
                                                                 EXHIBIT 1.1




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                                AMPEX CORPORATION
                            (a Delaware corporation)

                                   $30,000,000
                            12% Senior Notes Due 2003

                                       and

                           Warrants to Purchase up to
                         1,020,000 Class A Common Shares
                           ($0.01 par value per share)

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

                               PURCHASE AGREEMENT

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





                             Dated: January 26, 1998





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679049.1


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                                Table of Contents

PURCHASE AGREEMENT.........................................................  1
    SECTION 1.   Representations and Warranties............................  2
             (a) Representations and Warranties by the Company.............  2
                 (i)     Similar Offerings.................................  2
                 (ii)    Offering Memorandum...............................  3
                 (iii)   Incorporated Documents............................  3
                 (iv)    Independent Accountants...........................  3
                 (v)     Financial Statements..............................  3
                 (vi)    No Material Adverse Change in Business............  4
                 (vii)   Good Standing of the Company......................  4
                 (viii)  Good Standing of Significant Subsidiaries.........  4
                 (ix)    Capitalization....................................  4
                 (x)     Authorization of Agreement........................  5
                 (xi)    Authorization of Registration Rights Agreements...  5
                 (xii)   Authorization of the Indenture....................  5
                 (xiii)  Authorization of the Warrant Agreement............  5
                 (xiv)   Authorization of the Notes........................  5
                 (xv)    Authorization of the Warrants.....................  6
                 (xvi)   Authorization and Valid Issuance of 
                         the Warrant Shares................................  6
                 (xviii) Absence of Defaults and Conflicts.................  6
                 (xix)   Absence of Labor Dispute..........................  7
                 (xx)    Absence of Proceedings............................  7
                 (xxi)   Possession of Intellectual Property...............  7
                 (xxii)  Absence of Further Requirements...................  8
                 (xxiii) Possession of Licenses and Permits................  8
                 (xxiv)  Title to Property.................................  8
                 (xxv)   Tax Returns.......................................  9
                 (xxvi)  Insurance.........................................  9
                 (xxvii) ERISA Matters.....................................  9
                 (xxix)  Investment Company Act............................ 10
                 (xxx)   Rule 144A Eligibility............................. 10
                 (xxxi)  No General Solicitation........................... 10
                 (xxxii) No Registration Required.......................... 10
             (b) Officer's Certificates.................................... 10
    SECTION 2.   Sale and Delivery to Initial Purchaser; Closing........... 11
             (a) Securities................................................ 11
             (b) Payment................................................... 11
             (c) Qualified Institutional Buyer............................. 11
             (d) Denominations; Registration............................... 11
    SECTION 3.   Covenants of the Company.................................. 11
             (a) Offering Memorandum....................................... 11
             (b) Notice and Effect of Material Events...................... 12
             (c) Amendment to Offering Memorandum and Supplements.......... 12

679049.1
                                        i

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             (d) Qualification of Securities for Offer and Sale............ 12
             (e) DTC....................................................... 12
             (f) Use of Proceeds........................................... 12
    SECTION 4.   Payment of Expenses....................................... 13
             (a) Expenses.................................................. 13
             (b) Termination of Agreement.................................. 13
    SECTION 5.   Conditions of Initial Purchaser's Obligations............. 13
             (a) Opinion of Counsel for the Company........................ 13
             (b) Opinion of Patent Counsel for the Company................. 14
             (c) Opinion of Counsel for Initial Purchaser.................. 14
             (d) Officers' Certificate..................................... 14
             (e) Accountant's Comfort Letter............................... 14
             (f) Bring-down Comfort Letter................................. 14
             (g) Registration Rights Agreements............................ 15
             (h) PORTAL.................................................... 15
             (i) Additional Documents...................................... 15
             (j) Termination of Agreement.................................. 15
    SECTION 6.   Subsequent Offers and Resales of the Securities........... 15
             (a) Offer and Sale Procedures................................. 15
                 (i)   Offers and Sales only to Institutional Accredited 
                       Investors and Qualified Institutional Buyers........ 15
                 (ii)  No General Solicitation............................. 15
                 (iii) Purchases by Non-Bank Fiduciaries................... 16
                 (iv)  Subsequent Purchaser Notification................... 16
                 (v)   Minimum Principal Amount............................ 16
                 (vi)  Restrictions on Transfer............................ 16
             (b) Covenants of the Company.................................. 17
                 (i)   Due Diligence....................................... 17
                 (ii)  Integration......................................... 17
                 (iii) Rule 144A Information............................... 17
                 (iv)  Restriction on Repurchases.......................... 17
    SECTION 7.   Indemnification........................................... 18
             (a) Indemnification of Initial Purchaser...................... 18
             (b) Indemnification of Company, Directors and Officers........ 18
             (c) Actions against Parties; Notification..................... 19
    SECTION 8.   Contribution.............................................. 19
    SECTION 9.   Representations, Warranties and Agreements to 
                 Survive Delivery.......................................... 20
    SECTION 10.  Termination of Agreement.................................. 21
             (a) Termination; General...................................... 21
             (b) Liabilities............................................... 21
    SECTION 11.  Notices................................................... 21
    SECTION 12.  Parties................................................... 21
    SECTION 13.  GOVERNING LAW AND TIME.................................... 22
    SECTION 14.  Effect of Headings........................................ 22

679049.1
                                       ii

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Exhibit A     FORM OF OPINION OF COMPANY'S COUNSEL........................A-1
Exhibit B     FORM OF OPINION OF GENERAL COUNSEL OF THE COMPANY...........B-1
Exhibit C     FORM OF OPINION OF PATENT COUNSEL OF THE COMPANY............C-1

679049.1
                                       iii

<PAGE>






                                   $30,000,000
                            12% Senior Notes Due 2003
                                       and
                           Warrants to Purchase up to
                         1,020,000 Class A Common Shares
                           ($0.01 par value per share)



                                AMPEX CORPORATION

                            (a Delaware corporation)


                               PURCHASE AGREEMENT

                                                             January 26, 1998


FIRST ALBANY CORPORATION
One Penn Plaza
New York, New York 10119

Ladies and Gentlemen:

     Ampex  Corporation,  a Delaware  corporation (the "Company"),  confirms its
agreement with First Albany Corporation (the "Initial Purchaser"),  with respect
to the issue and sale by the Company and the  purchase by the Initial  Purchaser
of $30,000,000  aggregate principal amount of the Company's 12% Senior Notes Due
2003 (the "Notes"),  and warrants (the "Warrants") to purchase  1,020,000 shares
(the "Warrant  Shares") of the Class A Common Stock,  par value $0.01 per share,
of the  Company  expiring  March  15,  2003.  The  Notes  and the  Warrants  are
collectively  hereinafter  referred to as the "Securities".  The Notes are to be
issued pursuant to an Indenture dated as of January 28, 1998 (the  "Indenture"),
between the Company  and IBJ  Schroder  Bank & Trust  Company,  as trustee  (the
"Trustee").  The Warrants are to be issued pursuant to a Warrant Agreement dated
as of January  28,  1998 (the  "Warrant  Agreement"),  between  the  Company and
American Stock Transfer & Trust Company, as warrant agent (the "Warrant Agent").
The purchase  price for Warrant  Shares upon  exercise of Warrants will be $2.25
per share (the  "Exercise  Price"),  subject to adjustment in certain  events as
specified  in the Warrant  Agreement.  Notes issued in  book-entry  form will be
issued to Cede & Co. as nominee of The Depository Trust Company ("DTC") pursuant
to a letter  agreement,  to be dated as of the Closing Time (as defined below in
Section 2(b)) (the "DTC Agreement"), among the Company, the Trustee and DTC.

679049.1
                                        1

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     The  Company  understands  that the Initial  Purchaser  proposes to make an
offering of the  Securities  on the terms and in the manner set forth herein and
agrees that the Initial  Purchaser  may resell,  subject to the  conditions  set
forth herein,  all or a portion of the  Securities  to  purchasers  ("Subsequent
Purchasers") at any time after the date of this Agreement. The Securities are to
be offered and sold through the Initial Purchaser without being registered under
the  Securities  Act of 1933,  as amended  (the "1933  Act"),  in reliance  upon
exemptions therefrom. Pursuant to the terms of the Securities and the Indenture,
investors  that acquire  Securities  may only resell or otherwise  transfer such
Securities if such Securities are hereafter  registered under the 1933 Act or if
an exemption  from the  registration  requirements  of the 1933 Act is available
(including  the  exemption  afforded by Rule 144A ("Rule 144A") of the rules and
regulations  promulgated  under  the 1933  Act by the  Securities  and  Exchange
Commission (the "Commission")).

     The Company has prepared and delivered to the Initial Purchaser copies of a
preliminary  offering  memorandum  dated  January  21,  1998  (the  "Preliminary
Offering  Memorandum")  and  has  prepared  and  will  deliver  to  the  Initial
Purchaser,  on the date  hereof or the next  succeeding  day,  copies of a final
offering  memorandum  dated January 23, 1998 (the "Final Offering  Memorandum"),
each for use by the Initial  Purchaser in connection  with its  solicitation  of
purchases of, or offering of, the Securities.  "Offering Memorandum" means, with
respect  to any date or time  referred  to in this  Agreement,  the most  recent
offering  memorandum  (whether the Preliminary  Offering Memorandum or the Final
Offering  Memorandum,  or any amendment or supplement to either such  document),
including exhibits thereto, which has been prepared and delivered by the Company
to the Initial Purchaser in connection with its solicitation of purchases of, or
offering of, the Securities.

     The  holders of Notes will be entitled  to the  benefits of a  Registration
Rights  Agreement  between the Company  and the  Initial  Purchaser  (the "Notes
Registration  Rights  Agreement"),  pursuant  to which the  Company  will file a
registration  statement  (the  "Registration  Statement")  with  the  Commission
registering  the  Securities  or  the  Exchange  Securities  referred  to in the
Registration  Rights  Agreement under the 1933 Act. The holders of Warrants will
be  entitled to the  benefits of a  Registration  Rights  Agreement  between the
Company  and  the  Initial   Purchaser   (the  "Warrants   Registration   Rights
Agreement"),  pursuant  to which  the  Company  will  file a shelf  registration
statement (the "Shelf Registration  Statement") with the Commission  registering
the Securities under the 1933 Act. The Notes  Registration  Rights Agreement and
the Warrant Registration Rights Agreement are collectively  hereinafter referred
to as the "Registration Rights Agreements".

     SECTION 1. Representations and Warranties.

     (a) Representations  and Warranties by the Company.  The Company represents
and  warrants  to the  Initial  Purchaser  as of the date  hereof  and as of the
Closing Time  referred to in Section  2(b)  hereof,  and agrees with the Initial
Purchaser as follows:

          (i) Similar  Offerings.  The Company has not,  directly or indirectly,
     solicited  any offer to buy or offered to sell,  and will not,  directly or
     indirectly, solicit any offer to buy or offer to sell, in the United States
     or to any United States citizen or resident,

679049.1
                                        2

<PAGE>



     any  security  which  is or  would  be  integrated  with  the  sale  of the
     Securities in a manner that would  require the  Securities to be registered
     under the 1933 Act.

         (ii) Offering Memorandum.  The Offering Memorandum does not, and at the
     Closing Time will not,  include an untrue  statement of a material  fact or
     omit to state a material  fact  necessary  in order to make the  statements
     therein,  in the light of the circumstances under which they were made, not
     misleading; provided that this representation, warranty and agreement shall
     not apply to statements in or omissions from the Offering  Memorandum  made
     in reliance upon and in conformity  with written  information  furnished to
     the Company in writing by the Initial  Purchaser  expressly  for use in the
     Offering Memorandum.

          (iii) Incorporated Documents.  The documents incorporated or deemed to
     be  incorporated  by reference in the Offering  Memorandum at the time they
     were or hereafter are filed with the Commission complied and will comply in
     all material  respects with the  requirements of the 1934 Act and the rules
     and regulations of the Commission  thereunder,  and when read together with
     the  other  information  in the  Offering  Memorandum,  at the  date of the
     Offering Memorandum and at the Closing Time, do not and will not include an
     untrue  statement  of a  material  fact or omit to  state a  material  fact
     required to be stated therein or necessary to make the statements  therein,
     in the  light  of  the  circumstances  under  which  they  were  made,  not
     misleading.

          (iv) Independent Accountants. The accountants who certified certain of
     the financial  statements and supporting schedules included in the Offering
     Memorandum are independent certified public accountants with respect to the
     Company and its subsidiaries within the meaning of Regulation S-X under the
     1933 Act.

          (v) Financial Statements. The financial statements,  together with the
     related schedules and notes,  included in the Offering  Memorandum  present
     fairly  the  financial   position  of  the  Company  and  its  consolidated
     subsidiaries   at  the  dates   indicated  and  the  statement  of  income,
     stockholders'  equity and cash flows of the  Company  and its  consolidated
     subsidiaries for the periods specified; said financial statements have been
     prepared  in  conformity  with  generally  accepted  accounting  principles
     ("GAAP")  applied on a consistent  basis  throughout the periods  involved,
     except  as  indicated  therein  or in the  notes  thereto.  The  supporting
     schedules,  if any, included in the Offering  Memorandum  present fairly in
     accordance  with GAAP the information  required to be stated  therein.  The
     selected  consolidated  historical  financial data included in the Offering
     Memorandum  present  fairly the  information  shown  therein  and have been
     compiled  on  a  basis  consistent  with  that  of  the  audited  financial
     statements  included in the Offering  Memorandum.  The pro forma  financial
     information  of the Company  and its  subsidiaries  and the  related  notes
     thereto included in the Offering  Memorandum present fairly the information
     shown therein, have been prepared in accordance with the Commission's rules
     and guidelines with respect to pro forma financial statements and have been
     properly compiled on the bases described therein, and the

679049.1
                                        3

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     assumptions  used  in  the  preparation  thereof  are  reasonable  and  the
     adjustments used therein are appropriate to give effect to the transactions
     and circumstances referred to therein.

          (vi) No Material  Adverse  Change in  Business.  Since the  respective
     dates as of which information is given in the Offering  Memorandum,  except
     as otherwise stated therein, (A) there has been no material adverse change,
     and no development  involving a prospective material adverse change, in the
     condition,  financial or  otherwise,  or in the earnings or business of the
     Company and its  subsidiaries  considered  as one  enterprise  (a "Material
     Adverse  Effect"),  whether  or not  arising  in  the  ordinary  course  of
     business,  (B) there have been no transactions  entered into by the Company
     or any of its  subsidiaries,  other  than those in the  ordinary  course of
     business,   which  are  material  with  respect  to  the  Company  and  its
     subsidiaries  considered  as one  enterprise,  and (C)  there  has  been no
     dividend or distribution of any kind declared,  paid or made by the Company
     on any class of its capital stock.

          (vii)  Good  Standing  of the  Company.  The  Company  has  been  duly
     organized and is validly  existing as a corporation  in good standing under
     the laws of the State of Delaware and has corporate  power and authority to
     own,  lease and  operate  its  properties  and to conduct  its  business as
     described  in the  Offering  Memorandum  and to enter into and  perform its
     obligations  under this  Agreement;  and the Company is duly qualified as a
     foreign  corporation  to transact  business and is in good standing in each
     other  jurisdiction  in which such  qualification  is required,  whether by
     reason of the  ownership or leasing of property or the conduct of business,
     except where the failure so to qualify or to be in good standing  would not
     result in a Material Adverse Effect.

          (viii) Good Standing of Significant  Subsidiaries.  Each  "significant
     subsidiary"  of the  Company  (as  such  term is  defined  in Rule  1-02 of
     Regulation S-X) (each a "Significant  Subsidiary")  has been duly organized
     and is validly existing as a corporation in good standing under the laws of
     the jurisdiction of its incorporation, has corporate power and authority to
     own,  lease and  operate  its  properties  and to conduct  its  business as
     described in the  Offering  Memorandum  and is duly  qualified as a foreign
     corporation  to  transact   business  and  is  in  good  standing  in  each
     jurisdiction in which such qualification is required,  whether by reason of
     the  ownership  or leasing of property or the conduct of  business,  except
     where the failure so to qualify or to be in good standing  would not result
     in a Material  Adverse Effect;  all of the issued and  outstanding  capital
     stock  of  each   Significant   Subsidiary   (other  than  Ampex   Holdings
     Corporation,  which  was  incorporated  on  January  20,  1998 and is being
     capitalized  as  described  in  the  Offering  Memorandum)  has  been  duly
     authorized  and validly  issued,  is fully paid and  non-assessable  and is
     owned by the Company,  directly or through subsidiaries,  free and clear of
     any  security  interest,  mortgage,  pledge,  lien,  encumbrance,  claim or
     equity;  none of the outstanding shares of capital stock of the Significant
     Subsidiaries  was issued in violation of any  preemptive or similar  rights
     arising  by  operation  of law,  or under the  charter  or  by-laws  of any
     Significant  Subsidiary  or under any agreement to which the Company or any
     Significant Subsidiary is a party.


679049.1
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          (ix)  Capitalization.  The authorized,  issued and outstanding capital
     stock of the Company is as set forth in the Offering  Memorandum  under the
     caption  "Capitalization"  as of the date set forth therein,  and except as
     set forth in the Offering  Memorandum,  there have been no material changes
     thereto.

          (x)   Authorization  of  Agreement.   This  Agreement  has  been  duly
     authorized, executed and delivered by the Company.

          (xi)  Authorization  of Registration  Rights  Agreements.  Each of the
     Registration Rights Agreements has been duly authorized by the Company and,
     at the Closing  Time,  will have been duly  executed  and  delivered by the
     Company and will  constitute a valid and binding  agreement of the Company,
     enforceable  against the Company in  accordance  with its terms,  except as
     enforcement  thereof may be limited by bankruptcy,  insolvency  (including,
     without   limitation,   all  laws   relating  to   fraudulent   transfers),
     reorganization,  moratorium  or  similar  laws  relating  to  or  affecting
     enforcement of creditors'  rights  generally,  or by general  principles of
     equity (regardless of whether  enforcement is considered in a proceeding in
     equity  or  at  law),  and  except  that  rights  to  indemnification   and
     contribution thereunder may be limited by applicable law.

          (xii)  Authorization  of the  Indenture.  The  Indenture has been duly
     authorized  by the Company  and, at the Closing  Time,  will have been duly
     executed  and  delivered  by the  Company and will  constitute  a valid and
     binding  agreement  of the  Company,  enforceable  against  the  Company in
     accordance with its terms, except as the enforcement thereof may be limited
     by bankruptcy, insolvency (including, without limitation, all laws relating
     to fraudulent transfers), reorganization,  moratorium or other similar laws
     relating to or affecting enforcement of creditors' rights generally,  or by
     general  principles  of  equity  (regardless  of  whether   enforcement  is
     considered in a proceeding in equity or at law).

          (xiii)  Authorization of the Warrant Agreement.  The Warrant Agreement
     has been duly authorized by the Company and, at the Closing Time, will have
     been duly executed and delivered by the Company and will constitute a valid
     and binding  agreement of the Company,  enforceable  against the Company in
     accordance with its terms, except as the enforcement thereof may be limited
     by bankruptcy, insolvency (including, without limitation, all laws relating
     to fraudulent transfers), reorganization,  moratorium or other similar laws
     relating to or affecting enforcement of creditors' rights generally,  or by
     general  principles  of  equity  (regardless  of  whether   enforcement  is
     considered in a proceeding in equity or at law).

          (xiv)  Authorization of the Notes. The Notes have been duly authorized
     and, at the Closing Time,  will have been duly executed by the Company and,
     when  authenticated  in  the  manner  provided  for in  the  Indenture  and
     delivered  against  payment of the purchase price therefor will  constitute
     valid and  binding  obligations  of the  Company,  enforceable  against the
     Company in accordance with their terms,  except as the enforcement  thereof
     may

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<PAGE>



     be limited by bankruptcy,  insolvency (including,  without limitation,  all
     laws relating to fraudulent transfers), reorganization, moratorium or other
     similar laws  relating to or affecting  enforcement  of  creditors'  rights
     generally,  or by  general  principles  of equity  (regardless  of  whether
     enforcement is considered in a proceeding in equity or at law), and will be
     in the  form  contemplated  by,  and  entitled  to  the  benefits  of,  the
     Indenture.

          (xv)  Authorization  of the  Warrants.  The  Warrants  have  been duly
     authorized  and, at the Closing  Time,  will have been duly executed by the
     Company and, when  authenticated  in the manner provided for in the Warrant
     Agreement and delivered against payment of the purchase price therefor will
     constitute  valid  and  binding  obligations  of the  Company,  enforceable
     against  the  Company  in  accordance  with  their  terms,  except  as  the
     enforcement  thereof may be limited by bankruptcy,  insolvency  (including,
     without   limitation,   all  laws   relating   to   fraudulent   transfers)
     reorganization,  moratorium  or other similar laws relating to or affecting
     enforcement of creditors'  rights  generally,  or by general  principles of
     equity (regardless of whether  enforcement is considered in a proceeding in
     equity or at law), and will be in the form contemplated by, and entitled to
     the benefits of, the Warrant Agreement.

          (xvi)  Authorization and Valid Issuance of the Warrant Shares. (1) The
     Company has  sufficient  shares  authorized  and has  reserved for issuance
     shares of Class A Common  Stock  which may be issued  upon  exercise of the
     Warrants;  (2) the  issuance of the  Warrant  Shares and  Warrants  are not
     subject to preemptive rights;  (3) the Warrant Shares,  when issued against
     payment of the Exercise Price, will be duly authorized,  validly issued and
     will be fully paid and non-assessable.

          (xvii)  Description of the Notes,  the Warrants,  the  Indenture,  the
     Warrant  Agreement,   the  Warrant  Shares  and  the  Registration   Rights
     Agreements.  The Notes, the Warrants,  the Warrant  Agreement,  the Warrant
     Shares,  the Indenture and each of the Registration  Rights Agreements will
     conform in all  material  respects to the  respective  statements  relating
     thereto  contained in the Offering  Memorandum and will be in substantially
     the respective forms previously delivered to the Initial Purchaser.

          (xviii) Absence of Defaults and Conflicts. Neither the Company nor any
     of its subsidiaries is in violation of its charter or by-laws or in default
     in the performance or observance of any obligation,  agreement, covenant or
     condition contained in any contract,  indenture,  mortgage,  deed of trust,
     loan or credit  agreement,  note, lease or other agreement or instrument to
     which the Company or any of its  subsidiaries  is a party or by which it or
     any of them may be bound,  or to which any of the property or assets of the
     Company or any of its  subsidiaries is subject  (collectively,  "Agreements
     and  Instruments")  except as set  forth in the  Offering  Memorandum  with
     respect to the Company's 8%  Noncumulative  Preferred Stock, and except for
     such  defaults and, in the case of the Company's  subsidiaries  only,  such
     violations  that  would not result in a Material  Adverse  Effect;  and the
     execution,  delivery  and  performance  of  this  Agreement,  each  of  the
     Registration  Rights Agreements,  the Indenture,  the Warrant Agreement and
     the Securities and any other agreement or instrument entered

679049.1
                                        6

<PAGE>



     into or issued or to be entered into or issued by the Company in connection
     with the  transactions  contemplated  hereby or thereby or in the  Offering
     Memorandum and the  consummation of the transactions  contemplated  herein,
     therein and in the Offering Memorandum  (including the issuance and sale of
     the Securities,  the use of the proceeds from the sale of the Securities as
     described  in the Offering  Memorandum  under the caption "Use of Proceeds"
     and  the  filing  of the  Registration  Statement  and  Shelf  Registration
     Statement)  and compliance by the Company with its  obligations  hereunder,
     and under each of the Registration  Rights Agreements,  the Indenture,  the
     Warrant  Agreement  and the  Securities  have been duly  authorized  by all
     necessary corporate action and do not and will not, whether with or without
     the  giving  of  notice  or  passage  of time  or  both,  conflict  with or
     constitute a breach of, or default or a Repayment  Event (as defined below)
     under,  or result in the  creation  or  imposition  of any lien,  charge or
     encumbrance  upon any  property  or  assets  of the  Company  or any of its
     subsidiaries  pursuant to, the Agreements and  Instruments  except for such
     conflicts,  breaches or defaults or liens,  charges or  encumbrances  that,
     singly or in the aggregate,  would not result in a Material Adverse Effect,
     nor will such  action  result in any  violation  of the  provisions  of the
     charter  or  by-laws  of the  Company  or any  of its  subsidiaries  or any
     applicable law, statute, rule, regulation,  judgment, order, writ or decree
     of  any  government,  government  instrumentality  or  court,  domestic  or
     foreign, having jurisdiction over the Company or any of its subsidiaries or
     any of their  assets or  properties.  As used herein,  a "Repayment  Event"
     means any event or condition which gives the holder of any note,  debenture
     or other  evidence of  indebtedness  (or any person acting on such holder's
     behalf) the right to require the repurchase, redemption or repayment of all
     or  a  portion  of  such   indebtedness  by  the  Company  or  any  of  its
     subsidiaries.

          (xix) Absence of Labor Dispute. To the Company's  knowledge,  no labor
     dispute with the employees of the Company or any of its subsidiaries exists
     or is  imminent,  and  to  the  Company's  knowledge  (without  independent
     investigation),  there is no existing or imminent labor  disturbance by the
     employees of any if its  principal  suppliers  which,  in either case,  may
     reasonably be expected to result in a Material Adverse Effect.

          (xx)  Absence of  Proceedings.  Except as  disclosed  in the  Offering
     Memorandum, there is no action, suit, proceeding,  inquiry or investigation
     before or by any court or governmental agency or body, domestic or foreign,
     now pending,  or, to the knowledge of the Company,  threatened,  against or
     affecting the Company or any of its subsidiaries  which might reasonably be
     expected to result in a Material Adverse Effect,  or which might reasonably
     be expected to materially and adversely  affect the properties or assets of
     the  Company  or any of  its  subsidiaries  or  the  consummation  of  this
     Agreement or the performance by the Company of its  obligations  hereunder.
     The aggregate of all pending legal or governmental proceedings to which the
     Company  or any of its  subsidiaries  is a party or of  which  any of their
     respective  property or assets is the subject  which are not  described  or
     generally  referred  to in  the  Offering  Memorandum,  including  ordinary
     routine  litigation  incidental  to the business,  could not  reasonably be
     expected to result in a Material Adverse Effect.


679049.1
                                        7

<PAGE>



          (xxi)  Possession  of  Intellectual  Property.  The  Company  and  its
     subsidiaries own or possess,  or can acquire on reasonable terms,  adequate
     patents,  patent  rights,  licenses,   inventions,   copyrights,   know-how
     (including   trade  secrets  and  other  unpatented   and/or   unpatentable
     proprietary   or   confidential   information,   systems  or   procedures),
     trademarks,  service  marks,  trade  names or other  intellectual  property
     (collectively,  "Intellectual Property") necessary to carry on the business
     now operated by them, and, except as disclosed in the Offering  Memorandum,
     neither the Company nor any of its  subsidiaries has received any notice or
     is otherwise aware of any  infringement of or conflict with asserted rights
     of others  with  respect to any  Intellectual  Property  or of any facts or
     circumstances  which  would  render any  Intellectual  Property  invalid or
     inadequate   to  protect  the  interest  of  the  Company  or  any  of  its
     subsidiaries  therein,  and which infringement or conflict or invalidity or
     inadequacy,  singly or in the  aggregate,  could  reasonably be expected to
     result in a Material  Adverse  Effect;  and the use, in connection with the
     business  and  operations  of the  Company  and its  subsidiaries,  of such
     trademarks,  service marks, trade names, patents, patent rights,  licenses,
     inventions,  copyrights  and  know-how  does not  violate or  infringe  any
     trademark, trade name, contract, agreement, patent, patent right, copyright
     or license of any person, firm, corporation or association whatsoever.

          (xxii)   Absence  of  Further   Requirements.   No  filing  with,   or
     authorization,    approval,    consent,   license,   order,   registration,
     qualification  or decree of, any court or governmental  authority or agency
     (other than under state  securities laws, or the 1933 Act and the rules and
     regulations  thereunder or the Securities Exchange Act of 1934, as amended,
     and the rules and regulations  thereunder with respect to the  Registration
     Rights Agreement and the transactions contemplated hereunder or thereunder)
     is  necessary  or  required  for  the  performance  by the  Company  of its
     obligations hereunder, in connection with the offering, issuance or sale of
     the  Securities   hereunder  or  the   consummation  of  the   transactions
     contemplated by this Agreement.

          (xxiii)  Possession  of  Licenses  and  Permits.  The  Company and its
     subsidiaries possess such permits, licenses,  approvals, consents and other
     authorizations  (collectively,   "Governmental  Licenses")  issued  by  the
     appropriate federal,  state, local or foreign regulatory agencies or bodies
     necessary to conduct the  business  now operated by them,  except where the
     failure to possess any such  Governmental  Licenses could not, singly or in
     the aggregate,  reasonably be expected to have a Material  Adverse  Effect;
     the  Company  and its  subsidiaries  are in  compliance  with the terms and
     conditions of all such Governmental  Licenses,  except where the failure so
     to comply could not, singly or in the aggregate,  reasonably be expected to
     have a Material Adverse Effect; all of the Governmental  Licenses are valid
     and  in  full  force  and  effect,  except  when  the  invalidity  of  such
     Governmental Licenses or the failure of such Governmental Licenses to be in
     full force and effect could not  reasonably  be expected to have a Material
     Adverse  Effect;  and neither the Company nor any of its  subsidiaries  has
     received  any  notice  of   proceedings   relating  to  the  revocation  or
     modification  of any such  Governmental  Licenses  which,  singly or in the
     aggregate,  if the subject of an unfavorable  decision,  ruling or finding,
     could reasonably be expected to result in a Material Adverse Effect.

679049.1
                                        8

<PAGE>



          (xxiv) Title to Property.  The Company and its subsidiaries  have good
     title to all material  property owned by the Company and its  subsidiaries,
     in each case,  free and clear of all mortgages,  pledges,  liens,  security
     interests,  claims, restrictions or encumbrances of any kind except such as
     (a) are described in the Offering  Memorandum  or (b) do not,  singly or in
     the  aggregate,  materially  affect the value of such  property  and do not
     interfere with the use made and proposed to be made of such property by the
     Company or any of its  subsidiaries;  and all of the  leases and  subleases
     material to the business of the Company and its subsidiaries, considered as
     one  enterprise,  and under  which the  Company or any of its  subsidiaries
     holds properties  described in the Offering  Memorandum,  are in full force
     and effect,  and neither  the Company nor any of its  subsidiaries  has any
     notice of any material  claim of any sort that has been  asserted by anyone
     adverse to the rights of the Company or any of its  subsidiaries  under any
     of the leases or subleases mentioned above, or affecting or questioning the
     rights  of  the  Company  or  any of  its  subsidiaries  to  the  continued
     possession  of the  leased or  subleased  premises  under any such lease or
     sublease.

          (xxv) Tax  Returns.  The Company and its  subsidiaries  have filed all
     federal, state, local and foreign tax returns that are required to be filed
     or have duly requested  extensions thereof and have paid all taxes required
     to be paid by any of them and any related assessments,  fines or penalties,
     except  for any  such  tax,  assessment,  fine  or  penalty  that is  being
     contested  in good  faith  and by  appropriate  proceedings;  and  adequate
     charges,  accruals and  reserves  have been  provided for in the  financial
     statements  referred to in Section 1(a)(v) above in respect of all federal,
     state,  local  and  foreign  taxes  for all  periods  as to  which  the tax
     liability  of the Company or any of its  subsidiaries  has not been finally
     determined or remains open to examination by applicable taxing authorities.

          (xxvi)  Insurance.  The Company and each of its subsidiaries and their
     respective  properties are insured in such amounts  against such losses and
     with such insurers as the Company  believes are prudent when  considered in
     light of the nature of the properties and businesses of the Company and its
     subsidiaries.

          (xxvii)  ERISA  Matters.  The Company is in compliance in all material
     respects  with  all  presently   applicable   provisions  of  the  Employee
     Retirement  Income  Security  Act  of  1974,  as  amended,   including  the
     regulations  and  published   interpretations   thereunder  ("ERISA");   no
     "reportable  event" (as defined in ERISA) has occurred  with respect to any
     "pension  plan" (as defined in ERISA) for which the Company  would have any
     liability;  the  Company  has not  incurred  and does not  expect  to incur
     liability  under (i) Title IV of ERISA with respect to  termination  of, or
     withdrawal  from,  any "pension  plan" or (ii)  Sections 412 or 4971 of the
     Internal  Revenue Code of 1986, as amended,  including the  regulations and
     published interpretations  thereunder (the "Code"); and each "pension plan"
     for which the  Company  would have any  liability  that is  intended  to be
     qualified  under Section 401(a) of the Code is so qualified in all material
     respects and nothing has occurred,  whether by action or by failure to act,
     which would cause the loss of such qualification.


679049.1
                                        9

<PAGE>



          (xxviii) Environmental Laws. Except as described or generally referred
     to in the Offering  Memorandum and except such matters as could not, singly
     or in the aggregate, reasonably be expected to result in a Material Adverse
     Effect, to the best of the Company's knowledge, (A) neither the Company nor
     any of its  subsidiaries  is in violation of any federal,  state,  local or
     foreign statute, law, rule, regulation,  ordinance, code, policy or rule of
     common  law or  any  judicial  or  administrative  interpretation  thereof,
     including  any  judicial  or  administrative  order,  consent,   decree  or
     judgment,  relating  to  pollution  or  protection  of  human  health,  the
     environment  (including,  without  limitation,  ambient air, surface water,
     groundwater,  land surface or  subsurface  strata) or wildlife,  including,
     without  limitation,  laws  and  regulations  relating  to the  release  or
     threatened release of chemicals,  pollutants,  contaminants,  wastes, toxic
     substances,   hazardous   substances,   petroleum  or  petroleum   products
     (collectively,  "Hazardous  Materials") or to the manufacture,  processing,
     distribution,  use, treatment,  storage, disposal, transport or handling of
     Hazardous Materials  (collectively,  "Environmental Laws"), (B) the Company
     and  its  subsidiaries  have  all  permits,  authorizations  and  approvals
     required under any applicable Environmental Laws and are each in compliance
     with  their   requirements,   (C)  there  are  no  pending  or   threatened
     administrative,  regulatory or judicial  actions,  suits,  demands,  demand
     letters,   claims,   liens,   notices  of   noncompliance   or   violation,
     investigation or proceedings  relating to any Environmental Law against the
     Company  or any  of its  subsidiaries  and  (D)  there  are  no  events  or
     circumstances  that might  reasonably  be  expected to form the basis of an
     order for clean-up or remediation,  or an action, suit or proceeding by any
     private  party or  governmental  body or agency,  against or affecting  the
     Company or any of its  subsidiaries  relating  to  Hazardous  Materials  or
     Environmental Laws.

          (xxix)  Investment  Company  Act.  The  Company  is not,  and upon the
     issuance  and  sale  of the  Securities  as  herein  contemplated  and  the
     application  of the net  proceeds  therefrom  as  described in the Offering
     Memorandum will not be, an "investment  company" as such term is defined in
     the Investment Company Act of 1940, as amended (the "1940 Act").

          (xxx)  Rule  144A  Eligibility.  The  Securities  are not,  and at the
     Closing  Time  will not be,  of the same  class as  securities  listed on a
     national  securities exchange registered under Section 6 of the 1934 Act or
     quoted in a U.S. automated interdealer quotation system.

          (xxxi) No General  Solicitation.  None of the Company, its affiliates,
     as such term is defined in Rule 501(b)  under the 1933 Act  ("Affiliates"),
     or any person  acting on its or any of their behalf (other than the Initial
     Purchaser,  as to whom the Company makes no representation)  has engaged or
     will engage, in connection with the offering of the Securities, in any form
     of general  solicitation or general  advertising within the meaning of Rule
     502(c) under the 1933 Act.

          (xxxii) No Registration Required. Subject to compliance by the Initial
     Purchaser  with the  representations  and warranties set forth in Section 2
     and the  procedures  set forth in Section 6 hereof,  it is not necessary in
     connection with the offer, sale and delivery

679049.1
                                       10

<PAGE>



     of the Securities to the Initial Purchaser and to each Subsequent Purchaser
     in the manner contemplated by this Agreement and the Offering Memorandum to
     register  the  Securities  under the 1933 Act or to qualify  the  Indenture
     under the Trust Indenture Act of 1939, as amended (the "1939 Act").

     (b) Officer's  Certificates.  Any certificate  signed by any officer of the
Company or any of its  subsidiaries  delivered  to the Initial  Purchaser  or to
counsel for the Initial Purchaser shall be deemed a representation  and warranty
by the Company to the Initial Purchaser as to the matters covered thereby.

     SECTION 2. Sale and Delivery to Initial Purchaser; Closing.

     (a) Securities.  On the basis of the  representations and warranties herein
contained and subject to the terms and conditions  herein set forth, the Company
agrees to sell to the Initial  Purchaser,  and the Initial  Purchaser  agrees to
purchase  from the  Company,  at the price set forth in Schedule A,  $30,000,000
aggregate principal amount of Notes, and 1,020,000 Warrants.

     (b)  Payment.   Payment  of  the  purchase   price  for,  and  delivery  of
certificates  for,  the  Securities  shall be made at the office of Brown & Wood
LLP, One World Trade Center, New York, New York 10048, or at such other place as
shall be agreed upon by the Initial Purchaser and the Company,  at 10:00 A.M. on
the second business day after the date hereof, or such other time not later than
ten (10)  business  days after such date as shall be agreed  upon by the Initial
Purchaser  and the  Company  (such time and date of payment and  delivery  being
herein called the "Closing Time").

     Payment  of the  purchase  price  for the  Securities  shall be made to the
Company  by wire  transfer  of  immediately  available  funds to a bank  account
designated  by the  Company,  against  delivery  to  the  Initial  Purchaser  of
certificates  for the Securities to be purchased by it.  Certificates  for Notes
shall be in such  denominations,  not less than $1,000 each,  and  registered in
such names as the  Initial  Purchaser  may  request in writing at least one full
business  day  before  the  Closing  Time,   which  writing  shall  specify  the
denomination of any certificate to be issued in global form  representing  Notes
resold to Qualified Institutional Buyers (as defined in Section 6(a)(i)) and the
denomination  of any certificate to be issued in registered,  certificated  form
representing  the Notes resold to  Accredited  Investors  (as defined in Section
6(a)(i)).   Any   certificates   representing  the  Notes  resold  to  Qualified
Institutional  Buyers shall be shall be  registered in the name of Cede & Co. as
nominee  of  DTC  pursuant  to the  DTC  Agreement.  All  certificates  for  the
Securities  shall be made available for examination and packaging by the Initial
Purchaser in The City of New York not later than 10:00 A.M. on the last business
day prior to the Closing Time.

     (c) Qualified  Institutional  Buyer. The Initial  Purchaser  represents and
warrants to, and agrees with, the Company that it is a "qualified  institutional
buyer"  within the  meaning  of Rule 144A under the 1933 Act and an  "accredited
investor" within the meaning of Rule 501(a) under the 1933 Act.


679049.1
                                       11

<PAGE>



     (d) Denominations;  Registration. Certificates for the Warrants shall be in
such  denominations  and  registered in such names as the Initial  Purchaser may
request in writing at least one full business day before the Closing Time.

     SECTION 3. Covenants of the Company. The Company covenants with the Initial
Purchaser as follows:

     (a) Offering Memorandum. The Company, as promptly as possible, will furnish
to  the  Initial  Purchaser,  without  charge,  such  number  of  copies  of the
Preliminary  Offering   Memorandum,   the  Final  Offering  Memorandum  and  any
amendments  and  supplements  thereto and  documents  incorporated  by reference
therein as the Initial Purchaser may reasonably request.

     (b) Notice and Effect of Material Events.  The Company will promptly notify
the Initial  Purchaser,  and confirm  such notice in writing,  of (x) any filing
made by the Company of  information  relating to the offering of the  Securities
with any securities  exchange or any other  regulatory body in the United States
or any other  jurisdiction,  and (y) prior to the completion of the placement of
the Securities by the Initial Purchaser as evidenced by a notice in writing from
the  Initial  Purchaser  to the  Company,  which the  Initial  Purchaser  hereby
undertakes  to deliver to the Company as promptly as  practicable,  any material
changes in or affecting,  or any  developments  involving  prospective  material
changes in or  affecting,  the  earnings  or  business  of the  Company  and its
subsidiaries  considered as one  enterprise  which (i) make any statement in the
Offering  Memorandum  false  or  misleading  or (ii)  are not  disclosed  in the
Offering Memorandum.  In such event or if during such time any event shall occur
as a result of which it is necessary,  in the reasonable opinion of the Company,
its  counsel,  the Initial  Purchaser or counsel for the Initial  Purchaser,  to
amend or  supplement  the  Final  Offering  Memorandum  in order  that the Final
Offering  Memorandum not include any untrue statement of a material fact or omit
to state a material fact necessary in order to make the  statements  therein not
misleading in the light of the  circumstances  then  existing,  the Company will
forthwith  amend or supplement  the Final  Offering  Memorandum by preparing and
furnishing  to the  Initial  Purchaser  an  amendment  or  amendments  of,  or a
supplement  or  supplements  to,  the  Final  Offering  Memorandum  (in form and
substance  satisfactory  in the  reasonable  opinion of counsel  for the Initial
Purchaser) so that, as so amended or supplemented, the Final Offering Memorandum
will not  include  an untrue  statement  of a  material  fact or omit to state a
material fact necessary in order to make the statements therein, in the light of
the  circumstances  existing  at  the  time  it  is  delivered  to a  Subsequent
Purchaser, not misleading.

     (c)  Amendment to Offering  Memorandum  and  Supplements.  The Company will
advise the Initial Purchaser promptly of any proposal to amend or supplement the
Offering Memorandum and will not effect such amendment or supplement without the
consent of the Initial Purchaser.  Neither the consent of the Initial Purchaser,
nor the Initial Purchaser's delivery of any such amendment or supplement,  shall
constitute a waiver of any of the conditions set forth in Section 5 hereof.

     (d)  Qualification  of Securities  for Offer and Sale. The Company will use
its best efforts,  in  cooperation  with the Initial  Purchaser,  to qualify the
Securities for offering and sale under the

679049.1
                                       12

<PAGE>



applicable  securities laws of such  jurisdictions as the Initial  Purchaser may
designate and will maintain  such  qualifications  in effect as long as required
for the sale of the Securities; provided, however, that the Company shall not be
obligated  to file any general  consent to service of process or to qualify as a
foreign corporation or as a dealer in securities in any jurisdiction in which it
is not so  qualified  or to  subject  itself to  taxation  in  respect  of doing
business in any jurisdiction in which it is not otherwise so subject.

     (e) DTC. The Company will cooperate with the Initial  Purchaser and use its
best  efforts  to  permit  the  Securities  to be  eligible  for  clearance  and
settlement through the facilities of DTC.

     (f) Use of Proceeds.  The Company will use the net proceeds  received by it
from  the  sale  of the  Securities  in the  manner  specified  in the  Offering
Memorandum under "Use of Proceeds".

     SECTION 4. Payment of Expenses.

     (a) Expenses. The Company will pay all expenses incident to the performance
of its obligations under this Agreement, including (i) the preparation, printing
and any filing of the Offering Memorandum  (including  financial  statements and
any  schedules or exhibits and any document  incorporated  therein by reference)
and of each amendment or supplement thereto, (ii) the preparation,  printing and
delivery to the Initial Purchaser of this Agreement,  the Indenture, the Warrant
Agreement  and such other  documents as may be required in  connection  with the
offering,  purchase, sale and delivery of the Securities, (iii) the preparation,
issuance  and delivery of the  certificates  for the  Securities  to the Initial
Purchasers,  including any charges of DTC in connection therewith; (iv) the fees
and disbursements of the Company's counsel,  accountants and other advisors, (v)
the qualification of the Securities under securities laws in accordance with the
provisions of Section 3(d) hereof, including filing fees and the reasonable fees
and disbursements of counsel for the Initial  Purchaser in connection  therewith
and in connection  with the  preparation of the Blue Sky Survey,  any supplement
thereto  and any Legal  Investment  Survey,  (vi) the fees and  expenses  of the
Trustee,  including  the fees and  disbursements  of counsel  for the Trustee in
connection with the Indenture,  the Warrant  Agreement and the  Securities,  and
(vii)  any fees and  expenses  relating  to the  eligibility  of the  Notes  for
clearance  and  settlement  through  the  facilities  of DTC and  (vi)  fees and
expenses  relating  to the  initial and  continued  designation  of the Notes as
PORTAL securities under the PORTAL Market Rules pursuant to NASD Rule 5322.

     (b)  Termination  of  Agreement.  If this  Agreement is  terminated  by the
Initial  Purchaser in  accordance  with the  provisions  of Section 5 or Section
10(a)(i)  hereof (except by reason of a default by the Initial  Purchaser),  the
Company  shall  reimburse the Initial  Purchaser for all of their  out-of-pocket
expenses,  including the reasonable  fees and  disbursements  of counsel for the
Initial Purchaser.

     SECTION 5. Conditions of Initial Purchaser's  Obligations.  The obligations
of  the  Initial  Purchaser  hereunder  are  subject  to  the  accuracy  of  the
representations  and warranties of the Company  contained in Section 1 hereof or
in certificates of any officer of the Company or any of

679049.1
                                       13

<PAGE>



its subsidiaries delivered pursuant to the provisions hereof, to the performance
by the Company of its  covenants  and other  obligations  hereunder,  and to the
following further conditions:

     (a) Opinion of Counsel for the Company.  At the Closing  Time,  the Initial
Purchaser  shall have received the favorable  opinions,  dated as of the Closing
Time,  of (i) Battle  Fowler,  counsel for the  Company,  in form and  substance
reasonably  satisfactory to counsel for the Initial Purchaser, to the effect set
forth in Exhibit A hereto  (with such changes as may be agreed to by the parties
after the date hereof) and (ii) the  Corporate  Counsel of the Company,  in form
and substance reasonably  satisfactory to counsel for the Initial Purchaser,  to
the effect set forth in Exhibit B hereto  (with such changes as may be agreed to
by the parties after the date hereof).

     (b) Opinion of Patent  Counsel for the Company.  At the Closing  Time,  the
Initial  Purchaser  shall have  received a  favorable  opinion,  dated as of the
Closing  Time,  of the Patent  Counsel  of the  Company,  in form and  substance
reasonably  satisfactory to counsel for the Initial Purchaser, to the effect set
forth in Exhibit C hereto  (with such changes as may be agreed to by the parties
after the date hereof).

     (c) Opinion of Counsel  for Initial  Purchaser.  At the Closing  Time,  the
Initial  Purchaser  shall have received the favorable  opinion,  dated as of the
Closing  Time,  of Brown & Wood LLP,  counsel  for the Initial  Purchaser,  with
respect to the issuance of the Securities and such other related  matters as the
Initial Purchaser may require.  In giving such opinion such counsel may rely, as
to all matters governed by the laws of  jurisdictions  other than the law of the
State  of New  York,  the  federal  law of the  United  States  and the  General
Corporation  Law  of the  State  of  Delaware,  upon  the  opinions  of  counsel
satisfactory to the Initial Purchaser. Such counsel may also state that, insofar
as such opinion involves factual matters,  they have relied,  to the extent they
deem proper,  upon  certificates of officers of the Company and its subsidiaries
and certificates of public officials.

     (d) Officers' Certificate.  At the Closing Time, there shall not have been,
since the date hereof or since the respective  dates as of which  information is
given  in  the  Offering  Memorandum,   any  material  adverse  change,  or  any
development  involving a prospective  material adverse change, in the condition,
financial  or  otherwise,  or in the earnings or business of the Company and its
subsidiaries  considered  as  one  enterprise,  whether  or not  arising  in the
ordinary  course of business,  and the Initial  Purchaser  shall have received a
certificate of the President or a Vice President of the Company and of the chief
financial or chief  accounting  officer of the Company,  dated as of the Closing
Time,  to the effect that (i) there has been no such  material  adverse  change,
(ii) the representations and warranties in Section 1 hereof are true and correct
with the same force and effect as though expressly made at and as of the Closing
Time,  and (iii) the Company has complied with all  agreements and satisfied all
conditions  on its part to be  performed or satisfied at or prior to the Closing
Time.

     (e)  Accountant's  Comfort  Letter.  At the time of the  execution  of this
Agreement,  the Initial  Purchaser  shall have  received  from Coopers & Lybrand
L.L.P. a letter dated such date, in form and substance  reasonably  satisfactory
to the Initial  Purchaser,  containing  statements  and  information of the type
ordinarily included in accountants' "comfort letters" to Initial Purchaser with

679049.1
                                       14

<PAGE>



respect to the financial statements and certain financial  information contained
in the Offering Memorandum.

     (f) Bring-down  Comfort Letter.  At the Closing Time, the Initial Purchaser
shall have  received  from Coopers & Lybrand  L.L.P.  a letter,  dated as of the
Closing Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (d) of this Section,  except that the specified
date referred to shall be a date not more than three  business days prior to the
Closing Time.

     (g)  Registration  Rights  Agreements.  At the  Closing  Time,  each of the
Registration  Rights  Agreements shall have been fully executed and delivered by
the Company.

     (h) PORTAL.  At the Closing Time, the Notes shall have been  designated for
trading on PORTAL.

     (i)  Additional  Documents.  At the Closing  Time,  counsel for the Initial
Purchaser shall have been furnished with such documents and opinions as they may
reasonably  require for the purpose of enabling  them to pass upon the  issuance
and sale of the Securities as herein  contemplated,  or in order to evidence the
accuracy of any of the representations or warranties,  or the fulfillment of any
of the conditions, herein contained; and all proceedings taken by the Company in
connection  with the issuance and sale of the Securities as herein  contemplated
shall be reasonably  satisfactory in form and substance to the Initial Purchaser
and counsel for the Initial Purchaser.

     (j)  Termination of Agreement.  If any condition  specified in this Section
shall  not have  been  fulfilled  when and as  required  to be  fulfilled,  this
Agreement may be terminated by the Initial Purchaser by notice to the Company at
any time at or prior to the Closing Time, and such termination  shall be without
liability  of any party to any other  party  except as provided in Section 4 and
except that  Sections 7 and 8 shall survive any such  termination  and remain in
full force and effect.

     SECTION 6. Subsequent Offers and Resales of the Securities.

     (a) Offer and Sale Procedures. The Initial Purchaser and the Company hereby
establish and agree to observe the following  procedures in connection  with the
offer and sale of the Securities:

          (i) Offers and Sales only to  Institutional  Accredited  Investors and
     Qualified  Institutional Buyers. Offers and sales of the Securities will be
     made only by the Initial Purchaser or Affiliates thereof qualified to do so
     in the  jurisdictions  in which  such  offers or sales are made.  Each such
     offer or sale shall only be made to (A) persons whom the offeror or seller,
     or any  person  acting on  behalf  of the  offeror  or  seller,  reasonably
     believes  to be  qualified  institutional  buyers (as  defined in Rule 144A
     under  the  Securities  Act,  "Qualified  Institutional  Buyers")  or (B) a
     limited number of other institutional accredited investors (as such term is
     defined in Rule 501(a)(1),  (2), (3) or (7) of Regulation D, "Institutional
     Accredited  Investors") that, with respect to offers, the offeror or seller
     reasonably believes

679049.1
                                       15

<PAGE>



     to  be,  and  with  respect  to  sales  and   deliveries,   that  are  such
     Institutional Accredited Investors.

          (ii) No  General  Solicitation.  The  Securities  will be  offered  by
     approaching  prospective  Subsequent  Purchasers on an individual basis. No
     general  solicitation  or general  advertising  (within the meaning of Rule
     502(c) under the 1933 Act) will be used in the United  States in connection
     with the offering of the Securities.

          (iii)  Purchases  by Non-Bank  Fiduciaries.  In the case of a non-bank
     Subsequent  Purchaser of a Security  acting as a fiduciary  for one or more
     third  parties,  in  connection  with an offer  and sale to such  purchaser
     pursuant to clause (a) above,  each such third party shall, in the judgment
     of the applicable Initial Purchaser, be a Qualified Institutional Buyer.

          (iv) Subsequent  Purchaser  Notification.  The Initial  Purchaser will
     take  reasonable  steps to inform  persons  acquiring  Securities  from the
     Initial  Purchaser  that the  Securities  (A) have not been and will not be
     registered  under  the  1933  Act,  (B) are  being  sold  to  them  without
     registration  under the 1933 Act in reliance on Rule 144A or in  accordance
     with another  exemption from  registration  under the 1933 Act, as the case
     may be, and (C) may not be offered,  sold or otherwise transferred prior to
     the earlier of (x) the date when such  Securities  can be sold  pursuant to
     Rule 144 under the 1933 Act without any limitations under clauses (c), (e),
     (f) and (h) of Rule 144 and (y) the date  which is three  years  after  the
     later of the original  issuance date thereof and the last date on which the
     Company or any  "affiliate" of the Company was the owner of such Securities
     (or any predecessor Securities), except (1) to the Company, (2) pursuant to
     a registration  statement which has been declared  effective under the 1933
     Act, (3) as long as the Securities are eligible for resale pursuant to Rule
     144A,  to a person  whom the  seller  reasonably  believes  is a  Qualified
     Institutional  Buyer that is purchasing such Securities for its own account
     or for the  account of a  Qualified  Institutional  Buyer to whom notice is
     given that the offer,  sale or  transfer  is being made in reliance on Rule
     144A or (4) pursuant to any other available exemption from the registration
     requirements of the 1933 Act.

          (v)  Minimum  Principal  Amount.  No  sale  of the  Notes  to any  one
     Subsequent Purchaser will be for less than U.S. $1,000 principal amount and
     no Note will be issued in a smaller  principal  amount.  If the  Subsequent
     Purchaser is a non-bank  fiduciary acting on behalf of others,  each person
     for whom it is acting must purchase at least U.S. $1,000  principal  amount
     of the Notes.

         (vi) Restrictions on Transfer.  The transfer restrictions and the other
     provisions set forth in Section 1.5 of the Indenture and Section 2.7 of the
     Warrant  Agreement,  including the legend required thereby,  shall apply to
     the Notes and  Warrants,  respectively,  except as otherwise  agreed by the
     Company and the Initial Purchaser.  Following the sale of the Securities by
     the  Initial  Purchaser  to  Subsequent  Purchasers  pursuant  to the terms
     hereof,  the Initial  Purchaser  shall not be liable or  responsible to the
     Company for any losses, damages or liabilities


                                       16

<PAGE>

     suffered or  incurred  by the  Company,  including  any losses,  damages or
     liabili ties under the 1933 Act,  arising from or relating to any resale or
     transfer of any  Security,  except  those  arising  from or relating to any
     breach of the obligations hereunder of the Initial Purchaser.

          (vii)  Delivery of Offering  Memorandum.  The Initial  Purchaser  will
     deliver to each purchaser of the Securities from the Initial Purchaser,  in
     connection with its original distribution of the Securities,  a copy of the
     Offering  Memorandum,  as  amended  and  supplemented  at the  date of such
     delivery.

     (b)  Covenants  of the  Company.  The  Company  covenants  with the Initial
Purchaser as follows:

          (i) Due Diligence. In connection with the original distribution of the
     Securities,  the Company  agrees that,  prior to any offer or resale of the
     Securities by the Initial Purchaser,  the Initial Purchaser and counsel for
     the Initial  Purchaser  shall have the right to make  reasonable  inquiries
     into the  business of the Company and its  subsidiaries.  The Company  also
     agrees to  provide  answers to each  prospective  Subsequent  Purchaser  of
     Securities who so requests  concerning the Company and its subsidiaries (to
     the extent that such  information  is available or can be acquired and made
     available to prospective  Subsequent Purchasers without unreasonable effort
     or expense and to the extent the  provision  thereof is not  prohibited  by
     applicable  law)  and the  terms  and  conditions  of the  offering  of the
     Securities, as provided in the Offering Memorandum.

          (ii)  Integration.  The Company agrees that it will not and will cause
     its  Affiliates  not to make any offer or sale of securities of the Company
     of any class if, as a result of the doctrine of  "integration"  referred to
     in Rule 502 under the 1933 Act,  such  offer or sale would  render  invalid
     (for the  purpose of (i) the sale of the  Securities  by the Company to the
     Initial  Purchaser,  (ii)  the  resale  of the  Securities  by the  Initial
     Purchaser to Subsequent Purchasers or (iii) the resale of the Securities by
     such Subsequent  Purchasers to others) the exemption from the  registration
     requirements  of the 1933 Act  provided by Section  4(2) thereof or by Rule
     144A thereunder or otherwise.

          (iii) Rule 144A  Information.  The Company  agrees  that,  in order to
     render the Securities  eligible for resale  pursuant to Rule 144A under the
     1933 Act,  while any of the  Securities  remain  outstanding,  it will make
     available,  upon  request,  to any  holder  of  Securities  or  prospective
     purchasers  of Securities  the  information  specified in Rule  144A(d)(4),
     unless the Company  furnishes  information  to the  Commission  pursuant to
     Section  13 or  15(d)  of the  1934 Act  (such  information,  whether  made
     available  to  holders  or  prospective  purchasers  or  furnished  to  the
     Commission, is herein referred to as "Additional Information").

          (iv)  Restriction on Repurchases.  Until the expiration of three years
     after the original  issuance of the  Securities,  the Company will not, and
     will  cause  its  Affiliates  not to,  purchase  or  agree to  purchase  or
     otherwise acquire any Securities which are "restricted

679049.1
                                       17

<PAGE>



     securities"  (as such term is defined under Rule  144(a)(3)  under the 1933
     Act), whether as beneficial owner or otherwise (except as agent acting as a
     securities  broker on behalf of and for the  account  of  customers  in the
     ordinary course of business in unsolicited broker's  transactions)  unless,
     immediately  upon any such  purchase,  the Company or any  Affiliate  shall
     submit such Securities to the Trustee for cancellation.

     SECTION 7. Indemnification.

     (a)  Indemnification of Initial Purchaser.  The Company agrees to indemnify
and hold harmless the Initial  Purchaser  and each person,  if any, who controls
the  Initial  Purchaser  within  the  meaning  of  Section 15 of the 1933 Act or
Section 20 of the 1934 Act as follows:

          (i) against  any and all loss,  liability,  claim,  damage and expense
     whatsoever,  as  incurred,  arising out of any untrue  statement or alleged
     untrue  statement of a material fact contained in any Preliminary  Offering
     Memorandum or the Final Offering Memorandum (or any amendment or supplement
     thereto)  or in any  Additional  Information,  or the  omission  or alleged
     omission  therefrom  of a  material  fact  necessary  in  order to make the
     statements therein, in the light of the circumstances under which they were
     made, not misleading;

          (ii) against any and all loss,  liability,  claim,  damage and expense
     whatsoever,  as  incurred,  to the extent of the  aggregate  amount paid in
     settlement of any  litigation,  or any  investigation  or proceeding by any
     governmental  agency  or body,  commenced  or  threatened,  or of any claim
     whatsoever  based upon any such untrue  statement or omission,  or any such
     alleged  untrue  statement or omission;  provided  that (subject to Section
     7(d) below) any such settlement is effected with the written consent of the
     Company; and

          (iii) against any and all expense  whatsoever,  as incurred (including
     the fees and  disbursements  of counsel  chosen by the Initial  Purchaser),
     reasonably  incurred in  investigating,  preparing or defending against any
     litigation,  or any investigation or proceeding by any governmental  agency
     or body,  commenced or threatened,  or any claim  whatsoever based upon any
     such untrue statement or omission,  or any such alleged untrue statement or
     omission, to the extent that any such expense is not paid under (i) or (ii)
     above;

provided,  however,  that this indemnity  agreement shall not apply to any loss,
liability,  claim,  damage or expense to the  extent  arising  out of any untrue
statement or omission or alleged  untrue  statement or omission made in reliance
upon and in conformity with written information  furnished to the Company by the
Initial Purchaser expressly for use in the Offering Memorandum (or any amendment
or supplement thereto).

     (b)  Indemnification  of  Company,  Directors  and  Officers.  The  Initial
Purchaser  agrees to indemnify and hold harmless the Company,  its directors and
officers,  and each person,  if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act  against any and all
loss, liability, claim, damage and expense described in the indemnity

679049.1

                                       18

<PAGE>



contained in subsection (a) of this Section, as incurred,  but only with respect
to untrue  statements or omissions,  or alleged untrue  statements or omissions,
made in the Offering  Memorandum in reliance upon and in conformity with written
information  furnished to the Company by the Initial Purchaser expressly for use
in the Offering Memorandum (or any amendment or supplement thereto).

     (c) Actions against Parties;  Notification.  Each  indemnified  party shall
give notice as promptly as reasonably  practicable to each indemnifying party of
any action commenced or threatened  against it in respect of which indemnity may
be sought  hereunder,  but failure to so notify an indemnifying  party shall not
relieve such indemnifying party from any liability hereunder to the extent it is
not materially prejudiced as a result thereof and in any event shall not relieve
it from any  liability  which  it may have  otherwise  than on  account  of this
indemnity agreement. In the case of parties indemnified pursuant to Section 7(a)
above,  counsel to the  indemnified  parties  shall be  selected  by the Initial
Purchaser,  and, in the case of parties  indemnified  pursuant  to Section  7(b)
above,  counsel to the indemnified  parties shall be selected by the Company. An
indemnifying party may participate at its own expense in the defense of any such
action;  provided,  however,  that counsel to the  indemnifying  party shall not
(except  with the  consent  of the  indemnified  party)  also be  counsel to the
indemnified party. In no event shall the indemnifying parties be liable for fees
and  expenses  of more than one  counsel  (in  addition  to any  local  counsel)
separate from their own counsel for all  indemnified  parties in connection with
any  one  action  or  separate  but  similar  or  related  actions  in the  same
jurisdiction  arising out of the same general  allegations or circumstances.  No
indemnifying  party shall,  without the prior written consent of the indemnified
parties,  settle or  compromise  or  consent to the entry of any  judgment  with
respect  to  any  litigation,   or  any   investigation  or  proceeding  by  any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which  indemnification  or  contribution  could be sought  under this
Section 7 or Section 8 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional  release of each indemnified  party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.

     SECTION 8. Contribution.  If the indemnification  provided for in Section 7
hereof is for any reason  unavailable  to or  insufficient  to hold  harmless an
indemnified  party in respect of any  losses,  liabilities,  claims,  damages or
expenses referred to therein,  then each indemnifying  party shall contribute to
the aggregate amount of such losses,  liabilities,  claims, damages and expenses
incurred by such  indemnified  party,  as  incurred,  in such  proportion  as is
appropriate to reflect the relative  benefits received by the Company on the one
hand and the  Initial  Purchaser  on the  other  hand from the  offering  of the
Securities  pursuant to this  Agreement and the relative fault of the Company on
the one hand and of the Initial  Purchaser on the other hand in connection  with
the statements or omissions which resulted in such losses, liabilities,  claims,
damages or expenses, as well as any other relevant equitable considerations.

     The  relative  benefits  received  by the  Company  on the one hand and the
Initial  Purchaser  on the other hand in  connection  with the  offering  of the
Securities pursuant to this Agreement shall be

679049.1
                                       19

<PAGE>



deemed to be in the same  respective  proportions as the total net proceeds from
the offering of the  Securities  pursuant to this  Agreement  (before  deducting
expenses) received by the Company and the total  underwriting  discount received
by the Initial  Purchaser,  bear to the aggregate  initial offering price of the
Securities.

     The relative fault of the Company on the one hand and the Initial Purchaser
on the other hand shall be  determined  by  reference  to,  among other  things,
whether  any such  untrue or alleged  untrue  statement  of a  material  fact or
omission or alleged  omission to state a material  fact  relates to  information
supplied by the Company or by the Initial  Purchaser  and the parties'  relative
intent,  knowledge,  access to information and opportunity to correct or prevent
such statement or omission.

     The Company and the Initial  Purchaser  agree that it would not be just and
equitable if contribution pursuant to this Section 8 were determined by pro rata
allocation or by any other method of  allocation  which does not take account of
the equitable  considerations referred to above in this Section 8. The aggregate
amount of losses,  liabilities,  claims,  damages  and  expenses  incurred by an
indemnified  party and  referred  to above in this  Section 8 shall be deemed to
include any legal or other  expenses  reasonably  incurred  by such  indemnified
party in investigating,  preparing or defending  against any litigation,  or any
investigation  or proceeding by any  governmental  agency or body,  commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.

     Notwithstanding  the  provisions  of this Section 8, the Initial  Purchaser
shall not be required to contribute  any amount in excess of the amount by which
the total price at which the Securities  underwritten  by it and  distributed to
the public were  offered to the public  exceeds the amount of any damages  which
the  Initial  Purchaser  has  otherwise  been  required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission.

     No person  guilty of  fraudulent  misrepresentation  (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.

     For  purposes of this  Section 8, each  person,  if any,  who  controls the
Initial Purchaser within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act  shall  have the same  rights  to  contribution  as the  Initial
Purchaser,  and each  director and officer of the Company,  and each person,  if
any, who  controls the Company  within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act shall have the same rights to  contribution as the
Company.

     SECTION 9. Representations,  Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company submitted pursuant hereto,  shall remain
operative and in full force and effect,  regardless of any investigation made by
or on behalf of the Initial Purchaser or controlling  person, or by or on behalf
of the Company,  and shall  survive  delivery of the  Securities  to the Initial
Purchaser.


679049.1
                                       20

<PAGE>



     SECTION 10. Termination of Agreement.

     (a)  Termination;   General.  The  Initial  Purchaser  may  terminate  this
Agreement, by notice to the Company, at any time at or prior to the Closing Time
(i) if there has been,  since the time of execution  of this  Agreement or since
the  respective  dates  as  of  which  information  is  given  in  the  Offering
Memorandum,  any  material  adverse  change,  or  any  development  involving  a
prospective  material adverse change, in the condition,  financial or otherwise,
or in the earnings or business of the Company and its subsidiaries considered as
one enterprise,  whether or not arising in the ordinary  course of business,  or
(ii) if there has occurred any material adverse change in the financial  markets
in the United States or the  international  financial  markets,  any outbreak of
hostilities  or escalation  thereof or other calamity or crisis or any change or
development   involving  a  prospective  change  in  national  or  international
political, financial or economic conditions, in each case the effect of which is
such as to  make  it,  in the  reasonable  judgment  of the  Initial  Purchaser,
impracticable  to market the Securities or to enforce  contracts for the sale of
the  Securities,  or (iii) if trading in the  Securities  has been  suspended or
limited  by the  Commission,  or if  trading  generally  on the  American  Stock
Exchange or the New York Stock Exchange or in the NASDAQ  National Market System
has been  suspended  or limited  (other than in  accordance  with New York Stock
Exchange  Rules 80A and 80B or any similar rules of the American  Stock Exchange
or the NASDAQ  National  Market System  regarding  limitations on trading during
significant market declines and extraordinary market volatility),  or minimum or
maximum  prices for trading have been fixed,  or maximum  ranges for prices have
been  required,  by any of said  exchanges  or by such system or by order of the
Commission,  the National  Association of Securities Dealers,  Inc. or any other
governmental  authority  or (iv) if a banking  moratorium  has been  declared by
either Federal or New York authorities.

     (b) Liabilities.  If this Agreement is terminated pursuant to this Section,
such  termination  shall be without  liability  of any party to any other  party
except as provided in Section 4 hereof, and provided further that Sections 7 and
8 shall survive such termination and remain in full force and effect.


     SECTION 11. Notices. All notices and other  communications  hereunder shall
be in  writing  and  shall be  deemed  to have  been  duly  given if  mailed  or
transmitted  by any standard form of  telecommunication.  Notices to the Initial
Purchaser  shall be directed to the First Albany  Corporation at One Penn Plaza,
New York, New York 10119,  attention of Frank Lunn,  with a copy to Brown & Wood
LLP, One World Trade  Center,  New York,  New York 10048,  attention of Mitchell
Kleinman;  notices  to the  Company  shall be  directed  to it at 500  Broadway,
Redwood City, California 94063- 3199, attention of Chief Financial Officer, with
a copy to Battle  Fowler LLP,  75 East 55th  Street,  New York,  New York 10022,
attention of David D. Griffin.

     SECTION 12.  Parties.  This Agreement  shall inure to the benefit of and be
binding  upon  the  Initial  Purchaser  and the  Company  and  their  respective
successors.  Nothing  expressed or  mentioned  in this  Agreement is intended or
shall be  construed  to give any  person,  firm or  corporation,  other than the
Initial  Purchaser  and the  Company  and their  respective  successors  and the
controlling

679049.1
                                       21

<PAGE>



persons and  officers  and  directors  referred to in Sections 7 and 8 and their
heirs and legal  representatives,  any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision  herein  contained.  This
Agreement and all conditions  and  provisions  hereof are intended to be for the
sole and  exclusive  benefit of the Initial  Purchaser and the Company and their
respective  successors,  and said controlling persons and officers and directors
and their  heirs  and legal  representatives,  and for the  benefit  of no other
person,  firm or  corporation.  No  purchaser  of  Securities  from the  Initial
Purchaser shall be deemed to be a successor by reason merely of such purchase.

     SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED  IN  ACCORDANCE  WITH THE LAWS OF THE  STATE OF NEW  YORK.  EXCEPT  AS
OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.

     SECTION 14. Effect of Headings. The Article and Section headings herein and
the  Table of  Contents  are for  convenience  only and  shall  not  affect  the
construction hereof.


679049.1
                                       22

<PAGE>



     If the foregoing is in accordance with your understanding of our agreement,
please  sign and return to the  Company a  counterpart  hereof,  whereupon  this
instrument, along with all counterparts, will become a binding agreement between
the Initial Purchaser and the Company in accordance with its terms.

                                        Very truly yours,

                                        AMPEX CORPORATION



                                        By /s/ CRAIG L. MCKIBBEN
                                          -------------------------------------
                                          Name:  Craig L. McKibben
                                          Title: Vice President

CONFIRMED AND ACCEPTED,
 as of the date first above written:


FIRST ALBANY CORPORATION



By /s/ FRANK P. LUNN
  ----------------------------------
          Authorized Signatory



679049.1
                                       23

<PAGE>



                                   SCHEDULE A

                                AMPEX CORPORATION
                                   $30,000,000
                            12% Senior Notes Due 2003
                                       and
                      1,020,000 Warrants to Purchase up to
                         1,020,000 Class A Common Shares
                           ($0.01 par value per share)




     1. The initial  offering  price of the Notes shall be 100% of the principal
amount thereof, plus accrued interest, if any, from the date of issuance.

     2. The  purchase  price to be paid by the Initial  Purchaser  for the Notes
shall be 97% of the principal amount thereof.

     3. The interest rate on the Notes shall be 12% per annum.

     4. There is no separate consideration being paid for the Warrants.



679049.1
                                    Sch A - 1

<PAGE>



                                                                     Exhibit A



                      FORM OF OPINION OF COMPANY'S COUNSEL
                           TO BE DELIVERED PURSUANT TO
                                 SECTION 5(a)(i)



     1. The  Company  has been duly  incorporated  and is validly  existing as a
corporation in good standing under the laws of the State of Delaware.

     2. The Company has the  corporate  power and  authority  to own,  lease and
operate its  properties and to conduct its business as described in the Offering
Memorandum  and to enter into and perform  its  obligations  under the  Purchase
Agreement,  the Indenture,  the Warrant  Agreement and each of the  Registration
Rights Agreements.

     3. Each  Significant  Subsidiary  has been duly  organized  and is  validly
existing as a corporation in good standing under the laws of the jurisdiction of
its  incorporation,  has corporate power and authority to own, lease and operate
its  properties  and to  conduct  its  business  as  described  in the  Offering
Memorandum and is duly qualified as a foreign  corporation to transact  business
and is in good  standing in each  jurisdiction  in which such  qualification  is
required,  whether by reason of the  ownership  or leasing  of  property  or the
conduct of  business,  except  where the  failure so to qualify or to be in good
standing would not result in a Material  Adverse  Effect;  all of the issued and
outstanding  capital  stock of each  Significant  Subsidiary  (other  than Ampex
Holdings  Corporation,  which was  incorporated on January 20, 1998 and is being
capitalized as described in the Offering  Memorandum)  has been duly  authorized
and validly  issued,  is fully paid and  non-assessable  and, to the best of our
knowledge, is owned by the Company,  directly or through subsidiaries,  free and
clear of any security interest,  mortgage,  pledge, lien, encumbrance,  claim or
equity;  none of the  outstanding  shares of  capital  stock of the  Significant
Subsidiaries was issued in violation of any preemptive or similar rights arising
by  operation  of law,  or under  the  charter  or  by-laws  of any  Significant
Subsidiary  or under any  agreement  to which  the  Company  or any  Significant
Subsidiary is a party.

     4. The authorized,  issued and outstanding  capital stock of the Company is
as set forth in the Offering Memorandum under the caption "Capitalization" as of
the date set forth therein,  and except as set forth in the Offering Memorandum,
there  have  been  no  material  changes  thereto;  the  shares  of  issued  and
outstanding  capital stock of the Company have been duly  authorized and validly
issued and are fully paid and non-assessable; and none of the outstanding shares
of capital  stock of the Company was issued in  violation of the  preemptive  or
other similar rights of any securityholder of the Company.

     5. The Notes, the Warrants,  the Indenture,  the Warrant Agreement and each
of the Registration  Rights  Agreements  conform in all material respects to the
descriptions thereof contained in the Offering Memorandum.

679049.1
                                       A-1

<PAGE>



     6.  The  information  in  the  Offering   Memorandum   under  the  captions
"Description of the Notes" and "Description of the Warrants", to the extent that
it  constitutes  summaries  of legal  matters,  or legal  conclusions,  has been
reviewed by us and is correct in all material respects.

     7. The  statements in the Offering  Memorandum,  insofar as they purport to
describe  certain  aspects of contracts and other documents to which the Company
or any of its subsidiaries  are a party,  are accurate in all material  respects
(as to such descriptions).

     8. No filing with, or authorization,  approval,  consent,  license,  order,
registration, qualification or decree of, any court or governmental authority or
agency,  domestic  or foreign,  (other  than such as may be  required  under the
applicable  securities laws of the various jurisdictions in which the Securities
will be offered or sold,  as to which we express no  opinion)  is  necessary  or
required in connection with the due authorization, execution and delivery of the
Purchase  Agreement or the  Registration  Rights Agreement or the due execution,
delivery or  performance  of the  Indenture by the Company or for the  offering,
issuance,  sale or delivery of the  Securities to the Initial  Purchasers or the
resale  by  the  Initial  Purchasers  in  accordance  with  and  in  the  manner
contemplated by the Purchase Agreement.

     9. It is not necessary in connection  with the offer,  sale and delivery of
the  Securities to the Initial  Purchasers and to each  Subsequent  Purchaser in
accordance with and in the manner contemplated by the Purchase Agreement and the
Offering  Memorandum to register the  Securities  under the 1933 Act (other than
with  respect  to  the  Registration   Rights  Agreement  and  the  transactions
contemplated  thereunder) or to qualify the Indenture  under the Trust Indenture
Act.

     10. The Company is not an  "investment  company" as such term is defined in
the 1940 Act.

     Nothing has come to our  attention  that would lead us to believe  that the
Offering Memorandum or any amendment or supplement thereto (except for financial
statements and schedules and other  financial data included or  incorporated  by
reference  therein,  as to  which we make no  statement),  contained  an  untrue
statement of a material  fact or omitted to state a material fact required to be
stated  therein or necessary to make the  statements  therein not  misleading or
that the Offering  Memorandum or any amendment or supplement thereto (except for
financial  statements  and  schedules  and  other  financial  data  included  or
incorporated by reference therein,  as to which we make no statement at the time
the Offering  Memorandum  was issued),  at the time the Offering  Memorandum was
issued,  at the time any such amended or  supplemented  Offering  Memorandum was
issued or at the Closing  Time,  included or includes an untrue  statement  of a
material fact or omitted or omits to state a material fact necessary in order to
make the statements  therein, in the light of the circumstances under which they
were made, not misleading.



679049.1
                                       A-2

<PAGE>



                                                                    Exhibit B



                      FORM OF OPINION OF CORPORATE COUNSEL
                         OF THE COMPANY TO BE DELIVERED
                          PURSUANT TO SECTION 5(a)(ii)




     1. The  Company is duly  qualified  as a foreign  corporation  to  transact
business  and  is  in  good  standing  in  each   jurisdiction   in  which  such
qualification  is  required,  whether by reason of the  ownership  or leasing of
property or the conduct of  business,  except where the failure so to qualify or
to be in good standing would not result in a Material Adverse Effect.

     2. The Purchase Agreement has been duly authorized,  executed and delivered
by the Company.

     3. Each of the  Registration  Rights  Agreements has been duly  authorized,
executed and  delivered  by the Company and is a valid and binding  agreement of
the  Company,  enforceable  against  the Company in  accordance  with its terms,
except  as  enforcement  thereof  may  be  limited  by  bankruptcy,   insolvency
(including,  without  limitation,  all laws relating to  fraudulent  transfers),
reorganization,  moratorium or similar laws relating to or affecting enforcement
of creditors' rights generally,  or by general  principles of equity (regardless
of whether  enforcement  is considered in a proceeding in equity or at law), and
except that rights to indemnification and contribution thereunder may be limited
by applicable law.

     4. The  Indenture has been duly  authorized,  executed and delivered by the
Company and (assuming the due  authorization,  execution and delivery thereof by
the  Trustee)  constitutes  a  valid  and  binding  agreement  of  the  Company,
enforceable  against the  Company in  accordance  with its terms,  except as the
enforcement thereof may be limited by bankruptcy, insolvency (including, without
limitation,   all  laws  relating  to  fraudulent  transfers),   reorganization,
moratorium  or other  similar  laws  relating  to or  affecting  enforcement  of
creditors' rights generally,  or by general  principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at law).

     5. The Warrant  Agreement has been duly authorized,  executed and delivered
by the Company and  (assuming  the due  authorization,  execution  and  delivery
thereof by the Warrant Trustee) constitutes a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms, except as
the  enforcement  thereof may be limited by bankruptcy,  insolvency  (including,
without limitation, all laws relating to fraudulent transfers),  reorganization,
moratorium  or other  similar  laws  relating  to or  affecting  enforcement  of
creditors' rights generally,  or by general  principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at law).

     6. The Notes are in the form contemplated by the Indenture,  have been duly
authorized  by  the  Company  and,  assuming  that  the  Notes  have  been  duly
authenticated by the Trustee pursuant to the

679049.1
                                       B-1

<PAGE>



Indenture and in the manner described in its certificate delivered to you today,
the Notes have been duly  executed,  issued and  delivered  by the  Company  and
constitute valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms, except as the enforcement thereof may be
limited by  bankruptcy,  insolvency  (including,  without  limitation,  all laws
relating to fraudulent transfers),  reorganization,  moratorium or other similar
laws relating to or affecting enforcement of creditor's rights generally,  or by
general principles of equity (regardless of whether enforcement is considered in
a proceeding  in equity or at law),  and will be entitled to the benefits of the
Indenture.

     7. The Warrants are in the form contemplated by the Warrant Agreement, have
been duly  authorized  by the Company and,  assuming that the Warrants have been
issued  pursuant to the Warrant  Agreement  and in the manner  described  in its
certificate delivered to you today, the Warrants have been duly executed, issued
and delivered by the Company and constitute valid and binding obligations of the
Company,  enforceable against the Company in accordance with their terms, except
as the enforcement thereof may be limited by bankruptcy,  insolvency (including,
without limitation, all laws relating to fraudulent transfers),  reorganization,
moratorium  or other  similar  laws  relating  to or  affecting  enforcement  of
creditor's rights generally,  or by general  principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at law), and will
be entitled to the benefits of the Warrant Agreement.

     8. The  Company has  sufficient  shares  authorized  and has  reserved  for
issuance shares of Class A Common Stock which may be issued upon exercise of the
Warrants.

     9.  The  issuance  of  Warrant  Shares  and  Warrants  are not  subject  to
preemptive rights.

     10. The Warrant Shares,  when issued against payment of the Exercise Price,
will  be  duly   authorized,   validly   issued  and  will  be  fully  paid  and
non-assessable.

     11. To the best of my  knowledge,  there is not pending or  threatened  any
action, suit, proceeding, inquiry or investigation,  to which the Company or any
of its  subsidiaries  is a party, or to which the property of the Company or any
of its  subsidiaries is subject,  before or brought by any court or governmental
agency or body,  which  might  reasonably  be  expected  to result in a Material
Adverse  Effect,  or which  might  reasonably  be  expected  to  materially  and
adversely  affect the  properties or assets of the Company and its  subsidiaries
considered  as  one  enterprise  or  the   consummation   of  the   transactions
contemplated in the Purchase  Agreement or the Registration  Rights Agreement or
the performance by the Company of its obligations thereunder or the transactions
contemplated by the Offering Memorandum;

     12.  To the  best  of my  knowledge,  neither  the  Company  nor any of its
subsidiaries  is in violation of its charter or by-laws  (except as set forth in
the Offering Memorandum with respect to the Company's 8% Noncumulative Preferred
Stock, and, in the case of the Company's  subsidiaries only, for such violations
that, singly or in the aggregate, would not result in a Material Adverse Effect)
and no  default  by the  Company  or any of its  subsidiaries  exists in the due
performance  or observance of any material  obligation,  agreement,  covenant or
condition contained in any contract, indenture, mortgage, loan

679049.1
                                       B-2

<PAGE>



agreement,  note,  lease or other  agreement or instrument  that is described or
referred to in the Offering Memorandum.

     13. The execution,  delivery and performance of the Purchase Agreement, the
DTC Agreement,  each of the Registration Rights Agreements,  the Indenture,  the
Warrant  Agreement,  the Securities  and the  consummation  of the  transactions
contemplated therein and in the Offering Memorandum  (including the issuance and
sale of the Securities,  the use of the proceeds from the sale of the Securities
as described in the Offering  Memorandum under the caption "Use Of Proceeds" and
the filing of the Registration  Statement and Shelf Registration  Statement) and
compliance  by the Company with its  obligations  under the Purchase  Agreement,
each of the Registration Rights Agreements, the Indenture, the Warrant Agreement
and the  Securities  will not,  whether  with or without the giving of notice or
lapse of time or both,  conflict  with or  constitute a breach of, or default or
Repayment Event (as defined in Section 1(a) of the Purchase Agreement) under, or
result in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any  subsidiary  thereof  pursuant  to, any
contract,  indenture,  mortgage, deed of trust, loan or credit agreement,  note,
lease or any other agreement or instrument, known to me, to which the Company or
any of its  subsidiaries  is a party or by which it or any of them may be bound,
or to  which  any  of the  property  or  assets  of  the  Company  or any of its
subsidiaries  is subject  (except  for such  conflicts,  breaches or defaults or
liens,  charges or encumbrances  that could not reasonably be expected to have a
Material  Adverse  Effect),  nor will such action result in any violation of the
provisions of the charter or by-laws of the Company or any of its  subsidiaries,
or any applicable law,  statute,  rule,  regulation,  judgment,  order,  writ or
decree,  known to me, of any government,  government  instrumentality  or court,
domestic  or  foreign,  having  jurisdiction  over  the  Company  or  any of its
subsidiaries or any of their respective properties, assets or operations.


     Nothing  has come to my  attention  that would lead me to believe  that the
Offering Memorandum or any amendment or supplement thereto (except for financial
statements and schedules and other  financial data included or  incorporated  by
reference  therein,  as to  which  I make no  statement),  contained  an  untrue
statement of a material  fact or omitted to state a material fact required to be
stated  therein or necessary to make the  statements  therein not  misleading or
that the Offering  Memorandum or any amendment or supplement thereto (except for
financial  statements  and  schedules  and  other  financial  data  included  or
incorporated by reference  therein,  as to which I make no statement at the time
the Offering  Memorandum  was issued),  at the time the Offering  Memorandum was
issued,  at the time any such amended or  supplemented  Offering  Memorandum was
issued or at the Closing  Time,  included or includes an untrue  statement  of a
material fact or omitted or omits to state a material fact necessary in order to
make the statements  therein, in the light of the circumstances under which they
were made, not misleading.



679049.1
                                       B-3

<PAGE>



                                                                    Exhibit C



                        FORM OF OPINION OF PATENT COUNSEL
                         OF THE COMPANY TO BE DELIVERED
                            PURSUANT TO SECTION 5(b)


     1. To the best of my  knowledge,  there is no basis for a finding  that the
Company  does not have clear  title or valid  license  rights to the  patents or
patent  applications  described in the Offering  Memorandum as being owned by or
licensed to the Company,  and i have not  identified  any basis for a finding of
unenforceability or invalidity of any such patents.

     2. Other than as disclosed in the  Offering  Memorandum,  to the best of my
knowledge,  there are no legal or governmental  proceedings  pending (other than
patent  applications  pending)  relating to patents or  proprietary  information
rights to which the  Company  is a party or of which  any such  property  of the
Company is subject,  and no such  proceedings  are threatened or contemplated by
governmental authorities or others.

     3. The  statements  in the Offering  Memorandum  under the  headings  "Risk
Factors--Dependence on Licensed Patent Applications  Proprietary Technology" and
"Business--Patents,  Licenses and Trademarks"  constitute an accurate summary of
the matters  referred to therein and fairly present the  information  called for
with  respect  to such  matters;  and I have  no  reason  to  believe  that  the
statements  under such  headings in the Offering  Memorandum  contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements  therein,  in the light of the circumstances  under which
they were made, not misleading.

     4. Other than as disclosed in the Offering Memorandum,  based upon a review
of the  third  party  rights  made  known  to me and  discussions  with  Company
scientific  personnel,  such  counsel is not aware of any valid  United  States,
foreign  patent or  published  foreign  patent  application  that is or would be
infringed by the activities of the Company described in the Offering  Memorandum
and relating to products currently manufactured,  used or sold by the Company or
currently proposed to be manufactured, used or sold by the Company.

     5. Except as disclosed in the Offering Memorandum,  neither the Company nor
any  of  its  subsidiaries  is  subject  to  any  current  claim  or  notice  of
infringement or other violation of any asserted rights of others with respect to
any Intellectual Property,  which, singly or in the aggregate,  could reasonably
be expected to result in a Material Adverse Effect.

     6. There are no legal or governmental  proceedings  pending relating to the
Intellectual  Property owned or used by the Company or its  subsidiaries,  other
than review of pending patent and trademark  applications,  which,  singly or in
the aggregate, could reasonably be expected to result in a Material Adverse

679049.1
                                       C-1

<PAGE>


Effect  and no  such  proceedings,  including  without  limitation  interference
proceedings,  are currently  threatened by  governmental  authorities or others,
with such  exceptions as could not,  singly or in the  aggregate,  reasonably be
expected to result in a Material Adverse Effect.

679049.1
                                       C-2

<PAGE>


