Exhibit 4.1.1


SUPPLEMENTAL INDENTURE


This Supplemental Indenture, dated as of August 10,
2006 (this “Supplemental Indenture”), between
Walter Industries, Inc. (hereinafter called the “Company”),
and The Bank of New York Trust Company, N.A., as trustee (the “Trustee”) under the Indenture referred to below.


W I T N E S S E T H:


WHEREAS, the Company and the Trustee have heretofore
executed and delivered an Indenture, dated as of April 20, 2004 (as amended,
supplemented, waived or otherwise modified, the “Indenture”),
providing for the issuance of an aggregate principal amount of up to $175.0
million of 3.75% Convertible Subordinated Notes due 2024 of the Company (the “Notes”);


WHEREAS, pursuant to Section 11.01 of the Indenture,
the Indenture may be amended without the consent of any Noteholder to cure any
ambiguity or to correct or supplement any provision contained therein or in the
Notes or in any supplemental indenture that may be defective or inconsistent
with any other provisions contained therein or in any supplemental indenture;
and


WHEREAS, the Company has identified an ambiguity and
defect in a provision of the Indenture that it wishes to correct and
supplement;


NOW, THEREFORE, in consideration of the foregoing and
for other good and valuable consideration, the receipt of which is hereby
acknowledged, the Company and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Noteholders as follows:


ARTICLE I


Definitions


SECTION 1.1  Defined Terms.  As used in this Supplemental Indenture, terms
defined in the Indenture or in the preamble or recital hereto are used herein
as therein defined.  The words “herein,” “hereof”
and “hereby” and other words of similar import used in this Supplemental
Indenture refer to this Supplemental Indenture as a whole and not to any
particular section hereof.









 



ARTICLE II


Amendments to Indenture


SECTION
2.1.  Amendments.  (a) 
The definition of “Last Reported Sale Price” is amended by inserting the
language that is italicized:


“Last Reported Sale Price”
of the Common Stock on any date means the closing sale price per share (or if
no closing sale price is reported, the average of the bid and asked prices or,
if more than one in either case, the average of the average bid and the average
asked prices) on that date as reported in composite transactions for the
principal U.S. securities exchange on which the Common Stock is traded or, if
the Common Stock is not listed on a U.S. national or regional securities
exchange, as reported by the Nasdaq National Market.  If the Common Stock is not listed for trading
on a U.S. national or regional securities exchange and not reported by the
Nasdaq National Market on the relevant date, the “Last Reported Sale Price”
will be the last quoted bid price for the Common Stock in the over-the-counter
market on the relevant date as reported by the National Quotation Bureau
Incorporated or similar organization.  If
the Common Stock is not so quoted, the “Last Reported Sale Price” will be the
average of the mid-point of the last bid and asked prices for the Common Stock
on the relevant date quoted by each of at least three nationally recognized
independent investment banking firms selected by the Company for this
purpose.  In
connection with any determination of the Spin-off Market Price for any share of
the capital stock of, or similar equity interests in, a Subsidiary or other
business unit of the Company, the “Last Reported Sale Price” shall be
determined as set forth above but substituting such capital stock of, or
similar equity interests in, a Subsidiary or other business unit of the Company
where there are references to “Common Stock”.


(b)   Section
15.05(d) of the Indenture is hereby amended by deleting the text marked below
that is stricken and inserting the language that is italicized:


(d) In case the Company
shall, by dividend or otherwise, distribute to all holders of its Common Stock
evidences of its indebtedness, shares of capital stock, securities or other
property (but excluding any cash distributions referred to in Section 15.05(e),
rights, options or warrants referred to in Section 15.05(b) and any dividend or
distribution referred to in Section 15.05(a)), the Conversion Rate shall be
adjusted by dividing the Conversion Rate in effect immediately prior to the
close of business on the date fixed for the determination of stockholders
entitled to receive such distribution by a fraction,


(i) the numerator of
which shall be the Current Market Price per share of the Common Stock on the
date fixed for such determination, and


(ii) the denominator of
which shall be such Current Market Price per share of the Common Stock plus the
then fair market value per share (as determined by the Board of Directors,
whose determination shall be conclusive and described in a Board Resolution) on
the date fixed for such determination of the evidences of indebtedness, shares
of capital stock, securities, or other property so to be distributed,



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such adjustment shall become effective immediately
prior to the opening of business on the Business Day following the date fixed
for the determination of stockholders entitled to receive such distribution; provided,
however, that in the event that the Company makes a distribution to all
holders of its Common Stock consisting of capital stock of, or similar equity
interest in, a subsidiary or other business unit of the Company, the Conversion
Rate shall be adjusted by dividing the Conversion Rate in effect immediately
prior to the close of business on the date fixed for the determination of
stockholders entitled to receive such distribution by a fraction of which the
numerator shall be the Spin-off Market Price per share of the Common Stock on
the date fixed for such determination less the Spin-off Market Price per
share or similar equity interest of the subsidiary or other business unit of
the Company on such date and the denominator shall be the Spin-off Market
Price per share of the Common Stock plus the value per share
of Common Stock on such date of the share(s) or similar equity interest(s) of
the subsidiary or other business unit of the Company distributed based on the
Spin-off Market Price thereof on such date, such adjustment to
become effective 10 Trading Days after the effective date of such distribution
of capital stock of, or similar equity interest in, a subsidiary or other
business unit of the Company.  In any
case in which this Section 15.05(d) is applicable, Sections 15.05(a), (b) and
(e) shall not be applicable.  If such dividend
or distribution is not so paid or made, the Conversion Rate shall again be
adjusted to be the Conversion Rate that would then be in effect if such
dividend or distribution had not been declared.


ARTICLE III


Miscellaneous


SECTION 3.1  Parties.  Nothing expressed or mentioned herein is
intended or shall be construed to give any Person, firm or corporation, other
than the Holders and the Trustee, any legal or equitable right, remedy or claim
under or in respect of this Supplemental Indenture or the Indenture or any
provision herein or therein contained.


SECTION 3.2  Governing Law; Waiver of
Jury Trial.  This Supplemental
Indenture shall be deemed a contract made under the laws of the State of New
York, and for all purposes shall be construed in accordance with the laws of
the State of New York (including Section 5-1401 of the New York General
Obligations Law or any successor to such statute).


EACH OF THE COMPANY AND THE TRUSTEE
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING
TO THIS SUPPLEMENTAL INDENTURE OR THE TRANSACTION CONTEMPLATED HEREBY.


SECTION 3.3  Severability Clause.  In case any provision in this Supplemental
Indenture shall be invalid, illegal or unenforceable, then (to the extent
permitted by law) the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.



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SECTION 3.4  Ratification of Indenture;
Supplemental Indenture Part of Indenture. 
Except as expressly amended hereby, the Indenture is in all
respects ratified and confirmed and all the terms, conditions and provisions
thereof shall remain in full force and effect. 
This Supplemental Indenture shall form a part of the Indenture for all
purposes, and every holder of Notes heretofore or hereafter authenticated and
delivered shall be bound hereby.  The
Trustee makes no representation or warranty as to the validity or sufficiency
of this Supplemental Indenture.


SECTION 3.5  Execution in Counterparts.  This Indenture may be executed in any number of
counterparts, each of which shall be an original, but such counterparts shall
together constitute but one and the same instrument.


SECTION 3.6  Headings.  The headings in this Supplemental Indenture
are for convenience of reference only and shall not be deemed to alter or
affect the meaning or interpretation of any provisions hereof.


SECTION 3.7  Trustee.  The Trustee makes no representations as to
the validity or sufficiency of this Supplemental Indenture.  The recitals herein are deemed to be those of
the Company and not the Trustee and the Trustee assumes no responsibility for
their correctness.


IN WITNESS WHEREOF, the parties hereto have caused
this Supplemental Indenture to be duly executed as of the date first above
written.


	
  

  	
  WALTER
  INDUSTRIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Miles C.
  Dearden, III

  
	
   

  	
   

  	
  Name: Miles
  C. Dearden, III

  
	
   

  	
   

  	
  Title:   Senior
  Vice President and Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE BANK OF NEW
  YORK TRUST COMPANY, N.A., as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Tina D.
  Gonzalez

  
	
   

  	
   

  	
  Name: Tina D.
  Gonzalez

  
	
   

  	
   

  	
  Title: Assistant
  Treasurer

  



 



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