults and Remedies

      Section  6.1.   Events of Default.  An "Event  of  Default"
occurs  if  (a)  the  Company does not make the  payment  of  the
principal of this Debenture when the same becomes due and payable
at  maturity, upon redemption or otherwise, (b) the Company  does
not  make  a payment for a period of 5 days thereafter,  (c)  the
Company fails to comply with any of its other agreements in  this
Debenture and such failure continues for the period and after the
notice specified below, (d) the Company pursuant to or within the
meaning  of  any  Bankruptcy  Law (as hereinafter  defined):  (i)
commences  a  voluntary case; (ii) consents to the  entry  of  an
order  for  relief  against  it in  an  involuntary  case;  (iii)
consents  to  the  appointment  of a  Custodian  (as  hereinafter
defined) of it or for all or substantially all of its property or
(iv)  makes a general assignment for the benefit of its creditors
or  (v)  a  court of competent jurisdiction enters  an  order  or
decree  under any Bankruptcy Law that: (A) is for relief  against
the  Company in an involuntary case; (B) appoints a Custodian  of
the  Company  or for all or substantially all of its property  or
(C)  orders  the  liquidation of the Company, and  the  order  or
decree  remains unstayed and in effect for 60 days.  As  used  in
this Section 6.1, the term "Bankruptcy Law" means Title 11 of the
United  States Code or any similar federal or state law  for  the
relief  of  debtors.   The term "Custodian" means  any  receiver,
trustee,  assignee,  liquidator or  similar  official  under  any
Bankruptcy Law.  A default under clause (c) above is not an Event
of  Default  until the holders of at least 25% of  the  aggregate
principal  amount of the Debentures notify the  Company  of  such
default and the Company does not cure it within 5 days after  the
receipt  of  such notice, which must specify the default,  demand
that it be remedied and state that it is a "Notice of Default."

      Section 6.2.  Acceleration.  If an Event of Default  occurs
and  is  continuing, the Holder hereof by notice to the  Company,
may  declare  the  principal  of and  accrued  interest  on  this
Debenture  to  be  due and payable.  Upon such  declaration,  the
principal   and  interest  hereof  shall  be  due   and   payable
immediately.

Article 7.  Registered Debentures

      Section  7.1.  Series.  This Debenture is one of a numbered
series of Debentures having an aggregate principal amount of  not
more  than  $5,000,000  which  are identical  except  as  to  the
principal  amount  and date of issuance thereof  and  as  to  any
restriction on the transfer thereof in order to comply  with  the
Securities Act of 1933 and the regulations of the Securities  and
Exchange Commission promulgated thereunder.  Such Debentures  are
referred  to  herein  collectively  as  the  "Debentures."    The
Debentures shall be issued in whole multiples of $10,000.

      Section 7.2.  Record Ownership.  The Company shall maintain
a  register  of  the holders of the Debentures  (the  "Register")
showing  their  names and addresses and the  serial  numbers  and
principal  amounts  of  Debentures issued to  or  transferred  of
record by them from time to time.  The Register may be maintained
in  electronic, magnetic or other computerized form.  The Company
may treat the person named as the Holder of this Debenture in the
Register as the sole owner of this Debenture.  The Holder of this
Debenture is the person exclusively entitled to receive  payments
of interest on this Debenture, receive notifications with respect
to  this  Debenture, convert it into Common Stock  and  otherwise
exercise  all  of  the rights and powers as  the  absolute  owner
hereof.

      Section 7.3.  Registration of Transfer.  Transfers of  this
Debenture  may  be  registered  on  the  books  of  the   Company
maintained for such purpose pursuant to Section 7.2 above  (i.e.,
the Register).  Transfers shall be registered when this Debenture
is  presented  to  the  Company with a request  to  register  the
transfer  hereof  and  the  Debenture is  duly  endorsed  by  the
appropriate  person, reasonable assurances  are  given  that  the
endorsements  are  genuine and effective,  and  the  Company  has
received  evidence  satisfactory to  it  that  such  transfer  is
rightful  and  in compliance with all applicable laws,  including
tax  laws  and  state  and federal securities  laws.   When  this
Debenture   is  presented  for  transfer  and  duly   transferred
hereunder,  it shall be canceled and a new Debenture showing  the
name  of  the  transferee as the record holder thereof  shall  be
issued  in lieu hereof.  When this Debenture is presented to  the
Company  with  a reasonable request to exchange it for  an  equal
principal  amount  of  Debentures  of  other  denominations,  the
Company  shall make such exchange and shall cancel this Debenture
and  issue  in  lieu thereof Debentures having a total  principal
amount equal to this Debenture in the denominations requested  by
the  Holder.   The Company may charge a reasonable  fee  for  any
registration of transfer or exchange other than one occasioned by
a notice of redemption or the conversion hereof.

      Section  7.4.  Worn and Lost Debentures.  If this Debenture
becomes  worn,  defaced or mutilated but is  still  substantially
intact and recognizable, the Company or its agent may issue a new
Debenture in lieu hereof upon its surrender.  Where the Holder of
this Debenture claims that the Debenture has been lost, destroyed
or  wrongfully taken, the Company shall issue a new Debenture  in
place  of  the  original Debenture if the Holder so  requests  by
written  notice to the Company actually received by  the  Company
before it is notified that the Debenture has been acquired  by  a
bona  fide purchaser and the Holder has delivered to the  Company
an indemnity bond in such amount and issued by such surety as the
Company  deems  satisfactory together with an  affidavit  of  the
Holder  setting forth the facts concerning such loss, destruction
or  wrongful taking and such other information in such form  with
such proof or verification as the Company may request.

Article 8.  Notices

      Any  notice which is required or convenient under the terms
of  this  Debenture shall be duly given if it is in  writing  and
delivered  in  person  or  mailed by first  class  mail,  postage
prepaid  and  directed  to the Holder of  the  Debenture  at  its
address as it appears on the Register or if to the Company to its
principal executive offices.  The time when such notice  is  sent
shall be the time of the giving of the notice.

Article 9.  Time

      Where this Debenture authorizes or requires the payment  of
money  or  the  performance of a condition  or  obligation  on  a
Saturday or Sunday or a public holiday, or authorizes or requires
the  payment  of  money  or the performance  of  a  condition  or
obligation within, before or after a period of time computed from
a  certain date, and such period of time ends on a Saturday or  a
Sunday or a public holiday, such payment may be made or condition
or  obligation performed on the next succeeding business day, and
if  the period ends at a specified hour, such payment may be made
or  condition performed, at or before the same hour of such  next
succeeding  business day, with the same force and  effect  as  if
made or performed in accordance with the terms of this Debenture.
Where  time  is  extended  by virtue of the  provisions  of  this
Article  9,  such  extended time shall not  be  included  in  the
computation of interest.

Article 10.  Waivers

      The  holders  of  a  majority in principal  amount  of  the
Debentures may waive a default or rescind the declaration  of  an
Event of Default and its consequences except for a default in the
payment of principal of or interest on any Debenture.

Article 11.  Rules of Construction

      In  this  Debenture, unless the context otherwise requires,
words  in  the  singular number include the plural,  and  in  the
plural  include  the singular, and words of the masculine  gender
include  the  feminine  and the neuter, and  when  the  sense  so
indicates,  words of the neuter gender may refer to  any  gender.
The  numbers  and titles of sections contained in this  Debenture
are  inserted for convenience of reference only, and they neither
form  a  part  of this Debenture nor are they to be used  in  the
construction  or  interpretation  hereof.   Wherever,   in   this
Debenture, a determination of the Company is required or allowed,
such  determination shall be made by a majority of the  Board  of
Directors  of  the Company and if it is made in  good  faith,  it
shall  be conclusive and binding upon the Company and the  Holder
of this Debenture.

Article 12.  Governing Law

      The  validity, terms, performance and enforcement  of  this
Debenture  shall  be  governed and construed  by  the  provisions
hereof  and in accordance with the laws of the State of New  York
applicable to agreements that are negotiated, executed, delivered
and performed solely in the State of New York.

      IN  WITNESS  WHEREOF, the Company has  duly  executed  this
Debenture as of the date first written above.

                         ELECTROSOURCE, INC.

                         By             /s/
                              Michael G. Semmens
                              President

                      NOTICE OF CONVERSION
                                
     [To be completed and signed only upon conversion of
Debenture]

     The undersigned, the Holder of this Debenture, hereby
irrevocably elects to exercise the right to convert it into
common stock, par value $0.10 per share, of Electrosource, Inc.,
as follows:

[Complete if less than        ____________________Dollars($__________)*___
all of principal amount       ($10,000 or integral multiples of $10,000)
is to be converted]

[Signature must be             ___________________________________________
guaranteed if registered       (Name of Holder of shares if different than
holder of stock differs        registered Holder of Debenture)
from registered Holder of
Debenture)

                               __________________________________________
                               (Address of Holder if different than address
                               of registered Holder of Debenture)


                               __________________________________________
                              (Social Security or EIN of Holder of shares
                              if different than Holder of Debenture)

     *If the principal amount of the Debenture to be converted is
     less than the entire principal amount thereof, a new
     Debenture for the balance of the principal amount shall be
     returned to the Holder of the Debenture.
     
Date:________________        Sign:_____________________________________
                             (Signature must conform in all respects
                             to name of Holder shown on face of this
                             Debenture)

Signature Guaranteed:



                       Assignment of Note
                                
                                
     The undersigned hereby sell(s) and assign(s) and transfer(s) unto

________________________________________________________________________
          (name, address and SSN or EIN of assignee)

__________________________________________________Dollars($_________)___
(principal amount of Debenture, $10,000 or integral multiples of $10,000)

of principal amount of this Debenture together with all accrued
interest hereon.


Date:________            Sign:__________________________________________
                         (Signature must conform in all respects to
                         name of Holder shown on face of Debenture)


Signature Guaranteed:
                                
                      SUBSCRIPTION REGISTER
Debenture
 Number                   Purchaser                    Amount

D597-101  Baskerville Trading Corporation           $  250,000
          Nassau Bahamas

D597-102  Infinity Investors, Ltd                    1,250,000
          London, United Kingdom

D597-103  Taryak, Inc.                                 100,000
          Zurich, Switzerland

D597-104  Mifal Klita                                  900,000
-D597-121 Downsview, Ontario, Canada

D597-122  Gems of the World London England, Inc.       200,000
-D597-125 London, England

D597-126  Societe Commerciale Guttenberg SA            580,000
-D597-136 Herisau, Switzerland

              TOTAL                                 $3,280,000