EXHIBIT 10.c

         Zero Coupon Convertible Senior Subordinated Debentures due 2018


                           Sunbeam Corporation, Issuer

                                       and

                          The Bank of New York, Trustee


                                    INDENTURE



                           Dated as of March 25, 1998


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                               TABLE OF CONTENTS(1)
                                                                                            PAGE
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ARTICLE 1
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DEFINITIONS AND INCORPORATION BY REFERENCE...................................................-1-

Section 1.01.     Definitions................................................................-1-
Section 1.02.     Other Definitions..........................................................-8-
Section 1.03.     Incorporation by Reference of Trust Indenture Act..........................-9-
Section 1.04.     Rules of Construction.....................................................-10-

ARTICLE 2

THE SECURITIES..............................................................................-10-

Section 2.01.     Form and Dating...........................................................-10-
Section 2.02.     Execution and Authentication..............................................-11-
Section 2.03.     Registrar, Paying Agent and Conversion Agent..............................-11-
Section 2.04.     Paying Agent to Hold Money and Securities in Trust........................-12-
Section 2.05.     Securityholder Lists......................................................-12-
Section 2.06.     Exchange and Registration of Transfer of Securities; Restrictions on
                  Transfers; Depositary.....................................................-12-
Section 2.07.     Replacement Securities....................................................-20-
Section 2.08.     Outstanding Securities; Determinations of Holders' Action.................-21-
Section 2.09.     Temporary Securities......................................................-22-
Section 2.10.     Cancellation..............................................................-22-
Section 2.11.     Persons Deemed Owners.....................................................-23-
Section 2.12.     CUSIP Numbers.............................................................-23-

ARTICLE 3

REDEMPTION AND PURCHASES....................................................................-23-

Section 3.01.     Right to Redeem; Notices to Trustee.......................................-23-
Section 3.02.     Selection of Securities to be Redeemed....................................-23-
Section 3.03.     Notice of Redemption......................................................-24-
Section 3.04.     Effect of Notice of Redemption............................................-25-
Section 3.05.     Deposit of Redemption Price...............................................-25-
Section 3.06.     Securities Redeemed in Part...............................................-26-
Section 3.07.     Conversion Arrangement on Call for Redemption.............................-26-
Section 3.08.     Purchase of Securities at Option of the Holder............................-27-
Section 3.09.     Redemption at Option of the Holder upon a Fundamental Change..............-33-

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(1) This Table of Contents  shall not, for any  purpose, be deemed to be part of
    the Indenture.
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Section 3.10.     Effect of Purchase Notice or Fundamental Change Redemption Notice..........-34-
Section 3.11.     Deposit of Purchase Price or Fundamental Change Redemption Price...........-35-
Section 3.12.     Securities Purchased in Part...............................................-35-
Section 3.13.     Covenant to Comply with Securities Laws upon Purchase of Securities........-35-
Section 3.14.     Repayment to the Company...................................................-35-

ARTICLE 4

COVENANTS....................................................................................-36-

Section 4.01.     Payment of Securities......................................................-36-
Section 4.02.     Financial Information; SEC Reports.........................................-36-
Section 4.03.     Compliance Certificate.....................................................-37-
Section 4.04.     Further Instruments and Acts...............................................-38-
Section 4.05.     Maintenance of Office or Agency............................................-38-
Section 4.06.     Existence..................................................................-38-
Section 4.07.     Maintenance of Properties..................................................-38-
Section 4.08.     Payment of Taxes and Other Claims..........................................-39-
Section 4.09.     Calculation of Original Issue Discount.....................................-39-

ARTICLE 5

SUCCESSOR CORPORATION........................................................................-39-

Section 5.01.     When the Company May Merge or Transfer Assets..............................-39-

ARTICLE 6

DEFAULTS AND REMEDIES........................................................................-40-

Section 6.01.     Events of Default..........................................................-40-
Section 6.02.     Acceleration...............................................................-41-
Section 6.03.     Other Remedies.............................................................-42-
Section 6.04.     Waiver of Past Defaults....................................................-42-
Section 6.05.     Control by Majority........................................................-42-
Section 6.06.     Limitation on Suits........................................................-42-
Section 6.07.     Rights of Holders to Receive Payment.......................................-43-
Section 6.08.     Collection Suit by Trustee.................................................-43-
Section 6.09.     Trustee May File Proofs of Claim...........................................-43-
Section 6.10.     Priorities.................................................................-44-
Section 6.11.     Undertaking for Costs......................................................-45-

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Section 6.12.     Waiver of Stay, Extension or Usury Laws...................................-45-

ARTICLE 7

TRUSTEE.....................................................................................-46-

Section 7.01.     Duties of Trustee.........................................................-46-
Section 7.02.     Rights of Trustee.........................................................-47-
Section 7.03.     Individual Rights of Trustee..............................................-48-
Section 7.04.     Trustee's Disclaimer......................................................-48-
Section 7.05.     Notice of Defaults........................................................-48-
Section 7.06.     Reports by Trustee to Holders.............................................-48-
Section 7.07.     Compensation and Indemnity................................................-49-
Section 7.08.     Replacement of Trustee....................................................-49-
Section 7.09.     Successor Trustee by Merger...............................................-50-
Section 7.10.     Eligibility; Disqualification.............................................-50-
Section 7.11.     Preferential Collection of Claims Against Company.........................-51-

ARTICLE 8

DISCHARGE OF INDENTURE......................................................................-51-

Section 8.01.     Discharge of Liability on Securities......................................-51-
Section 8.02.     Repayment to the Company..................................................-51-

ARTICLE 9

AMENDMENTS..................................................................................-51-

Section 9.01.     Without Consent of Holders................................................-51-
Section 9.02.     With Consent of Holders...................................................-52-
Section 9.03.     Compliance with Trust Indenture Act.......................................-53-
Section 9.04.     Revocation and Effect of Consents, Waivers and Actions....................-53-
Section 9.05.     Notation on or Exchange of Securities.....................................-53-
Section 9.06.     Trustee to Sign Supplemental Indentures...................................-54-
Section 9.07.     Effect of Supplemental Indentures.........................................-54-
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ARTICLE 10

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SUBORDINATION...............................................................................-54-

Section 10.01.    Agreement of Subordination................................................-54-
Section 10.02.    Payments to Holders.......................................................-54-
Section 10.03.    Subrogation of Securities.................................................-57-
Section 10.04.    Authorization by Holders..................................................-58-
Section 10.05.    Notice to Trustee.........................................................-59-
Section 10.06.    Trustee's Relation to Senior Indebtedness.................................-60-
Section 10.07.    No Impairment of Subordination............................................-60-
Section 10.08.    Reliance by Holders of Senior Indebtedness on Subordination Provisions....-60-
Section 10.09.    Reinstatement of Subordination............................................-61-
Section 10.10.    Permitted Payments........................................................-61-
Section 10.11.    Article Applicable to Paying Agents.......................................-61-
Section 10.12.    Treatment of Conversion Payments..........................................-61-
Section 10.13.    Reliance on Judicial Order or Certificate of Liquidating Agent............-62-
Section 10.14.    Holders of Senior Indebtedness May File Proofs of Claim...................-62-

ARTICLE 11

CONVERSION..................................................................................-62-

Section 11.01.    Conversion Privilege......................................................-63-
Section 11.02.    Conversion Procedure......................................................-63-
Section 11.03.    Fractional Shares.........................................................-64-
Section 11.04.    Taxes on Conversion.......................................................-64-
Section 11.05.    Company to Provide Stock..................................................-64-
Section 11.06.    Adjustment for Change in Capital Stock....................................-65-
Section 11.07.    Adjustment for Rights Issue...............................................-65-
Section 11.08.    Adjustment for Other Distributions........................................-66-
Section 11.09.    When Adjustment May be Deferred...........................................-69-
Section 11.10.    When No Adjustment Required...............................................-69-
Section 11.11.    Notice of Adjustment......................................................-69-
Section 11.12.    Voluntary Increase........................................................-70-
Section 11.13.    Notice of Certain Transactions............................................-70-
Section 11.14.    Effect of Reclassification, Consolidation, Merger or Sale.................-70-
Section 11.15.    Company Determination Final...............................................-71-
Section 11.16.    Trustee's Adjustment Disclaimer...........................................-71-
Section 11.17.    Simultaneous Adjustments..................................................-71-
Section 11.18.    Successive Adjustments....................................................-72-
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Section 11.19.    Rights Issued in Respect of Common Stock Issued Upon Conversion...........-72-
Section 11.20.    General Considerations....................................................-72-

ARTICLE 12

MISCELLANEOUS...............................................................................-73-

Section 12.01.    Trust Indenture Act.......................................................-73-
Section 12.02.    Notices...................................................................-73-
Section 12.03.    Communication by Holders with other Holders...............................-74-
Section 12.04.    Certificate and Opinion as to Conditions Precedent........................-74-
Section 12.05.    Statements Required in Certificate or Opinion.............................-74-
Section 12.06.    Separability Clause.......................................................-75-
Section 12.07.    Rules by Trustee, Paying Agent, Conversion Agent and Registrar............-75-
Section 12.08.    Legal Holidays............................................................-75-
Section 12.09.    Governing Law.............................................................-75-
Section 12.10.    No Recourse Against Others................................................-75-
Section 12.11.    Successors................................................................-75-
Section 12.12.    Multiple Originals........................................................-75-


EXHIBIT A--Form of Security
EXHIBIT B--Form of Institutional Accredited Investor letter
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     INDENTURE, dated as of March 25, 1998, between Sunbeam Corporation, a
Delaware corporation (the "Company"), and The Bank of New York, a New York
banking corporation (the "Trustee").

     Each party agrees as follows for the benefit of the other parties and for
the equal and ratable benefit of the Holders of the Company's Zero Coupon
Convertible Senior Subordinated Debentures due 2018 (the "Securities"):


                                    ARTICLE 1

                   DEFINITIONS AND INCORPORATION BY REFERENCE

     SECTION 1.01. DEFINITIONS.

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

     "Applicable Price" means (i) in the event of a Fundamental Change in which
the holders of the Common Stock receive only cash, the amount of cash received
by the holder of one share of Common Stock and (ii) in the event of any other
Fundamental Change, the average of the last reported sales price for the Common
Stock (determined as set forth in the definition of Current Market Price) during
the ten Trading Days prior to the record date for the determination of the
holders of Common Stock entitled to receive cash, securities, property or other
assets in connection with such Fundamental Change, or, if there is no such
record date, the date upon which the holders of Common Stock shall have the
right to receive such cash, securities, property or other assets in connection
with a Fundamental Change.

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

     "Business Day" means each day of the year on which banking institutions are
not required or authorized to close in The City of New York or the city in which
the Corporate Trust Office is located.

     "Common Stock" means any stock of any class of the Company which has no
preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation,


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dissolution  or winding up of the Company and which is not subject to redemption
by the Company.  Subject to the  provisions of Section  11.14,  however,  shares
issuable upon  conversion of the Securities  shall include only shares of Common
Stock,  par value of $.01 per share,  of the Company as it exists on the date of
this   Indenture  or  shares  of  any  class  or  classes   resulting  from  any
reclassification  or  reclassifications  thereof and which have no preference in
respect of  dividends  or of amounts  payable in the event of any  voluntary  or
involuntary liquidation,  dissolution or winding up of the Company and which are
not subject to  redemption  by the Company;  provided  that if at any time there
shall be more than one such resulting  class, the shares of each such class then
so issuable shall be  substantially  in the proportion which the total number of
shares of such  class  resulting  from all such  reclassifications  bears to the
total   number  of  shares  of  all  such  classes   resulting   from  all  such
reclassifications.

     "Company" means the party named as the "Company" in the first paragraph of
this Indenture until a successor replaces it pursuant to the applicable
provisions of this Indenture and, thereafter, shall mean such successor. The
foregoing sentence shall likewise apply to any subsequent such successor or
successors.

     "Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, a Vice Chairman,
its President or a Vice President, and by its Treasurer, an Assistant Treasurer,
its Secretary or an Assistant Secretary, and delivered to the Trustee.

     "Conversion Rate" shall have the meaning specified in Section 11.01.

     "Corporate Trust Office" or other similar term, shall mean the principal
office of the Trustee at which at any particular time its corporate trust
business shall be principally administered, which office is, at the date as of
which this Indenture is dated, located at 101 Barclay Street, 21st Floor West,
New York, New York 10286, Attention: Corporate Trust Trustee Administration
(Sunbeam Corporation - Zero Coupon Convertible Senior Subordinated Debentures
due 2018).

     "Credit Agreement" means any credit agreement or agreements entered into by
the Company and/or one or more of its subsidiaries and one or more lending
institutions for the purpose of consummating the acquisitions of CLN Holdings
Inc. and The Coleman Company, Inc. (collectively, "Coleman"), Signature Brands
USA, Inc. ("Signature Brands") and First Alert, Inc. ("First Alert") and the
refinancing of the outstanding indebtedness of the Company, Coleman, Signature
Brands, First Alert or any of their respective subsidiaries, as the same may be
amended, restated, supplemented or otherwise modified from time to time.

     "Current Market Price" per share of the Common Stock on any date of
determination means the average of the daily closing prices of the Common Stock
on the NYSE for the 5 consecutive trading days ending on and including such date
of determination. The last reported sale price for each day


                                       -2-

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shall be (i) if the Common Stock is listed on the NYSE or listed or admitted for
trading on any national securities exchange, the last sale price, or the closing
bid price if no sale occurred,  of the Common Stock on the principal  securities
exchange on which the Common  Stock is listed,  (ii) if the Common  Stock is not
listed or admitted for trading as  described  in clause (i),  the last  reported
sale price of Common Stock on the Nasdaq National Market,  or any similar system
of automated  dissemination  of quotations  of securities  prices then in common
use, if so quoted,  or (iii) if not quoted as described in clause (ii), the mean
between the high bid and low asked  quotations  for Common  Stock as reported by
the National  Quotation Bureau  Incorporated if at least two securities  dealers
have inserted both bid and asked  quotations  for the Common Stock on at least 5
of the 10 preceding  Trading Days. If none of the  conditions set forth above is
met, the last  reported  sale price of Common Stock on any day or the average of
such last  reported sale prices for any period shall be the fair market value of
the Common  Stock as  determined  by a member  firm of the NYSE  selected by the
Company.

     "Custodian" shall mean The Bank of New York, as custodian with respect to
the Securities in global form, or any successor entity thereto.

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

     "Depositary" means, with respect to the Securities issuable or issued in
whole or in part in global form, the Person specified in Section 2.06 as the
Depositary with respect to the Securities, until a successor shall have been
appointed and become such pursuant to the applicable provisions of this
Indenture, and thereafter, "Depositary" shall mean or include such successor.
The foregoing sentence shall likewise apply to any subsequent such successor or
successors.

     "Designated Senior Indebtedness" means (i) Senior Indebtedness incurred
under the Credit Agreement and (ii) any other particular Senior Indebtedness in
which the instrument creating or evidencing the same or the assumption or
guarantee thereof (or related agreements or documents to which the Company is a
party) expressly provides that such Senior Indebtedness shall be "Designated
Senior Indebtedness" for purposes of this Indenture; provided that such
instrument, agreement or other document may place limitations and conditions on
the right of such Senior Indebtedness to exercise the rights of Designated
Senior Indebtedness. If any payment made to any holder of any Designated Senior
Indebtedness or its Representative with respect to such Designated Senior
Indebtedness is rescinded or must otherwise be returned by such holder or
Representative upon the insolvency, bankruptcy or reorganization of the Company
or otherwise, the reinstated Indebtedness of the Company arising as a result of
such rescission or return shall constitute Designated Senior Indebtedness
effective as of the date of such rescission or return.

     "Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated thereunder.


                                       -3-

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     "Fundamental Change" means the occurrence of any transaction or event in
connection with which all or substantially all the Common Stock shall be
exchanged for, converted into, acquired for or constitute solely the right to
receive consideration (whether by means of an exchange offer, liquidation,
tender offer, consolidation, merger, combination, reclassification,
recapitalization or otherwise) which is not all or substantially all common
stock of a company listed (or, upon consummation of or immediately following
such transaction or event, which will be listed) on a United States national
securities exchange or approved for quotation in the Nasdaq National Market or
any similar United States system of automated dissemination of quotations of
securities prices.

     "Holder" or "Securityholder" means a Person in whose name a Security is
registered on the Registrar's books.

     "Indebtedness" means, with respect to any Person, and without duplication,
(a) all indebtedness, obligations and other liabilities (contingent or
otherwise) of such Person for borrowed money (including obligations of the
Company in respect of overdrafts, foreign exchange contracts, currency exchange
agreements, interest rate protection agreements, and any loans or advances,
whether or not evidenced by notes or similar instruments) or evidenced by bonds,
debentures, notes or similar instruments (whether or not the recourse of the
lender is to the whole of the assets of such Person or to only a portion
thereof), (b) all reimbursement obligations and other liabilities (contingent or
otherwise) of such Person with respect to letters of credit, bank guarantees,
bankers' acceptances or similar facilities, (c) all obligations and liabilities
(contingent or otherwise) in respect of leases of such Person (i) required, in
conformity with generally accepted accounting principles, to be accounted for as
capitalized lease obligations on the balance sheet of such Person, or (ii)
required, in conformity with generally accepted accounting principles, to be
accounted for as an operating lease, provided either (A) such operating lease
requires, at the end of the term thereof, that such Person make any payment
other than accrued periodic rent in the event that such Person does not acquire
the leased real property and related fixtures subject to such lease, or (B) such
Person has an option to acquire the leased real property and related fixtures,
whether such option is exercisable at any time or under specific circumstances,
(d) all obligations of such Person (contingent or otherwise) with respect to an
interest rate swap, cap or collar agreement or other similar instrument or
agreement or foreign currency hedge or exchange agreement or other similar
instrument or agreement, (e) all direct or indirect guarantees or similar
agreements by such Person in respect of, and obligations or liabilities
(contingent or otherwise) of such Person to purchase or otherwise acquire or
otherwise assure a creditor against loss in respect of, indebtedness,
obligations or liabilities of another Person of the kind described in clauses
(a) through (d), (f) any indebtedness or other obligations described in clauses
(a) through (d) secured by any mortgage, pledge, lien or other encumbrance
existing on property which is owned or held by such Person, regardless of
whether the indebtedness or other obligation secured thereby shall have been
assumed by such Person, and (g) any and all deferrals, renewals, extensions and
refundings of, or amendments, modifications or supplements to, any indebtedness,
obligation or liability of the kind described in clauses (a) through (f).


                                       -4-

<PAGE>


     "Indenture" means this Indenture, as amended or supplemented from time to
time in accordance with the terms hereof.

     "Initial Purchaser" means Morgan Stanley & Co. Incorporated.

     "Institutional Accredited Investor" means an institutional "accredited
investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act.

     "Issue Date" of any Security means the date on which the Security was
originally issued or deemed issued as set forth on the face of the Security.

     "Issue Price" of any Security means, in connection with the original
issuance of such Security, the initial issue price at which the Security is
issued as set forth on the face of the Security.

     "Liquidated Damages" shall have the meaning specified in the Registration
Rights Agreement.

     "Nasdaq National Market" means the electronic inter-dealer quotation system
operated by NASDAQ Stock Market, Inc., a subsidiary of the National Association
of Securities Dealers, Inc.

     "NYSE" means The New York Stock Exchange, Inc.

     "Officer" means the Chairman of the Board, any Vice Chairman, the
President, any Vice President, the Treasurer or the Secretary or any Assistant
Treasurer or Assistant Secretary of the Company.

     "Officers' Certificate" means a written certificate containing the
information specified in Sections 12.04 and 12.05, signed in the name of the
Company by its Chairman of the Board, a Vice Chairman, its President or a Vice
President, and by its Treasurer, an Assistant Treasurer, its Secretary or an
Assistant Secretary, and delivered to the Trustee.

     "Opinion of Counsel" means a written opinion containing the information
specified in Sections 12.04 and 12.05, from legal counsel who is acceptable to
the Trustee. The counsel may be an employee of, or counsel to, the Company or
the Trustee.

     "Original Issue Discount" of any Security means the difference between the
Issue Price and the Principal Amount of the Security as set forth on the face of
the Security. For purposes of this Indenture and the Securities, accrual of
Original Issue Discount shall be calculated on the basis of a 360 day year of
twelve 30-day months, compounded semi-annually.

     "Payment Blockage Notice" has the meaning specified in Section 10.02.


                                       -5-

<PAGE>


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

     "Portal Market" means the Private Offerings, Resales and Trading through
Automated Linkages operated by the National Association of Securities Dealers,
Inc. or any successor thereto.

     "Principal" or "Principal Amount" of a Security means the Principal Amount
as set forth on the face of the Security.

     "QIB" means a "qualified institutional buyer" as defined in Rule 144A.

     "Redemption Date" shall mean a date specified for redemption of the
Securities (other than redemption upon a Fundamental Change at the option of the
Securityholder) in accordance with the terms of the Securities and Section 3.01
of this Indenture.

     "Redemption Price" shall have the meaning set forth in paragraph 5 of the
Securities.

     "Reference Market Price" shall initially mean $30.2083 and in the event of
any adjustment to the Conversion Rate pursuant to Article 11, the Reference
Market Price shall be adjusted to equal the initial Reference Market Price
multiplied by a fraction the numerator of which is the Conversion Rate specified
in the form of Security attached hereto as Exhibit A (without regard to any
adjustment thereto), and the denominator of which is the Conversion Rate
following such adjustment.

     "Registration Rights Agreement" means the Registration Rights Agreement,
dated as of the date hereof, between the Company and the Initial Purchaser.

     "Representative" means the (a) indenture trustee or other trustee, agent or
representative for any Senior Indebtedness or (b) with respect to any Senior
Indebtedness that does not have any such trustee, agent or other representative,
(i) in the case of such Senior Indebtedness issued pursuant to an agreement
providing for voting arrangements as among the holders or owners of such Senior
Indebtedness, any holder or owner of such Senior Indebtedness acting with the
consent of the required Persons necessary to bind such holders or owners of such
Senior Indebtedness and (ii) in the case of all other such Senior Indebtedness,
the holder or owner of such Senior Indebtedness.

     "Rule 144A" means Rule 144A as promulgated under the Securities Act, or any
successor rule.

     "Rule 144(k)" means Rule 144(k) as promulgated under the Securities Act, or
any successor rule.

     "SEC" means the Securities and Exchange Commission.


                                       -6-

<PAGE>


     "Secured Indebtedness" means, with respect to any Person, Indebtedness of
such Person secured by any mortgage, pledge, lien or other encumbrance existing
on property or assets which is owned or held by such Person.

     "Securities" shall have the meaning set forth in the second paragraph of
this Indenture.

     "Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.

     "Securityholder" or "Holder" means a person in whose name a Security is
registered on the Registrar's books.

     "Senior Indebtedness" means the principal of, premium, if any, interest
(including all interest accruing subsequent to, or which would accrue but for,
the commencement of any bankruptcy or similar proceeding, whether or not a claim
for post-petition interest is allowable as a claim in any such proceeding),
original issue discount, rent and end of term payments payable on or in
connection with, and, to the extent not included in the foregoing, all amounts
payable as fees, costs, expenses, liquidated damages, indemnities, repurchase
and other put obligations and other amounts to the extent accrued or due on or
in connection with, Secured Indebtedness of the Company, whether outstanding on
the date of this Indenture or thereafter created, incurred, assumed, guaranteed
or in effect guaranteed by the Company (including all deferrals, renewals,
extensions or refundings of, or amendments, modifications or supplements to, the
foregoing). Notwithstanding the foregoing, the term Senior Indebtedness shall
not include (i) Indebtedness of the Company to any Subsidiary of the Company,
(ii) accounts payable or other indebtedness to trade creditors created or
assumed by the Company in the ordinary course of business and (iii) any
particular Indebtedness in which the instrument creating or evidencing the same
or the assumption or guarantee thereof expressly provides that such Indebtedness
shall not be senior in right of payment to, or is pari passu with, or is
subordinated or junior to, the Securities. If any payment made to any holder of
any Senior Indebtedness or its Representative with respect to such Senior
Indebtedness is rescinded or must otherwise be returned by such holder or
Representative upon the insolvency, bankruptcy or reorganization of the Company
or otherwise, the reinstated Indebtedness of the Company arising as a result of
such rescission or return shall constitute Senior Indebtedness effective as of
the date of such rescission or return.

     "Stated Maturity", when used with respect to any Security, means the date
specified in such Security as the fixed date on which an amount equal to the
Principal of such Security is due and payable.

     "Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of capital stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers


                                       -7-

<PAGE>


or trustees thereof is at the time owned or controlled,  directly or indirectly,
by such  Person or one or more of the other  subsidiaries  of that  Person (or a
combination  thereof) and (ii) any  partnership  (a) the sole general partner or
managing  general partner of which is such person or a Subsidiary of such Person
or (b) the only  general  partners  of which  are such  Person or of one or more
Subsidiaries of such Person (or any combination thereof).

     "TIA" means the Trust Indenture Act of 1939, as amended, as in effect on
the date of this Indenture, except as provided in Section 9.03.

     "Trading Day" means a day during which trading in securities generally
occurs on the NYSE or, if the applicable security is not listed on the NYSE, on
the principal other national or regional securities exchange on which the
applicable security is then listed or, if the applicable security is not listed
on a national or regional securities exchange, on the Nasdaq National Market or,
if the applicable security is not quoted on the Nasdaq National Market, on the
principal other market on which the applicable security is then traded.

     "Trust Officer" means any officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.

     "Trustee" means the party named as the "Trustee" in the first paragraph of
this Indenture until a successor replaces it pursuant to the applicable
provisions of this Indenture and, thereafter, shall mean such successor. The
foregoing sentence shall likewise apply to any subsequent such successor or
successors.

     "Voting Stock" shall mean stock of any class or classes, however
designated, having ordinary voting power for the election of a majority of the
board of directors of a corporation, other than stock having such power only by
reason of the happening of a contingency.

     SECTION 1.02. OTHER DEFINITIONS.


                                                 DEFINED IN
TERM                                              SECTION
----------------------------------------------  ------------
"Bankruptcy Law"...............................    6.01
"Company Notice"...............................    3.08(e)
"Company Notice Date"..........................    3.08(c)
"Conversion Agent".............................    2.03
"Expiration Time"..............................   11.08(c)
"Event of Default".............................    6.01
"Fundamental Change Repurchase Date"...........    3.09(a)


                                       -8-

<PAGE>

                                                 DEFINED IN
TERM                                              SECTION
----------------------------------------------  ------------
"Fundamental Change Redemption Notice"........     3.09(a)
"Fundamental Change Redemption Price".........     3.09(a)
"Legal Holiday"...............................    12.08
"Market Price"................................     3.08(d)
"Notice of Default"...........................     6.01
"Over-allotment Option".......................     2.02
"Paying Agent"................................     2.03
"Purchase Date"...............................     3.08(a)
"Purchase Notice".............................     3.08(a)
"Purchase Price"..............................     3.08(a)
"Purchased Shares"............................    11.08(c)
"Registrar"...................................     2.03
"Restricted Securities".......................     2.06(d)
"Sale Price"..................................     3.08(d)
"Tender Expiration Time"......................    11.08(d)
"Tender Purchased Shares".....................    11.08(d)

     SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT. Whenever
this Indenture refers to a provision of the TIA, the provision is incorporated
by reference in and made a part of this Indenture. The following TIA terms used
in this Indenture have the following meanings:

     "Commission" means the SEC.

     "Indenture Securities" means the Securities.

     "Indenture Security Holder" means a Securityholder.

     "Indenture to be Qualified" means this Indenture.

     "Indenture Trustee" or "Institutional Trustee" means the Trustee.

     All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rules have the
meanings assigned to them by such definitions.


                                       -9-

<PAGE>


     SECTION 1.04. RULES OF CONSTRUCTION. Unless the context otherwise requires:

         (1)  a term has the meaning assigned to it;

         (2)  an accounting term not otherwise defined has the meaning assigned
              to it in accordance with generally accepted accounting principles
              as in effect from time to time;

         (3)  "or" is not exclusive;

         (4)  "including" means including, without limitation; and

         (5)  words in the singular include the plural, and words in the plural
              include the singular.


                                    ARTICLE 2

                                 THE SECURITIES

     SECTION 2.01. FORM AND DATING. The Securities and the Trustee's certificate
of authentication for the Securities shall be substantially in the form of
Exhibit A, which is a part of this Indenture. The Securities may have notations,
legends or endorsements required by law, rule or regulation of any stock
exchange or trading system on which the Securities may be listed or admitted for
trading or to conform to usage (provided that any such notation, legend or
endorsement is in a form acceptable to the Company and is not inconsistent with
the provisions of this Indenture). The Company shall provide any such notations,
legends or endorsements to the Trustee in writing. Each Security shall be dated
the date of its authentication.

     Any Security in global form shall represent such of the outstanding
Securities as shall be specified therein and shall provide that it shall
represent the aggregate amount of outstanding Securities from time to time
endorsed thereon and that the aggregate amount of outstanding Securities
represented thereby may from time to time be increased or reduced to reflect
transfers or exchanges permitted hereby. Any endorsement of a Security in global
form to reflect the amount of any increase or decrease in the amount of
outstanding Security represented thereby shall be made by the Trustee or the
Custodian, at the direction of the Trustee, in such manner and upon instructions
given by the Holder of such Security in accordance with this Indenture. Payment
of Principal Amount, Issue Price, accrued Original Issue Discount, accrued
Liquidated Damages, if any, Redemption Price, Purchase Price, Fundamental Change
Redemption Price or interest, if any, on any Security in global form shall be
made to the Holder of such Security.


                                      -10-

<PAGE>


     SECTION 2.02. EXECUTION AND AUTHENTICATION. The Securities shall be
executed on behalf of the Company by its Chairman of the Board, one of its Vice
Chairmen, its President or one of its Vice Presidents. The signature of any of
these officers on the Securities may be manual or facsimile.

     Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper Officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of authentication of such Securities or at the
date of execution of this Indenture.

     No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein duly
executed by the Trustee by manual signature of an authorized officer, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder.

     The Trustee shall authenticate and make available for delivery Securities
for original issue in an aggregate Principal Amount at maturity of
$2,014,000,000 upon a Company Order without any further action by the Company;
PROVIDED, HOWEVER, that if the Company sells any Securities pursuant to the
Initial Purchaser's over-allotment option (the "Over-allotment Option") granted
pursuant to the Purchase Agreement, dated March 19, 1998, between the Company
and the Initial Purchaser, then the Trustee shall also authenticate and make
available for delivery additional Securities for original issue in an aggregate
Principal Amount at maturity of up to $302,100,000 pursuant to the
Over-Allotment Option upon a Company Order without any further action by the
Company. The aggregate Principal Amount at maturity of Securities outstanding at
any time may not exceed the amount set forth in the foregoing sentence, except
as provided in Section 2.07.

     SECTION 2.03. REGISTRAR, PAYING AGENT AND CONVERSION AGENT. The Company
shall maintain an office or agency where Securities may be presented for
registration of transfer or for exchange ("Registrar"), an office or agency
where Securities may be presented for purchase or payment ("Paying Agent") and
an office or agency where Securities may be presented for conversion into Common
Stock ("Conversion Agent"). The Registrar shall keep a register of the
Securities and of their transfer and exchange. The Company may have one or more
co-registrars, one or more additional paying agents and one or more additional
conversion agents. The term Paying Agent includes any additional paying agent.
The term Conversion Agent includes any additional conversion or agent, including
any Person named pursuant to Section 4.05.

     The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent, Conversion Agent or co-registrar (if not the Trustee or
an Affiliate of the Trustee). The agreement shall implement the provisions of
this Indenture that relate to such agent and the relevant Security. The Company
shall notify the Trustee of the name and address of any such agent. If the

                                      -11-

<PAGE>


Company fails to maintain a Registrar, Paying Agent or Conversion Agent, the
Trustee shall act as such and shall be entitled to appropriate compensation
therefor pursuant to Section 7.07. The Company or an Affiliate of the Company
may act as Paying Agent, Registrar, Conversion Agent or co-registrar.

     The Company initially appoints the Trustee as Registrar, Conversion Agent
and Paying Agent in connection with the Securities.

     SECTION 2.04. PAYING AGENT TO HOLD MONEY AND SECURITIES IN TRUST. Except as
otherwise provided herein, prior to 10:00 a.m., New York City time on each due
date of payments in respect of any Security, the Company shall deposit with the
Paying Agent a sum of money or securities sufficient to make such payments when
such payments are due. The Company shall require each Paying Agent (other than
the Trustee) to agree in writing that the Paying Agent shall hold in trust for
the benefit of Holders or the Trustee all money and securities held by the
Paying Agent for the making of payments in respect of the Securities and shall
notify the Trustee of any default by the Company in making any such payment. At
any time during the continuance of any such default, the Paying Agent shall,
upon the written request of the Trustee, forthwith pay to the Trustee all money
and securities so held in trust. If the Company or an Affiliate of the Company
acts as Paying Agent, it shall segregate the money and securities held by it as
Paying Agent and hold it as a separate trust fund. The Company at any time may
require a Paying Agent to pay all money and securities held by it to the Trustee
and to account for any funds and securities disbursed by it. Upon doing so, the
Paying Agent shall have no further liability for the money or securities.

     SECTION 2.05. SECURITYHOLDER LISTS. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of Holders. If the Trustee is not the Registrar, the
Company shall cause to be furnished to the Trustee at least semiannually on
March 25 and September 25 a listing of Holders dated within 15 days of the date
on which the list is furnished and at such other times as the Trustee may
request in writing a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of Holders.

     SECTION 2.06. EXCHANGE AND REGISTRATION OF TRANSFER OF SECURITIES;
RESTRICTIONS ON TRANSFERS; DEPOSITARY.

     (a) Upon surrender for registration of transfer of any Security at any
office or agency of the Company designated as Registrar or co-registrar pursuant
to Section 2.03 and satisfaction of the requirements for such transfer set forth
in this Section 2.06, the Company shall execute, and the Trustee shall
authenticate and make available for delivery, in the name of the designated
transferee or transferees, one or more new Securities of any authorized
denominations and of a like aggregate principal amount and bearing such
restrictive legends as may be required by this Indenture.


                                      -12-

<PAGE>


     Securities may be exchanged for a like aggregate principal amount of
Securities of other authorized denominations. Securities to be exchanged shall
be surrendered at any office or agency to be maintained by the Company
designated as Registrar or co-registrar pursuant to Section 2.03 and the Company
shall execute and register, and the Trustee shall authenticate and make
available for delivery in exchange therefor, the Security or Securities which
the Securityholder making the exchange shall be entitled to receive, bearing
registration numbers not contemporaneously outstanding.

     All Securities presented for registration of transfer or for exchange into
like Securities, purchase, redemption or conversion into Common Stock or payment
shall (if so required by the Company, the Trustee, the Registrar or any
co-registrar) be duly endorsed by, or be accompanied by a written instrument or
instruments of transfer in form satisfactory to the Company and the Trustee,
duly executed by the Holder or such Holder's attorney duly authorized in
writing.

     No service charge shall be charged to the Securityholder for any exchange
for like Securities or registration of transfer of Securities, but the Company,
as a condition to any exchange or transfer, may require payment of a sum
sufficient to cover any tax, assessments or other governmental charges that may
be imposed in connection therewith.

     None of the Company, the Trustee, the Registrar or any co-registrar shall
be required to exchange for like Securities or register a transfer of (a) any
Securities for a period of 15 days next preceding the mailing of a notice of
redemption of Securities to be redeemed, or (b) any Securities or portions
thereof selected or called for redemption, or (c) any Securities or portion
thereof surrendered for conversion into Common Stock, or (d) any Securities or
portion thereof surrendered for purchase or redemption (and not withdrawn)
pursuant to Sections 3.08 or 3.09, respectively.

     All Securities issued upon any transfer or exchange for like Securities
shall be valid obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture as the Securities surrendered
upon such exchange or transfer.

     (b) So long as the Securities are eligible for book-entry settlement with
the Depositary (as defined below), or unless otherwise required by law, all
Securities to be traded on the Portal Market may be represented by a Security in
global form registered in the name of the Depositary or the nominee of the
Depositary, except as otherwise specified below. The transfer and exchange of
beneficial interests in such Security in global form shall be effected through
the Depositary in accordance with this Indenture (including the restrictions on
transfer set forth herein) and the procedures of the Depositary therefor.

     Securities that upon initial issuance are owned by QIBs will be represented
by one or more Securities in global form. Transfers of interests in a Security
in global form will be made in accordance with the standing instructions and
procedures of the Depositary and its participants. The

                                      -13-

<PAGE>


Trustee shall make appropriate endorsements to reflect increases or decreases in
the Principal Amounts of such Securities in global form as set forth on the face
of the Security in global form to reflect any such transfers.

     At any time at the request of the beneficial holder of an interest in a
Security in global form, such beneficial holder shall be entitled to obtain a
definitive Security upon written request to the Trustee in accordance with the
procedures of the Depositary for the issuance thereof. Upon receipt of any such
request, the Trustee will cause, in accordance with the standing instructions
and procedures of the Depositary, the aggregate principal amount at maturity of
the Security in global form to be reduced and, following such reduction, the
Company will execute and the Trustee will authenticate and make available for
delivery to such beneficial holder (or its nominee) a Security or Securities in
the appropriate aggregate principal amount at maturity of the name of such
beneficial holder (or its nominee) and bearing such restrictive legends as may
be required by this Indenture.

     Any transfer of a beneficial interest in a Security in global form which
cannot be effected through book-entry settlement must be effected by the
delivery to the transferee (or its nominee) of a definitive Security or
Securities registered in the name of the transferee (or its nominee) on the
books maintained by the Trustee. With respect to any such transfer, the Trustee
will cause, in accordance with the standing instructions and procedures of the
Depositary, the aggregate principal amount at maturity of the Security in global
form to be reduced and, following such reduction, the Company will execute and
the Trustee will authenticate and make available for delivery to the transferee
(or such transferee's nominee, as the case may be), Security or Securities in
the appropriate aggregate principal amount at maturity in the name of such
transferee (or its nominee) and bearing such restrictive legends as may be
required by this Indenture.

     (c) So long as the Securities are eligible for book-entry settlement, or
unless otherwise required by law, upon any transfer of a definitive Security to
a QIB in accordance with Rule 144A, unless otherwise requested by the
transferor, Securities being so transferred, together with a certification,
substantially in the form of the reverse of the Security, from the transferor
that the transfer is being made in compliance with Rule 144A (or other evidence
satisfactory to the Trustee), the Trustee shall make an endorsement on the
Security in global form to reflect an increase in the aggregate Principal Amount
of the Securities represented by the Security in global form, the Trustee shall
cancel such definitive Security or Securities in accordance with the standing
instructions and procedures of the Depositary and the aggregate principal amount
of Securities represented by the Security in global form will be increased
accordingly; PROVIDED that no definitive Security, or portion thereof, in
respect of which the Company or an Affiliate of the Company held any beneficial
interest shall be included in such Security in global form until such definitive
Security is freely tradable in accordance with Rule 144(k); PROVIDED FURTHER
that the Trustee shall make available for delivery Securities in definitive form
upon any transfer of a beneficial interest in any Security in global form to the
Company or any Affiliate of the Company.


                                      -14-

<PAGE>


     Upon any sale or transfer of a Security to an Institutional Accredited
Investor (other than pursuant to a registration statement that has been declared
effective under the Securities Act), such Institutional Accredited Investor
shall, prior to such sale or transfer, furnish to the Company and/or the Trustee
a signed letter containing representations and agreements relating to
restrictions on transfer substantially in the form set forth in Exhibit B to
this Indenture.

     Any Security in global form may be endorsed with or have incorporated in
the text thereof such legends or recitals or changes not inconsistent with the
provisions of this Indenture as may be required by the Custodian, the Depositary
or by the National Association of Securities Dealers, Inc. in order for the
Securities to be tradeable on the Portal Market or as may be required for the
Securities to be tradeable on any other market developed for trading of
securities pursuant to Rule 144A or required to comply with any applicable law
or any regulation thereunder or with the rules and regulations of any securities
exchange upon which the Securities may be listed or traded or to conform with
any usage with respect thereto, or to indicate any special limitations or
restrictions to which any particular Securities are subject.

     (d) Every Security that bears or is required under this Section 2.06(d) to
bear the legend set forth in this Section 2.06(d) (together with any Common
Stock issued upon conversion of the Securities and required to bear the legend
set forth in Section 2.06(e), collectively, the "Restricted Securities") shall
be subject to the restrictions on transfer set forth in this Section 2.06(d)
(including those set forth in the legend set forth below) unless such
restrictions on transfer shall be waived by written consent of the Company, and
the holder of each such Restricted Security, by such Securityholder's acceptance
thereof, agrees to be bound by all such restrictions on transfer. As used in
Sections 2.06(d) and 2.06(e), the term "transfer" encompasses any sale, pledge,
transfer or other disposition whatsoever of any Restricted Security.

     Until the expiration of the holding period applicable to sales thereof
under Rule 144(k) under the Securities Act (or any successor provision), any
certificate evidencing such Security (and all securities issued in exchange
therefor or substitution thereof, other than Common Stock, if any, issued upon
conversion therefor, which shall bear the legend set forth in Section 2.06(e),
if applicable) shall bear a legend in substantially the following form, unless
such Security has been sold pursuant to a registration statement that has been
declared effective under the Securities Act (and which continues to be effective
at the time of such transfer), or unless otherwise agreed by the Company in
writing, with written notice thereof to the Trustee:

           THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE
           UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
           ACT"), OR ANY STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE
           OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
           BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING
           SENTENCE. BY


                                      -15-

<PAGE>


           ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A
           "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
           SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR"
           (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES
           ACT) ("INSTITUTIONAL ACCREDITED INVESTOR"); (2) AGREES THAT IT WILL
           NOT, PRIOR TO EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF
           THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES
           ACT (OR ANY SUCCESSOR PROVISION), RESELL OR OTHERWISE TRANSFER THE
           SECURITY EVIDENCED HEREBY OR THE COMMON STOCK ISSUABLE UPON
           CONVERSION OF SUCH SECURITY WITHIN THE UNITED STATES OR TO, OR FOR
           THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT (A) TO SUNBEAM
           CORPORATION OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED
           INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
           ACT, (C) TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH
           TRANSFER, FURNISHES TO THE BANK OF NEW YORK, AS TRUSTEE (OR A
           SUCCESSOR TRUSTEE, AS APPLICABLE), A SIGNED LETTER CONTAINING CERTAIN
           REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON
           TRANSFER OF THE SECURITY EVIDENCED HEREBY (THE FORM OF WHICH LETTER
           CAN BE OBTAINED FROM SUCH TRUSTEE OR A SUCCESSOR TRUSTEE, AS
           APPLICABLE), (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED
           BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (E) PURSUANT
           TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER
           THE SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME
           OF SUCH TRANSFER); (3) PRIOR TO SUCH TRANSFER (OTHER THAN A TRANSFER
           PURSUANT TO CLAUSE 2(E) ABOVE), IT WILL FURNISH TO THE BANK OF NEW
           YORK, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH
           CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE TRUSTEE
           MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
           PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
           THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (4) AGREES
           THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE SECURITY EVIDENCED
           HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
           LEGEND. IN CONNECTION WITH ANY TRANSFER OF THE SECURITY EVIDENCED
           HEREBY PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO
           SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K)

                                      -16-

<PAGE>


           UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), THE HOLDER
           MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF
           RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE
           TO THE BANK OF NEW YORK, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS
           APPLICABLE). IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL
           ACCREDITED INVESTOR OR IS A PURCHASER WHO IS NOT A U.S. PERSON, THE
           HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE BANK OF NEW YORK,
           AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH
           CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS IT MAY
           REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
           PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
           THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL
           BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THE SECURITY EVIDENCED
           HEREBY PURSUANT TO CLAUSE 2(E) ABOVE OR UPON ANY TRANSFER OF THE
           SECURITY EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT
           (OR ANY SUCCESSOR PRO VISION). AS USED HEREIN, THE TERMS "UNITED
           STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY
           REGULATION S UNDER THE SECURITIES ACT.

     Any Security (or security issued in exchange or substitution therefor) as
to which such restrictions on transfer shall have expired in accordance with
their terms or as to the conditions for removal of the foregoing legend set
forth therein have been satisfied may, upon surrender of such Securities for
exchange to the Registrar in accordance with the provisions of this Section
2.06, be exchanged for a new Security or Securities, of like tenor and aggregate
principal amount, which shall not bear the restrictive legend required by this
Section 2.06(d).

     Notwithstanding any other provisions of this Indenture (other than the
provisions set forth in this Section 2.06(d)), a Security in global form may not
be transferred as a whole except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee to a successor Depositary or a nominee of such successor Depositary.

     The Depositary shall be a clearing agency registered under the Exchange
Act. The Company initially appoints The Depository Trust Company to act as
Depositary with respect to the Securities in global form. Initially, the
Security in global form shall be issued to the Depositary, registered in the
name of Cede & Co., as the nominee of the Depositary, and deposited with the
Custodian for Cede & Co.

                                      -17-

<PAGE>


     If at any time the Depositary for a Security in global form notifies the
Company that it is unwilling or unable to continue as Depositary for such
Security, the Company may appoint a successor Depositary with respect to such
Security. If a successor Depositary for the Security is not appointed by the
Company within 90 days after the Company receives such notice, the Company will
execute, and the Trustee, upon receipt of an Officers' Certificate for
authentication and delivery of Securities, will authenticate and deliver,
Securities in certificated form, in an aggregate principal amount equal to the
principal amount of the Security in global form, in exchange for such Security
in global form.

     Securities in definitive certificated form issued in exchange for all or a
part of a Security in global form pursuant to this Section 2.06 shall be
registered in such names and in such authorized denominations as the Depositary,
pursuant to instructions from its direct or indirect participants or otherwise,
shall instruct the Trustee. Upon execution and authentication, the Trustee shall
make available for delivery such Securities in certificated form to the Persons
in whose names such Securities in certificated form are so registered.

     At such time as all interests in a Security in global form have been
redeemed, converted, exchanged, repurchased or canceled, such Security in global
form shall be, upon receipt thereof, canceled by the Trustee in accordance with
standing procedures and instructions existing between the Custodian and
Depositary. At any time prior to such cancellation, if any interest in a
Security in global form is exchanged for Securities in definitive certificated
form, redeemed, converted, exchanged, repurchased by the Company pursuant to
Article 3 or canceled, or transferred for part of a Security in global form, the
principal amount of such Security in global form shall, in accordance with the
standing procedures and instructions existing between the Custodian and the
Depositary, be reduced or increased, as the case may be, and an endorsement
shall be made on such Security in global form, by the Trustee or the Custodian,
at the direction of the Trustee, to reflect such reduction or increase.

     (e) Until the expiration of the holding period applicable to sales thereof
under Rule 144(k) under the Securities Act (or any successor provision), any
stock certificate representing Common Stock issued upon conversion of a Security
shall bear a legend in substantially the following form, unless such Common
Stock has been sold pursuant to a registration statement that has been declared
effective under the Securities Act (and which continues to be effective at the
time of such transfer) or such Common Stock has been issued upon conversion of
Securities that have been transferred pursuant to a registration statement that
has been declared effective under the Securities Act, or unless otherwise agreed
by the Company in writing with written notice thereof to the transfer agent for
the Common Stock:

           THE COMMON STOCK EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE
           UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
           ACT") OR ANY STATE SECURITIES LAWS, AND,


                                      -18-

<PAGE>


           ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR
           TO, OR FOR THE ACCOUNT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE
           FOLLOWING SENTENCE. THE HOLDER HEREOF AGREES THAT UNTIL THE
           EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY
           EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY
           SUCCESSOR PROVISION), (1) IT WILL NOT RESELL OR OTHERWISE TRANSFER
           THE COMMON STOCK EVIDENCED HEREBY WITHIN THE UNITED STATES OR TO, OR
           FOR ACCOUNT OF U.S. PERSONS, EXCEPT (A) TO SUNBEAM CORPORATION OR ANY
           SUBSIDIARY THEREOF, (B) TO A "QUALIFIED INSTITUTIONAL BUYER" (AS
           DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN COMPLIANCE WITH
           RULE 144A, (C) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED
           IN RULE 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) THAT
           PRIOR TO SUCH TRANSFER FURNISHES TO THE BANK OF NEW YORK, AS TRANSFER
           AGENT (OR A SUCCESSOR TRANSFER AGENT, AS APPLICABLE), A SIGNED LETTER
           CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
           RESTRICTIONS ON TRANSFER OF THE COMMON STOCK EVIDENCED HEREBY (THE
           FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH TRANSFER AGENT OR
           SUCCESSOR TRANSFER AGENT, AS APPLICABLE), (D) PURSUANT TO THE
           EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES
           ACT (IF AVAILABLE), OR (E) PURSUANT TO A REGISTRATION STATEMENT WHICH
           HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH
           CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER); (2) PRIOR TO
           SUCH TRANSFER (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 1(E) ABOVE),
           IT WILL FURNISH TO THE BANK OF NEW YORK, AS TRANSFER AGENT (OR A
           SUCCESSOR TRANSFER AGENT, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL
           OPINIONS OR OTHER INFORMATION AS THE TRANSFER AGENT MAY REASONABLY
           REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
           EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
           REQUIREMENTS OF THE SECURITIES ACT AND (3) IT WILL DELIVER TO EACH
           PERSON TO WHOM THE SECURITY EVIDENCED HEREBY IS TRANSFERRED (OTHER
           THAN A TRANSFER PURSUANT TO CLAUSE 1(E) ABOVE) A NOTICE SUBSTANTIALLY
           TO THE EFFECT OF THIS LEGEND. THIS LEGEND WILL BE REMOVED UPON THE
           EARLIER OF THE TRANSFER OF THE COMMON STOCK EVIDENCED HEREBY PURSUANT
           TO CLAUSE 1(E) ABOVE OR UPON ANY TRANSFER OF THE COMMON STOCK
           EVIDENCED HEREBY AFTER THE EXPIRATION OF THE HOLDING PERIOD
           APPLICABLE TO SALES OF THE SECURITY EVIDENCED


                                      -19-

<PAGE>


           HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
           PROVISION). AS USED HEREIN, THE TERMS "UNITED STATES" AND "U.S.
           PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE
           SECURITIES ACT.

     Any such Common Stock as to which such restrictions on transfer shall have
expired in accordance with their terms or as to which the conditions for removal
of the foregoing legend set forth therein have been satisfied may, upon
surrender of the certificates representing such shares of Common Stock for
exchange in accordance with the procedures of the transfer agent for the Common
Stock, be exchanged for a new certificate or certificates for a like number of
shares of Common Stock, which shall not bear the restrictive legend required by
this Section 2.06(e).

     (f) Any Security or Common Stock issued upon the conversion or exchange of
a Security that, prior to the expiration of the holding period applicable to
sales thereof under Rule 144(k) under the Securities Act (or any successor
provision), is purchased or owned by the Company or any Affiliate thereof may
not be resold by the Company or such Affiliate unless registered under the
Securities Act or resold pursuant to an exemption from the registration
requirements of the Securities Act in a transaction which results in such
Securities or Common Stock, as the case may be, no longer being "restricted
securities" (as defined under Rule 144).

     (g) Each Holder of a Security agrees to indemnify the Company and the
Trustee against any liability that may result from the transfer, exchange or
assignment of such Holder's Security in violation of any provision of this
Indenture and/or applicable United States Federal or state securities law.

     The Trustee shall have no obligation or duty to monitor, determine or
inquire as to compliance with any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any transfer of any interest
in any Security (including any transfers between or among Depositary
participants or beneficial owners of interests in any global Security) other
than to require delivery of such certificates and other documentation or
evidence as are expressly required by, and to do so if and when expressly
required by the terms of, this Indenture, and to examine the same to determine
substantial compliance as to form with the express requirements hereof.

     SECTION 2.07. REPLACEMENT SECURITIES. If (a) any mutilated Security is
surrendered to the Trustee, or (b) the Company and the Trustee receive evidence
to their satisfaction of the destruction, loss or theft of any Security, and
there is delivered to the Company and the Trustee such security or indemnity as
may be required by them to save each of them harmless, then, in the absence of
notice to the Company or the Trustee that such Security has been acquired by a
bona fide purchaser, the Company shall execute and, upon its written request,
the Trustee shall authenticate and make available for delivery, in exchange for
any such mutilated Security or in lieu


                                      -20-

<PAGE>


of any such destroyed, lost or stolen Security, a new Security of like tenor and
Principal Amount, bearing a number not contemporaneously outstanding.

     In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, or is about to be purchased or redeemed
by the Company pursuant to Article 3 hereof, or is about to be converted into
Common Stock the Company in its discretion may, instead of issuing a new
Security, pay, purchase or redeem such Security or authorize the conversion of
the same, as the case may be.

     Upon the issuance of any new Securities under this Section 2.07, the
Company may, as a condition to such issuance, require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Trustee) connected therewith.

     Every new Security issued pursuant to this Section 2.07 in lieu of any
mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all benefits of this Indenture equally and proportionately with any
and all other Securities duly issued hereunder.

     The provisions of this Section 2.07 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.

     SECTION 2.08. OUTSTANDING SECURITIES; DETERMINATIONS OF HOLDERS' ACTION.
Securities outstanding at any time are all the Securities authenticated by the
Trustee except for those canceled by it, those delivered to it for cancellation
and those described in this Section 2.08 as not outstanding. A Security does not
cease to be outstanding because the Company or an Affiliate thereof holds the
Security; PROVIDED, HOWEVER, that in determining whether the Holders of the
requisite Principal Amount of Securities have given or concurred in any request,
demand, authorization, direction, notice, consent or waiver hereunder,
Securities owned by the Company or any Affiliate of the Company shall be
disregarded and deemed not to be outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities which a
Trust Officer of the Trustee actually knows to be so owned shall be so
disregarded. Subject to the foregoing, only Securities outstanding at the time
of such determination shall be considered in any such determination (including,
without limitation, determinations pursuant to Articles 6 and 9).

     If a Security is replaced or paid pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced or paid Security is held by a bona fide purchaser.


                                      -21-

<PAGE>


     If the Paying Agent holds, in accordance with this Indenture, on a
Redemption Date, or on the Business Day following a Purchase Date or a
Fundamental Change Redemption Date, or on Stated Maturity, money or securities,
if permitted hereunder, sufficient to pay Securities payable on that date, then
on and after that date such Securities shall cease to be outstanding and
Original Issue Discount and interest, if any, on such Securities shall cease to
accrue; provided, that if such Securities are to be redeemed, notice of such
redemption has been duly given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made.

     If a Security is converted in accordance with Article 11, then from and
after such conversion such Security shall cease to be outstanding and Original
Issue Discount and interest, if any, shall cease to accrue on such Security.

     SECTION 2.09. TEMPORARY SECURITIES. Pending the preparation of definitive
Securities, the Company may execute, and upon Company Order the Trustee shall
authenticate and make available for delivery, temporary Securities which are
printed, lithographed, typewritten, mimeographed or otherwise produced, in any
authorized denomination, substantially of the tenor of the definitive Securities
in lieu of which they are issued and with such appropriate insertions,
omissions, substitutions and other variations as the officers executing such
Securities may determine, as conclusively evidenced by their execution of such
Securities.

     If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at the office
or agency of the Company designated for such purpose pursuant to Section 2.03,
without charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities the Company shall execute and the Trustee shall
authenticate and make available for delivery in exchange therefor a like
Principal Amount of definitive Securities of authorized denominations. Until so
exchanged the temporary Securities shall in all respects be entitled to the same
benefits under this Indenture as definitive Securities.

     SECTION 2.10. CANCELLATION. All Securities surrendered for payment,
purchase by the Company pursuant to Article 3, conversion, redemption or
registration of transfer or exchange shall, if surrendered to any Person other
than the Trustee, be delivered to the Trustee and shall be promptly canceled by
it, or, if surrendered to the Trustee, shall be promptly cancelled by it. The
Company may at any time deliver to the Trustee for cancellation any Securities
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and all Securities so delivered shall be
promptly canceled by the Trustee. The Company may not issue new Securities to
replace Securities it has paid for or delivered to the Trustee for cancellation
or that any Holder has converted pursuant to Article 11. No Securities shall be
authenticated in lieu of or in exchange for any Securities canceled as provided
in this


                                      -22-

<PAGE>


Section  2.10,  except as expressly  permitted by this  Indenture.  All canceled
Securities held by the Trustee shall be disposed of by the Trustee in accordance
with its customary practice.

     SECTION 2.11. PERSONS DEEMED OWNERS. Prior to due presentment of a Security
for registration of transfer, the Company, the Trustee and any agent of the
Company or the Trustee may treat the Person in whose name such Security is
registered as the owner of such Security for the purpose of receiving payment of
Principal Amount, Issue Price, accrued Original Issue Discount, accrued
Liquidated Damages, if any, Redemption Price, Purchase Price, Fundamental Change
Redemption Price and interest, if any, in respect thereof, for the purpose of
conversion and for all other purposes whatsoever, whether or not such Security
be overdue, and none of the Company, the Trustee or any agent of the Company or
the Trustee shall be affected by notice to the contrary.

     SECTION 2.12. CUSIP NUMBERS. The Company in issuing the Securities may use
"CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to Holders; provided
that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained
in any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such numbers. The Company will
promptly notify the Trustee of any change in the "CUSIP" numbers.


                                    ARTICLE 3

                            REDEMPTION AND PURCHASES

     SECTION 3.01. RIGHT TO REDEEM; NOTICES TO TRUSTEE. The Company, at its
option, may redeem the Securities in accordance with the provisions of
paragraphs 5 and 7 of the Securities. If the Company elects to redeem Securities
pursuant to paragraph 5 of the Securities, it shall notify the Trustee in
writing of the Redemption Date, the Principal Amount of Securities to be
redeemed and the Redemption Price.

     The Company shall give the notice to the Trustee provided for in this
Section 3.01 (i) in the case of any redemption of fewer than all of the
Securities, at least 60 days before the Redemption Date and (ii) in the case of
a redemption of all of the Securities, at least 45 days before the Redemption
Date, in each case unless a shorter notice shall be satisfactory to the Trustee.

     SECTION 3.02. SELECTION OF SECURITIES TO BE REDEEMED. If less than all the
Securities held in definitive form are to be redeemed, the Trustee shall select
the definitive Securities to be redeemed pro rata or by lot or by a method the
Trustee considers fair and appropriate (as long as


                                      -23-

<PAGE>


such method is not  prohibited  by the rules of any stock  exchange on which the
Securities  are then listed,  if any).  The Trustee  shall make the selection at
least 30 days,  but not more  than 60 days,  before  the  Redemption  Date  from
outstanding  definitive  Securities not previously  called for  redemption.  The
Trustee may select for redemption  portions of the Principal of Securities  that
have  denominations  larger than  $1,000.  Securities  and  portions of them the
Trustee selects shall be in Principal Amounts of $1,000 or a multiple of $1,000.
Provisions  of this  Indenture  that apply to definitive  Securities  called for
redemption  also  apply  to  portions  of  definitive   Securities   called  for
redemption.  The Trustee  shall  notify the Company  promptly of the  definitive
Securities or portions of definitive Securities to be redeemed.

     Any interest in a Security held in global form by and registered in the
name of the Depositary or its nominee to be redeemed in whole or in part will be
redeemed in accordance with the procedures of the Depositary.

     If any Security selected for partial redemption is converted in part before
termination of the conversion right with respect to the portion of the Security
so selected, the converted portion of such Security shall be deemed (so far as
may be) to be the portion selected for redemption. Securities which have been
converted during a selection of Securities to be redeemed may be treated by the
Trustee as outstanding for the purpose of such selection.

     SECTION 3.03. NOTICE OF REDEMPTION. At least 30 days but not more than 60
days before a Redemption Date, the Company shall mail a notice of redemption by
first-class mail, postage prepaid, to each Holder of Securities to be redeemed.

     The notice shall identify the Securities to be redeemed and shall state:

     (1) the Redemption Date;

     (2) the Redemption Price;

     (3) the Conversion Rate;

     (4) the name and address of the Paying Agent and Conversion Agent;

     (5) that Securities called for redemption may be converted at any time
before the close of business on the last Trading Day prior to the Redemption
Date;

     (6) that Holders who want to convert Securities must satisfy the
requirements set forth in paragraph 9 of the Securities;


                                      -24-

<PAGE>


     (7) that Securities called for redemption must be surrendered to the Paying
Agent to collect the Redemption Price;

     (8) if fewer than all the outstanding Securities are to be redeemed, the
certificate number and Principal Amounts of the particular Securities to be
redeemed;

     (9) that Original Issue Discount on Securities called for redemption will
cease to accrue on and after the Redemption Date; and

     (10) the CUSIP number or numbers for the Securities.

The notice if mailed in the manner herein provided shall be conclusively
presumed to have been duly given, whether or not the Holder receives such
notice. In any case, failure to give such notice by mail or any defect in the
notice to the Holder of any Security designated for redemption as a whole or in
part shall not affect the validity of the proceedings for the redemption of any
other Security.

     At the Company's request, the Trustee shall give the notice of redemption
in the Company's name and at the Company's expense.

     SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION. Once notice of redemption is
given, Securities called for redemption become due and payable on the Redemption
Date and at the Redemption Price stated in the notice except for Securities
which are converted in accordance with the terms of this Indenture.

     Upon the later of the Redemption Date or the date such Securities are
surrendered to the Paying Agent, such Securities shall be paid at the Redemption
Price stated in the notice.

     SECTION 3.05. DEPOSIT OF REDEMPTION PRICE. Prior to 10:00 a.m., New York
City time, on the Redemption Date, the Company shall deposit with the Paying
Agent (or if the Company or an Affiliate of the Company is the Paying Agent,
shall segregate and hold in trust) money sufficient to pay the Redemption Price
of all Securities to be redeemed on that date other than Securities or portions
of Securities called for redemption which prior thereto have been delivered by
the Company to the Trustee for cancellation or have been converted for Common
Stock, and on or after the Redemption Date (unless the Company shall default in
the payment of the Securities at the Redemption Price), Original Issue Discount
on the Securities or portion of Securities called for redemption shall cease to
accrue and such Securities shall cease after the close of business on the
Business Day immediately preceding the Redemption Date to be convertible into
Common Stock and, except as provided in this Section 3.05 and Section 8.02, to
be entitled to any benefit or security under this Indenture, and the Holders
thereof shall have no right in respect of such Securities except the right to
receive the Redemption Price thereof and unpaid interest, if any, to


                                      -25-

<PAGE>


(but  excluding)  the  Redemption  Date.  The Paying  Agent shall as promptly as
practicable return to the Company any money, with interest, if any, thereon, not
required for that purpose because of conversion of Securities.  If such money is
then held by the Company in trust and is not  required for such purpose it shall
be discharged from such trust.

     SECTION 3.06. SECURITIES REDEEMED IN PART. Upon surrender of a Security
that is redeemed in part, the Company shall execute and the Trustee shall
authenticate and deliver to the Holder a new Security in an authorized
denomination equal in Principal Amount to the unredeemed portion of the Security
surrendered.

     SECTION 3.07. CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION. In connection
with any redemption of Securities, the Company may arrange for the purchase and
conversion for Common Stock of any Securities called for redemption by an
agreement with one or more investment bankers or other purchasers to purchase
such Securities by paying to the Paying Agent in trust for the Holders, on or
before the close of business on the Redemption Date, an amount that, together
with any amounts deposited with the Paying Agent by or on behalf of the Company
for the redemption of the Securities, is not less than the applicable Redemption
Price, including interest, if any, to the Redemption Date, of such Securities.
Notwithstanding anything to the contrary contained in this Article 3, the
obligation of the Company to pay the Redemption Price of such Securities,
including all accrued Original Issue Discount, shall be deemed to be satisfied
and discharged to the extent such amount is so paid by such purchasers. If such
an agreement is entered into, a copy of which shall be filed with the Trustee 5
days prior to the date fixed for redemption, any Securities not duly surrendered
for conversion by the Holders thereof may, at the option of the Company, be
deemed, to the fullest extent permitted by law, acquired by such purchasers from
such Holders and (notwithstanding anything to the contrary contained in Article
11) surrendered by such purchasers for conversion, all immediately prior to the
close of business on the Redemption Date, subject to payment of the above amount
as aforesaid. The Paying Agent shall hold and pay to the Holders whose
Securities are selected for redemption any such amount paid to it in the same
manner as it would money deposited with it by the Company for the redemption of
Securities. Without the Paying Agent's prior written consent, no arrangement
between the Company and such purchasers for the purchase and conversion of any
Securities shall increase or otherwise affect any of the powers, duties,
responsibilities or obligations of the Paying Agent as set forth in this
Indenture, and the Company agrees to indemnify the Paying Agent from, and hold
it harmless against, any loss, liability or expense (including the reasonable
fees and expenses of counsel) arising out of or in connection with any such
arrangement for the purchase and conversion of any Securities between the
Company and such purchasers, including the costs and expenses incurred by the
Paying Agent in the defense of any claim or liability arising out of or in
connection with the exercise or performance of any of its powers, duties,
responsibilities or obligations under this Indenture.


                                      -26-

<PAGE>


     SECTION 3.08. PURCHASE OF SECURITIES AT OPTION OF THE HOLDER.

     (a) GENERAL. Subject to Section 3.10, Securities shall be purchased by the
Company pursuant to paragraph 6 of the Securities as of March 25, 2003, March
25, 2008 and March 25, 2013 (each, a "Purchase Date"), at the purchase price
specified therein (each, a "Purchase Price") at the option of the Holder
thereof, upon:

     (1) delivery to the Paying Agent by the Holder of a written notice of
purchase (a "Purchase Notice") at any time from the opening of business on the
date that is 20 Business Days prior to a Purchase Date until the close of
business on such Purchase Date, stating:

         (A) the certificate number of the Security which the Holder will
deliver to be purchased;

         (B) the portion of the Principal Amount of the Security which the
Holder will deliver to be purchased, which portion must be $1,000 or a multiple
thereof;

         (C) that such Security shall be purchased by the Company as of the
Purchase Date pursuant to the terms and conditions specified in paragraph 6 of
the Securities and in this Indenture; and

         (D) if the Company elects, pursuant to a Company Notice, to pay the
Purchase Price to be paid as of such Purchase Date in Common Stock, in whole or
in part, but such portion of the Purchase Price shall ultimately be payable to
such Holder entirely in cash because any of the conditions to the payment of the
Purchase Price (or portion thereof) in Common Stock are not satisfied prior to
or on the Purchase Date, as set forth in Section 3.08(d), whether such Holder
elects (x) to withdraw such Purchase Notice as to some or all of the Securities
to which such Purchase Notice relates (stating the Principal Amount at maturity
and certificate numbers of the Securities as to which such withdrawal shall
relate), or (y) to receive cash in respect of the entire Purchase Price for all
Securities to which such Purchase Notice relates; and

     (2) delivery of such Security to the Paying Agent prior to, on or after the
Purchase Date (together with all necessary endorsements) at the offices of the
Paying Agent, such delivery being a condition to receipt by the Holder of the
Purchase Price therefor; provided, however, that such Purchase Price shall be so
paid pursuant to this Section 3.08 only if the Security so delivered to the
Paying Agent shall conform in all respects to the description thereof in the
related Purchase Notice.

     If a Holder, in such Holder's Purchase Notice (and in any written notice of
withdrawal of a portion of a Holder's Securities previously submitted for
purchase pursuant to a Purchase Notice, the portion that remains subject to the
Purchase Notice), fails to indicate such Holder's choice with respect to the
election set forth in clause (D) of Section 3.08(a)(1), such Holder shall be
deemed to


                                      -27-

<PAGE>


have  elected to receive  cash in respect of the entire  Purchase  Price for all
Securities  subject to such Purchase  Notice in the  circumstances  set forth in
such clause (D).

     The Company shall purchase from the Holder thereof, pursuant to this
Section 3.08, a portion of a Security if the Principal Amount of such portion is
$1,000 or a multiple of $1,000. Provisions of this Indenture that apply to the
purchase of all of a Security also apply to the purchase of such portion of such
Security.

     Any purchase by the Company contemplated pursuant to the provisions of this
Section 3.08 shall be consummated by the delivery of the consideration to be
received by the Holder promptly following the later of the Purchase Date and the
time of delivery of the Security.

     Notwithstanding anything herein to the contrary, any Holder delivering to
the Paying Agent the Purchase Notice contemplated by this Section 3.08(a) shall
have the right at any time prior to the close of business on the Purchase Date
to withdraw such Purchase Notice by delivery of a written notice of withdrawal
to the Paying Agent in accordance with Section 3.10.

     The Paying Agent shall promptly notify the Company of the receipt by it of
any Purchase Notice or written notice of withdrawal thereof.

     (b) COMPANY'S RIGHT TO ELECT MANNER OF PAYMENT OF PURCHASE PRICE. The
Company may elect with respect to any Purchase Date to pay the Purchase Price in
respect of the Securities to be purchased pursuant to Section 3.08(a) as of such
Purchase Date, in cash or Common Stock, or in any combination of cash and Common
Stock, subject to the conditions set forth in Sections 3.08(c) and (d). The
Company shall designate, in the Company Notice delivered pursuant to Section
3.08(e), whether the Company will purchase the Securities for cash or Common
Stock, or, if a combination thereof, the percentages of the Purchase Price of
Securities in respect of which it will pay in cash and/or Common Stock; PROVIDED
that the Company will pay cash for fractional interests in Common Stock. For
purposes of determining the existence of potential fractional interests, all
Securities subject to purchase by the Company held by a Holder shall be
considered together (no matter how many separate certificates are to be
presented). Each Holder whose Securities are purchased pursuant to this Section
3.08 shall receive the same percentage of cash and/or Common Stock in payment of
the Purchase Price for such Securities, except (i) as provided in Section
3.08(d) with regard to the payment of cash in lieu of fractional interests in
Common Stock and (ii) in the event that the Company is unable to purchase the
Securities of a Holder or Holders for Common Stock because any necessary
qualifications or registrations of the Common Stock under applicable federal or
state securities laws cannot be obtained, the Company may purchase the
Securities of such Holder or Holders for cash. Once the Company has given its
Company Notice to Holders the Company may not change its election with respect
to the consideration (or components or percentages of components thereof) to be
paid except pursuant to this Section 3.08(b) or Section 3.08(d).


                                      -28-

<PAGE>


     At least two Business Days before the Company Notice Date (as defined in
Section 3.08(c)), the Company shall deliver an Officers' Certificate to the
Trustee specifying:

              (i) the manner of payment selected by the Company,

              (ii) the information required by Section 3.08(e),

              (iii) if the Company elects to pay the Purchase Price, or a
specified percentage thereof, in Common Stock, that the conditions to such
manner of payment set forth in Section 3.08(d) have been or will be complied
with, and

              (iv) whether the Company desires the Trustee to give the Company
Notice required by Section 3.08(e).

     (c) PURCHASE WITH CASH. At the option of the Company, the Purchase Price of
Securities in respect of which a Purchase Notice pursuant to Section 3.08(a) has
been given, or a specified percentage thereof, may be paid by the Company with
cash equal to the aggregate Purchase Price, or such specified percentage
thereof, as the case may be, of such Securities. If the Company elects to
purchase Securities with cash, a Company Notice as provided in Section 3.08(e)
shall be sent to Holders (and to beneficial owners as required by applicable
law) not less than 20 Business Days prior to the Purchase Date (the "Company
Notice Date").

     (d) PAYMENT BY ISSUANCE OF COMMON STOCK. At the option of the Company, the
Purchase Price of Securities in respect of which a Purchase Notice pursuant to
Section 3.08(a) has been given, or a specified percentage thereof, may be paid
by the Company by the issuance of a number of shares of Common Stock equal to
the quotient obtained by dividing (i) the amount of cash to which the Holders
would have been entitled had the Company elected to pay all or such specified
percentage, as the case may be, of the Purchase Price of such Securities in cash
by (ii) the Market Price of a share of Common Stock, subject to the next
succeeding paragraph.

     The Company will not issue a fractional share of Common Stock in payment of
the Purchase Price. Instead the Company will pay cash for the current market
value of the fractional share. The current market value of a fraction of a share
shall be determined by multiplying the Market Price by such fraction and
rounding the product to the nearest whole cent (with one-half cent being rounded
upwards). It is understood that if a Holder elects to have more than one
Security purchased, the number of shares of Common Stock shall be based on the
aggregate amount of Securities to be purchased.

     If the Company elects to purchase the Securities by the issuance of shares
of Common Stock, a Company Notice as provided in Section 3.08(e) shall be sent
to the Holders (and to beneficial owners as required by applicable law) not
later than the Company Notice Date.


                                      -29-

<PAGE>


     The Company's right to exercise its election to purchase the Securities
pursuant to Section 3.08 through the issuance of shares of Common Stock shall be
conditioned upon:

         (i) the Company having given timely Company Notice of election to
purchase all or a specified percentage of the Securities with Common Stock as
provided herein;

         (ii) the registration of the shares of Common Stock to be issued in
respect of the payment of the specified percentage of the Purchase Price under
the Securities Act; unless the shares of Common Stock so issued can be resold by
the Securityholder receiving such shares without registration under the
Securities Act pursuant to Rule 144 under the Securities Act or otherwise
(unless such Securityholder is the Company or an Affiliate of the Company);

         (iii)any necessary qualification or registration under applicable state
securities laws or the availability of an exemption from such qualification and
registration; and

         (iv) the receipt by the Trustee of an Officers' Certificate and an
Opinion of Counsel each stating that (A) the terms of the issuance of the Common
Stock are in conformity with this Indenture and (B) the shares of Common Stock
to be issued by the Company in payment of the specified percentage of the
Purchase Price in respect of Securities have been duly authorized and, when
issued and delivered pursuant to the terms of this Indenture in payment of the
specified percentage of the Purchase Price in respect of Securities, will be
validly issued, fully paid and nonassessable, and, in the case of such Officers'
Certificate, stating that conditions (i), (ii) and (iii) above have been
satisfied and, in the case of such Opinion of Counsel, stating that conditions
(ii) and (iii) above have been satisfied.

Such Officers' Certificate shall also set forth the number of shares of Common
Stock to be issued for each $1,000 Principal Amount of Securities and the Sale
Price of a share of Common Stock on each Trading Day during the period during
which the Market Price is calculated and ending on the Purchase Date. The
Company may elect to pay the Purchase Price (or any portion thereof) in Common
Stock only if the information necessary to calculate the Market Price is
reported in a daily newspaper of national circulation. Upon determination of the
actual number of shares of Common Stock in accordance with the provisions of
this Section 3.08, the Company will publish, or cause the publication of, such
determination in a daily newspaper of national circulation. If such conditions
are not satisfied with respect to a Holder or Holders prior to or on the
Purchase Date and the Company elected to purchase the Securities to be purchased
as of such Purchase Date pursuant to this Section 3.08 through the issuance of
shares of Common Stock, the Company shall pay the entire Purchase Price in
respect of such Securities of such Holder or Holders in cash.

     The "Market Price" means the average of the Sale Prices of the Common Stock
for the five Trading Day period ending on the third Business Day prior to the
applicable Purchase Date (if the third Business Day prior to the applicable
Purchase Date is a Trading Day or, if it is not a Trading


                                      -30-

<PAGE>


Day,  then  on  the  last  Trading  Day  prior  to  such  third  Business  Day),
appropriately  adjusted to take into account the  occurrence,  during the period
commencing on the first of such Trading Days during such five Trading Day period
and ending on such Purchase Date, of any event described in Section 11.06, 11.07
or 11.08;  subject,  however,  to the conditions set forth in Sections 11.09 and
11.10.  The "Sale  Price" of the Common  Stock on any date means the closing per
share sale price (or if no closing  sale price is  reported,  the average of the
bid and ask  prices or, if more than one,  in either  case,  the  average of the
average bid and  average  ask prices) on such date as reported in the  composite
transactions  for the principal United States  securities  exchange on which the
Common Stock is traded or, if the Common Stock is not listed on a United  States
national or regional stock exchange,  as reported by the National Association of
Securities Dealers Automated Quotation System.

     (e) NOTICE OF ELECTION. The Company's notices of election to purchase with
cash or Common Stock, or any combination thereof, shall be sent to the Holders
(and to beneficial owners as required by applicable law) in the manner provided
in Section 12.02 at the time specified in Section 3.08(c) or (d), as applicable
(each, a "Company Notice"). Such Company Notices shall state the manner of
payment elected and shall contain the following information:

     In the event the Company has elected to pay a Purchase Price (or a
specified percentage thereof) with Common Stock, the Company Notice shall:

         (1) state that each Holder will receive Common Stock with a Market
Price determined as of a specified date prior to the Purchase Date equal to such
specified percentage of the Purchase Price of the Securities held by such Holder
(except any cash amount to be paid in lieu of fractional share); and

         (2) set forth the method of calculating the Market Price and state that
because the Market Price of Common Stock will be determined prior to the
Purchase Date, the Holders will bear the market risk with respect to the value
of the Common Stock to be received from the date such Market Price is determined
to the Purchase Date.

     In any case, each Company Notice shall include a form of Purchase Notice to
be completed by a Securityholder and shall state:

              (i) the Purchase Price and Conversion Rate;

              (ii) the name and address of the Paying Agent and the Conversion
Agent;

              (iii) that Securities as to which a Purchase Notice has been given
may be converted only if the applicable Purchase Notice has been withdrawn in
accordance with the terms of this Indenture;


                                      -31-

<PAGE>


              (iv) that Securities must be surrendered to the Paying Agent to
collect payment;

              (v) that the Purchase Price for any Security as to which a
Purchase Notice has been given and not withdrawn will be paid promptly following
the later of the Purchase Date and the time of surrender of such Security as
described in (iv);

              (vi) the procedures the Holder must follow under Section 3.08;

              (vii) briefly, the conversion rights of the Securities; and

              (viii) the procedures for withdrawing a Purchase Notice
(including, without limitation, for a conditional withdrawal pursuant to the
terms of Section 3.08 (a) (1) (D) or Section 3.10).

     At the Company's request, the Trustee shall give the Company Notice to
Holders of the Securities in the Company's name and at the Company's expense;
provided, however, that, in all cases, the text of the Company Notice shall be
prepared by the Company.

     (f) COVENANTS OF THE COMPANY. All shares of Common Stock delivered upon
conversion or purchase of the Securities shall be newly issued shares or
treasury shares, shall be fully paid and nonassessable and shall be free from
preemptive rights and free of any lien or adverse claim.

     The Company shall use its best efforts to list or cause to have quoted all
such shares of Common Stock on each United States national securities exchange
or over-the-counter or other domestic market on which the Common Stock is then
listed or quoted.

     (g) PROCEDURE UPON PURCHASE. On the Business Day following the Purchase
Date, the Company shall deposit with the Paying Agent cash (in respect of a cash
purchase under Section 3.08(c) or for fractional interests, as applicable), or
shares of Common Stock, or a combination thereof, as applicable, sufficient to
pay the aggregate Purchase Price of the Securities to be purchased pursuant to
this Section 3.08. As soon as practicable after the Purchase Date, the Company
shall deliver to each Holder entitled to receive Common Stock, through the
Paying Agent, a certificate for the number of full shares of Common Stock, as
applicable, issuable in payment of such Purchase Price and cash in lieu of any
fractional interests. The Person in whose name the certificate for Common Stock
is registered shall be treated as a holder of record following the Purchase
Date. Subject to Section 3.08(d), no payment or adjustment will be made for
dividends on the Common Stock the record date for which occurred on or prior to
the Purchase Date.


                                      -32-

<PAGE>


     (h) TAXES. If a Holder of a Security is paid in Common Stock, the Company
shall pay any documentary, stamp or similar issue or transfer tax due on such
issue of shares of Common Stock. However, the Holder shall pay any such tax
which is due because the Holder requests the shares of Common Stock to be issued
in a name other than the Holder's name. The Paying Agent may refuse to deliver
the certificates representing the Common Stock being issued in a name other than
the Holder's name until the Paying Agent receives a sum sufficient to pay any
tax which will be due because the shares of Common Stock are to be issued in a
name other than the Holder's name. Nothing herein shall preclude any income tax
withholding required by law or regulations.

     SECTION 3.09. REDEMPTION AT OPTION OF THE HOLDER UPON A FUNDAMENTAL CHANGE.

     (a) If a Fundamental Change shall occur at any time prior to March 25,
2018, subject to Section 3.10, each Holder of Securities shall have the right,
at such Holder's option, to require the Company to redeem any or all of such
Holder's Securities on the date (the "Fundamental Change Repurchase Date") (or
if such date is not a Business Day, the next succeeding Business Day) that is 45
days after the date of the Company's notice of such Fundamental Change. The
Securities will be redeemable in whole multiples of $1,000 of Principal Amount
at their accreted value on the Fundamental Change Repurchase Date. The Company
shall redeem such Securities at a price (the "Fundamental Change Redemption
Price") equal to the Issue Price plus accrued Original Issue Discount to, but
excluding, the Fundamental Change Repurchase Date; provided that, with respect
to a Fundamental Change, if the Applicable Price in connection with a
Fundamental Change is less than the Reference Market Price, the Company shall
redeem such Securities at a price equal to the foregoing Fundamental Change
Redemption Price multiplied by the fraction obtained by dividing the Applicable
Price by the Reference Market Price.

     (b) The Company, or at its request (which must be received by the Trustee
at least three Business Days prior to the date the Trustee is requested to give
such notice as described below) the Trustee in the name of and at the expense of
the Company, shall mail to all Holders of record of the Securities a notice (a
"Fundamental Change Redemption Notice") of the occurrence of a Fundamental
Change and of the redemption right arising as a result thereof on or before the
tenth day after the occurrence of such Fundamental Change. The Company shall
promptly furnish the Trustee a copy of such notice.

     (c) For a Security to be so redeemed at the option of the Holder, the
Paying Agent must receive such Security with the form entitled "Option to Elect
Redemption Upon a Fundamental Change" on the reverse thereof duly completed,
together with such Security duly endorsed for transfer, on or before the 30th
day after the date of such notice (or if such 30th day is not a Business Day,
the immediately preceding Business Day). All questions as to the validity,
eligibility (including time of receipt) and acceptance of any Security for
redemption shall be determined by the Company, whose determination shall be
final and binding.


                                      -33-

<PAGE>


     SECTION 3.10. EFFECT OF PURCHASE NOTICE OR FUNDAMENTAL CHANGE REDEMPTION
NOTICE. Upon receipt by the Company of the Purchase Notice or Fundamental Change
Redemption Notice specified in Section 3.08(a) or Section 3.09(b), as
applicable, the Holder of the Security in respect of which such Purchase Notice
or Fundamental Change Redemption Notice, as the case may be, was given shall
(unless such Purchase Notice or Fundamental Change Redemption Notice is
withdrawn as specified in the following two paragraphs) thereafter be entitled
to receive solely the Purchase Price or Fundamental Change Redemption Price, as
the case may be, with respect to such Security. Such Purchase Price or
Fundamental Change Redemption Price shall be paid to such Holder promptly
following the later of (x) the Purchase Date or the Fundamental Change
Redemption Date, as the case may be, with respect to such Security (provided the
conditions in Section 3.08(a) or Section 3.09(c), as applicable, have been
satisfied) and (y) the time of delivery of such Security to the Paying Agent by
the Holder thereof in the manner required by Section 3.08(a) or Section 3.09(c),
as applicable. Securities in respect of which a Purchase Notice or Fundamental
Change Redemption Notice, as the case may be, has been given by the Holder
thereof may not be converted for shares of Common Stock on or after the date of
the delivery of such Purchase Notice (or Fundamental Change Redemption Notice,
as the case may be), unless such Purchase Notice (or Fundamental Change
Redemption Notice, as the case may be) has first been validly withdrawn as
specified in the following two paragraphs.

     A Purchase Notice or Fundamental Change Redemption Notice, as the case may
be, may be withdrawn by means of a written notice of withdrawal delivered to the
office of the Paying Agent at any time prior to the close of business on the
Purchase Date or the Fundamental Change Redemption Date, as the case may be, to
which it relates specifying:

     (1) the certificate number of the Security in respect of which such notice
of withdrawal is being submitted,

     (2) the Principal Amount of the Security with respect to which such notice
of withdrawal is being submitted, and

     (3) the Principal Amount, if any, of such Security which remains subject to
the original Purchase Notice or Fundamental Change Redemption Notice, as the
case may be, and which has been or will be delivered for purchase by the
Company.

     A written notice of withdrawal of a Purchase Notice may be in the form of
(i) a conditional withdrawal contained in a Purchase Notice pursuant to the
terms of Section 3.08(a)(1)(D) or (ii) a conditional withdrawal containing the
information set forth in Section 3.08(a)(1)(D) and the preceding paragraph and
contained in a written notice of withdrawal delivered to the Paying Agent as set
forth in the preceding paragraph.


                                      -34-

<PAGE>


     There shall be no purchase of any Securities pursuant to Section 3.08
(other than through the issuance of Common Stock in payment of the Purchase
Price, including cash in lieu of any fractional shares) or redemption pursuant
to Section 3.09 if there has occurred (prior to, on or after, as the case may
be, the giving, by the Holders of such Securities, of the required Purchase
Notice or Fundamental Change Redemption Notice, as the case may be) and is
continuing an Event of Default (other than a default in the payment of the
Purchase Price or Fundamental Change Redemption Price, as the case may be, with
respect to such Securities).

     SECTION 3.11. DEPOSIT OF PURCHASE PRICE OR FUNDAMENTAL CHANGE REDEMPTION
PRICE. On or before the Business Day following a Purchase Date or a Fundamental
Change Redemption Date, as the case may be, the Company shall deposit with the
Trustee or with the Paying Agent (or, if the Company or an Affiliate of the
Company is acting as the Paying Agent, shall segregate and hold in trust as
provided in Section 2.04) an amount of money and/or securities, if permitted
hereunder, sufficient to pay the aggregate Purchase Price or Fundamental Change
Redemption Price, as the case may be, of all the Securities or portions thereof
which are to be purchased as of such Purchase Date or Fundamental Change
Redemption Date, as the case may be.

     SECTION 3.12. SECURITIES PURCHASED IN PART. Any Security that is to be
purchased, or redeemed upon a Fundamental Change, only in part shall be
surrendered at the office of the Paying Agent (with, if the Company or the
Trustee so requires, due endorsement by, or a written instrument of transfer in
form satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or such Holder's attorney duly authorized in writing) and the Company
shall execute and the Trustee shall authenticate and deliver to the Holder of
such Security, without service charge, a new Security or Securities, of any
authorized denomination as requested by such Holder in aggregate Principal
Amount equal to, and in exchange for, the portion of the Principal Amount of the
Security so surrendered which is not purchased or redeemed.

     SECTION 3.13. COVENANT TO COMPLY WITH SECURITIES LAWS UPON PURCHASE OF
SECURITIES. In connection with any offer to purchase or redemption of Securities
under Section 3.08 or 3.09 hereof, the Company shall (i) comply with Rule 13e-4
(which term, as used herein, includes any successor provision thereto) under the
Exchange Act, if applicable, (ii) file the related Schedule 13E-4 (or any
successor schedule, form or report) under the Exchange Act, if applicable, and
(iii) otherwise comply with all Federal and state securities laws so as to
permit the rights and obligations under Section 3.08 and 3.09 to be exercised in
the time and in the manner specified in Section 3.08 and 3.09.

     SECTION 3.14. REPAYMENT TO THE COMPANY. The Trustee and the Paying Agent
shall return to the Company any cash or shares of Common Stock that remain
unclaimed as provided in paragraph 14 of the Securities, together with interest
or dividends, if any, thereon, held by them for the payment of a Purchase Price
or Fundamental Change Redemption Price, as the case may be; provided, however,
that to the extent that the aggregate amount of cash or shares of Common


                                      -35-

<PAGE>


Stock  deposited by the Company  pursuant to Section 3.11 exceeds the  aggregate
Purchase Price or Fundamental  Change  Redemption  Price, as the case may be, of
the Securities or portions thereof which the Company is obligated to purchase as
of the Purchase Date or Fundamental  Change Redemption Date, as the case may be,
then promptly  after the Business Day following the Purchase Date or Fundamental
Change  Redemption  Date,  as the case may be, the Trustee and the Paying  Agent
shall return any such excess to the Company together with interest or dividends,
if any, thereon.


                                    ARTICLE 4

                                    COVENANTS

     SECTION 4.01. PAYMENT OF SECURITIES. The Company shall promptly make all
payments in respect of the Securities on the dates and in the manner provided in
the Securities or pursuant to this Indenture. Principal Amount, Issue Price,
accrued Original Issue Discount, accrued Liquidated Damages, if any, Redemption
Price, Purchase Price, Fundamental Change Redemption Price and interest, if any,
shall be considered paid on the applicable date due or, in the case of a
Purchase Price or Fundamental Change Redemption Price, on the Business Day
following the applicable Purchase Date or Fundamental Change Redemption Date, as
the case may be, if on such date the Trustee or the Paying Agent holds, in
accordance with this Indenture, money or securities, if permitted hereunder,
sufficient to pay all such amount then due.

     The Company shall pay interest on overdue amounts at the rate set forth in
paragraph 1 of the Securities and it shall pay interest on overdue interest at
the same rate compounded semiannually (to the extent that the payment of such
interest shall be legally enforceable), which interest on overdue interest shall
accrue from the date such amounts became overdue and shall be in lieu of, and
not in addition to, the continued accrual of Original Issue Discount.

     SECTION 4.02. FINANCIAL INFORMATION; SEC REPORTS. The Company will deliver
to the Trustee (a) as soon as available and in any event within 90 days after
the end of each fiscal year of the Company (i) a consolidated balance sheet of
the Company and its Subsidiaries as of the end of such fiscal year and the
related consolidated statements of operations, stockholders' equity and cash
flows for such fiscal year, all reported on by an independent public accountant
of nationally recognized standing and (ii) a report containing a management's
discussion and analysis of the financial condition and results of operations and
a description of the business and properties of the Company and (b) as soon as
available and in any event within 45 days after the end of each of the first
three quarters of each fiscal year of the Company (i) an unaudited consolidated
financial report for such quarter and (ii) a report containing a management's
discussion and analysis of the financial condition and results of operations of
the Company; PROVIDED that the foregoing shall not be required for any fiscal
year or quarter, as the case may be, with respect to which the Company


                                      -36-

<PAGE>


files or expects to file with the Trustee an annual report or quarterly  report,
as the case may be, pursuant to the third paragraph of this Section 4.02.

     So long as the Securities or the Common Stock issued upon conversion of the
Securities are Restricted Securities, if the Company is not subject to either
Section 13 or 15(d) of the Exchange Act, the Company shall at the request of any
Holder of Securities (or holders of Common Stock issued upon conversion of the
Securities) provide to such Holder of Securities (or holders of such Common
Stock) and any prospective purchaser designated by such Holders (or holders of
such Common Stock), as the case may be, such information, if any, required by
Rule 144A(d)(4) under the Securities Act.

     The Company shall file with the Trustee, within 15 days after it files such
annual and quarterly reports, information, documents and other reports with the
SEC, copies of its annual report and of the information, documents and other
reports (or copies of such portions of any of the foregoing as the SEC may by
rules and regulations prescribe) which the Company is required to file with the
SEC pursuant to Section 13 or 15(d) of the Exchange Act.

     Delivery of such reports, information and documents to the Trustee is for
informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).

     SECTION 4.03. COMPLIANCE CERTIFICATE. The Company shall deliver to the
Trustee, within 120 days after the end of each fiscal year of the Company
(commencing with the fiscal year of the Company ending December 27, 1998), an
Officers' Certificate in which one of the two Officers signing such certificate
is either the principal executive officer, principal financial officer or
principal accounting officer of the Company, stating whether or not to the best
knowledge of the signers thereof the Company is in Default in the performance
and observance of any of the terms, provisions and conditions of this Indenture
(without regard to any period of grace or requirement of notice provided
hereunder) and, if the Company shall be in Default, specifying all such Defaults
and the nature and status thereof of which the signers may have knowledge.

     The Company will deliver to a Trust Officer of the Trustee, forthwith upon
becoming aware of any Default in the performance or observance of any covenant,
agreement or condition contained in this Indenture, or any Event of Default, an
Officers' Certificate specifying with particularity such Default or Event of
Default and further stating what action the Company has taken, is taking or
proposes to take with respect thereto.

     Any notice required to be given under this Section 4.03 shall be delivered
to the Trustee at its Corporate Trust Office.


                                      -37-

<PAGE>


     SECTION 4.04. FURTHER INSTRUMENTS AND ACTS. Upon request of the Trustee,
the respective Company will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purposes of this Indenture.

     SECTION 4.05. MAINTENANCE OF OFFICE OR AGENCY. The Company will maintain in
the Borough of Manhattan, The City of New York, an office or agency where
Securities may be presented or surrendered for payment, where Securities may be
surrendered for registration of transfer, exchange, purchase, redemption or
conversion and where notices and demands to or upon the Company in respect of
the Securities and this Indenture may be served. The office or agency of The
Bank of New York, located at 101 Barclay Street, 21st Floor West, Corporate
Trust Trustee Administration, New York, New York 10286 (Attention: Sunbeam
Corporation, Zero Coupon Convertible Senior Subordinated Debentures due 2018)
shall be such office or agency for all of the aforesaid purposes unless the
Company shall maintain some other office or agency for such purposes and shall
give prompt written notice to the Trustee of the location, and any change in the
location, of such other office or agency. If at any time the Company shall fail
to maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Trustee Administration.

     The Company may also from time to time designate one or more other offices
or agencies where the Securities may be presented or surrendered for any or all
such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, The City of New York, for such purposes.

     SECTION 4.06. EXISTENCE. Subject to Article 5, the Company will do or cause
to be done all things necessary to preserve and keep in full force and effect
its existence and rights (charter and statutory); PROVIDED, HOWEVER, that the
Company shall not be required to preserve any such right if the Company shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Company and that the loss thereof is not disadvantageous in
any material respect to the Holders.

     SECTION 4.07. MAINTENANCE OF PROPERTIES. The Company will cause all
properties used or useful in the conduct of its business or the business of any
Subsidiary to be maintained and kept in good condition, repair and working order
and supplied with all necessary equipment and will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereof,
all as in the judgment of the Company may be necessary so that the business
carried on in connection therewith may be properly and advantageously conducted
at all times; PROVIDED, HOWEVER, that nothing in this Section 4.07 shall prevent
the Company from discontinuing the operation or maintenance of any of such
properties if such discontinuance is, in the judgment of the Company, desirable
in the conduct of its business or the business of any Subsidiary.


                                      -38-

<PAGE>


     SECTION 4.08. PAYMENT OF TAXES AND OTHER CLAIMS. The Company will pay or
discharge, or cause to be paid or discharged, before the same may become
delinquent, (i) all taxes, assessments and governmental charges levied or
imposed upon the Company or any Subsidiary or upon the income, profits or
property, of the Company or any Subsidiary, (ii) all claims for labor, materials
and supplies which, if unpaid, might by law become a lien or charge upon the
property of the Company or any Subsidiary, and (iii) all stamps and other
duties, if any, which may be imposed by the United States or any political
subdivision thereof or therein in connection with the issuance, transfer,
exchange or conversion of any Securities or with respect to this Indenture;
PROVIDED HOWEVER, that, in the case of clauses (i) and (ii), the Company shall
not be required to pay or discharge or cause to be paid or discharged any such
tax, assessment, charge or claim (A) if the failure to do so will not, in the
aggregate, have a material adverse impact on the Company, or (B) if the amount
applicability or validity is being contested in good faith by appropriate
proceedings.

     SECTION 4.09. CALCULATION OF ORIGINAL ISSUE DISCOUNT. The Company shall
file with the Trustee promptly at the end of each calendar year (i) a written
notice specifying the amount of original issue discount (including daily rates
and accrual periods) accrued on outstanding Securities as of the end of such
year and (ii) such other specific information relating to such original issue
discount as may then be relevant under the Internal Revenue Code of 1986, as
amended from time to time.

                                    ARTICLE 5

                              SUCCESSOR CORPORATION

     SECTION 5.01. WHEN THE COMPANY MAY MERGE OR TRANSFER ASSETS.

     The Company shall not consolidate with or merge with or into any other
Person (other than in a merger or consolidation in which the Company is the
surviving Person) or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, unless:

         (i) the Person (if other than the Company) formed by such consolidation
or into which the Company is merged or the Person which acquires by conveyance,
transfer or lease the properties and assets of the Company substantially as an
entirety shall be a corporation, limited liability company, partnership or trust
organized and validly existing under the laws of the United States or any State
thereof or the District of Columbia, and shall expressly assume by an indenture
supplemental hereto, executed and delivered to the Trustee in form satisfactory
to the Trustee, the due and punctual payment of the Principal Amount, Issue
Price, accrued Original Issue Discount, accrued Liquidated Damages, if any,
Redemption Price, Purchase Price, Fundamental Change Redemption Price or
interest, if any, on the Securities, according to their tenor, and the due and
punctual performance of all of the covenants and obligations of the Company
under the Securities and this Indenture, and shall have provided for conversion
rights in accordance with the Indenture;


                                      -39-

<PAGE>


         (ii) immediately after giving effect to such transaction, no Default
shall have occurred and be continuing; and

         (iii) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger, conveyance, transfer or lease and, if a supplemental indenture is
required in connection with such transaction, such supplemental indenture,
comply with this Article 5 and that all conditions precedent herein provided for
relating to such transaction have been satisfied.

     The successor Person formed by such consolidation or into which the Company
is merged or the successor Person to which such conveyance, transfer or lease is
made shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor had been named as the Company herein; and thereafter, except in the
case of a lease, the Company shall be discharged from all obligations and
covenants under this Indenture and the Securities.


                                    ARTICLE 6

                              DEFAULTS AND REMEDIES

     SECTION 6.01. EVENTS OF DEFAULT. AN "EVENT OF DEFAULT" OCCURS IF:

         (1) the Company defaults in the payment of the Principal Amount, Issue
Price, accrued Original Issue Discount, accrued Liquidated Damages, if any,
Redemption Price, Purchase Price or a Fundamental Change Redemption Price with
respect to any Security when the same becomes due and payable at its Stated
Maturity, upon redemption, upon declaration, when due for purchase by the
Company or otherwise (provided that in the case of a default in the payment of
Liquidated Damages, such default in payment of Liquidated Damages continues for
a period of 30 days), whether or not such payment shall be prohibited by Article
10;

         (2) the Company fails to comply with any of its agreements or covenants
in the Securities or this Indenture (other than those referred to in clause (1)
above) and such failure continues for 60 days after receipt by the Company of a
Notice of Default;

         (3) a decree or order by a court having jurisdiction in the premises
shall have been entered adjudging the Company a bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization of the Company
under any Bankruptcy Law, and such decree or order shall have continued
undischarged and unstayed for a period of 60 consecutive days; or a decree or
order of a court having jurisdiction in the premises of the appointment of a
receiver or liquidator or trustee or assignee in bankruptcy or insolvency of the
Company or of its property, or for the


                                      -40-

<PAGE>


winding-up or  liquidation  of its affairs,  shall have been  entered,  and such
decree or order shall have  remained  in force  undischarged  and  unstayed of a
period of 60 consecutive days; or

         (4) the Company shall institute proceedings to be adjudicated a
voluntary bankrupt, or shall consent to the filing of a bankruptcy proceeding
against it, or shall file a petition or answer or consent seeking reorganization
under any Bankruptcy Law, or shall consent to the filing of any such petition,
or shall consent to the appointment of a receiver or liquidator or trustee or
assignee in bankruptcy or insolvency of it or of its property or shall make an
assignment for the benefit of creditors, or shall admit in writing its inability
to pay its debts generally as they become due.

     "Bankruptcy Law" means Title 11, United States Code, or any similar Federal
or state law for the relief of debtors.

     A Default under clause (2) above is not an Event of Default until the
Trustee notifies the Company, or the Holders of at least 25% in aggregate
Principal Amount of the Securities at the time outstanding notify the Company
and the Trustee, of the Default and the Company does not cure such Default (and
such Default is not waived) within the time specified in clause (2) above after
actual receipt of such notice (a "Notice of Default"). Any such notice must
specify the Default, demand that it be remedied and state that such notice is a
Notice of Default.

     SECTION 6.02. ACCELERATION. If an Event of Default (other than an Event of
Default specified in Section 6.01(3) or (4)) occurs and is continuing, the
Trustee by notice to the Company, or the Holders of at least 25% in aggregate
Principal Amount of the Securities at the time outstanding by notice to the
Company and the Trustee, may declare the Issue Price and accrued Original Issue
Discount and Liquidated Damages, if any, accrued to the date of declaration on
all the Securities to be immediately due and payable. Upon such a declaration,
such Issue Price and accrued Original Issue Discount and accrued Liquidated
Damages, if any, shall be due and payable immediately. If an Event of Default
specified in Section 6.01(3) or (4) occurs and is continuing, the Issue Price
and accrued Original Issue Discount and accrued Liquidated Damages, if any, on
all the Securities shall become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Holders. The Holders
of a majority in aggregate Principal Amount of the Securities at the time
outstanding, by notice to the Company and the Trustee (and without notice to any
other Securityholder), may rescind an acceleration and its consequences if the
rescission would not conflict with any judgment or decree and if all existing
Events of Default have been cured or waived except nonpayment of the Issue Price
and accrued Original Issue Discount that have become due solely as a result of
acceleration and if all amounts due to the Trustee under Section 7.07 have been
paid. No such rescission shall affect any subsequent Default or impair any right
consequent thereto.

     SECTION 6.03. OTHER REMEDIES. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of the Issue Price and accrued


                                      -41-

<PAGE>


Original Issue  Discount on the Securities or to enforce the  performance of any
provision of the Securities or this Indenture.

     The Trustee may maintain a proceeding even if the Trustee does not possess
any of the Securities or does not produce any of the Securities in the
proceeding. A delay or omission by the Trustee or any Securityholder in
exercising any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of, or acquiescence in, the
Event of Default. No remedy is exclusive of any other remedy. All available
remedies are cumulative.

     SECTION 6.04. WAIVER OF PAST DEFAULTS. The Holders of a majority in
aggregate Principal Amount of the Securities at the time outstanding, by notice
to the Company and the Trustee (and without notice to any other Securityholder),
may waive an existing Default and its consequences except (1) an Event of
Default described in Section 6.01(l), (2) a Default in respect of a provision
that under Section 9.02 cannot be amended without the consent of each
Securityholder affected or (3) a Default that constitutes a failure to convert
any Security in accordance with the terms of Article 11. When a Default is
waived, it is deemed cured, but no such waiver shall extend to any subsequent or
other Default or impair any consequent right.

     SECTION 6.05. CONTROL BY MAJORITY. The Holders of a majority in aggregate
Principal Amount of the Securities at the time outstanding may direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or of exercising any trust or power conferred on the Trustee. However,
the Trustee may refuse to follow any direction that conflicts with law or this
Indenture or that the Trustee determines in good faith is unduly prejudicial to
the rights of other Holders or would involve the Trustee in personal liability
unless the Trustee is offered indemnity satisfactory to it.

     SECTION 6.06. LIMITATION ON SUITS. A Securityholder may not pursue any
remedy with respect to this Indenture or the Securities unless:

         (1) the Holder gives to the Company and a Trust Officer of the Trustee
written notice stating that an Event of Default is continuing;

         (2) the Holders of at least 25% in aggregate Principal Amount of the
Securities at the time outstanding make a written request to the Trustee to
pursue the remedy;

         (3) such Holder or Holders offer to the Trustee reasonable security or
indemnity satisfactory to the Trustee against the costs, expenses and
liabilities which might be incurred by the Trustee in complying with any such
direction;

         (4) the Trustee does not comply with the request within 60 days after
receipt of the notice, the request and the offer of security or indemnity; and


                                      -42-

<PAGE>


         (5) the Holders of a majority in aggregate Principal Amount of the
Securities at the time outstanding do not give the Trustee a direction
inconsistent with the request during such 60 day period.

     A Securityholder may not use this Indenture to prejudice the rights of any
other Securityholder or to obtain a preference or priority over any other
Securityholder.

     SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT. Notwithstanding any
other provision of this Indenture, but subject to Article 10, the right of any
Holder to receive payment of the Principal Amount, Issue Price, accrued Original
Issue Discount, Redemption Price, Purchase Price, Fundamental Change Redemption
Price or interest, if any, in respect of the Securities held by such Holder, on
or after the respective due dates expressed in the Securities or any Redemption
Date and to convert the Securities in accordance with Article 11, or to bring
suit for the enforcement of any such payment on or after such respective dates
or the right to convert, shall not be impaired or affected adversely without the
consent of each such Holder.

     SECTION 6.08. COLLECTION SUIT BY TRUSTEE. If an Event of Default described
in Section 6.01(1) occurs and is continuing, the Trustee may recover judgment in
its own name and as trustee of an express trust against the Company for the
whole amount owing with respect to the Securities and the amounts provided for
in Section 7.07.

     SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM. In case of the pendency of
any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Company or any other obligor upon the Securities or the property of the
Company or of such other obligor or their creditors, the Trustee (irrespective
of whether the Principal Amount, Issue Price, accrued Original Issue Discount,
accrued Liquidated Damages, if any, Redemption Price, Purchase Price,
Fundamental Change Redemption Price or interest, if any, in respect of the
Securities shall then be due and payable as therein expressed or by declaration
or otherwise and irrespective of whether the Trustee shall have made any demand
on the Company for the payment of any such amount) shall be entitled and
empowered, by intervention in such proceeding or otherwise,

         (a) to file and prove a claim for the whole amount of the Principal
Amount, Issue Price, accrued Original Issue Discount, accrued Liquidated
Damages, if any, Redemption Price, Purchase Price, Fundamental Change Redemption
Price or interest, if any, and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee (including any
claim for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel) and of the Holders allowed in such judicial
proceeding, and

         (b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;


                                      -43-

<PAGE>


and any custodian,  receiver,  assignee,  trustee,  liquidator,  sequestrator or
similar  official in any such judicial  proceeding is hereby  authorized by each
Holder to make such  payments to the Trustee  and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay the
Trustee  any  amount  due  it  for  the   reasonable   compensation,   expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.07.

     If the Trustee does not file a claim or proof of debt in the form required
in such proceedings prior to 30 days before the expiration of the time to file
such claims or proofs, then any holder or holders of Senior Indebtedness or
their representative or representatives shall have the right to demand, sue for,
collect, receive and receipt for the payments and distributions in respect of
the Securities which are required to be paid or delivered to the holders of
Senior Indebtedness as provided in this Article and to file and prove all claims
therefor and to take all such other action in the name of the holders or
otherwise, as such holders of Senior Indebtedness or representative thereof may
determine to be necessary or appropriate for the enforcement of the provisions
of this Article.

     Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claims of any Holder in any such proceeding.

     SECTION 6.10. PRIORITIES. If the Trustee collects any money pursuant to
this Article 6, it shall pay out the money in the following order:

     FIRST: to the Trustee for amounts due under Section 7.07;

     SECOND: to holders of Senior Indebtedness to the extent required by Article
10;

     THIRD: to Holders for amounts due and unpaid on the Securities for the
Principal Amount, Issue Price, accrued Original Issue Discount, accrued
Liquidated Damages, if any, Redemption Price, Purchase Price, Fundamental Change
Redemption Price or interest, if any, as the case may be, ratably, without
preference or priority of any kind, according to such amounts due and payable on
the Securities; and

     FOURTH: the balance, if any, to the Company.

     The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section 6.10. At least 15 days before such record date,
the Company shall mail to each Securityholder and the Trustee a notice that
states the record date, the payment date and amount to be paid.


                                      -44-

<PAGE>


     SECTION 6.11. UNDERTAKING FOR COSTS. In any suit for the enforcement of any
right or remedy under this Indenture or in any suit against the Trustee for any
action taken or omitted by it as Trustee, a court in its discretion may require
the filing by any party litigant (other than the Trustee) in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees and expenses,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section 6.11
does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section
6.07 or a suit by Holders of more than 10% in aggregate Principal Amount of the
Securities at the time outstanding.

     SECTION 6.12. WAIVER OF STAY, EXTENSION OR USURY LAWS. The Company
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or any usury or other law
wherever enacted, now or at any time hereafter in force, which would prohibit or
forgive the Company from paying all or any portion of the Principal Amount,
Issue Price, accrued Original Issue Discount, accrued Liquidated Damages, if
any, Redemption Price, Purchase Price or Fundamental Change Redemption Price in
respect of Securities, or any interest on any such amounts, as contemplated
herein, or which may affect the covenants or the performance of this Indenture;
and the Company (to the extent that it may lawfully do so) hereby expressly
waives all benefit or advantage of any such laws and covenants that it will not
hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.


                                    ARTICLE 7

                                     TRUSTEE

     SECTION 7.01. DUTIES OF TRUSTEE.

         (a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise the rights and powers vested in it by this Indenture and use the
same degree of care and skill in its exercise as a prudent individual would
exercise or use under the circumstances in the conduct of his or her own
affairs.

         (b) Except during the continuance of an Event of Default:

              (1) the Trustee need perform only those duties that are
specifically set forth in this Indenture and no others; and


                                      -45-

<PAGE>


              (2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture. However, in the
case of any such certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee shall be under
a duty to examine the same to determine whether or not they conform to the
requirements of this Indenture (but need not confirm or investigate the accuracy
of mathematical calculations or other facts stated therein).

This Section 7.01(b) shall be in lieu of Section 315(a) of the TIA and such
Section 315(a) is hereby expressly excluded from this Indenture, as permitted by
the TIA.

         (c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:

              (1) this paragraph (c) does not limit the effect of paragraph (b)
of this Section 7.01;

              (2) the Trustee shall not be liable for any error of judgment made
in good faith by a Trust Officer unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and

              (3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction received by
it pursuant to Section 6.05.

Subparagraphs (c)(1),(2) and (3) shall be in lieu of Sections 315(d)(1),
315(d)(2) and 315(d)(3) of the TIA and such Sections 315(d)(1), 315(d)(2) and
315(d)(3) are hereby expressly excluded from this Indenture, as permitted by the
TIA.

         (d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (e) of this Section 7.01.

         (e) The Trustee may refuse to perform any duty or exercise any right or
power or extend or risk its own funds or otherwise incur any financial liability
unless it receives indemnity satisfactory to it against any loss, liability or
expense.

         (f) Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law.

         (g) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or


                                      -46-

<PAGE>


in the  exercise  of any of its  rights or powers,  if it shall have  reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it.

     SECTION 7.02. RIGHTS OF TRUSTEE.

         (a) The Trustee may conclusively rely on any document believed by it to
be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.

         (b) Before the Trustee acts or refrains from acting, it may require a
Company Order, an Officers' Certificate or an Opinion of Counsel. The Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on a Company Order, Officers' Certificate or Opinion of Counsel.

         (c) The Trustee may act through agents and shall not be responsible for
the misconduct or negligence of any agent appointed with due care.

         (d) Subject to the provisions of Section 7.01(c), the Trustee shall not
be liable for any action it takes or omits to take in good faith which it
believes to be authorized or within its rights or powers.

         (e) The Trustee may consult with counsel selected by it and any advice
or Opinion of Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder in good faith
and in accordance with such advice or Opinion of Counsel.

         (f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture, unless the Holders shall have
offered to the Trustee security or indemnity reasonably satisfactory to the
Trustee against the costs, expenses and liabilities which may be incurred
therein or thereby.

         (g) The Trustee shall not be deemed to have notice of any Default or
Event of Default unless a Trust Officer of the Trustee has actual knowledge
thereof or unless written notice of any event which is in fact such a default is
received by the Trustee at the Corporate Trust Office of the Trustee, and such
notice references the Securities and this Indenture.

     SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee in its individual
or any other capacity may become the owner or pledgee of Securities and may
otherwise deal with the Company or its Affiliates with the same rights it would
have if it were not Trustee. Any Paying


                                      -47-

<PAGE>


Agent, Registrar, Conversion Agent or co-registrar may do the same with the like
rights. However, the Trustee must comply with Section 7.10 and 7.11.

     SECTION 7.04. TRUSTEE'S DISCLAIMER. The Trustee makes no representation as
to the validity or adequacy of this Indenture or the Securities, it shall not be
accountable for Company's use of the proceeds from the Securities, it shall not
be responsible for any statement in the offering memorandum for the Securities
or in the Indenture or the Securities (other than its certificate of
authentication), the acts of a prior Trustee hereunder, or the determination as
to which beneficial owners are entitled to receive any notices hereunder.

     SECTION 7.05. NOTICE OF DEFAULTS. If a Default occurs and is continuing and
if it is actually known to the Trustee, the Trustee shall give to each
Securityholder notice of the Default within 90 days after it occurs. Except in
the case of a Default described in Section 6.01(1), the Trustee may withhold the
notice if and so long as a committee of its Trust Officers in good faith
determines that withholding the notice is in the interests of Holders. The
second sentence of this Section 7.05 shall be in lieu of the proviso to Section
315(b) of the TIA and such provision is hereby expressly excluded from this
Indenture, as permitted by the TIA. The Trustee shall not give notice of a
Default pursuant to Section 6.01(2) until at least sixty days have passed since
its occurrence.

     SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS. Within 60 days after each May
1, beginning with the May 1 following the date of this Indenture, the Trustee
shall mail to each Holder a brief report dated as of such May 1 that complies
with TIA Section 313(a), if required by such Section 313(a). The Trustee also
shall comply with TIA Section 313(b).

     A copy of each report at the time of its mailing to Holders shall be filed
with the SEC and each securities exchange on which the Securities are listed.
The Company agrees to notify the Trustee whenever the Securities become listed
on any securities exchange and of any delisting thereof.

     SECTION 7.07. COMPENSATION AND INDEMNITY. The Company agrees:

         (a) to pay to the Trustee from time to time such compensation as shall
be agreed in writing between the Company and the Trustee for all services
rendered by it hereunder (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust);

         (b) to reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the reasonable
compensation and the expense, advances and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and


                                      -48-

<PAGE>


         (c) to indemnify each of the Trustee and any predecessor Trustee for,
and to hold it harmless against, any and all loss, liability, damage, claim or
expense incurred without negligence or bad faith on its part, arising out of or
in connection with the acceptance or administration of this trust, including the
costs and expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder.

     To secure the Company's payment obligations in this Section 7.07 the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay the Principal
Amount, Issue Price, accrued Original Issue Discount, accrued Liquidated
Damages, if any, Redemption Price, Purchase Price, Fundamental Change Redemption
Price or interest, if any, as the case may be, on particular Securities.

     The Company's payment obligations pursuant to this Section 7.07 shall
survive the discharge of this Indenture. When the Trustee incurs expenses after
the occurrence of a Default specified in Section 6.01(3) or (4), the expenses
are intended to constitute expenses of administration under any Bankruptcy Law.

     SECTION 7.08. REPLACEMENT OF TRUSTEE. The Trustee may resign by so
notifying the Company; provided, however, that no such resignation shall be
effective until a successor Trustee has accepted its appointment pursuant to
this Section 7.08. The Holders of a majority in aggregate Principal Amount of
the Securities at the time outstanding may remove the Trustee by so notifying
the Trustee and may appoint a successor Trustee. The Company shall remove the
Trustee if:

         (1) the Trustee fails to comply with, or ceases to be eligible under,
Section 7.10;

         (2) the Trustee is adjudged bankrupt or insolvent;

         (3) a receiver or public officer takes charge of the Trustee or its
property; or

         (4) the Trustee otherwise becomes incapable of acting.

     If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint, by resolution of
its Board of Directors, a successor Trustee.

     A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon the resignation or removal
of the retiring Trustee shall become effective, and the successor Trustee shall
have all the rights, powers and duties of the Trustee under this Indenture. The
successor Trustee shall mail a notice of its succession to Holders. The retiring
Trustee shall promptly transfer all property held by it as Trustee to the
successor Trustee, subject to the lien provided for in Section 7.07.


                                      -49-

<PAGE>


     If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of a majority in aggregate Principal Amount of the Securities at the
time outstanding may petition, at the expense of the Company, any court of
competent jurisdiction for the appointment of a successor Trustee.

     If the Trustee fails to comply with Section 7.10, any Securityholder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.

     SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
corporate trust business (including the trust created by this Indenture) or
assets to, another corporation, the resulting, surviving or transferee
corporation without any further act shall be the successor Trustee.

     SECTION 7.10. ELIGIBILITY; DISQUALIFICATION. The Trustee shall at all times
satisfy the requirements of TIA Sections 310(a)(1) and 310(b). The Trustee shall
have a combined capital and surplus of at least $50,000,000 (or if the Trustee
is a member of a bank holding company system, its bank holding company shall
have a combined capital and surplus of $50,000,000) as set forth in its most
recent published annual report of conditions. Nothing herein contained shall
prevent the Trustee from filing with the SEC the application referred to in the
penultimate paragraph of TIA Section 310(b). If at any time the Trustee shall
cease to be eligible in accordance with the provisions of this Section 7.10, it
shall resign immediately in the manner and with the effect hereinafter specified
in this Article 7.

     SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. The
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.


                                    ARTICLE 8

                             DISCHARGE OF INDENTURE

     SECTION 8.01. DISCHARGE OF LIABILITY ON SECURITIES. When (i) the Company
delivers to the Trustee all outstanding Securities (other than Securities
replaced pursuant to Section 2.07) for cancellation or (ii) all outstanding
Securities have become due and payable and the Company deposits with the Trustee
cash and/or securities, as permitted by the terms hereof, sufficient to pay at
Stated Maturity the Principal Amount of all outstanding Securities (other than
Securities replaced pursuant to Section 2.07), and if in either case the Company
pays all other sums payable hereunder by the Company, then this Indenture shall,
subject to Section 7.07, cease to be of further effect. The Trustee shall join
in the execution of a document prepared by the Company


                                      -50-

<PAGE>


acknowledging  satisfaction  and  discharge  of this  Indenture on demand of the
Company  accompanied by an Officers'  Certificate  and Opinion of Counsel and at
the cost and expense of the Company.

     SECTION 8.02. REPAYMENT TO THE COMPANY. The Trustee and the Paying Agent
shall return to the Company upon written request any money or securities held by
them for the payment of any amount with respect to the Securities that remains
unclaimed for two years, provided, however, that the Trustee or such Paying
Agent, before being required to make any such return, may at the expense of the
Company cause to be published once in a newspaper of general circulation in The
City of New York or mail to each such Holder notice that such money or
securities remains unclaimed and that, after a date specified therein, which
shall not be less than 30 days from the date of such publication or mailing, any
unclaimed money or securities then remaining will be returned to the Company.
After return to the Company, Holders entitled to the money or securities must
look to the Company for payment as general creditors unless an applicable
abandoned property law designates another person.


                                    ARTICLE 9

                                   AMENDMENTS

     SECTION 9.01. WITHOUT CONSENT OF HOLDERS. The Company and the Trustee may
amend this Indenture and the Securities without the consent of any
Securityholder:

         (1) to cure any ambiguity, defect or inconsistency;

         (2) to comply with Article 5 or Section 11.14;

         (3) to provide for uncertificated Securities in addition to
certificated Securities so long as such uncertificated Securities are in
registered form for purposes of the Internal Revenue Code of 1986, as amended;

         (4) to make any change that does not adversely affect the right of any
Securityholder; or

         (5) to make any change to comply with the TIA, or any amendment
thereto, or to comply with any requirement of the SEC in connection with the
qualification, if any, of the Indenture under the TIA.

     SECTION 9.02. WITH CONSENT OF HOLDERS. The Company and the Trustee, with
the written consent of the Holders of at least a majority in aggregate Principal
Amount of the Securities at the time outstanding, may amend this Indenture or
the Securities. However, without the consent of


                                      -51-

<PAGE>


each Securityholder affected, an amendment or supplement to this Indenture or
the Securities may not:

         (1) make any change to the Principal Amount of Securities whose Holders
must consent to an amendment;

         (2) make any change to the manner or rate of accrual in connection with
Original Issue Discount or interest, if any, reduce the rate of interest
referred to in paragraph 1 of the Securities or extend the time for payment of
Original Issue Discount or interest, if any, on any Security;

         (3) reduce the Principal Amount or the Issue Price of or extend the
Stated Maturity of any Security;

         (4) reduce the Redemption Price, Purchase Price or Fundamental Change
Redemption Price of any Security;

         (5) make any Security payable in money or securities other than that
stated in the Security;

         (6) make any change in Article 10 that adversely affects the rights of
any Securityholder in any material respect;

         (7) make any change in Section 6.04, Section 6.07 or this Section 9.02,
except to increase any such percentage;

         (8) make any change that adversely affects the right to convert any
Security; or

         (9) make any change that adversely affects the right to require the
Company to purchase the Securities, or the right to require the Company to
redeem the Securities upon a Fundamental Change, in accordance with the terms
thereof and this Indenture.

     It shall not be necessary for the consent of the Holders under this Section
9.02 to approve the particular form of any proposed amendment, but it shall be
sufficient if such consent approves the substance thereof.

     An amendment under this Section 9.02 or Section 9.01 may not make any
change that adversely affects the rights under Article 10 of any holder of
Senior Indebtedness then outstanding unless the requisite holders of such Senior
Indebtedness consent to such change pursuant to the terms of such Senior
Indebtedness.


                                      -52-

<PAGE>


     After an amendment under this Section 9.02 becomes effective, the Company
shall mail to each Holder a notice briefly describing the amendment.

     SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT. Every supplemental
indenture executed pursuant to this Article 9 shall comply with the TIA as then
in effect, if then required to so comply.

     SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS, WAIVERS AND ACTIONS. Until
an amendment, waiver or other action becomes effective, a consent to it or any
other action by a Holder of a Security is a continuing consent by the Holder and
every subsequent Holder of that Security or portion of the Security that
evidences the same obligation as the consenting Holder's Security, even if
notation of the consent, waiver or action is not made on the Security. However,
any such Holder or subsequent Holder may revoke the consent, waiver or action as
to such Holder's Security or portion of the Security if the Trustee receives the
notice or revocation before the date the amendment, waiver or action becomes
effective. After an amendment, waiver or action becomes effective, it shall bind
every Securityholder.

     SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURITIES. Securities
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article 9 may, and shall if required by the Trustee, bear a
notation in form approved by the Trustee as to any matter provided for in such
supplemental indenture. If the Company shall so determine, new Securities so
modified as to conform, in the opinion of the Trustee and the Board of
Directors, to any such supplemental indenture may be prepared and executed by
the Company and authenticated and delivered by the Trustee in exchange for
outstanding Securities.

     SECTION 9.06. TRUSTEE TO SIGN SUPPLEMENTAL INDENTURES. The Trustee shall
sign any supplemental indenture authorized pursuant to this Article 9 if the
amendment does not adversely affect the rights, duties, liabilities or
immunities of the Trustee. If it does, the Trustee may, but need not, sign such
supplemental indenture. In signing such amendment the Trustee shall be entitled
to receive, and (subject to the provisions of Section 7.01) shall be fully
protected in relying upon, an Officers' Certificate and an Opinion of Counsel
stating that such amendment is authorized or permitted by this Indenture.

     SECTION 9.07. EFFECT OF SUPPLEMENTAL INDENTURES. Upon the execution of any
supplemental indenture under this Article 9, this Indenture shall be modified in
accordance therewith, and such supplemental indenture shall form a part of this
Indenture for all purposes; and every Holder of Securities theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby.


                                      -53-

<PAGE>


                                   ARTICLE 10

                                  SUBORDINATION

     SECTION 10.01. AGREEMENT OF SUBORDINATION. The Company covenants and agrees
for itself and its successors, and each Holder of Securities issued hereunder by
such Holder's acceptance thereof likewise covenants and agrees, that all
Securities shall be issued subject to the provisions of this Article 10; and
each Person holding any such Security whether upon original issue or upon
transfer or assignment thereof, accepts and agrees to be bound by such
provisions.

     The payment of the Principal Amount, Issue Price, accrued Original Issue
Discount, accrued Liquidated Damages, if any, Redemption Price, Purchase Price,
Fundamental Change Redemption Price, interest, if any, or any other payments, in
respect of all Securities issued hereunder shall, to the extent and in the
manner hereinafter set forth, be subordinated and subject in right of payment to
the prior payment in full in cash or other payment satisfactory to the holders
of all Senior Indebtedness, whether outstanding at the date of this Indenture or
thereafter incurred.

     No provision of this Article 10 shall prevent the occurrence of any Default
or Event of Default hereunder.

     SECTION 10.02. PAYMENTS TO HOLDERS. No payment shall be made with respect
to the payment of Principal Amount, Issue Price, accrued Original Issue
Discount, accrued Liquidated Damages, if any, Redemption Price, Purchase Price,
Fundamental Change Redemption Price, interest, if any, or any other payments, on
the Securities, except payments and distributions made by the Trustee as
permitted by Section 10.05, if:

              (i) a default in any payment obligations in respect of Senior
Indebtedness occurs and is continuing, without regard to any applicable period
of grace (whether at maturity or at a date fixed for payment or by declaration
or otherwise); or

              (ii) any other default occurs and is continuing with respect to
Designated Senior Indebtedness that permits the holders of such Designated
Senior Indebtedness as to which such default relates to accelerate its maturity
and the Trustee receives a notice of the default (a "Payment Blockage Notice")
from the Company or a Representative for any issue of Designated Senior
Indebtedness.

     If the Trustee receives any Payment Blockage Notice pursuant to clause (ii)
above, no subsequent Payment Blockage Notice shall be effective for purposes of
this Section unless and until at least 365 days shall have elapsed since the
initial effectiveness of the immediately prior Payment Blockage Notice. No
nonpayment default that existed or was continuing on the date of


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delivery of any Payment Blockage Notice to the Trustee shall be, or shall be
made, the basis for a subsequent Payment Blockage Notice unless such default
shall have been cured or waived for a period of not less than 90 days (it being
acknowledged that (x) any action of the Company or any of its Subsidiaries
occurring subsequent to delivery of a Payment Blockage Notice that would give
rise to any event of default pursuant to any provision of Senior Indebtedness
under which an event of default previously existed (or was continuing at the
time of delivery of such Payment Blockage Notice) shall constitute a new event
of default for this purpose and (y) any breach of a financial covenant giving
rise to a nonpayment default for a period ending subsequent to the date of
delivery of the respective Payment Blockage Notice shall constitute a new event
of default for this purpose.)

         The Company may and shall resume payments on and distributions in
respect of the Securities upon the earlier of:

         (1) in case of a default referred to in clause (i) above, the earlier
of the date upon which the default is cured or waived in accordance with the
terms of the governing instrument or ceases to exist, or

         (2) in the case of a default referred to in clause (ii) above, the
earlier of the date upon which the default is cured, waived in accordance with
the terms of the governing instrument or ceases to exist or 179 days after the
date on which the applicable Payment Blockage Notice is received by the Trustee
if the maturity of such Designated Senior Indebtedness has not been accelerated,

unless this Article 10 otherwise prohibits the payment or distribution at the
time of such payment or distribution.

     Upon any payment by the Company or distribution of assets of the Company of
any kind or character, whether in cash, property or securities, to creditors
upon any dissolution or winding-up or liquidation or reorganization or
bankruptcy of Company, whether voluntary or involuntary or insolvency,
reorganization, receivership or similar proceedings relating to the Company or
its property, or an assignment for the benefit of creditors or any marshaling of
the Company's assets or liabilities, all amounts due or to become due upon all
Senior Indebtedness shall first be paid in full in cash or other payment
satisfactory to the holders of such Senior Indebtedness, or provision is made
for such payment in cash or other payment satisfactory to the holders of Senior
Indebtedness, before any payment is made on account of the Principal Amount,
Issue Price, accrued Original Issue Discount, accrued Liquidated Damages, if
any, Redemption Price, Purchase Price, Fundamental Change Redemption Price or
interest, if any, in respect of the Securities or any other payment in respect
of the Securities (except payments made pursuant to Article 8 hereof from monies
deposited with the Trustee pursuant thereto prior to the happening of such
dissolution or winding-up or liquidation or reorganization or bankruptcy of
Company, whether voluntary or

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involuntary or insolvency, reorganization, receivership or similar proceedings
relating to the Company or its property, or an assignment of the benefit of
creditors or any marshaling of the Company's assets or liabilities), and upon
any such dissolution or winding-up or liquidation or reorganization or
bankruptcy of Company, whether voluntary or involuntary or insolvency,
reorganization, receivership or similar proceedings relating to the Company or
its property, or an assignment of the benefit of creditors or any marshaling of
the Company's assets or liabilities, any payment by the Company, or distribution
of assets of the Company of any kind or character, whether in cash, property or
securities, to which the Holders or the Trustee would be entitled, except for
the provisions of this Article 10, shall (except as aforesaid) be paid by the
Company or by any receiver, trustee in bankruptcy, liquidating trustee, agent or
other Person making such payment or distribution, or by the Holders of the
Securities or by the Trustee if received by them or it, directly to the holders
of Senior Indebtedness (pro rata to such holders on the basis of the respective
amounts of Senior Indebtedness held by such holders, as calculated by the
Company) or their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing any
such Senior Indebtedness may have been issued, as their respective interests may
appear to the extent necessary to pay all such Senior Indebtedness in full in
cash or other payment satisfactory to the holders of such Senior Indebtedness,
after giving effect to any concurrent payment or distribution to or for the
holders of such Senior Indebtedness, before any payment or distribution is made
to the Holders or to the Trustee.

     In the event that any Securities are declared due and payable before their
Stated Maturity pursuant to Section 6.02, then and in such event the Company
shall promptly notify holders of its Senior Indebtedness of such acceleration.
The Company may not pay monies owed pursuant to the Securities until 120 days
have passed after such acceleration occurs and may thereafter pay the Securities
if this Article 10 permits the payment at that time.

     In the event that, notwithstanding the foregoing provisions, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities (including, without limitation, by way of setoff or
otherwise), prohibited by the foregoing provisions in this Section 10.02, shall
be received by the Trustee or the Holders of the Securities before all Senior
Indebtedness of the Company is paid in full in cash or other payment
satisfactory to the holders of such Senior Indebtedness, or provision is made
for such payment in cash or other payment satisfactory to the holders of such
Senior Indebtedness, such payment or distribution shall be held in trust for the
benefit of and shall be paid over or delivered to the holders of Senior
Indebtedness of the Company or their representative or representatives, or to
the trustee or trustees under any indenture pursuant to which any instruments
evidencing any such Senior Indebtedness may have been issued, as their
respective interests may appear, as calculated by the Company, for application
to the payment of all such Senior Indebtedness remaining unpaid to the extent
necessary to pay all such Senior Indebtedness in full in cash or other payment
satisfactory to the holders of such Senior Indebtedness, after giving effect to
any concurrent payment or distribution, or provision therefor, to or for the
holders of such Senior Indebtedness.


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<PAGE>


     For purposes of this Article 10, the words, "cash, property or securities"
shall not be deemed to include shares of stock of the Company as reorganized or
readjusted, or securities of the Company or any other corporation provided for
by a plan of reorganization or readjustment, the payment of which is
subordinated at least to the extent provided in this Article 10 with respect to
the Securities to the payment of all Senior Indebtedness of the Company which
may at the time be outstanding; provided that (i) such Senior Indebtedness is
assumed by the new corporation, if any, resulting from any such reorganization
or readjustment, and (ii) the rights of the holders of such Senior Indebtedness
(other than leases that are not assumed by the Company or the new corporation,
as the case may be) are not, without the consent of such holders, altered by
such reorganization or readjustment. The consolidation of the Company with, or
the merger of the Company into, another corporation or the liquidation or
dissolution of the Company following the conveyance or transfer of its property
as an entirety, or substantially as an entirety, to another corporation upon the
terms and conditions provided for in Article 5 hereof shall not be deemed a
dissolution, winding-up, liquidation or reorganization for the purposes of this
Section 10.02 if such other corporation shall, as a part of such consolidation,
merger, conveyance or transfer, comply with the conditions stated in Article 5
hereof.

     Nothing in this Section 10.02 shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 7.07. This Section 10.02 shall be subject
to the further provisions of Section 10.05.

     SECTION 10.03. SUBROGATION OF SECURITIES. Subject to the payment in full in
cash or other payment satisfactory to the holders of all Senior Indebtedness of
the Company, the rights of the Holders shall be subrogated to the rights of the
holders of such Senior Indebtedness to receive payments or distributions of
cash, property or securities of the Company applicable to such Senior
Indebtedness until the Principal Amount, Issue Price, accrued Original Issue
Discount, accrued Liquidated Damages, if any, Redemption Price, Purchase Price,
Fundamental Change Redemption Price and interest, if any, in respect of the
Securities shall be paid in full; and, for the purposes of such subrogation, no
payments or distributions to the holders of such Senior Indebtedness of any
cash, property or securities to which the Holders or the Trustee would be
entitled except for the provisions of this Article 10, and no payment over
pursuant to the provisions of this Article 10, to or for the benefit of the
holders of such Senior Indebtedness by Holders or the Trustee, shall, as between
the Company, its creditors other than holders of its Senior Indebtedness, and
the Holders of the Securities be deemed to be a payment by the Company to or on
account of its Senior Indebtedness; and no payments or distributions of cash,
property or securities to or for the benefit of the Holders pursuant to the
subrogation provisions of this Article 10, which would otherwise have been paid
to the holders of Senior Indebtedness shall be deemed to be a payment by the
Company to or for the account of the Securities. It is understood that the
provisions of this Article 10 are and are intended solely for the purpose of
defining the relative rights of the Holders on the one hand, and the holders of
Senior Indebtedness, on the other hand.


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    Nothing contained in this Article 10 or elsewhere in this Indenture or in
the  Securities  is intended to or shall  impair,  as between the  Company,  its
creditors other than the holders of its Senior Indebtedness and the Holders, the
obligation of the Company,  which is absolute and  unconditional,  to pay to the
Holders the Principal  Amount,  Issue Price,  accrued  Original Issue  Discount,
accrued  Liquidated  Damages,   if  any,   Redemption  Price,   Purchase  Price,
Fundamental  Change  Redemption  Price and  interest,  if any, in respect of the
Securities as and when the same shall become due and payable in accordance  with
their  terms,  or is  intended  to or shall  affect the  relative  rights of the
Holders  and  creditors  of the  Company  other  than the  holders of the Senior
Indebtedness,  nor shall anything  herein or therein  prevent the Trustee or the
Holder of any  Security  from  exercising  all remedies  otherwise  permitted by
applicable  law upon an Event of Default,  subject to the rights,  if any, under
this  Article  10 of the  holders  of Senior  Indebtedness  in  respect of cash,
property or  securities  of the Company  received  upon the exercise of any such
remedy.

    Upon any payment or distribution of assets of the Company referred to in
this Article 10, the Trustee, subject to the provisions of Section 7.01, and the
Holders of the  Securities  shall be  entitled  to rely upon any order or decree
made  by  any  court  of  competent  jurisdiction  in  which  such  dissolution,
winding-up,   liquidation  or  reorganization  proceedings  are  pending,  or  a
certificate of the receiver,  trustee in bankruptcy,  liquidating trustee, agent
or other Person making such payment or  distribution,  delivered to the Trustee,
to the  Holders  for  the  purpose  of  ascertaining  the  Persons  entitled  to
participate in such  distribution,  the holders of the Senior  Indebtedness  and
other  indebtedness of the Company,  the amount thereof or payable thereon,  the
amount or amounts  paid or  distributed  thereon and all other  facts  pertinent
thereto or to this Article 10.

      SECTION 10.04. AUTHORIZATION BY HOLDERS. Each Holder by such Holder's
acceptance thereof authorizes and directs the Trustee in such Holder's behalf to
take  such  action  as  may  be  necessary  or  appropriate  to  effectuate  the
subordination provided in this Article 10 and appoints the Trustee such Holder's
attorney-in-fact for any and all such purposes.

     SECTION 10.05. NOTICE TO TRUSTEE. The Company shall give prompt written
notice in a form of an Officers' Certificate to a Trust Officer of any fact
known to the Company which would prohibit the making of any payment of monies to
or by the Trustee or any Paying Agent in respect of the Securities pursuant to
the provisions of this Article 10. Notwithstanding the provisions of this
Article 10 or any other provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts which would prohibit the
making of any payment of monies to or by the Trustee in respect of the
Securities pursuant to the provisions of this Article 10, unless and until a
Trust Officer shall have received written notice thereof at the Corporate Trust
Office from the Company (in the form of an Officers' Certificate) or a holder or
holders of Senior Indebtedness or a Representative or from any trustee therefor;
and before the receipt of any such written notice, the Trustee, subject to the
provisions of Section 7.01, shall be entitled in all respects to assume that no
such facts exist; provided that if on a date not fewer than two Business Days
prior to the date upon which by the terms hereof any such monies may become
payable for any


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purpose (including, without limitation, the payment of the Principal Amount,
Issue Price, accrued Original Issue Discount, accrued Liquidated Damages, if
any, Redemption Price, Purchase Price, Fundamental Change Redemption Price or
interest, if any, in respect of any Security) the Trustee shall not have
received, with respect to such monies, the notice provided for in this Section
10.05, then, anything herein contained to the contrary notwithstanding, the
Trustee shall have full power and authority to receive such monies and to apply
the same to the purpose for which they were received, and shall not be affected
by any notice to the contrary which may be received by it on or after such prior
date.

     Notwithstanding anything to the contrary herein set forth, nothing shall
prevent any payment by the Company or the Trustee to the Holders of monies in
connection with a redemption of Securities if (i) notice of such redemption has
been given pursuant to Article 3 hereof prior to the receipt by the Trustee of
written notice as aforesaid, and (ii) such notice of redemption is given not
earlier than 60 days before the redemption date.

     The Trustee, subject to the provisions of Section 7.01, shall be entitled
to rely conclusively on the delivery to it of a written notice by a Person
representing himself to be a holder or a Representative of Designated Senior
Indebtedness or a Representative of Senior Indebtedness (or a trustee on behalf
of such holder) to establish that such notice has been given by a holder or a
Representative of Designated Senior Indebtedness or a Representative of such
Senior Indebtedness or a trustee on behalf of any such holder or holders. In the
event that the Trustee determines in good faith that further evidence is
required with respect to the right of any Person as a holder of Senior
Indebtedness to participate in any payment or distribution pursuant to this
Article 10, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of such Senior
Indebtedness held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and any other facts pertinent to the
rights of such Person under this Article 10, and if such evidence is not
furnished the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment.

     SECTION 10.06. TRUSTEE'S RELATION TO SENIOR INDEBTEDNESS. The Trustee in
its individual capacity shall be entitled to all the rights set forth in this
Article 10 in respect of any Senior Indebtedness at any time held by it, to the
same extent as any other holder of such Senior Indebtedness, and nothing or
elsewhere in this Indenture shall deprive the Trustee of any of its rights as
such holder.

     Nothing in this Article shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 7.07.

     With respect to the holders of Senior Indebtedness, the Trustee undertakes
to perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article 10,


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and no implied covenants or obligations with respect to the holders of such
Senior Indebtedness shall be read into this Indenture against the Trustee. The
Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior
Indebtedness and, subject to the provisions of Section 7.01, the Trustee shall
not be liable to any holder of such Senior Indebtedness if it shall pay over or
deliver to Holders, the Company or any other Person money or assets to which any
holder of Senior Indebtedness shall be entitled by virtue of this Article 10 or
otherwise.

     SECTION 10.07. NO IMPAIRMENT OF SUBORDINATION. No right of any present or
future holder of any Senior Indebtedness to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by (i) any
amendment of or addition or supplement to any such Senior Indebtedness or any
instrument or agreement relating thereto (unless otherwise expressly provided
therein), or (ii) any act or failure to act on the part of the Company or by any
act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms, provisions and covenants of the
instrument, regardless of any knowledge thereof which any such holder may have
or otherwise be charged with.

     SECTION 10.08. RELIANCE BY HOLDERS OF SENIOR INDEBTEDNESS ON SUBORDINATION
PROVISIONS. Each Holder of Securities by such Holder's acceptance thereof,
acknowledges and agrees that the foregoing subordination provisions are, and are
intended to be, an inducement and a consideration to each holder of any Senior
Indebtedness, whether such Senior Indebtedness was created or acquired before or
after the issuance of the Securities, to acquire and continue to hold, or to
continue to hold, such Senior Indebtedness and such holder of Senior
Indebtedness shall be deemed conclusively to have relied on such subordination
provisions in acquiring and continuing to hold, or in continuing to hold, such
Senior Indebtedness, and no amendment or modification of the provisions
contained herein shall diminish the rights of such holder or holders unless such
holder or holders shall have agreed in writing thereto.

     SECTION 10.09. REINSTATEMENT OF SUBORDINATION. If, at any time, all or part
of any payment of any Senior Indebtedness theretofore made by the Company or any
other Person is rescinded or must otherwise be returned by the holders of such
Senior Indebtedness for any reason whatsoever (including, without limitation,
the insolvency, bankruptcy or reorganization of the Company or such other
Person), these subordination provisions shall continue to be effective or be
reinstated, as the case may be, all as though such payment had not been made.

     SECTION 10.10. PERMITTED PAYMENTS. Nothing contained in this Article 10 or
elsewhere in this Indenture, or in the Securities shall prevent (a) the Company
at any time, except under the conditions described in Section 10.02, from making
payments at any time of Principal Amount, Issue Price, accrued Original Issue
Discount, accrued Liquidated Damages, if any, Redemption Price, Purchase Price,
Fundamental Change Redemption Price or interest, if any, in respect of the
Securities, or from depositing with the Trustee or any Paying Agent money for
such payments, or (b) the application by the Trustee or Paying Agent of any
moneys deposited with it under this


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Indenture to the payment of or on account of the Principal Amount, Issue Price,
accrued Original Issue Discount, accrued Liquidated Damages, if any, Redemption
Price, Purchase Price, Fundamental Change Redemption Price or interest, if any,
in respect of the Securities to the Holders entitled thereto to the
beneficiaries thereof, if such payment would not have been prohibited by the
provisions of Section 10.02.

     SECTION 10.11. ARTICLE APPLICABLE TO PAYING AGENTS. If at any time any
Paying Agent other than the Trustee shall have been appointed by the Company and
be then acting hereunder, the term "Trustee" as used in this Article 10 shall
(unless the context otherwise requires) be construed as extending to and
including such Paying Agent within its meaning as fully for all intents and
purposes as if such Paying Agent were named in this Article 10 in addition to or
in place of the Trustee; PROVIDED, HOWEVER, that the first paragraph of Section
10.05 shall not apply to the Company or any Affiliate of the Company if it or
such Affiliate acts as Paying Agent.

     SECTION 10.12. TREATMENT OF CONVERSION PAYMENTS. Notwithstanding anything
in this Indenture to the contrary, neither the issuance and delivery of junior
securities upon conversion of the Securities in accordance with Article 11 nor
the payment of cash in lieu of fractional shares of Common Stock in accordance
with Article 11 shall be deemed to constitute a payment or distribution on
account of the Principal Amount, Issue Price, accrued Original Issue Discount,
accrued Liquidated Damages, if any, Redemption Price or Fundamental Change
Purchase Price or interest, if any, in respect of the Securities. For the
purposes of this paragraph, the term "junior securities" means (a) shares of any
stock of any class of the Company, (b) securities of the Company which are
subordinated in right of payment to all Senior Indebtedness which may be
outstanding at the time of issuance or delivery of such securities to
substantially the same extent as, or to a greater extent than, the Securities
are so subordinated as provided in this Article 10, and (c) any securities into
which the Securities become convertible pursuant to Section 11.14 which are
securities of a Person required to enter into a supplemental indenture pursuant
to such section (or Section 5.01) and are either (x) shares of any stock of any
class of such Person, or (y) securities of such Person which are subordinated in
right of payment to all Senior Indebtedness of such Person which may be
outstanding at the time of issuance or delivery of such securities to
substantially the same extent as, or to a greater extent than, the Securities
or, are so subordinated as provided in this Article 10. Nothing contained in
this Article 10 or elsewhere in this Indenture or in the Securities is intended
to or shall impair, as among the Company, its creditors other than the holders
of Senior Indebtedness and the Holders, the right, which is absolute and
unconditional, of the Holder to convert such Security in accordance with Article
11.

     SECTION 10.13. RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING
AGENT. Upon any payment or distribution of assets of the Company referred to in
this Article 10, the Trustee and the Holders shall be entitled to rely upon any
order or decree entered by any court of competent jurisdiction in which such
insolvency, bankruptcy, receivership, liquidation, reorganization, dissolution,
winding up or similar case or proceeding is pending, or a certificate of the
trustee in


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bankruptcy, liquidating trustee, custodian, receiver, assignee for the benefit
of creditors, agent or other Person making such payment or distribution,
delivered to the Trustee or to the Holders, for the purpose of ascertaining the
Persons entitled to participate in such payment or distribution, the holders of
Senior Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article 10.

     SECTION 10.14. HOLDERS OF SENIOR INDEBTEDNESS MAY FILE PROOFS OF CLAIM. If
the Trustee does not file a claim or proof of debt in the form required in any
receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement,
adjustment, composition or other judicial proceeding pursuant to Section 6.09
prior to 30 days before the expiration of the time to file such claims or
proofs, then any holder or holders of Senior Indebtedness or their
representative or representatives shall have the right to demand, sue for,
collect, receive and receipt for the payments and distributions in respect of
the Securities which are required to be paid or delivered to the holders of
Senior Indebtedness as provided in this Article 10 and to file and prove all
claims therefor and to take all such other action in the name of the holders or
otherwise, as such holders of Senior Indebtedness or representative thereof may
determine to be necessary or appropriate for the enforcement of the provisions
of this Article 10.


                                   ARTICLE 11

                                   CONVERSION

     SECTION 11.01. CONVERSION PRIVILEGE. A Holder of a Security may convert
such Security for Common Stock at any time during the period stated in paragraph
9 of the Securities. The number of shares of Common Stock issuable upon
conversion of a Security per $1,000 of Principal Amount thereof (the "Conversion
Rate") shall be that set forth in paragraph 9 in the Securities, subject to
adjustment as herein set forth.

     A Holder may convert a portion of the Principal Amount of a Security if the
portion is $1,000 or a multiple of $1,000. Provisions of this Indenture that
apply to conversion of all of a Security also apply to conversion of a portion
of a Security.

     SECTION 11.02. CONVERSION PROCEDURE. To convert a Security a Holder must
satisfy the requirements in paragraph 9 of the Securities. The date on which the
Holder of Securities satisfies all those requirements is the conversion date
(the "Conversion Date"). As soon as practicable after the Conversion Date the
Company shall deliver to the Holder, through the Conversion Agent, a certificate
for the number of full shares of Common Stock issuable upon the conversion and
cash in lieu of any fractional share determined pursuant to Section 11.03. The
Person in whose name the certificate is registered shall be treated as a
stockholder of record on and after the Conversion


                                      -62-

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Date; PROVIDED, HOWEVER, that no surrender of a Security on any date when the
stock transfer books of the Company shall be closed shall be effective to
constitute the Person or Persons entitled to receive the shares of Common Stock
upon such conversion as the record holder or holders of such shares of Common
Stock on such date, but such surrender shall be effective to constitute the
Person or Persons entitled to receive such shares of Common Stock as the record
holder or holders thereof for all purposes at the close of business on the next
succeeding day on which such stock transfer books are open; such conversion
shall be at the Conversion Rate in effect on the date that such Security shall
have been surrendered for conversion, as if the stock transfer books of the
Company had not been closed. Upon conversion of a Security, such Person shall no
longer be a Holder of such Security.

     No payment or adjustment will be made for dividends on or other
distribution with respect to any Common Stock except as provided in this Article
11. On conversion of a Security, that portion of accrued Original Issue Discount
attributable to the period from the Issue Date of the Security to the Conversion
Date with respect to the converted Security shall not be canceled, extinguished
or forfeited, but rather shall be deemed to be paid in full to the Holder
thereof through delivery of the Common Stock (together with the cash payment, if
any, in lieu of fractional shares) in exchange for the Security being converted
pursuant to the provisions hereof.

     If a Holder converts more than one Security at the same time, the number of
shares of Common Stock issuable upon the conversion shall be based on the total
Principal Amount of the Securities converted.

     Upon surrender of a Security that is converted in part, the Company shall
execute, and the Trustee shall authenticate and deliver to the Holder, a new
Security in an authorized denomination equal in Principal Amount to the
unconverted portion of the Security surrendered.

     If the last day on which a Security may be converted is a Legal Holiday in
a place where a Conversion Agent is located, the Security may be surrendered to
that Conversion Agent on the next succeeding day that it is not a Legal Holiday.

     SECTION 11.03. FRACTIONAL SHARES. The Company will not issue a fractional
share of Common Stock upon conversion of a Security. Instead the Company will
deliver cash for the current market value of the fractional share. The current
market value of a fractional share shall be determined to the nearest 1/10,000th
of a share by multiplying the last reported sale price (determined as set forth
in the definition of Current Market Price) on the last Trading Day prior to the
Conversion Date of a full share by the fractional amount and rounding the
product to the nearest whole cent (with one-half cent being rounded upwards).

     SECTION 11.04. TAXES ON CONVERSION. If a Holder converts a Security, the
Company shall pay any documentary, stamp or similar issue or transfer tax due on
the issue of shares of Common


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Stock upon the conversion. However, the Holder shall pay any such tax which is
due because the Holder requests the shares to be issued in a name other than the
Holder's name. The Conversion Agent may refuse to deliver the certificates
representing the Common Stock being issued in a name other than the Holder's
name until the Conversion Agent receives a sum sufficient to pay any tax which
will be due because the shares are to be issued in a name other than the
Holder's name. Nothing herein shall preclude any tax withholding required by law
or regulations.

     SECTION 11.05. COMPANY TO PROVIDE STOCK. The Company shall, prior to
issuance of any Securities hereunder, and from time to time as may be necessary,
reserve out of its authorized but unissued Common Stock a sufficient number of
shares of Common Stock to permit the conversion of the Securities.

     All shares of Common Stock delivered upon conversion of the Securities
shall be newly issued shares or treasury shares, shall be duly and validly
issued and fully paid and nonassessable and shall be free from preemptive rights
and free of any lien or adverse claim.

     The Company will endeavor promptly to comply with all Federal and state
securities laws regulating the offer and delivery of shares of Common Stock upon
conversion of Securities, if any, and will endeavor promptly, if permitted by
the rules of such exchange, over-the-counter market or other market, to list or
cause to have quoted such shares of Common Stock on each national securities
exchange or in the over-the-counter market or on such other market on which the
Common Stock is then listed or quoted.

     SECTION 11.06. ADJUSTMENT FOR CHANGE IN CAPITAL STOCK. In case the Company
shall (i) pay a dividend, or make a distribution, in shares of its Common Stock,
on its Common Stock, (ii) subdivide its outstanding Common Stock into a greater
number of shares, or (iii) combine its outstanding Common Stock into a smaller
number of shares, the Conversion Rate in effect immediately prior thereto shall
be adjusted so that the holder of any Security thereafter surrendered for
conversion shall be entitled to receive the number of shares of Common Stock of
the Company which such Holder would have owned or have been entitled to receive
after the happening of any of the events described above had such Security been
converted immediately prior to the happening of such event. An adjustment made
pursuant to this Section 11.06 shall become effective immediately after the
effective date of such dividend, distribution, subdivision or combination.

     SECTION 11.07. ADJUSTMENT FOR RIGHTS ISSUE. In case the Company shall issue
rights or warrants to all holders of its Common Stock entitling them (for a
period expiring within 45 days after the record date mentioned below) to
subscribe for or purchase Common Stock at a price per share less than the
Current Market Price per share of Common Stock at the record date for the
determination of stockholders entitled to receive such rights or warrants, the
Conversion Rate in effect immediately prior thereto shall be adjusted so that
the same shall equal the Conversion Rate


                                      -64-

<PAGE>


determined by multiplying the Conversion Rate in effect immediately prior to the
date of issuance of such rights or warrants by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding on the date of
issuance of such rights or warrants plus the number of additional shares of
Common Stock offered for subscription or purchase, and of which the denominator
shall be the number of shares of Common Stock outstanding on the date of
issuance of such rights or warrants plus the number of shares which the
aggregate offering price of the total number of shares so offered would purchase
at such Current Market Price. Such adjustment shall be made successively
whenever any such rights or warrants are issued, and shall become effective
immediately after the opening of business on the day following the record date
for the determination of the stockholders entitled to receive such rights or
warrants. To the extent that shares of Common Stock are not delivered after the
expiration of such rights or warrants, the Conversion Rate shall be readjusted
to the Conversion Rate which would then be in effect had the adjustments made
upon the issuance of such rights or warrants been made on the basis of delivery
of only the number of shares of Common Stock actually delivered. If such rights
or warrants are not so issued, the Conversion Rate shall again be adjusted to be
the Conversion Rate which would then be in effect if such record date for the
determination of stockholders entitled to receive such rights or warrants had
not been fixed. In determining whether any rights or warrants entitle the
holders to subscribe for or purchase shares of Common Stock at less than such
Current Market Price, and in determining the aggregate offering price of such
shares of Common Stock, there shall be taken into account any consideration
received by the Company for such rights or warrants, the value of such
consideration, if other than cash, to be determined by the Board of Directors.

     SECTION 11.08. ADJUSTMENT FOR OTHER DISTRIBUTIONS. (a) In case the Company
shall distribute to all holders of its Common Stock (excluding any distribution
in connection with the liquidation, dissolution or winding up of the Company,
whether voluntary or involuntary) any shares of any class of capital stock of
the Company (other than Common Stock) or evidences of its indebtedness or assets
(other than cash) or rights or warrants to subscribe for or purchase any of its
securities (excluding those referred to in Section 11.07 hereof) (any of the
foregoing hereinafter in this Section 11.08(a) called the "Distributed
Securities"), then, the Conversion Rate shall be adjusted so that the same shall
equal the Conversion Rate determined by multiplying the Conversion Rate in
effect immediately prior to the date of such distribution by a fraction of which
the numerator shall be the Current Market Price per share of the Common Stock on
the record date mentioned below, and the denominator shall be the Current Market
Price per share of the Common Stock on such record date less the fair market
value on such record date (as determined by the Board of Directors of the
Company, whose determination shall be conclusive, and described in a certificate
filed with the Trustee) of the Distributed Securities so distributed applicable
to one share of Common Stock. Such adjustment shall become effective immediately
after the record date for the determination of stockholders entitled to receive
such distribution. Notwithstanding the foregoing, in the event the then fair
market value (as so determined) of the portion of the Distributed Securities so
distributed applicable to one share of Common Stock is equal to or greater than
the Current Market Price of the Common Stock on the record date, in lieu of the


                                      -65-

<PAGE>


foregoing adjustment, adequate provision shall be made so that each
Securityholder shall have the right to receive upon conversion the amount of
Distributed Securities such Holder would have received had such Holder converted
each Security on such record date. In the event that such distribution is not so
paid or made, the Conversion Rate shall again be adjusted to the Conversion Rate
which would then be in effect if such distribution had not been declared. If the
Board of Directors determines the fair market value of any distribution for
purposes of this Section 11.08(a) by reference to the actual or when issued
trading market for any securities, it must in doing so consider the prices in
such market over the same period used in computing the Current Market Price of
the Common Stock.

     Notwithstanding the foregoing provisions of this Section 11.08(a), no
adjustment shall be made thereunder for any distribution of Distributed
Securities if the Company makes proper provision so that each Holder of a
Security who converts such Security (or any portion thereof) after the record
date for such distribution shall be entitled to receive upon such conversion, in
addition to the shares of Common Stock issuable upon such conversion, the amount
and kind of Distributed Securities that such Holder would have been entitled to
receive if such Holder had, immediately prior to such record date, converted
such Security for Common Stock; provided that, with respect to any Distributed
Securities that are convertible, exchangeable or exercisable, the foregoing
provision shall only apply to the extent (and so long as) the Distributed
Securities receivable upon conversion of such Security would be convertible,
exchangeable or exercisable, as applicable, without any loss of rights or
privileges for a period of at least 60 days following conversion of such
Security.

     (b) In case the Company shall, by dividend or otherwise, distribute to all
holders of its Common Stock cash (excluding (x) any quarterly cash dividend on
the Common Stock to the extent the aggregate cash dividend per share of Common
Stock in any fiscal quarter does not exceed the greater of (A) the amount per
share of Common Stock of the next preceding quarterly cash dividend on the
Common Stock to the extent such preceding quarterly dividend did not require an
adjustment of the Conversion Rate pursuant to this Section 11.08(b) (as adjusted
to reflect subdivisions or combinations of the Common Stock), and (B) 3.75% of
the average of the last reported sales prices of the Common Stock (determined as
provided in the definition of Current Market Price) during the ten Trading Days
next preceding the date of declaration of such dividend and (y) any dividend or
distribution in connection with the liquidation, dissolution or winding up of
the Company, whether voluntary or involuntary), then, in such case, unless the
Company elects to reserve such cash for distribution to the holders of the
Securities upon the conversion of the Securities so that any such holder
converting Securities will receive upon such conversion in addition to the
shares of Common Stock to which such holder is entitled, the amount of cash
which such holder would have received if such holder had, immediately prior to
the record date for such distribution of cash, converted its Securities for
Common Stock, the Conversion Rate shall be adjusted so that the same shall equal
the Conversion Rate determined by multiplying the Conversion Rate in effect
immediately prior to the record date by a fraction of which the numerator


                                      -66-

<PAGE>


shall be such Current Market Price of the Common Stock and the denominator shall
be the Current Market Price of the Common Stock on the record date less the
amount of cash so distributed (and not excluded as provided above) applicable to
one share of Common Stock, such adjustment to be effective immediately prior to
the opening of business on the day following the record date; PROVIDED, HOWEVER,
that in the event the portion of the cash so distributed applicable to one share
of Common Stock is equal to or greater than the Current Market Price of the
Common Stock on the record date, in lieu of the foregoing adjustment, adequate
provision shall be made so that each Securityholder shall have the right to
receive upon conversion the amount of cash such Holder would have received had
such Holder converted each Security on the record date. If such dividend or
distribution is not so paid or made, the Conversion Rate shall again be adjusted
to be the Conversion Rate which would then be in effect if such dividend or
distribution had not been declared. If any adjustment is required to be made as
set forth in this Section 11.08(b) as a result of a distribution that is a
quarterly dividend, such adjustment shall be based upon the amount by which such
distribution exceeds the amount of the quarterly cash dividend permitted to be
excluded pursuant hereto. If an adjustment is required to be made as set forth
in this Section 11.08(b) above as a result of a distribution that is not a
quarterly dividend, such adjustment shall be based upon the full amount of the
distribution.

     (c) In case a tender or exchange offer made by the Company or any
Subsidiary of the Company for all or any portion of the Common Stock shall
expire and such tender or exchange offer shall involve the payment by the
Company or such Subsidiary of consideration per share of Common Stock having a
fair market value (as determined by the Board of Directors, whose determination
shall be conclusive, and described in a resolution of such Board of Directors)
at the last time (the "Expiration Time") tenders or exchanges may be made
pursuant to such tender or exchange offer (as it shall have been amended) that
exceeds the last reported sale price of the Common Stock (determined as provided
in the definition of Current Market Price) on the Trading Day next succeeding
the Expiration Time, the Conversion Rate shall be adjusted so that the same
shall equal the Conversion Rate determined by multiplying the Conversion Rate in
effect immediately prior to the Expiration Time by a fraction of which the
numerator shall be the sum of (x) the fair market value (determined as
aforesaid) of the aggregate consideration payable to stockholders based on the
acceptance (up to any maximum specified in the terms of the tender or exchange
offer) of all shares validly tendered or exchanged and not withdrawn as of the
Expiration Time (the shares deemed so accepted up to any such maximum, being
referred to as the "Purchased Shares") and (y) the product of the number of
shares of Common Stock outstanding (less any Purchased Shares) on the Expiration
Time and the last reported sale price of the Common Stock (determined as
provided in the definition of Current Market Price) on the Trading Day next
succeeding the Expiration Time, and the denominator shall be the number of
shares of Common Stock outstanding (including any tendered or exchanged shares)
on the Expiration Time multiplied by the last reported sale price of the Common
Stock (determined as provided in the definition of Current Market Price) on the
Trading Day next succeeding the Expiration Time, such adjustment to become
effective immediately prior to the opening of business on the day following the


                                      -67-

<PAGE>


Expiration Time. In the event that the Company is obligated to purchase shares
pursuant to any such tender or exchange offer, but the Company is permanently
prevented by applicable law from effecting any such purchases or all such
purchases are rescinded, the Conversion Rate shall again be adjusted to be the
Conversion Rate which would then be effect if such tender or exchange offer had
not been made.

     (d) In case of a tender or exchange offer by a Person other than the
Company or any Subsidiary for an amount which increases the offerer's ownership
of Common Stock to more than 25% of the total shares of Common Stock outstanding
and shall involve the payment by such Person of consideration per share of
Common Stock having a fair market value (as determined by the Board of
Directors, whose determination shall be conclusive, and described in a
resolution of the Board of Directors) at the last time (the "Tender Expiration
Time") tenders or exchanges may be made pursuant to such tender or exchange
offer (as it shall have been amended) that exceeds the last reported sale price
of the Common Stock (determined as provided in the definition of Current Market
Price) on the Trading Day next succeeding the Tender Expiration Time, and in
which, as of the Tender Expiration Time the Board of Directors is not
recommending rejection of the offer, the Conversion Rate shall be adjusted so
that the same shall equal the Conversion Rate determined by multiplying the
Conversion Rate in effect immediately prior to the Tender Expiration Time by a
fraction of which the numerator shall be the sum of (x) the fair market value
(determined as aforesaid) of the aggregate consideration payable to stockholders
based on the acceptance (up to an maximum specified in the terms of the tender
or exchanged offer) of all shares validly tendered or exchanged and not
withdrawn as of the Tender Expiration Time (the shares deemed so accepted, up to
any such maximum, being referred to as the "Tender Purchased Shares") and (y)
the product of the number of shares of Common Stock outstanding (less any Tender
Purchased Shares) on the Tender Expiration Time and the last reported sale price
of the Common Stock (determined as provided in the definition of Current Market
Price) on the Trading Day next succeeding the Tender Expiration Time and the
denominator shall be the number of shares of Common Stock outstanding (including
any tendered or exchanged shares) on the Tender Expiration Time multiplied by
the last reported sale price of the Common Stock (determined as provided in the
definition of Current Market Price) on the Trading Day next succeeding the
Tender Expiration Time, such adjustment to become effective immediately prior to
the opening of business on the day following the Tender Expiration Time. In the
event that such Person is obligated to purchase shares pursuant to any such
tender or exchange offer, but such Person is permanently prevented by applicable
law from effecting any such purchases or all such purchases are rescinded, the
Conversion Rate shall again be adjusted to be the Conversion Rate which would
then be in effect if such tender or exchange offer had not been made.
Notwithstanding the foregoing, the adjustment described in this Section 11.08(d)
shall not be made if, as of the Tender Expiration Time, the offering documents
with respect to such offer disclose a plan or intention to cause the Company to
engage in any transaction described in Article 5.


                                      -68-

<PAGE>


     SECTION 11.09. WHEN ADJUSTMENT MAY BE DEFERRED. No adjustment in the
Conversion Rate need be made unless the adjustment would require an increase or
decrease of at least 1% in the Conversion Rate. Any adjustments that are not
made shall be carried forward and taken into account in any subsequent
adjustment.

     All calculations under this Article 11 shall be made to the nearest cent or
to the nearest 1/10,000th of a share, as the case may be.

     SECTION 11.10. WHEN NO ADJUSTMENT REQUIRED. No adjustment need be made for
rights to purchase Common Stock pursuant to a Company plan for reinvestment of
dividends or interest.

     No adjustment need be made for a change in the par value or no par value of
the Common Stock.

     To the extent the Securities become convertible into cash, assets, property
or securities (other than capital stock of the Company), no adjustment need be
made thereafter as to the cash, assets, property or such securities. Interest
will not accrue on the cash.

     SECTION 11.11. NOTICE OF ADJUSTMENT. Whenever the Conversion Rate is
adjusted, the Company shall promptly mail to Holders a notice of the adjustment.
The Company shall file with the Trustee and the Conversion Agent such notice.
The certificate shall, absent manifest error, be conclusive evidence that the
adjustment is correct. Neither the Trustee nor any Conversion Agent shall be
under any duty or responsibility with respect to any such certificate except to
exhibit the same to any Holder desiring inspection thereof.

     SECTION 11.12. VOLUNTARY INCREASE. The Company may make such increases in
the Conversion Rate, in addition to those required by Sections 11.06, 11.07 and
11.08, as the Board of Directors considers to be advisable to avoid or diminish
any income tax to holders of Common Stock or rights to purchase Common Stock
resulting from any dividend or distribution of stock (or rights to acquire
stock) or from any event treated as such for income tax purposes. To the extent
permitted by applicable law, the Company may from time to time increase the
Conversion Rate by any amount for any period of time if the period is at least
20 days, the increase is irrevocable during the period and the Board of
Directors shall have made a determination that such increase would be in the
best interests of the Company, which determination shall be conclusive. Whenever
the Conversion Rate is so increased, the Company shall mail to Holders and file
with the Trustee and the Conversion Agent a notice of such increase. Such
Company shall mail the notice at least 15 days before the date the increased
Conversion Rate takes effect. The notice shall state the increased Conversion
Rate and the period it will be in effect.


                                      -69-

<PAGE>


     SECTION 11.13. NOTICE OF CERTAIN TRANSACTIONS. If:

         (1) the Company makes any distribution or dividend that would require
an adjustment in the Conversion Rate pursuant to Section 11.06, 11.07 or 11.08;
or

         (2) the Company takes any action that would require a supplemental
indenture pursuant to Section 11.14; or

         (3) there is a liquidation, dissolution or winding-up of the Company;

then the Company shall mail to Holders and file with the Trustee and the
Conversion Agent a notice stating the proposed record date for a dividend or
distribution or the proposed effective date of a subdivision, combination,
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding-up. The Company shall file and mail the notice at least
15 days before such date. Failure to file or mail the notice or any defect in it
shall not affect the validity of the transaction.

     SECTION 11.14. EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE.
If any of the following events occur, namely (i) any reclassification or change
of outstanding shares of Common Stock (other than a change in par value, or from
par value to no par value, or from no par value to par value, or as a result of
a subdivision or combination), (ii) any consolidation, merger or combination of
the Company with another corporation as a result of which holders of Common
Stock shall be entitled to receive stock, securities or other property or assets
(including cash) with respect to or in exchange for such Common Stock, or (iii)
any sale or conveyance of the properties and assets of the Company as, or
substantially as, an entirety to any other corporation as a result of which
holders of Common Stock shall be entitled to receive stock, securities or other
property or assets (including cash) with respect to or in exchange for such
Common Stock, then the Company or the successor or purchasing corporation, as
the case may be, shall execute with the Trustee a supplemental indenture,
providing that each Security shall be convertible into the kind and amount of
shares of stock and other securities or property or assets (including cash)
receivable upon such reclassification, change, consolidation, merger,
combination, sale or conveyance by a holder of a number of shares of Common
Stock issuable upon conversion of such Securities immediately prior to such
reclassification, change, consolidation, merger, combination, sale or conveyance
assuming that a holder of Securities would not have exercised any rights of
election as to the stock, securities or other property or assets (including
cash) receivable in connection therewith. Such supplemental indenture shall
provide for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article.

     The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each Holder of Securities, at such Holder's address
appearing on the Security register provided for in Section 2.03 of this
Indenture.


                                      -70-

<PAGE>


     The above provisions of this Section shall similarly apply to successive
reclassifications, consolidations, mergers, combinations, and sales.

     If this Section applies, neither Section 11.06, 11.07 nor 11.08 applies.

     SECTION 11.15. COMPANY DETERMINATION FINAL. Any determination that the
Company or the Board of Directors must make pursuant to Section 11.03, 11.06,
11.07, 11.08, 11.09, 11.10, 11.14 or 11.17 is conclusive absent manifest error.

     SECTION 11.16. TRUSTEE'S ADJUSTMENT DISCLAIMER. The Trustee has no duty to
determine when an adjustment under this Article 11 should be made, how it should
be made or what it should be. The Trustee has no duty to determine whether a
supplemental indenture under Section 11.14 need be entered into or whether any
provisions of any supplemental indenture are correct. The Trustee shall not be
accountable for and makes no representation as to the validity or value of any
securities or assets issued upon conversion of Securities. The Trustee shall not
be responsible for the Company's failure to comply with this Article 11, and
shall not be deemed to have any knowledge whatsoever of any adjustment unless
and until it shall have received a notice of adjustment pursuant to Section
11.11. Each Conversion Agent shall have the same protection under this Section
11.16 as the Trustee.

     SECTION 11.17. SIMULTANEOUS ADJUSTMENTS. In the event that this Article 11
requires adjustments to the Conversion Rate under more than one of Sections
11.06, 11.07, 11.08(a) or 11.08(b), and the record dates for the distributions
giving rise to such adjustments shall occur on the same date, then such
adjustments shall be made by applying, first, the provisions of Section
11.08(a), second, the provisions of Section 11.08(b), third the provisions of
Section 11.06 and, fourth, the provisions of Section 11.07.

     SECTION 11.18. SUCCESSIVE ADJUSTMENTS. After an adjustment to the
Conversion Rate under this Article 11, any subsequent event requiring an
adjustment under this Article 11 shall cause an adjustment to the Conversion
Rate as so adjusted.

     SECTION 11.19. RIGHTS ISSUED IN RESPECT OF COMMON STOCK ISSUED UPON
CONVERSION. Rights or warrants distributed by the Company to all holders of
Common Stock entitling the holders thereof to subscribe for or purchase shares
of the Company's capital stock (either initially or under certain
circumstances), which rights or warrants, until the occurrence of a specified
event or events ("Trigger Event"):

              (i) are deemed to be transferred with such shares of Common Stock,

              (ii) are not exercisable, and


                                      -71-

<PAGE>


              (iii) are also issued in respect of future issuances of Common
Stock,

shall not be deemed distributed for purposes of Section 11.08(a) until the
occurrence of the earliest Trigger Event. In addition, in the event of any
distribution of rights or warrants, or any Trigger Event with respect thereto,
that shall have resulted in an adjustment to the Conversion Rate under Section
11.08(a), (1) in the case of any such rights or warrants which shall all have
been redeemed or repurchased without exercise by any holders thereof, the
Conversion Rate shall be readjusted upon such final redemption or repurchase to
give effect to such distribution or Trigger Event, as the case may be, as though
it were a cash distribution, equal to the per share redemption or repurchase
price received by a holder of Common Stock with respect to such rights or
warrants (assuming such holder had retained such rights or warrants), made to
all holders of Common Stock as of the date of such redemption or repurchase, and
(2) in the case of any such rights or warrants all of which shall have expired
without exercise by any holder thereof, the Conversion Rate shall be readjusted
as if such issuance had not occurred.

     SECTION 11.20. GENERAL CONSIDERATIONS. Whenever successive adjustments to
the Conversion Rate are called for pursuant to this Article 11, such adjustments
shall be made to the Current Market Price as may be necessary or appropriate to
effectuate the intent of this Article 11 and to avoid unjust or inequitable
results as determined in good faith by the Board of Directors.


                                   ARTICLE 12

                                  MISCELLANEOUS

     SECTION 12.01. TRUST INDENTURE ACT. This Indenture is hereby made subject
to, and shall be governed by, the provisions of the TIA required to be part of
and to govern indentures qualified under the TIA; PROVIDED, HOWEVER that this
Section 12.01 shall not require this Indenture or the Trustee to be qualified
under the TIA prior to the time such qualification is in fact required under the
terms of the TIA, nor shall it constitute any admission or acknowledgment by any
party that any such qualification is required prior to the time such
qualification is in fact required under the terms of the TIA. If any provision
hereof limits, qualifies or conflicts with another provision hereof which is
required to be included in an indenture qualified under the TIA, such required
provision shall control.

     SECTION 12.02. NOTICES. Any request, demand, authorization, notice, waiver,
consent or communication shall be in writing and delivered in Person or mailed
by first class mail, postage prepaid, addressed as follows or transmitted by
facsimile transmission (confirmed by overnight courier) to the following
facsimile numbers:


                                      -72-

<PAGE>


      if to the Company:

           Sunbeam Corporation
           1615 South Congress Avenue
           Suite 200
           Delray Beach, Florida 33445
           Attn: Associate General Counsel

           Telephone Number: (561) 243-2100
           Facsimile Number:  (561) 243-2218


      if to the Trustee:

           The Bank of New York
           101 Barclay Street, 21st Floor West
           New York, New York 10286
           Attention: Corporate Trust Trustee Administration
           (Attention: Sunbeam Corporation, Zero Coupon Convertible Senior
           Subordinated Debentures due 2018)

           Facsimile Number:   (212) 815-5915/5917


     The Company or the Trustee by notice to the other may designate additional
or different addresses for subsequent notices or communications.

     Any notice or communication given to a Securityholder shall be mailed to
the Securityholder, by first class mail, postage prepaid, at the
Securityholder's address as it appears on the registration books of the
Registrar and shall be sufficiently given if so mailed within the time
prescribed.

     Failure to mail a notice or communication to a Securityholder or any defect
in it shall not affect its sufficiency with respect to other Holders. If a
notice or communication is mailed in the manner provided above, it is duly
given, whether or not received by the addressee.

     If the Company mails a notice or communication to the Holders, it shall
mail a copy to the Trustee and each Registrar, Paying Agent, Conversion Agent or
co-registrar.

     SECTION 12.03. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS. Holders may
communicate pursuant to TIA Section 312(b) with other Holders with respect to
their rights under this Indenture or the Securities. The Company, the Trustee,
the Registrar, the Paying Agent, the Conversion Agent and anyone else shall have
the protection of TIA Section 312(c).


                                      -73-

<PAGE>


     SECTION 12.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT. Upon any
request or application by the Company to the Trustee to take any action under
this Indenture, the Company shall furnish to the Trustee:

         (1) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and

         (2) an Opinion of Counsel stating that, in the opinion of such counsel,
all such conditions precedent have been complied with.

     SECTION 12.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION. Each
Officers' Certificate or Opinion of Counsel with respect to compliance with a
covenant or condition provided for in this Indenture shall include:

         (1) a statement that each individual making such Officers' Certificate
or Opinion of Counsel has read such covenant or condition;

         (2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such Officers'
Certificate or Opinion of Counsel are based;

         (3) a statement that, in the opinion of each such individual, he or she
has made such examination or investigation as is necessary to enable him or her
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and

         (4) a statement that, in the opinion of such individual, such covenant
or condition has been complied with.

     SECTION 12.06. SEPARABILITY CLAUSE. In case any provision in this Indenture
or in the Securities shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.

     SECTION 12.07. RULES BY TRUSTEE, PAYING AGENT, CONVERSION AGENT AND
REGISTRAR. The Trustee may make reasonable rules for action by or a meeting of
Holders. The Registrar, Conversion Agent and the Paying Agent may make
reasonable rules for their functions.

     SECTION 12.08. LEGAL HOLIDAYS. A "Legal Holiday" is any day other than a
Business Day. If any specified date (including a date for giving notice) is a
Legal Holiday, the action shall be taken on the next succeeding day that is not
a Legal Holiday, and to the extent applicable no Original Issue Discount or
interest, if any, shall accrue for the intervening period.


                                      -74-

<PAGE>


     SECTION 12.09. GOVERNING LAW. The laws of the State of New York shall
govern this Indenture and the Securities, without regard to the principles of
conflicts of laws.

     SECTION 12.10. NO RECOURSE AGAINST OTHERS. A director, officer, employee or
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Securities or this Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Securityholder shall waive and release
all such liability. The waiver and release shall be part of the consideration
for the issue of the Securities.

     SECTION 12.11. SUCCESSORS. All agreements of the Company in this Indenture
and the Securities shall bind its successor. All agreements of the Trustee in
this Indenture shall bind its successor.

     SECTION 12.12. MULTIPLE ORIGINALS. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement. One signed copy is enough to prove this
Indenture.


                                      -75-

<PAGE>


     IN WITNESS WHEREOF, the undersigned, being duly authorized, has executed
this Indenture on behalf of the respective parties hereto as of the date first
written above.

                                       SUNBEAM CORPORATION


                                       By /s/ Russell A. Kersh
                                       -----------------------
                                       Title:Executice Vice President & 
                                             Chief Financial Officer


                                       THE BANK OF NEW YORK, as Trustee



                                       By /s/ MaryBeth A. Lewicki
                                       --------------------------
                                             Authorized Signatory




                                      -76-

<PAGE>


                                    EXHIBIT A

                           [FORM OF FACE OF SECURITY]

FOR UNITED STATES FEDERAL INCOME TAX PURPOSES, THIS SECURITY BEARS ORIGINAL
ISSUE DISCOUNT. THE ISSUE PRICE WITH RESPECT TO EACH $1,000 PRINCIPAL AMOUNT AT
MATURITY OF THIS SECURITY IS $372.43, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT WITH
RESPECT TO EACH $1,000 PRINCIPAL AMOUNT AT MATURITY OF THIS SECURITY IS $627.57,
THE ISSUE DATE IS MARCH 25, 1998 AND THE YIELD TO MATURITY BASED ON SEMIANNUAL
COMPOUNDING IS 5.0% PER ANNUM.


                      [FORM OF LEGEND FOR GLOBAL SECURITY:

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC) , ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]

     THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED
STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH
IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT)
("INSTITUTIONAL ACCREDITED INVESTOR"); (2) AGREES THAT IT WILL NOT, PRIOR TO
EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED
HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION),
RESELL OR OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY OR THE COMMON STOCK
ISSUABLE UPON CONVERSION OF SUCH SECURITY WITHIN THE UNITED STATES OR TO, OR FOR
THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT (A) TO SUNBEAM CORPORATION OR ANY
SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH
RULE 144A UNDER THE SECURITIES ACT, (C) TO AN INSTITUTIONAL ACCREDITED


                                       A-1

<PAGE>


INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE BANK OF NEW YORK, AS
TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE), A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER
OF THE SECURITY EVIDENCED HEREBY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM
SUCH TRUSTEE OR A SUCCESSOR TRUSTEE, AS APPLICABLE), (D) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE) OR (E) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE
TIME OF SUCH TRANSFER); (3) PRIOR TO SUCH TRANSFER (OTHER THAN A TRANSFER
PURSUANT TO CLAUSE 2(E) ABOVE), IT WILL FURNISH TO THE BANK OF NEW YORK, AS
TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS THE TRUSTEE MAY REASONABLY REQUIRE TO CONFIRM
THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
AND (4) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE SECURITY
EVIDENCED HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND. IN CONNECTION WITH ANY TRANSFER OF THE SECURITY EVIDENCED HEREBY PRIOR
TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY
EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION), THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE
HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO
THE BANK OF NEW YORK, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE). IF THE
PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR OR IS A PURCHASER
WHO IS NOT A U.S. PERSON, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO
THE BANK OF NEW YORK, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS IT MAY REASONABLY REQUIRE
TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN
A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT. THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THE
SECURITY EVIDENCED HEREBY PURSUANT TO CLAUSE 2(E) ABOVE OR UPON ANY TRANSFER OF
THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY
SUCCESSOR PROVISION). AS USED HEREIN, THE TERMS "UNITED STATES" AND "U.S.
PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES
ACT.


                                       A-2

<PAGE>


                               SUNBEAM CORPORATION

         ZERO COUPON CONVERTIBLE SENIOR SUBORDINATED DEBENTURE DUE 2018

No.__
Issue Date: March 25, 1998                    Original Issue Discount:  $627.57
Issue Price:  $372.43                         (for each $1,000 Principal Amount)
(for each $1,000 Principal Amount)
                                                         CUSIP: ________

      Sunbeam Corporation, a Delaware corporation, promises
 to pay to registered assigns, on March 25, 2018                    or
 [the Principal Amount of                                Dollars ($      )].(1)]

     This Security shall not bear interest except as specified on the other side
of this Security. Original Issue Discount will accrue as specified on the other
side of this Security. This Security is convertible as specified on the other
side of this Security.

     Additional provisions of this Security are set forth on the other side of
this Security.

     IN WITNESS WHEREOF, Sunbeam Corporation has caused this instrument to be
duly executed.

                                   SUNBEAM CORPORATION

                                   By: ___________________________
                                       Title:

                                   By: ___________________________
                                       Title:

Dated: ________


TRUSTEE'S CERTIFICATE OF AUTHENTICATION

THE BANK OF NEW YORK,
as Trustee, certifies that this is one of the Securities
referred to in the within-mentioned Indenture.

By ________________________________
        Authorized Signatory

--------
(1)  The global Security will read instead: "the Principal Amount then shown on
     Schedule A hereto."


                                       A-3

<PAGE>


                       [FORM OF REVERSE SIDE OF SECURITY]

                               SUNBEAM CORPORATION

         ZERO COUPON CONVERTIBLE SENIOR SUBORDINATED DEBENTURE DUE 2018

1.  INTEREST

     This Security shall not bear interest, except that if the Principal hereof
or any portion of such Principal is not paid when due (whether upon acceleration
pursuant to Section 6.02 of the Indenture, upon the date set for payment of the
Redemption Price pursuant to paragraph 5 hereof, upon the date set for payment
of a Purchase Price or Fundamental Change Redemption Price pursuant to paragraph
6 hereof or upon the Stated Maturity of this Security), then in each such case
the overdue amount shall bear interest at the rate of 5.0% per annum, compounded
semiannually (to the extent that the payment of such interest shall be legally
enforceable), which interest shall accrue from the date such overdue amount was
due to the date payment of such amount, including interest thereon, has been
made or duly provided for. All such interest shall be payable on demand. The
accrual of such interest on overdue amounts shall be in lieu of, and not in
addition to, the continued accrual of Original Issue Discount.

     The Original Issue Discount (the difference between the Issue Price and the
Principal Amount at maturity of the Security) in the period during which a
Security remains outstanding, shall accrue at 5.0% per annum, on a semiannual
bond equivalent basis using a 360-day year composed of twelve 30- day months,
commencing on the Issue Date of this Security.

2.  METHOD OF PAYMENT

     Subject to the terms and conditions of the Indenture, the Company will make
payments in respect of the Securities to the Persons who are registered Holders
of Securities at the close of business on the Business Day preceding the
Redemption Date or Stated Maturity, as the case may be, or at the close of
business on a Purchase Date or Fundamental Change Redemption Date, as the case
may be. Holders must surrender Securities to a Paying Agent to collect such
payments in respect of the Securities. The Company will pay cash amounts in
money of the United States that at the time of payment is legal tender for
payment of public and private debts. However, the Company may make such cash
payments by check payable in such money.

3.  PAYING AGENT, CONVERSION AGENT AND REGISTRAR

     Initially, The Bank of New York, a New York banking corporation (the
"Trustee"), will act as Paying Agent, Conversion Agent and Registrar. The
Company may appoint and change any Paying Agent, Conversion Agent, Registrar or
co-registrar without notice, other than notice to the Trustee. The Company or
any of its Subsidiaries or any of their Affiliates may act as Paying Agent,
Conversion Agent, Registrar or co-registrar.


                                       A-4

<PAGE>


4.  INDENTURE

     The Company issued the Securities under an Indenture (the "Indenture"),
dated as of March 25, 1998, between the Company and the Trustee. Capitalized
terms used herein and not defined herein have the meanings ascribed thereto in
the Indenture. The Securities are subject to all such terms, and Holders are
referred to the Indenture for a statement of those terms.

     The Securities are general unsecured obligations of the Company limited to
$2,014,000,000 aggregate Principal Amount (subject to Section 2.07 of the
Indenture), provided that the aggregate Principal Amount may be increased by up
to $302,100,000 as provided in Section 2.02 of the Indenture. The Indenture does
not limit other indebtedness of the Company, secured or unsecured, including
Senior Indebtedness of the Company.

5.  REDEMPTION AT THE OPTION OF THE COMPANY

     No sinking fund is provided for the Securities. The Securities are
redeemable as a whole, or from time to time in part, at any time at the option
of the Company at the Redemption Prices set forth below, provided that the
Securities are not redeemable prior to March 25, 2003.

     The table below shows Redemption Prices of a Security per $1,000 Principal
Amount at maturity on the dates shown below and at Stated Maturity, which prices
reflect accrued Original Issue Discount calculated to each such date. The
Redemption Price of a Security redeemed between such dates would include an
additional amount reflecting the additional Original Issue Discount accrued
since the next preceding date in the table to the actual Redemption Date.

                                               ACCRUED
                                               ORIGINAL
                                                ISSUE
                                               DISCOUNT      REDEMPTION
                               SECURITY        AT 5.0%          PRICE
  REDEMPTION DATE             ISSUE PRICE      PER-ANNUM      (1) + (2)
-------------------------     -----------      ---------     ----------
March 25, 2003...........      $ 372.43        $ 104.32       $ 476.75
March 25, 2004...........        372.43          128.45         500.88
March 25, 2005...........        372.43          153.81         526.24
March 25, 2006...........        372.43          180.45         552.88
March 25, 2007...........        372.43          208.44         580.87
March 25, 2008...........        372.43          237.84         610.27
March 25, 2009...........        372.43          268.74         641.17
March 25, 2010...........        372.43          301.20         673.63
March 25, 2011...........        372.43          335.30         707.73
March 25, 2012...........        372.43          371.13         743.56
March 25, 2013...........        372.43          408.77         781.20
March 25, 2014...........        372.43          448.32         820.75
March 25, 2015...........        372.43          489.87         862.30


                                       A-5

<PAGE>


March 25, 2016...........        372.43          533.52         905.95
March 25, 2017...........        372.43          579.39         951.82
At maturity..............        372.43          627.57       1,000.00


6.  PURCHASE  BY THE COMPANY AT THE OPTION OF THE  HOLDER;  REDEMPTION  AT THE
    OPTION OF THE HOLDER UPON A FUNDAMENTAL CHANGE

     (a) Subject to the terms and conditions of the Indenture, the Company shall
become obligated to purchase, at the option of the Holder, the Securities held
by such Holder on the following Purchase Dates and at the following Purchase
Prices per $1,000 Principal Amount, upon delivery of a Purchase Notice
containing the information set forth in the Indenture, from the opening of
business on the date that is 20 Business Days prior to such Purchase Date until
the close of business on such Purchase Date and upon delivery of the Securities
to the Paying Agent by the Holder as set forth in the Indenture. Such Purchase
Prices may be paid, at the option of the Company, in cash or by the issuance and
delivery of shares of Common Stock of the Company, or in any combination
thereof.


PURCHASE DATE                                PURCHASE PRICE
-------------                                --------------
March 25, 2003...................               $476.75
March 25, 2008...................                610.27
March 25, 2013...................                781.20


Securities in denominations larger than $1,000 of Principal Amount may be
purchased in part, but only in multiples of $1,000 of Principal Amount.

     (b) At the option of the Holder and subject to the terms and conditions of
the Indenture, the Company shall become obligated to redeem the Securities held
by such Holder 45 days after the date of the Company's notice of a Fundamental
Change occurring on or prior to March 25, 2018 for a Fundamental Change
Redemption Price equal to the Issue Price plus accrued Original Issue Discount
to the Fundamental Change Redemption Date; provided that, with respect to a
Fundamental Change, if the Applicable Price is less than the Reference Market
Price, the Company shall redeem such Securities at a price equal to the
foregoing Redemption Price multiplied by a fraction obtained by dividing the
Applicable Price by the Reference Market Price, which Fundamental Change
Redemption Price shall be paid in cash. Securities in denominations larger than
$1,000 of Principal Amount may be redeemed in part in connection with a
Fundamental Change, but only in multiples of $1,000 of Principal Amount.

     (c) Holders have the right to withdraw any Purchase Notice or Fundamental
Change Redemption Notice, as the case may be, by delivering to the Paying Agent
a written notice of withdrawal in accordance with the provisions of the
Indenture.

     (d) If cash (and/or securities if permitted under the Indenture) sufficient
to pay a Purchase Price or Fundamental Change Redemption Price, as the case may
be, of all Securities or portions


                                       A-6

<PAGE>


thereof to be purchased as of the Purchase Date or the Fundamental Change
Redemption Date, as the case may be, is deposited with the Paying Agent on the
Business Day following the Purchase Date or the Fundamental Change Redemption
Date, as the case may be, Original Issue Discount ceases to accrue on such
Securities (or portions thereof) on and after such date, and the Holder thereof
shall have no other rights as such (other than the right to receive the Purchase
Price or Fundamental Change Redemption Price, as the case may be, upon surrender
of such Security).

7.  NOTICE OF REDEMPTION AT THE OPTION OF THE COMPANY

     Notice of redemption at the option of the Company will be mailed at least
30 days but not more than 60 days before the Redemption Date to each Holder of
Securities to be redeemed at the Holder's registered address. If money
sufficient to pay the Redemption Price of all Securities (or portions thereof)
to be redeemed on the Redemption Date is deposited with the Paying Agent prior
to or on the Redemption Date, on and after such date Original Issue Discount
ceases to accrue on such Securities or portions thereof. Securities in
denominations larger than $1,000 of Principal Amount may be redeemed in part but
only in multiples of $1,000 of Principal Amount.

8.  SUBORDINATION

     The Securities are subordinated to all existing and future Senior
Indebtedness of the Company. To the extent provided in the Indenture, Senior
Indebtedness of the Company must be paid before the Securities may be paid. The
Indenture does not limit the present or future amount of Senior Indebtedness
that the Company may have. The Company agrees, and each Securityholder by
accepting a Security agrees, to the subordination and authorizes the Trustee to
give it effect and appoints the Trustee as attorney-in-fact for such purpose.

9.  CONVERSION

     Subject to the next two succeeding sentences, a Holder of a Security may
convert this Security for Common Stock of the Company at any time after 90 days
following the last date of original issuance of the Securities and before the
close of business on March 25, 2018. If this Security is called for redemption,
the Holder may convert it at any time before the close of the last Trading Day
prior to the Redemption Date. A Security in respect of which a Holder has
delivered a notice of exercise of the option to require the Company to purchase
such Security or to redeem such Security in the event of a Fundamental Change
may be converted only if the notice of exercise is withdrawn in accordance with
the terms of the Indenture.

     The initial Conversion Rate is 6.575 shares of Common Stock per $1,000
Principal Amount at maturity, subject to adjustment in certain events described
in the Indenture. The Company will deliver cash or a check in lieu of any
fractional share of Common Stock.

     To convert this Security a Holder must (1) complete and manually sign the
conversion notice on the back of this Security (or complete and manually sign a
facsimile of such notice) and deliver such


                                      A-7

<PAGE>


notice to the Conversion Agent, (2) surrender this Security to the Conversion
Agent, (3) furnish appropriate endorsements and transfer documents if required
by the Conversion Agent, the Company or the Trustee and (4) pay any transfer or
similar tax, if required.

     A Holder may convert a portion of this Security if the Principal Amount of
such portion is $1,000 or a multiple of $1,000. No payment or adjustment will be
made for dividends on the Common Stock except as provided in the Indenture. On
conversion of this Security, that portion of accrued Original Issue Discount
attributable to the period from the Issue Date to the Conversion Date with
respect to the converted portion of this Security shall not be canceled,
extinguished or forfeited, but rather shall be deemed to be paid in full to the
Holder thereof through the delivery of the Common Stock (together with any cash
payment in lieu of fractional shares) in exchange for the portion of this
Security being converted pursuant to the terms hereof.

10. CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION

     Any Securities called for redemption, unless surrendered for conversion
before the close of business on the last Trading Day prior to the Redemption
Date, may be deemed to be purchased from the Holders of such Securities at an
amount not less than the Redemption Price, by one or more investment bankers or
other purchasers who may agree with the Company to purchase such Securities from
the Holders, to convert them for Common Stock of the Company and to make payment
for such Securities to the Trustee in trust for such Holders.

11. REGISTRATION RIGHTS

     The Holder of this Security and the Common Stock issuable upon conversion
thereof is entitled to the benefits of a Registration Rights Agreement, dated as
of March 25, 1998, between the Company and the Initial Purchaser.

12. DENOMINATIONS; TRANSFER; EXCHANGE

     The Securities are in registered form, without coupons, in denominations of
$1,000 of Principal Amount and multiples of $1,000. A Holder may transfer or
convert Securities in accordance with the Indenture. The Registrar may require a
Holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar need not transfer or exchange any Securities selected
for redemption (except, in the case of a Security to be redeemed in part, the
portion of the Security not to be redeemed) or any Securities in respect of
which a Purchase Notice or Fundamental Change Redemption Notice has been given
and not withdrawn (except, in the case of a Security to be purchased in part,
the portion of the Security not to be purchased) or any Securities for a period
of 15 days before the mailing of a notice of redemption of Securities to be
redeemed.


                                       A-8

<PAGE>


13. PERSONS DEEMED OWNERS

     The registered Holder of this Security may be treated as the owner of this
Security for all purposes.

14. UNCLAIMED MONEY OR SECURITIES

     The Trustee and the Paying Agent shall return to the Company upon written
request any money or securities held by them for the payment of any amount with
respect to the Securities that remains unclaimed for two years, provided that
the Trustee or such Paying Agent, before being required to make any such return,
may at the expense of the Company cause to be published once in a newspaper of
general circulation in The City of New York or mail to each such Holder notice
that such money or securities remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such publication
or mailing, any unclaimed money or securities then remaining will be returned to
the Company. After return to the Company, Holders entitled to the money or
securities must look to the Company for payment as general creditors unless an
applicable abandoned property law designates another Person.

15. AMENDMENT; WAIVER

     Subject to certain exceptions set forth in the Indenture, (i) the Indenture
or the Securities may be amended with the written consent of the Holders of at
least a majority in aggregate Principal Amount of the Securities at the time
outstanding and (ii) certain defaults or noncompliance with certain provisions
may be waived with the written consent of the Holders of a majority in aggregate
Principal Amount of the Securities at the time outstanding. Subject to certain
exceptions set forth in the Indenture, without the consent of any
Securityholder, the Company and the Trustee may amend the Indenture or the
Securities to cure any ambiguity, defect or inconsistency, or to comply with
Article 5 or Section 11.14 of the Indenture, to provide for uncertificated
Securities in addition to or in place of certificated Securities or to make any
change that does not adversely affect the rights of any Securityholder or to
comply with any requirement of the SEC in connection with the qualification of
the Indenture under the TIA.

16. DEFAULTS AND REMEDIES

     Under the Indenture, Events of Default include (i) default in payment of
the Principal Amount, Issue Price, accrued Original Issue Discount, accrued
Liquidated Damages, if any, Redemption Price, Purchase Price or Fundamental
Change Redemption Price, as the case may be, in respect of the Securities when
the same becomes due and payable, provided that in the case of any failure to
pay Liquidated Damages, such failure to pay continues for a period of 30 days;
(ii) failure by the Company to comply with other agreements in the Indenture or
the Securities, subject to notice and lapse of time; and (iii) certain events of
bankruptcy or insolvency. If an Event of Default occurs and is continuing, the
Trustee, or the Holders of at least 25% in aggregate Principal Amount of the
Securities at the time outstanding, may declare all the Securities to be due and
payable immediately. Certain events of


                                       A-9

<PAGE>


bankruptcy or insolvency are Events of Default which will result in the
Securities being declared due and payable immediately upon the occurrence of
such Events of Default.

     Holders may not enforce the Indenture or the Securities except as provided
in the Indenture. The Trustee may refuse to enforce the Indenture or the
Securities unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in aggregate Principal Amount of the
Securities at the time outstanding may direct the Trustee in its exercise of any
trust or power. The Trustee may withhold from Holders notice of any continuing
Default (except a Default in payment of amounts specified in clause (i) above)
if it determines that withholding notice is in their interests.

17. TRUSTEE DEALINGS WITH THE COMPANY

     The Trustee under the Indenture, in its individual or any other capacity,
may become the owner or pledgee of Securities and may otherwise deal with and
collect obligations owed to it by the Company or its Affiliates and may
otherwise deal with the Company or its Affiliates with the same rights it would
have if it were not Trustee.

18. NO RECOURSE AGAINST OTHERS

     A director, officer, employee or stockholder, as such, of the Company shall
not have any liability for any obligations of the Company under the Securities
or the Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Security, each Securityholder
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.

19. AUTHENTICATION

     This Security shall not be valid until an authorized signatory of the
Trustee manually signs the Trustee's Certificate of Authentication on the other
side of this Security.

20. ABBREVIATIONS

     Customary abbreviations may be used in the name of a Securityholder or an
assignee, such as TEN COM (=tenants in common), TENANT (=tenants by the
entireties), JT TEN (=joint tenants with right of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).

21. GOVERNING LAW

     The laws of the State of New York shall govern the Indenture and this
Security, without regard to the principles of conflicts of laws.


                                      A-10

<PAGE>


                           [FORM OF CONVERSION NOTICE]

                                CONVERSION NOTICE

To: Sunbeam Corporation

     The undersigned registered holder of this Security hereby irrevocably
exercises the option to convert this Security, or portion hereof (which is
$1,000 principal amount or a multiple thereof) below designated, for shares of
Common Stock of Sunbeam Corporation in accordance with the terms of the
Indenture referred to in this Security, and directs that the shares issuable and
deliverable upon such conversion, together with any check in payment for
fractional shares and any Securities representing any unconverted principal
amount hereof, be issued and delivered to the registered holder hereof unless a
different name has been indicated below. If shares or any portion of this
Security not converted are to be issued in the name of a Person other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto.

Dated:

                                             ________________________________

                                             ________________________________
                                             Signature (s)


Fill in for registration of shares if to be delivered,
and Securities if to be issued other than to and in
the name of the registered holder:

___________________________________
(Name)

____________________________________
(Street Address)

____________________________________
(City, state and zip code)

Please print name and address
                                              Principal  amount  to  be
                                              converted  (if less  than
                                              all):

                                                  $___,000


                                               _________________________________
                                               Social Security or Other Taxpayer
                                               Identification Number


                                      A-11

<PAGE>


____________________________
    Signature Guarantee

Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.


                                      A-12

<PAGE>


                       [FORM OF OPTION TO ELECT REDEMPTION
                           UPON A FUNDAMENTAL CHANGE]


To:  Sunbeam Corporation

     The undersigned registered holder of this Security hereby acknowledges
receipt of a notice from Sunbeam Corporation (the "Company") as to the
occurrence of a Fundamental Change with respect to the Company and requests and
instructs the Company to redeem this Security, or the portion hereof (which is
$1,000 Principal Amount or a multiple thereof) below designated, in accordance
with the terms of the Indenture referred to in this Security.


Dated: __________________________


                                        _______________________________________

                                        _______________________________________
                                               Signature(s)


                                        Principal  amount  to be redeemed
                                        ( if less than all):

                                        $________________


                                        ________________________________________
                                        Social Security or Other Taxpayer
                                        Identification Number
_______________________________
    Signature Guarantee

Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.

NOTICE: The above signatures of the holder(s) hereof must correspond with the
name as written upon the face of the Security in every particular without
alteration or enlargement or any change whatever.


                                      A-13

<PAGE>


                                   ASSIGNMENT

For value received ________________________ hereby sell(s), assign(s) and
transfer(s) unto _____________________ (Please insert social security or other
Taxpayer Identification Number of assignee) the within Security, and hereby
irrevocably constitutes and appoints ________________ attorney to transfer the
said Security on the books of the Company, with full power of substitution in
the premises.

     In connection with any transfer of the Security within the United States or
to, or for the account or benefit of, U.S. Persons within the period prior to
the expiration of the holding period applicable to sales thereof under Rule
144(k) (other than any transfer pursuant to a registration statement that has
been declared effective under the Securities Act), under the Securities Act (or
any successor provision), the undersigned confirms that such Security is being
transferred:

      [ ]  To Sunbeam Corporation or a subsidiary thereof; or

      [ ]  Pursuant to and in compliance with Rule 144A under the Securities Act
           of 1933, as amended; or

      [ ]  To an Institutional Accredited Investor pursuant to and in compliance
           with the Securities Act of 1933, as amended; or

      [ ]  Pursuant to and in compliance with Rule 144 under the Securities Act
           of 1933, as amended;

and unless the box below is checked, the undersigned confirms that to its
knowledge such Security is not being transferred to an "affiliate" of the
Company as defined in Rule 144 under the Securities Act of 1933, as amended (an
"Affiliate").

      [ ]   The transferee is an Affiliate of the Company.


Dated: ________________________

                                             ___________________________________

                                             ___________________________________
                                                      Signature(s)


                                             ___________________________________
                                                    Signature Guarantee


                                             Signature(s) must be guaranteed by
                                             an "eligible guarantor institution"
                                             meeting the requirements of the
                                             Registrar, which requirements
                                             include membership or participation
                                             in the Security Transfer Agent
                                             Medallion Program ("STAMP") or such
                                             other "signature guarantee program"
                                             as may be determined by the
                                             Registrar in addition to, or in
                                             substitution for, STAMP, all in
                                             accordance with the Securities
                                             Exchange Act of 1934, as amended.


                                      A-14

<PAGE>


NOTICE: The above signatures of the holder(s) hereof must correspond with the
name as written upon the face of the Security in every particular without
alteration or enlargement or any change whatever.


                                      A-15

<PAGE>
<TABLE>
<CAPTION>


              [FORM OF SCHEDULE FOR ENDORSEMENTS ON GLOBAL SECURITY
                     TO REFLECT CHANGES IN PRINCIPAL AMOUNT]


                                   SCHEDULE A

                 CHANGES TO PRINCIPAL AMOUNT OF GLOBAL SECURITY

====================================================================================================
                           PRINCIPAL AMOUNT OF                    
                        SECURITIES BY WHICH THIS                    
                        GLOBAL SECURITY IS TO BE
                        REDUCED OR INCREASED, AND
                                REASON FOR                 REMAINING PRINCIPAL AMOUNT      NOTATION
   DATE                   REDUCTION OR INCREASE              OF THIS GLOBAL SECURITY       MADE BY
<S>                    <C>                                 <C>                             <C>
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-----------            ---------------------------         --------------------------      ---------

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</TABLE>


                                      A-16

<PAGE>


                                    EXHIBIT B

               [FORM OF INSTITUTIONAL ACCREDITED INVESTOR LETTER]

Sunbeam Corporation
1615 South Congress Avenue
Suite 200
Delray Beach, Florida 33445

Gentlemen:

     We are delivering this letter in connection with an offering of Zero Coupon
Convertible Senior Subordinated Debentures due 2018 (the "Debentures) which are
convertible into shares of Common Stock, $.01 par value (the "Common Stock"), of
Sunbeam Corporation (the "Company").

     We hereby confirm that:

         1. we are an "accredited investor" within the meaning of Rule
     501(a)(1), (2), (3) or (7) under the Securities Act of 1933 (the
     "Securities Act") or an entity in which all of the equity owners are
     accredited investors within the meaning of Rule 501(a)(1), (2), (3) or (7)
     under the Securities Act (an "Institutional Accredited Investor") able to
     bear the economic risk of an investment in the Debentures;

         2. (A) any purchase of Debentures by us will be for our own account or
     for the account of one or more other Institutional Accredited Investors for
     each of which we exercise sole investment discretion (and have authority to
     make, and do make, the statements contained in this letter) or as fiduciary
     for the account of one or more trusts, each of which is an "accredited
     investor" within the meaning of Rule 501(a)(7) under the Securities Act and
     for each of which we exercise sole investment discretion or (B) we are a
     "bank," within the meaning of Section 3(a)(2) of the Securities Act, or a
     "savings and loan association" or other institution described in Section
     3(a)(5)(A) of the Securities Act that is acquiring Debentures as fiduciary
     for the account of one or more institutions for which we exercise sole
     investment discretion;

         3. in the event that we purchase any Debentures, we will acquire
     Debentures having a minimum purchase price of not less than $100,000 for
     our own account or for any separate account for which we are acting;

         4. we have such knowledge and experience in financial and business
     matters that we are capable of evaluating the merits and risks of
     purchasing the Debentures; and

         5. we are not acquiring Debentures with a view to distribution thereof
     or with any present intention of offering or selling Debentures or the
     Common Stock issuable upon conversion thereof, except as permitted below;
     provided that the disposition of our property and property of any accounts
     for which we are acting as fiduciary shall remain at all times within our
     control.


                                       B-1

<PAGE>


     We understand that the Debentures are being offered in a transaction not
involving any public offering within the meaning of the Securities Act and that
the Debentures and the shares of Common Stock issuable upon conversion thereof
have not been registered under the Securities Act, and we agree, on our own
behalf and on behalf of each account for which we acquire any Debentures, that
if in the future we decide to resell or otherwise transfer such Debentures or
the Common Stock issuable upon conversion thereof, such Debentures or Common
Stock may be resold or otherwise transferred within the United States, or for
the account or benefit of, U.S. persons only (i) to the Company or any
subsidiary thereof, or (ii) to a person who is a "qualified institutional buyer"
(as defined in Rule 144A under the Securities Act) in a transaction meeting the
requirements of Rule 144A, or (iii) to an Institutional Accredited Investor
that, prior to such transfer, furnishes to the Trustee for the Debentures (or in
the case of Common Stock, the transfer agent therefor) a signed letter
containing certain representations and agreements relating to the restrictions
on transfer of such securities (the form of which letter can be obtained from
such Trustee or transfer agent, as the case may be), or (iv) pursuant to the
exemption from registration provided by Rule 144 under the Securities Art (if
applicable), or (v) pursuant to a registration statement which has been declared
effective under the Securities Act (and which continues to be effective at the
time of such transfer), and in each case, in accordance with any applicable
securities laws of any State of the United States or any other applicable
jurisdiction and in accordance with the legends set forth on the Debentures or
the Common Stock issuable upon conversion thereof, as the case may be. We
further agree to provide any person purchasing any of the Debentures or the
Common Stock issuable upon conversion thereof (other than pursuant to clause (v)
above) from us a notice advising such purchaser that resales of such securities
are restricted as stated herein. We understand that the Trustee or transfer
agent for the Debentures and the Common Stock will not be required to accept for
registration of transfer any Debentures or any shares of Common Stock issued
upon conversion of the Debentures except upon presentation of evidence
satisfactory to the Company that the foregoing restrictions on transfer have
been complied with. We further understand that any Debentures and any
certificates representing Common Stock will be in the form of definitive
physical certificates and that such certificates will bear a legend reflecting
the substance of this paragraph other than pursuant to clause (v) above.

     We acknowledge that the Company, the Trustee or transfer agent (as
applicable) others will rely upon our confirmations, acknowledgments and
agreements set forth herein, and we agree to notify you promptly in writing if
any of our representations or warranties herein ceases to be accurate and
complete.

     THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK.


                                          __________________________________
                                          (Name of Purchaser)

                                           By: _____________________________
                                               Name:
                                               Title:
                                               Address:


                                       B-2