Document:

EXHIBIT 10.2

                            LENNOX INTERNATIONAL INC.

                                       and

                              THE BANK OF NEW YORK

                                   as Trustee

                                    INDENTURE

                             Dated as of May 8, 2002

                          $125,000,000 Principal Amount

                          (Plus Over-allotment Option)

                 6 1/4% CONVERTIBLE SUBORDINATED NOTES DUE 2009

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                              CROSS-REFERENCE TABLE

   TIA                                                                 Indenture
 Section                                                                 Section
-------                                                                ---------
 310(a)(1)..............................................                7.10
    (a)(2)..............................................                7.10
    (a)(3)..............................................                N.A.
    (a)(4)..............................................                N.A.
    (b).................................................   7.08; 7.10; 12.02
    (c).................................................                N.A.
 311(a).................................................                7.11
    (b).................................................                7.11
    (c).................................................                N.A.
 312(a).................................................                2.05
    (b).................................................               12.03
    (c).................................................               12.03
 313(a).................................................                7.06
    (b)(1)..............................................                N.A.
    (b)(2)..............................................                7.06
    (c).................................................         7.06; 12.02
    (d).................................................                7.06
 314(a).................................................                4.02
    (b).................................................                N.A.
    (c)(1)..............................................               12.04
    (c)(2)..............................................               12.04
    (c)(3)..............................................                N.A.
    (d).................................................                N.A.
    (e).................................................               12.05
    (f).................................................                N.A.
 315(a).................................................             7.01(B)
    (b).................................................         7.05; 12.02
    (c).................................................             7.01(A)
    (d).................................................             7.01(C)
    (e).................................................                6.11
 316(a)(last sentence)..................................                2.09
    (a)(1)(A)...........................................                6.05
    (a)(1)(B)...........................................                6.04
    (a)(2)..............................................                N.A.
    (b).................................................                6.07
 317(a)(1)..............................................                6.08
    (a)(2)..............................................                6.09
    (b).................................................                2.04
 318(a).................................................               12.01

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                                TABLE OF CONTENTS

                                                                            Page

                  I. DEFINITIONS AND INCORPORATION BY REFERENCE

    1.01 Definitions..............................................             1
    1.02 Other Definitions........................................             5
    .03 Incorporation by Reference of Trust Indenture Act........              5
    .04 Rules of Construction....................................              6

                               II. THE SECURITIES

    .01 Form and Dating..........................................              6
    .02 Execution and Authentication.............................              7
    .03 Registrar, Paying Agent and Conversion Agent.............              8
    .04 Paying Agent To Hold Money in Trust......................              8
    .05 Securityholder Lists.....................................              9
    .06 Transfer and Exchange....................................              9
    .07 Replacement Securities...................................              9
    .08 Outstanding Securities...................................             10
    .09 Securities Held by the Company or an Affiliate...........             10
    .10 Temporary Securities.....................................             10
    .11 Cancellation.............................................             11
    .12 Defaulted Interest.......................................             11
    .13 CUSIP Numbers............................................             11
    .14 Deposit of Moneys........................................             11
    .15 Book-Entry Provisions for Global Securities..............             11
    .16 Special Transfer Provisions..............................             12
    .17 Restrictive Legends......................................             15

                                 III. REDEMPTION

    .01 Right of Redemption......................................             15
    .02 Notices to Trustee.......................................             15
    .03 Selection of Securities to Be Redeemed...................             15
    .04 Notice of Redemption.....................................             16
    .05 Effect of Notice of Redemption...........................             17
    .06 Deposit of Redemption Price..............................             17
    .07 Securities Redeemed in Part..............................             17
    .08 Repurchase at Option of Holder upon a Change in Control..             17
    .09 Conversion Arrangement on Call for Redemption............             21

                                  IV. COVENANTS

    .01 Payment of Securities....................................             22
    .02 Maintenance of Office or Agency..........................             22
    .03 Reports..................................................             22
    .04 Compliance Certificate...................................             23
    .05 Stay, Extension and Usury Laws...........................             23
    .06 Corporate Existence......................................             23
    .07 Notice of Default........................................             23

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                                  V. SUCCESSORS

    .01 When Company May Merge, etc..............................             24
    .02 Successor Substituted....................................             24

                                  VI. DEFAUDIES

    .01 Events of Default........................................             24
    .02 Acceleration.............................................             26
    .03 Other Remedies...........................................             26
    .04 Waiver of Past Defaults..................................             26
    .05 Control by Majority......................................             27
    .06 Limitation on Suits......................................             27
    .07 Rights of Holders to Receive Payment.....................             27
    .08 Collection Suit by Trustee...............................             28
    .09 Trustee May File Proofs of Claim.........................             28
    .10 Priorities...............................................             28
    .11 Undertaking for Costs....................................             29

                                  VII. TRUSTEE

    .01 Duties of Trustee........................................             29
    .02 Rights of Trustee........................................             30
    .03 Individual Rights of Trustee.............................             31
    .04 Trustee's Disclaimer.....................................             31
    .05 Notice of Defaults.......................................             31
    .06 Reports by Trustee to Holders............................             32
    .07 Compensation and Indemnity...............................             32
    .08 Replacement of Trustee...................................             33
    .09 Successor Trustee by Merger, etc.........................             33
    .10 Eligibility; Disqualification............................             34
    .11 Preferential Collection of Claims Against Company........             34

                          VIII. DISCHARGE OF INDENTURE

    .01 Termination of the Obligations of the Company............             34
    .02 Application of Trust Money...............................             35
    .03 Repayment to Company.....................................             35
    .04 Reinstatement............................................             35

                                 IX. AMENDMENTS

    .01 Without Consent of Holders...............................             36
    .02 With Consent of Holders..................................             36
    .03 Compliance with Trust Indenture Act......................             37
    .04 Revocation and Effect of Consents........................             37
    .05 Notation on or Exchange of Securities....................             38
    .06 Trustee Protected........................................             38

                                  X. CONVERSION

    0.01 Conversion Privilege; Restrictive Legends...............             38
    0.02 Conversion Procedure....................................             39
    0.03 Fractional Shares.......................................             39
    0.04 Taxes on Conversion.....................................             40
    0.05 Company to Provide Stock................................             40
    0.06 Adjustment of Conversion Rate...........................             40
    0.07 No Adjustment...........................................             45
    0.08 Other Adjustments.......................................             46
    0.09 Adjustments for Tax Purposes............................             46
    0.10 Notice of Adjustment....................................             46
    0.11 Notice of Certain Transactions..........................             46
    0.12 Effect of Reclassifications, Consolidations, Mergers,
         Binding Share Exchanges or Sales on Conversion Privilege             47
    0.13 Trustee's Disclaimer....................................             48

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                                XI. SUBORDINATION

    1.01 Agreement to Subordinate................................             48
    1.02 Certain Definitions.....................................             48
    1.03 Liquidation; Dissolution; Bankruptcy....................             49
    1.04 Company Not To Make Payments with Respect to Securities
         in Certain Circumstances................................             49
    1.05 Acceleration of Securities..............................             50
    1.06 When Distribution Must Be Paid Over.....................             50
    1.07 Notice by Company.......................................             51
    1.08 Subrogation.............................................             51
    1.09 Relative Rights.........................................             51
    1.10 Subordination May Not Be Impaired by Company............             52
    1.11 Distribution or Notice to Representative................             52
    1.12 Rights of Trustee and Paying Agent......................             52
    1.13 Officers' Certificate...................................             53
    1.14 Not to Prevent Events of Default........................             53

                               XII. MISCELLANEOUS

    2.01 Trust Indenture Act Controls............................             53
    2.02 Notices. 53
    2.03 Communication by Holders with Other Holders.............             54
    2.04 Certificate and Opinion as to Conditions Precedent......             54
    2.05 Statements Required in Certificate or Opinion...........             54
    2.06 Rules by Trustee and Agents.............................             55
    2.07 Legal Holidays..........................................             55
    2.08 No Recourse Against Others..............................             55
    2.09 Duplicate Originals.....................................             55
    2.10 Governing Law...........................................             55
    2.11 No Adverse Interpretation of Other Agreements...........             56
    2.12 Successors..............................................             56
    2.13 Separability............................................             56
    2.14 Table of Contents, Headings, etc........................             56

 Exhibit A   -     Form of Global Security

 Exhibit B   -     Form of Legends

 Exhibit C   -     Form of Transfer Certificate - Regulation S

 Exhibit D   -     Form of Transfer Certificate - Registration Statement

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     INDENTURE,  dated as of May 8, 2002 between  LENNOX  INTERNATIONAL  INC., a
Delaware corporation (the "Company"),  and The Bank of New York, as trustee (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 6 1/4% Convertible
Subordinated Notes due 2009 (the "Securities").

                  I.     DEFINITIONS AND INCORPORATION BY REFERENCE

1.01 DEFINITIONS.

     "Affiliate"  means  any  person  directly  or  indirectly   controlling  or
controlled by or under direct or indirect  common control with the Company.  For
this  purpose,  "control"  shall  mean the power to direct  the  management  and
policies  of a person  through  the  ownership  of  securities,  by  contract or
otherwise.

     "Agent"   means  any   Registrar,   Paying  Agent,   Conversion   Agent  or
co-registrar.

     "Board of  Directors"  means the Board of  Directors  of the Company or any
committee thereof authorized to act for it hereunder.

     "Board Resolution" means a copy of a resolution  certified by the Secretary
or an Assistant  Secretary of the Company to have been duly adopted by its Board
of  Directors  and  to be  in  full  force  and  effect  on  the  date  of  such
certification, and delivered to the Trustee.

     "Capital  Stock"  means any and all shares,  interests,  participations  or
other equivalents  (however  designated) of capital stock of the Company and all
warrants or options to acquire such capital stock.

     "Common  Stock" means the common stock,  par value $0.01 per share,  of the
Company,  or such other capital  stock into which the Company's  common stock is
reclassified or changed.

     "Company" means the party named as such above until a successor replaces it
pursuant to the applicable provision hereof and thereafter means the successor.

     "Company  Request"  or  "Company  Order"  means a written  request or order
signed  on  behalf  of the  Company  by its  Chairman  of the  Board,  its Chief
Executive  Officer,  its  President,  its  Chief  Operating  Officer,  its Chief
Financial Officer, any Executive Vice President or any Vice President and by its
Treasurer or an Assistant Treasurer or its Secretary or an Assistant  Secretary,
and delivered to the Trustee.

     "Conversion  Price"  means  the  principal  amount  of  Notes  that  can be
exchanged  for one share of Common  Stock,  subject  to the  adjustments  of the
conversion rate set forth in Section 10.06.

     "Corporate  Trust Office of the Trustee"  shall be the principal  office of
the  Trustee  at  which  at any  time  its  corporate  trust  business  shall be
administered, which office at the dated hereof is located at 101 Barclay Street,

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New York, New York 10286, Attention:  Corporate Trust Department,  or such other
address as the Trustee may designate  from time to time by notice to the Holders
and the  Company,  or the  principal  corporate  trust  office of any  successor
Trustee (or such other address as such successor Trustee may designate from time
to time by notice to the Holders and the Company).

     "Daily  Market  Price"  means the  price of a share of Common  Stock on the
relevant  date,  determined  (a) on the basis of the last  reported  sale  price
regular way of the Common Stock as reported on the New York Stock  Exchange (the
"NYSE"),  or if the Common Stock is not then listed on the NYSE,  as reported on
such national  securities exchange upon which the Common Stock is listed, or (b)
if there is no such  reported  sale on the day in question,  on the basis of the
average of the closing bid and asked quotations  regular way as so reported,  or
(c) if the Common Stock is not listed on the NYSE or on any national  securities
exchange or automated  quotation system, on the basis of the average of the high
bid  and  low  asked  quotations  regular  way on the  day  in  question  in the
over-the-counter  market as reported by the National  Association  of Securities
Dealers Automated Quotation System, or if not so quoted, as reported by National
Quotation Bureau, Incorporated, or a similar organization.

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

     "Depositary"   means  The  Depository  Trust  Company,   its  nominees  and
successors.

     "Exchange Act" means the Securities Exchange Act of 1934, as amended.

     "Exempt  Person" means any member of the Norris family;  provided that such
member does not participate in an extraordinary corporate transaction, such as a
merger or a going  private  transaction,  the result of which is that the Common
Stock  ceases to be listed on the NYSE or any  other  U.S.  national  securities
exchange or automated  quotation  system.  "Norris Family" means all persons who
are lineal  descendents  of D.W.  Norris (by birth or adoption),  all spouses of
such  descendents,  all estates of such  descendents or spouses which are in the
course of  administration,  all trusts for the  benefit of such  descendents  or
spouses,  and  all  corporations  or  other  entities  in  which,   directly  or
indirectly,  such  descendents or spouses  (either alone or in conjunction  with
other such descendents or spouses) have the right, whether by ownership of stock
or other equity interests or otherwise, to direct the management and policies of
such corporations or other entities (each such person,  spouse,  estate,  trust,
corporation or entity being referred to as a "member" of the Norris Family).  In
addition,  members of the Norris  Family  will not be counted as  affiliates  or
associates of any other person in determining  beneficial ownership of a "group"
(as such term is used for  purposes of Sections  13(d) and 14(d) of the Exchange
Act);  provided  that  such  member  does not  participate  in an  extraordinary
corporate  transaction,  such as a merger or a going  private  transaction,  the
result of which is that the Common  Stock ceases to be listed on the NYSE or any
other U.S. national securities exchange or automated quotation system.

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

                                       2
<PAGE>
     "Indenture"  means this Indenture as amended or  supplemented  from time to
time.

     "Initial  Purchasers" means UBS Warburg LLC, First Union  Securities,  Inc.
and J.P. Morgan Securities Inc.

     "Interest"  includes  liquidated  damages,  unless  the  context  otherwise
requires.

     "Liquidated  Damages" has the meaning provided in the  Registration  Rights
Agreement.

     "Maturity Date" means June 1, 2009.

     "Non-recourse  Indebtedness"  means  Indebtedness  upon the  enforcement of
which recourse may be had by the holder(s)  thereof only to identified assets of
the  Company  or  any  Subsidiary  and  not  to the  Company  or any  Subsidiary
personally.

     "Non-u.s.  Person"  means a person who is not a U.S.  person (as defined in
Regulation S pursuant to the Securities Act).

     "Officer" means the Chairman of the Board, the Chief Executive Officer, the
President,  the Chief  Operating  Officer,  the  Chief  Financial  Officer,  any
Executive Vice President,  any Vice President, the Treasurer or the Secretary of
the Company.

     "Officers' Certificate" means a certificate signed by two Officers or by an
Officer and an Assistant Treasurer or an Assistant Secretary of the Company.

     "Opinion of Counsel" means a written  opinion from legal counsel who may be
an  employee  of or  counsel  for  the  Company,  or  other  counsel  reasonably
acceptable to the Trustee.

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

     "Purchase  Agreement" means the Purchase  Agreement dated as of May 2, 2002
between the Company and the Initial Purchasers.

     "QIB" means a "qualified  institutional  buyer"  within the meaning of Rule
144A under the Act.

     "Redemption  Price" means, with respect to a Security to be redeemed by the
Company in  accordance  with  Article  III, the  percentage  of the  outstanding
principal amount of such Security payable by the Company upon such redemption.

     "Registration  Rights  Agreement" means the  Registration  Rights Agreement
dated as of May 8, 2002 between the Company and the Initial Purchasers.

     "Regulation S" means Regulation S under the Securities Act.

                                       3
<PAGE>
     "Regulation  S  Global  Security"  means a  permanent  Global  Security  in
registered form  representing the aggregate  principal amount of Securities sold
in reliance on Regulation S.

     "Repurchase  Price"  means,  with respect to a Security  duly  tendered for
purchase by the Company in accordance with Section 3.08, 100% of the outstanding
principal amount of such Security so tendered.

     "Responsible  Officer"  shall mean,  when used with respect to the Trustee,
any officer within the corporate trust department of the Trustee,  including any
vice  president,   assistant  vice  president,  assistant  secretary,  assistant
treasurer,  trust  officer or any other  officer of the Trustee who  customarily
performs  functions  similar to those  performed  by the Persons who at the time
shall be such officers,  respectively,  or to whom any corporate trust matter is
referred  because  of  such  person's  knowledge  of and  familiarity  with  the
particular   subject   and  who  shall  have  direct   responsibility   for  the
administration of this Indenture.

     "Restricted  Security"  means a Security  that  constitutes  a  "restricted
security"  within  the  meaning  of Rule  144(a)(3)  under the  Securities  Act;
provided,   however,   that  the  Trustee  shall  be  entitled  to  request  and
conclusively  rely on an Opinion of Counsel with respect to whether any Security
constitutes a Restricted Security.

     "Rule 144A" means Rule 144A under the Securities Act.

     "Rule 144A Global Security" means a permanent Global Security in registered
form representing the aggregate  principal amount of Securities sold in reliance
on Rule 144A.

     "SEC" means the Securities and Exchange Commission.

     "Securities"  means  the 6 1/4%  Convertible  Subordinated  Notes  due 2009
issued by the Company pursuant to this Indenture.

     "Securities Act" means the Securities Act of 1933, as amended.

     "Securityholder"  has the  meaning  given to such term in the  Registration
Rights Agreement.

     "Subsidiary" means (i) a corporation a majority of whose capital stock with
voting power, under ordinary  circumstances,  to elect directors is at the time,
directly or indirectly, owned by the Company, by one or more subsidiaries of the
Company or by the Company and one or more of its  subsidiaries or (ii) any other
person  (other  than a  corporation)  in  which  the  Company,  one or more  its
subsidiaries  or the  Company  and one or more  its  subsidiaries,  directly  or
indirectly,  at the  date  of  determination  thereof,  have at  least  majority
ownership interest.

     "TIA"  means  the  Trust  Indenture  Act  of  1939  (15  U.S.  Code  ss.ss.
77aaa-77bbbb) as in effect on the date of this Indenture,  except as provided in
Section 9.03.

     "Trustee" means the party named as such in this Indenture until a successor
replaces it in accordance  with the provisions  hereof and thereafter  means the
successor.

                                       4
<PAGE>

1.02 OTHER DEFINITIONS.

          Term                                                Defined in Section
          ----                                                ------------------
     "Additional Securities"................................          2.01
     "Bankruptcy Law".......................................          6.01
     "business day".........................................         12.07
     "Change in Control"....................................          3.08
     "Change in Control Notice".............................          3.08
     "Commencement Date"....................................         10.06
     "Combined Amount"......................................         10.06(d)
     "Conversion Agent".....................................          2.03
     "Conversion Date"......................................         10.02
     "Conversion Shares"....................................         10.06(c)
     "Custodian"............................................          6.01
     "Determination Date"...................................         10.06
     "Distribution Date"....................................         10.06(c)
     "Distribution Declaration Date"........................         10.06(d)
     "Event of Default".....................................          6.01
     "Expriation Time"......................................         10.06(e)(2)
     "Global Security"......................................          2.01
     "Indebtedness".........................................         11.02
     "Legal Holiday"........................................         12.07
     "Norris Family"........................................          1.01
     "NYSE".................................................          1.01
     "Participants".........................................          2.15
     "Paying Agent".........................................          2.03
     "Payment Blockage".....................................         11.04
     "Payment Blockage Notice"..............................         11.04
     "Physical Securities"..................................          2.01
     "Purchased Shares".....................................         10.06(e)(i)
     "Private Placement Legend".............................          2.17
     "Registrar"............................................          2.03
     "Representative".......................................         11.02
     "Repurchase Date"......................................          3.08
     "Repurchase Right".....................................          3.08
     "Rights"...............................................         10.06(c)
     "Senior Indebtedness"..................................         11.02
     "Triggering Distribution"..............................         10.06(d)
     "U.S. Government Obligations"..........................          8.01

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 or a Holder;
     "indenture to be qualified" means this Indenture;
     "indenture  trustee"  or  "institutional  trustee"  means  the Trustee; and
"obligor"
     on the indenture securities means the Company or any successor.

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<PAGE>

     All other terms used in this Indenture that are defined by the TIA, defined
by TIA reference to another statute or defined by SEC rule under the TIA and not
otherwise defined herein have the meanings so assigned to them.

1.04 RULES OF CONSTRUCTION.

     Unless the context otherwise requires:

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

         (ii) an accounting term not otherwise defined has the meaning assigned
     to it in accordance with generally accepted accounting principles in effect
     on the date hereof;

         (iii) "or" is not exclusive;

         (iv)  words in the  singular  include  the  plural  and in the  plural
     include the singular;

         (v)   provisions apply to successive events and transactions; and

         (vi)  "herein",  "hereof"  and  other words of similar  import refer to
     this  Indenture as a whole and not to any  particular  Article,  Section or
     other subdivision.

                               II. THE SECURITIES

2.01 FORM AND DATING.

     The Securities and the Trustee's  certificate  of  authentication  shall be
substantially  in the form set forth in Exhibit A, which is  incorporated in and
forms a part of this Indenture.  The Securities may have  notations,  legends or
endorsements  required by law, stock exchange rule or usage. Each Security shall
be dated the date of its authentication.

     Securities  offered  and sold in  reliance  on Rule  144A  shall be  issued
initially  in the  form of one or  more  United  States  global  securities  and
Securities offered and sold in reliance on Regulation S under the Securities Act
shall be issued initially in the form of one or more offshore global securities,
each such United States or offshore  global security  substantially  in the form
set forth in Exhibit A (a "Global  Security"),  deposited  with the Trustee,  as
custodian for the Depositary,  duly executed by the Company and authenticated by
the  Trustee as  hereinafter  provided  and  bearing  the  legends  set forth in
EXHIBITS B-1 and B-2. The aggregate  principal amount of the Global Security may
from time to time be increased or decreased by  adjustments  made on the records
of the Trustee,  as  custodian  for the  Depositary,  as  hereinafter  provided;
provided,  that in no event shall the aggregate  principal  amount of the Global
Security or  Securities  exceed  $125,000,000,  or  $143,750,000  if the Initial
Purchasers   elect  to   purchase   Additional   Securities   pursuant   to  the
over-allotment  option  provided  for in  Section  1 of the  Purchase  Agreement
("Additional Securities").

     Securities  issued in exchange for interests in a Global Security  pursuant
to Section 2.15 may be issued in the form of permanent  certificated

                                       6
<PAGE>

Securities   in   registered  form  in  substantially  the  form  set  forth  in
Exhibit A (the "Physical  Securities")  and, if applicable,  bearing any legends
required by Section 2.17.

     All Securities offered and sold in reliance on Regulation S shall remain in
the form of a Global Security for at least one year after the issue date for the
Securities. Notwithstanding the foregoing, in the event that Physical Securities
are issued in respect of beneficial  interests in a Regulation S Global Security
at any time prior to one year after the date of this Indenture  (other than in a
transaction subject to Rule 144A) the Company shall, as promptly as practicable,
institute procedures,  including appropriate  certifications reasonably designed
to ensure that any transfer of such Physical Securities prior to the end of such
one  year  is  made  only  in  accordance  with  Regulation  S,  pursuant  to  a
registration statement under the Securities Act or pursuant to an exemption from
registration under the Securities Act.

2.02 EXECUTION AND AUTHENTICATION.

     One  Officer  shall  sign the  Securities  for the  Company  by  manual  or
facsimile signature.

     If an Officer whose  signature is on a Security no longer holds that office
at the time the Security is  authenticated,  the Security shall  nevertheless be
valid.

     A Security shall not be valid until  authenticated  by the manual signature
of the Trustee. The signature shall be conclusive evidence that the Security has
been authenticated under this Indenture.

     Upon a written  order of the Company  signed by one Officer of the Company,
the Trustee shall  authenticate  Securities  for original issue in the aggregate
principal amount of $125,000,000 and such additional  principal  amount, if any,
as shall be determined  pursuant to the next sentence of this Section 2.02. Upon
receipt by the  Trustee of an  Officers'  Certificate  stating  that the Initial
Purchasers  have  elected to purchase  from the  Company a  specified  principal
amount of Additional Securities, not to exceed $18,750,000,  pursuant to SECTION
1 of the Purchase  Agreement,  the Trustee shall  authenticate  and deliver such
specified principal amount of Additional Securities to or upon the written order
of the Company signed as provided in the immediately  preceding  sentence.  Such
Officers'  Certificate  must be  received  by the  Trustee  not  later  than the
proposed date for delivery of such Additional Securities.  Except as provided in
SECTION 2.07, the aggregate  principal  amount of Securities  outstanding at any
time may not exceed  $125,000,000,  or  $143,750,000  if the Initial  Purchasers
elect to purchase Additional  Securities  pursuant to the over-allotment  option
provided for in Section 1 of the Purchase Agreement.

     Upon a written order of the Company signed by two Officers or by an Officer
and an  Assistant  Treasurer  of the  Company,  the Trustee  shall  authenticate
Securities  not  bearing  the  Private  Placement  Legend  to be  issued  to the
transferee when sold pursuant to an effective  registration  statement under the
Securities Act as set forth in Section 2.16(D).

     The Trustee may appoint an  authenticating  agent acceptable to the Company
to authenticate Securities.  An authenticating agent may authenticate

                                       7
<PAGE>
Securities  whenever  the  Trustee  may  do so. Each reference in this Indenture
to  authentication  by the Trustee  includes  authentication  by such Agent.  An
authenticating  agent has the same  rights as an Agent to deal with the  Company
and its Affiliates.

     If a written  order of the  Company  pursuant to this  Section  2.02 of the
Indenture has been, or  simultaneously  is,  delivered,  any instructions by the
Company to the Trustee with respect to endorsement,  delivery or redelivery of a
Security  issued in global  form  shall be in writing  but need not comply  with
SECTION 12.04 hereof and need not be accompanied by an Opinion of Counsel.

     The Securities  shall be issuable only in registered form without  interest
coupons and only in  denominations  of $1,000  principal amount and any positive
integral multiple thereof.

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 payment ("Paying Agent") and an
office or agency where  Securities may be presented for conversion  ("Conversion
Agent").  The  Registrar  shall keep a register of the  Securities  and of their
transfer  and  exchange.   The  Company  may  appoint  or  change  one  or  more
co-registrars,  one or more additional  paying agents and one or more additional
conversion  agents  without  notice and may act in any such  capacity on its own
behalf. The term "REGISTRAR" includes any co-registrar;  the term "Paying Agent"
includes any additional  paying agent; and the term "Conversion  Agent" includes
any additional conversion agent.

     The Company shall enter into an appropriate agency agreement with any Agent
not a party to this  Indenture.  The agreement shall implement the provisions of
this Indenture  that relate to such Agent.  The Company shall notify the Trustee
of the name and  address  of any  Agent  not a party to this  Indenture.  If the
Company  fails to maintain a Registrar,  Paying Agent or Conversion  Agent,  the
Trustee shall act as such.

     The Company initially  appoints the Trustee as Paying Agent,  Registrar and
Conversion Agent.

2.04 PAYING AGENT TO HOLD MONEY IN TRUST.

     Each   Paying   Agent   shall  hold  in  trust  for  the   benefit  of  the
Securityholders  or the  Trustee  all moneys  held by the  Paying  Agent for the
payment of the  Securities,  and shall  notify the Trustee of any default by the
Company  in making  any such  payment.  While any such  default  continues,  the
Trustee may require a Paying  Agent to pay all money held by it to the  Trustee.
The Company at any time may  require a Paying  Agent to pay all money held by it
to the Trustee. Upon payment over to the Trustee, the Paying Agent shall have no
further  liability for the money.  If the Company acts as Paying Agent, it shall
segregate  and hold as a  separate  trust  fund all  money  held by it as Paying
Agent.

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

                                       8
<PAGE>

of  Securityholders.  If  the  Trustee  is  not the Registrar, the Company shall
furnish to the Trustee on or before each interest payment date 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
Securityholders.

2.06 TRANSFER AND EXCHANGE.

     Subject to Sections 2.15 and 2.16 hereof, where Securities are presented to
the Registrar  with a request to register their transfer or to exchange them for
an equal principal amount of Securities of other authorized  denominations,  the
Registrar  shall register the transfer or make the exchange if its  requirements
for such transaction are met. To permit registrations of transfer and exchanges,
the Trustee  shall  authenticate  Securities  at the  Registrar's  request.  The
Company or the Trustee,  as the case may be, shall not be required (a) to issue,
authenticate,  register the transfer of or exchange any Security during a period
beginning  at the  opening of business 15 days before the mailing of a notice of
redemption  of the  Securities  selected for  redemption  under Section 3.04 and
ending at the close of  business  on the day of such  mailing or (b) to register
the  transfer  of or  exchange  any  Security  so  selected  for  redemption  or
repurchase in whole or in part,  except the unredeemed or unrepurchased  portion
of Securities being redeemed or repurchased in part.

     No service charge shall be made for any transfer, exchange or conversion of
Securities, but the Company may require payment of a sum sufficient to cover any
tax or other  governmental  charge  that may be imposed in  connection  with any
transfer, exchange or conversion of Securities, other than exchanges pursuant to
Sections 2.10, 3.07, 3.08, 9.05 or 10.02 not involving any transfer.

2.07 REPLACEMENT SECURITIES.

     If the Holder of a Security  claims that the Security  has been  mutilated,
lost,  destroyed or  wrongfully  taken,  the Company shall issue and the Trustee
shall authenticate a replacement Security if the Trustee's  requirements are met
and, in the case of a mutilated Security, such mutilated Security is surrendered
to the Trustee.  In the case of lost,  destroyed or wrongfully taken Securities,
if required by the  Trustee,  an  indemnity  bond must be provided by the Holder
that is  sufficient  in the judgment of the Trustee to protect the Company,  the
Trustee or any Agent from any loss which any of them may suffer if a Security is
replaced. The Trustee may charge for its expenses in replacing a Security.

     In case any such mutilated,  lost,  destroyed or wrongfully  taken Security
has become or is about to become due and payable,  the Company in its discretion
may, instead of issuing a new Security, pay such Security when due.

     Every replacement Security is an additional  obligation of the Company only
as provided in Section 2.08.

2.08 OUTSTANDING SECURITIES.

     Securities outstanding at any time are all the Securities  authenticated by
the Trustee except for those  converted,  those cancelled by it, those

                                       9
<PAGE>

delivered  to  it  for   cancellation  and  those described in this Section 2.08
as not  outstanding.  Except to the extent  provided in Section 2.09, a Security
does not cease to be outstanding  because the Company or one of its subsidiaries
or Affiliates holds the Security.

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

     If the Paying Agent (other than the  Company)  holds on a redemption  date,
Repurchase Date or maturity date money  sufficient to pay Securities  payable on
that date,  then on and after that date,  interest on them shall cease to accrue
whether or not the Security is delivered to the Paying  Agent.  Thereafter,  all
other rights of the Holders of such  Securities  shall terminate with respect to
such  Securities,  other  than  the  right  to  receive  the  Redemption  Price,
Repurchase Price or principal amount, as applicable.

2.09 SECURITIES HELD BY THE COMPANY OR AN AFFILIATE.

     In  determining  whether the Holders of the  required  aggregate  principal
amount of  Securities  have  concurred  in any  direction,  waiver  or  consent,
Securities owned by the Company or any of its subsidiaries or an Affiliate shall
be  considered  as though  not  outstanding,  except  that for the  purposes  of
determining  whether  the  Trustee  shall be  protected  in  relying on any such
direction, waiver or consent, only Securities which a Responsible Officer of the
Trustee actually knows are so owned shall be so disregarded.

     The  Company  or its  subsidiaries  may,  to the extent  permitted  by law,
purchase  Securities  in the open  market or by tender  offer at any price or by
private agreement.  Any Securities  purchased by the Company or its subsidiaries
may,  to the extent  permitted  by law,  be  reissued  or resold or may,  at the
Company's option or the option of such subsidiary, be surrendered to the Trustee
for cancellation.

2.10 TEMPORARY SECURITIES.

     Until definitive Securities are ready for delivery, the Company may prepare
and the Trustee shall authenticate  temporary  Securities.  Temporary Securities
shall  be  substantially  in the  form of  definitive  Securities  but may  have
variations  that the Company  considers  appropriate  for temporary  Securities.
Without  unreasonable  delay,  the Company  shall  prepare and the Trustee shall
authenticate definitive Securities in exchange for temporary Securities.

2.11 CANCELLATION.

     The  Company  at  any  time  may  deliver  Securities  to the  Trustee  for
cancellation.  The Registrar, Paying Agent and Conversion Agent shall forward to
the Trustee any Securities surrendered to them for transfer,  exchange,  payment
or conversion. The Trustee shall cancel all Securities surrendered for transfer,
exchange,  payment,  conversion or cancellation in accordance with its customary
procedures.  The Company may not issue new Securities to replace Securities that
it  has  paid  or  delivered  to  the  Trustee  for  cancellation  or  that  any
Securityholder has converted pursuant to Article X.

                                       10
<PAGE>

2.12 DEFAULTED INTEREST.

     If and to the extent the  Company  defaults in a payment of interest on the
Securities,  the Company shall pay the  defaulted  interest in any lawful manner
plus, to the extent not prohibited by applicable  statute or case law,  interest
payable on the defaulted  interest at the rate provided in the  Securities.  The
Company may pay the defaulted interest to the persons who are Securityholders on
a subsequent  special  record date.  The Company  shall fix such record date and
payment date. At least 15 days before the record date, the Company shall mail to
Securityholders a notice that states the record date, payment date and amount of
interest to be paid.

2.13 CUSIP NUMBERS.

     The Company in issuing the Securities may use one or more "CUSIP"  numbers,
and if so, the Trustee  shall use the CUSIP  numbers in notices of redemption or
exchange as a convenience to Holders; provided,  however, that no representation
is hereby deemed to be made by the Trustee as to the  correctness or accuracy of
the CUSIP numbers printed in the notice or on the Securities,  and that reliance
may  be  placed  only  on  the  other  identification  numbers  printed  on  the
Securities.  The Company shall promptly  notify the Trustee of any change in the
CUSIP numbers.

2.14 DEPOSIT OF MONEYS.

     Prior to 11:00 A.M.,  New York City time,  on each  interest  payment date,
maturity  date,  redemption  date and  Repurchase  Date,  the Company shall have
deposited with the Paying Agent in immediately  available funds money sufficient
to make cash payments, if any, due on such interest payment date, maturity date,
redemption  date and  Repurchase  Date,  as the case may be, in a timely  manner
which  permits the Paying Agent to remit payment to the Holders on such interest
payment date,  maturity date,  redemption date and Repurchase  Date, as the case
may be.

2.15 BOOK-ENTRY PROVISIONS FOR GLOBAL SECURITIES.

     (A)  The Global Securities initially shall (i) be registered in the name of
the  Depositary  or  the  nominee  of  such Depositary, (ii) be delivered to the
Trustee as  custodian for such Depositary and (iii) bear legends as set forth in
Section 2.17.

     Members of, or participants in, the Depositary  ("Participants") shall have
no rights under this Indenture with respect to any Global Security held on their
behalf by the Depositary,  or the Trustee as its custodian,  or under the Global
Security,  and the Depositary may be treated by the Company, the Trustee and any
agent of the Company or the Trustee as the absolute owner of the Global Security
for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall
prevent the Company, the Trustee or any agent of the Company or the Trustee from
giving  effect  to any  written  certification,  proxy  or  other  authorization
furnished  by  the   Depositary  or  impair,   as  between  the  Depositary  and
Participants, the operation of customary practices governing the exercise of the
rights of a Holder of any Security.

     (B)  Transfers of Global Securities shall be limited to transfers in whole,
but  not  in part,  to  the  Depositary,  its  successors  or  their  respective

                                       11
<PAGE>

nominees.  In  addition,  Physical  Securities   shall  be  transferred  to  all
beneficial  owners  in   exchange  for  their   beneficial  interests  in Global
Securities if (i) the Depositary  notifies  the  Company that it is unwilling or
unable  to  continue  as  Depositary  for  any  Global  Security and a successor
Depositary  is not appointed by the Company  within  90 days  of such  notice or
(ii) an  Event  of  Default has occurred and is continuing and the Registrar has
received a written request from the Depositary to issue Physical Securities.

     (C)  In  connection  with the transfer of a Global Security in its entirety
to  beneficial   owners   pursuant  to  Section  2.15(B),  such Global  Security
shall be deemed to be  surrendered  to the  Trustee  for  cancellation,  and the
Company shall execute,  and the Trustee shall upon written instructions from the
Company  authenticate  and deliver,  to each beneficial  owner identified by the
Depositary in exchange for its beneficial  interest in such Global Security,  an
equal  aggregate   principal   amount  of  Physical   Securities  of  authorized
denominations.

     (D)  Any  Physical Security constituting a Restricted Security delivered in
exchange for an interest in a Global Security pursuant to Section 2.15(B) shall,
except as  otherwise provided by Section 2.16, bear the Private Placement Legend
(as defined).

     (E)  The  Holder  of  any  Global  Security may grant proxies and otherwise
authorize any Person, including Participants and Persons that may hold interests
through  Participants,  to  take  any  action which a Holder is entitled to take
under this Indenture or the Securities.

2.16 SPECIAL TRANSFER PROVISIONS.

     (A)  Transfers to Non-U.S.  Persons.  The following provisions  shall apply
with  respect  to  the  registration  of  any  proposed transfer of a Restricted
Security to any Non-U.S. Person:

          (i)  the Registrar shall  register the transfer of any Restricted
     Security,  whether or not such  Security  bears the Private  Placement
     Legend, if (x) the requested  transfer is after the second anniversary
     of the issue date for the Securities;  provided, however, that neither
     the Company nor any of its Affiliates has held any beneficial interest
     in such Security,  or portion thereof,  at any time on or prior to the
     second  anniversary  of the issue date for the  Securities  or (y) the
     proposed  transferor  has  delivered  to  the  Registrar  certificates
     substantially in the form of Exhibit C-1 and Exhibit C-2 hereto; and

          (ii) if the  proposed  transferor  is a  Participant  seeking  to
     transfer an interest in one Global  Security to a transferee  who will
     hold such  interest in another  Global  Security,  upon receipt by the
     Registrar of (x) written  instructions  given in  accordance  with the
     Depositary's  and the  Registrar's  procedures and (y) the appropriate
     certificates  and other documents,  if any,  required by clause (y) of
     paragraph  (i) above,  the Registrar  shall  register the transfer and
     reflect on its books and  records  the date and (A) a decrease  in the
     aggregate  principal  amount of the Global Security  through which the
     transferor  held such  interest  in an amount  equal to the  aggregate
     principal  amount  of the  Securities  to be  transferred  and  (B) an
     increase  in the  aggregate  principal  amount of

                                    12
<PAGE>
     the Global Security through which the transferee proposes to hold such
     interest, in an amount equal to the aggregate principal  amount of the
     Securities to be transferred.

     (B)  Transfers to QIBs.  The Following  provisions shall apply with respect
to the  registration of any proposed transfer of a Restricted Security to a QIB:

          (i) the Registrar  shall  register the transfer of any Restricted
     Security,  whether or not such  Security  bears the Private  Placement
     Legend, if (x) the requested  transfer is after the second anniversary
     of the issue date for the Securities;  provided, however, that neither
     the Company nor any of its Affiliates has held any beneficial interest
     in such Security,  or portion thereof,  at any time on or prior to the
     second  anniversary  of the issue date for the  Securities or (y) such
     transfer  is being made by a proposed  transferor  who has checked the
     box provided  for on the form of Security  stating,  or has  otherwise
     advised the Company and the  Registrar  in writing,  that the sale has
     been  made  in  compliance  with  the  provisions  of  Rule  144A to a
     transferee who has signed the  certification  provided for on the form
     of  Security  stating,  or has  otherwise  advised the Company and the
     Registrar in writing,  that it is purchasing  the Security for its own
     account  or an  account  with  respect  to  which  it  exercises  sole
     investment discretion and that it and any such account is a QIB within
     the  meaning of Rule  144A,  and is aware that the sale to it is being
     made in reliance on Rule 144A and  acknowledges  that it has  received
     such information regarding the Company as it has requested pursuant to
     Rule 144A or has determined not to request such  information  and that
     it is  aware  that  the  transferor  is  relying  upon  its  foregoing
     representations  in order to claim  the  exemption  from  registration
     provided by Rule 144A; and

          (ii) if the  proposed  transferor  is a  Participant  seeking  to
     transfer an interest in one Global  Security to a transferee  who will
     hold such  interest in another  Global  Security,  upon receipt by the
     Registrar of (x) written  instructions  given in  accordance  with the
     Depositary's  and the  Registrar's  procedures and (y) the appropriate
     certificates  and other documents,  if any,  required by clause (y) of
     paragraph  (i) above,  the Registrar  shall  register the transfer and
     reflect on its books and  records  the date and (A) a decrease  in the
     aggregate  principal  amount of the Global Security  through which the
     transferor  held such  interest  in an amount  equal to the  aggregate
     principal  amount  of the  Securities  to be  transferred  and  (B) an
     increase  in the  aggregate  principal  amount of the Global  Security
     through which the  transferee  proposes to hold such  interest,  in an
     amount equal to the aggregate principal amount of the Securities to be
     transferred.

     (C)  Restrictions  on  Transfer   and   Exchange  of   Global   Securities.
Notwithstanding  any  other  provisions of this Indenture, a Global Security may
not  be  transferred  except  as  a  whole by the Depositary to a nominee of the
Depositary  or  by  a  nominee  of  the

                                       13
<PAGE>

Depositary to the Depositary or another nominee  of  the Depositary  or  by  the
Depositary  or  any  such nominee to a successor Depositary or a nominee of such
successor Depositary.

     (D)  Private  Placement  Legend. Upon the transfer, exchange or replacement
of  Securities  not  bearing  the Private  Placement  Legend,  the  Registrar or
co-Registrar  shall deliver  Securities  that do not bear the Private  Placement
Legend.  Upon the transfer,  exchange or replacement  of Securities  bearing the
Private  Placement  Legend,  the  Registrar or  co-Registrar  shall deliver only
Securities  that bear the  Private  Placement  Legend  unless (i) the  requested
transfer is after the second  anniversary  of the issue date for the  Securities
(provided,  however, that neither the Company nor any of its Affiliates has held
any beneficial interest in such Security,  or portion thereof, at any time prior
to or on the second  anniversary of the issue date),  (ii) there is delivered to
the Trustee an Opinion of Counsel reasonably  satisfactory to the Trustee to the
effect that  neither  such legend nor the related  restrictions  on transfer are
required in order to maintain  compliance  with the provisions of the Securities
Act or (iii) such Security has been sold  pursuant to an effective  registration
statement  under the Securities  Act and the Holder selling such  Securities has
delivered  to the  Registrar or  co-Registrar  a notice in the form of Exhibit D
hereto.  Upon the effectiveness of the Shelf Registration  Statement (as defined
in the Registration Rights Agreement),  the Company shall deliver to the Trustee
a notice of effectiveness,  a Security or Securities, an authentication order in
accordance with Section 2.02 and an Opinion of Counsel  reasonably  satisfactory
to the Trustee and, if required by the Depositary,  the Company shall deliver to
the Depositary a letter of  representations  in a form reasonably  acceptable to
the Depositary.

     (E)  General.  By  its  acceptance  of any  Security  bearing  the  Private
Placement Legend,  each Holder of such a Security  acknowledges the restrictions
on  transfer of such  Security  set forth in this  Indenture  and in the Private
Placement Legend and agrees that it will transfer such Security only as provided
in this Indenture.

     The Registrar shall retain copies of all letters, notices and other written
communications  received  pursuant to Section  2.15 or this  Section  2.16.  The
Company  shall have the right to inspect  and make  copies of all such  letters,
notices or other written  communications  at any reasonable time upon the giving
of reasonable written notice to the Registrar.

     (F)  Transfers  of  Securities  Held by  Affiliates.  Any  certificate  (i)
evidencing a Security that has been  transferred  to an Affiliate of the Company
within two years  after the issue date for the  Securities,  as  evidenced  by a
notation  on the  Assignment  Form for such  transfer  or in the  representation
letter  delivered in respect thereof or (ii) evidencing a Security that has been
acquired from an Affiliate  (other than by an  Affiliate) in a transaction  or a
chain of transactions not involving any public offering,  shall, until two years
after the last date on which the Company or any  Affiliate of the Company was an
owner of such Security,  in each case, bear the Private Placement Legend, unless
otherwise agreed by the Company (with written notice thereof to the Trustee).

                                       14
<PAGE>

2.17 RESTRICTIVE LEGENDS.

     Each Global  Security and Physical  Security that  constitutes a Restricted
Security shall bear the legend (the "Private  Placement Legend") as set forth in
Exhibit B-1 on the face thereof until after the second  anniversary of the later
of (i) the  issue  date for the  Securities,  (ii) the  last  date on which  the
Company or any  Affiliate of the Company was the owner of such  Security (or any
predecessor  security)  (or such  shorter  period of time as  permitted  by Rule
144(k) under the Securities Act or any successor provision  thereunder) (or such
longer period of time as may be required  under the Securities Act or applicable
state  securities  laws  in the  opinion  of  counsel  for the  Company,  unless
otherwise agreed between the Company and the Holder thereof).

     Each  Global  Security  shall  also bear the legend as set forth in Exhibit
B-2.

                                III. REDEMPTION

3.01 RIGHT OF REDEMPTION.

     Redemption  of the  Securities,  as  permitted  by any  provision  of  this
Indenture, shall be made in accordance with paragraphs 6 and 7 and, with respect
to any repurchase upon a Change in Control,  paragraph 8 of the Securities,  and
in each case in accordance  with this Article III. The Company will not have the
right to redeem any Securities  prior to June 3, 2005. On or after June 3, 2005,
the Company will have the right to redeem all or any part of the  Securities  at
the  Redemption  Prices  specified  in  paragraph  6 therein  under the  caption
"Redemption Price," in each case including accrued and unpaid interest,  if any,
to, but excluding,  the redemption date; provided that the Daily Market Price of
the  Company's  Common Stock has exceeded 130% of the  Conversion  Price then in
effect for at least 20 trading  days within a period of 30  consecutive  trading
days  ending  on the  trading  day  prior to the date of  mailing  of  notice of
redemption as required under pursuant to Section 3.04.

3.02 NOTICES TO TRUSTEE.

     If the Company elects to redeem  Securities  pursuant to paragraph 6 of the
Securities, it shall notify the Trustee at least 15 days prior to the mailing of
the notice of redemption  (unless a shorter notice period shall be  satisfactory
to the Trustee) of the  redemption  date and the aggregate  principal  amount of
Securities to be redeemed.

3.03 SELECTION OF SECURITIES TO BE REDEEMED.

     If less than all the  Securities  are to be  redeemed,  the  Trustee  shall
select the Securities to be redeemed on a pro rata basis. The Trustee shall make
the selection from Securities  outstanding not previously called for redemption.
The Trustee may select for  redemption  portions of the  principal of Securities
that have  denominations  larger than $1,000  principal  amount.  Securities and
portions of them it selects  shall be in amounts of $1,000  principal  amount or
positive  integral  multiples  of $1,000  principal  amount.  The Trustee  shall
promptly notify the Company in writing of the Securities selected for redemption
and the principal amount thereof to be redeemed.

     The  Registrar  need not transfer or exchange any  Securities  selected for
redemption,  except the unredeemed  portion of the Securities  redeemed in part.
Also, the Registrar need not transfer or exchange any Securities for a period of
15 days before selecting Securities to be redeemed.

                                       15
<PAGE>

     The Registrar  need not, if a redemption is to occur after a regular record
date but on or before the  corresponding  interest  payment  date,  register the
transfer or exchange of any  Security  after the regular  record date and before
the date of redemption.

3.04 NOTICE OF REDEMPTION.

     At least 30 days but not more than 60 days before a  redemption  date,  the
Company  shall mail by  first-class  mail a notice of  redemption to each Holder
whose Securities are to be redeemed.

     The notice shall identify the Securities and the aggregate principal amount
thereof to be redeemed and shall state:

          (i)  the redemption date;

          (ii) the Redemption  Price, plus the amount of accrued and unpaid
     interest to be paid on the Securities called for redemption;

          (iii) the then current conversion rate and Conversion Price;

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

          (v) the date on which the right to convert the  principal  of the
     Securities  called  for  redemption  will  terminate  and the place or
     places where such Securities may be surrendered for conversion;

          (vi) that Holders who want to convert Securities must satisfy the
     requirements in Article X;

          (vii)  the  paragraph  of the  Securities  pursuant  to which the
     Securities are to be redeemed;

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

          (ix) that unless the Company  shall default in the payment of the
     Redemption Price,  interest on Securities called for redemption ceases
     to accrue on and after  the  redemption  date and that the  Securities
     will  cease to be  convertible  after  the  close of  business  on the
     business day immediately preceding the redemption date; and

          (x) the  CUSIP  number  or  numbers,  as the case may be,  of the
     Securities.

                                    16
<PAGE>

     The date on which the right to  convert  the  principal  of the  Securities
called for redemption  will  terminate  shall be at the close of business on the
business day immediately preceding the redemption date.

     At the Company's  request,  upon reasonable prior notice, the Trustee shall
give the  notice  of  redemption  in the  Company's  name  and at the  Company's
expense;  provided that the form and content of such notice shall be prepared by
the Company.

3.05 EFFECT OF NOTICE OF REDEMPTION.

     Once  notice of  redemption  is mailed,  Securities  called for  redemption
become  due and  payable on the  redemption  date at the  Redemption  Price plus
accrued and unpaid  interest to the date of  redemption,  and, on and after such
date (unless the Company shall default in the payment of the Redemption  Price),
such  Securities  shall cease to bear  interest.  Upon  surrender  to the Paying
Agent,  such  Securities  shall be paid at the  Redemption  Price  plus  accrued
interest to, but excluding,  the redemption date,  unless the redemption date is
an interest payment date, in which case the accrued interest will be paid in the
ordinary course.

3.06 DEPOSIT OF REDEMPTION PRICE.

     On or before the redemption date, the Company shall deposit with the Paying
Agent money in funds immediately  available on the redemption date sufficient to
pay the  Redemption  Price  of and  accrued  interest  on all  Securities  to be
redeemed on that date. The Paying Agent shall return to the Company,  as soon as
practicable, any money not required for that purpose.

3.07 SECURITIES REDEEMED IN PART.

     Upon  surrender of a Security  that is redeemed in part,  the Company shall
execute  and the Trustee  shall  authenticate  for the Holder a new  Security or
Securities in an aggregate  principal amount equal to the unredeemed  portion of
the Security surrendered.

     If any Security  selected for partial  redemption is converted in part, the
converted  portion of such Security  shall be deemed to be the portion  selected
for redemption.

3.08 REPURCHASE AT OPTION OF HOLDER UPON A CHANGE IN CONTROL.

     Upon any Change in Control (as defined  below) with respect to the Company,
each Holder of Securities shall have the right (the "Repurchase  Right"), at the
Holder's  option,  subject to the rights of the  holders of Senior  Indebtedness
under Article XI of this Indenture,  to require the Company to repurchase all of
such  Holder's  Securities,  or a portion  thereof  which is $1,000 in principal
amount or any positive integral  multiple thereof,  on the date (the "Repurchase
Date") that is no later than 30  business  days after the date of the mailing of
the Change in Control  Notice (as  defined  below) at the  Repurchase  Price set
forth in paragraph 8 of the  Securities,  plus accrued and unpaid  interest,  if
any, to, but excluding, the Repurchase Date.

     Within 30 business days after the  occurrence of a Change in Control of the
Company,  the Company  shall mail to all Holders of record of the

                                       17
<PAGE>

Securities a notice (the "Change in Control  Notice") of the  occurrence of such
Change in Control and the  Repurchase  Right  arising as a result  thereof.  The
Company shall deliver a copy of the Change in Control  Notice to the Trustee and
the Company shall issue a press release  including the  information  required in
the Change of Control  Notice.  To exercise the  Repurchase  Right,  a Holder of
Securities must deliver on or before the close of business on the third business
day immediately  preceding the Repurchase Date written notice to the Company (or
an agent  designated  by the Company for such  purpose),  and the Trustee of the
Holder's  exercise of such right  together with the  Securities  with respect to
which the right is being exercised, duly endorsed for transfer.

     Each Change in Control Notice shall state:

          (i) the events causing the Change in Control;

          (ii) the date of such Change in Control;

          (iii) the Repurchase Date;

          (iv) the date by which the Repurchase Right must be exercised;

          (v) the Repurchase  Price, plus the amount of accrued interest to
     be paid on the Securities to be repurchased;

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

          (vii) a description  of the procedure  which a Holder must follow
     to exercise a Repurchase Right;

          (viii)  that,  in order to exercise  the  Repurchase  Right,  the
     Securities are to be surrendered for payment of the Repurchase Price;

          (ix) that Holders will be entitled to withdraw  their election if
     the Company (if acting as its own Paying  Agent),  or the Paying Agent
     receives,  not later than the close of  business on the  business  day
     immediately  preceding the  Repurchase  Date, or such longer period as
     may be  required  by law,  a letter or  telegram,  telex or  facsimile
     transmission (receipt of which is confirmed and promptly followed by a
     letter) setting forth the name of the Holder,  the principal amount of
     Securities the Holder delivered for purchase and a statement that such
     Holder  is   withdrawing   his   election  to  have  such   Securities
     repurchased,   the  certificate   numbers  of  such  Securities  being
     withdrawn,  if applicable,  and the principal  amount,  if any, of the
     Securities  that remain subject to a Change in Control Notice and that
     Securities  with respect to which a Change in Control  purchase notice
     is given by the Holder may be  converted,  if  otherwise  convertible,
     only if the Change in Control  purchase  notice has been  withdrawn in
     accordance with the terms hereof;

                                    18
<PAGE>

          (x) the then existing  conversion rate, and any adjustment to the
     conversion rate that will result from the Change in Control;

          (xi) the place or places where such Securities may be surrendered
     for conversion; and

          (xii) the CUSIP  number  or  numbers,  as the case may be, of the
     Securities.

     No failure of the  Company to give the  foregoing  notice  shall  limit any
Holder's right to exercise a Repurchase Right.

     To exercise a Repurchase  Right,  a Holder shall deliver to the Company (if
it is acting as its own Paying  Agent),  or to a Paying Agent  designated by the
Company for such purpose in the Change in Control  Notice  within the period set
forth in the second  paragraph of this Section 3.08, (i) the Option of Holder To
Elect Purchase  Notice on the back of the  Securities  with respect to which the
Repurchase  Right  is being  exercised,  or any  other  form of  written  notice
substantially  similar to the Option of Holder To Elect Purchase Notice, in each
case, duly completed and signed, with appropriate signature guarantee,  and (ii)
such Securities with respect to which the Repurchase  Right is being  exercised,
duly  endorsed  for  transfer to the  Company and the Holder of such  Securities
shall be entitled to receive from the Company (if it is acting as its own Paying
Agent),  or such Paying Agent a  nontransferable  receipt of deposit  evidencing
such deposit.

     In the event a Repurchase  Right shall be exercised in accordance  with the
terms  hereof,  the  Company  shall  pay or  cause  to be  paid  the  applicable
Repurchase  Price  (plus  accrued  and  unpaid  interest)  with  respect  to the
Securities  as to which the  Repurchase  Right shall have been  exercised to the
Holder on the  Repurchase  Date,  subject to the  provisions of the  immediately
preceding paragraph.

     On or prior to a  Repurchase  Date,  the  Company  shall  deposit  with the
Trustee or with a Paying  Agent (or,  if the Company is acting as its own Paying
Agent, segregate and hold in trust in accordance with Section 2.04) an amount of
money (to be available on the Repurchase  Date) sufficient to pay the Repurchase
Price (plus accrued and unpaid  interest) of all of the Securities  which are to
be repurchased on that date.

     Both the Change in Control  Notice and the notice of the Holder to exercise
a Repurchase Right having been duly given as specified in this Section 3.08, the
Securities so to be repurchased  shall, on the Repurchase  Date,  become due and
payable at the  Repurchase  Price  applicable  thereto  (plus accrued and unpaid
interest)  and from and after such date (unless  there shall be a default in the
payment of the Repurchase  Price) such  Securities  shall cease to bear interest
and shall cease to be  convertible.  Upon  surrender  of any such  Security  for
repurchase in accordance  with said notice,  such Security  shall be paid by the
Company at the Repurchase Price (plus accrued and unpaid interest).

     If any Security  shall not be paid upon surrender  thereof for  repurchase,
the principal  shall,  until paid, bear interest from the Repurchase Date at the
rate borne by such Security on the  principal  amount of such Security and shall
continue to be convertible.

                                       19
<PAGE>

     Any Security which is to be submitted for repurchase  only in part shall be
delivered  pursuant to this Section 3.08 (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 its attorney duly authorized in writing),  and the Company shall execute, and
the Trustee shall  authenticate and make available for delivery to the Holder of
such Security  without  service  charge,  a new Security or  Securities,  of any
authorized  denomination  as requested by such Holder,  of the same tenor and in
aggregate  principal  amount equal to the portion of such Security not submitted
for repurchase.

     Notwithstanding  anything herein to the contrary, (i) if the option granted
to  Securityholders  to  require  the  repurchase  of the  Securities  upon  the
occurrence  of a Change in Control is  determined  to constitute a tender offer,
the  Company  will  comply  with all  applicable  tender  offer  rules under the
Exchange Act, including Rules 13e-4 and 14e-1, and file Schedule TO or any other
schedules  required under the Exchange Act and (ii) the Company may not purchase
Securities  at the  option  of  Holders  upon a Change in  Control  if there has
occurred and is continuing  an Event of Default with respect to the  Securities,
other than a Default in the payment of the Change in Control purchase price with
respect to the Securities.

     As used in this Section 3.08 of the Indenture and in the Securities:

     A "Change in Control" of the  Company  shall be deemed to have  occurred at
such time as:

          (i) any  "person" or "group" (as such terms are used for purposes
     of Sections 13(d) and 14(d) of the Exchange Act), other than an Exempt
     Person, is or becomes the "beneficial  owner" (as such term is used in
     Rule 13d-3 under the Exchange Act), directly or indirectly,  of 50% or
     more of the voting power of the Company's Common Stock;

          (ii) the  individuals  who on the  issue  date of the  Securities
     constituted  the  Company's  Board of Directors  and any new directors
     whose election by the Company's Board of Directors or whose nomination
     for election by the Company's  stockholders was approved by at least a
     majority  of the  directors  then  still in  office  who  were  either
     directors  on the issue date of the  Securities  or whose  election or
     nomination  for  election  was  previously  so approved  cease for any
     reason to constitute a majority of the Company's  Board of Directors ;
     or

          (iii) the sale, lease or transfer of all or substantially  all of
     the assets and  property of the Company to any "person" or "group" (as
     such terms are used in Sections  13(d) and 14(d) of the Exchange Act),
     including  any group acting for the purpose of  acquiring,  holding or
     disposing of securities  within the meaning of Rule 13d-5(b)(1)  under
     the Exchange Act;  provided  that the grant of a security  interest in
     the  Company's  properties  or assets in  connection  with a financing
     arrangement is not a conveyance, transfer or lease for the purposes of
     this subsection (iii).

                                    20
<PAGE>

However, a Change in Control will not be deemed to have occurred if either:

          (X)  the Daily Market Price of the Company's Common Stock for any
               five trading days during the ten  trading   days immediately
               preceding the Change in Control is at least equal to 105% of
               the then effective Conversion Price on such trading date; or

          (Y)  in  the  case  of a  merger  or  consolidation,  all  of the
               consideration (excluding cash payments for fractional shares
               and cash payments pursuant to dissenters' appraisal  rights)
               in  the merger or consolidation constituting  the Change in
               Control  consists of common  stock traded on a U.S. national
               securities exchange or quoted on the Nasdaq National  Market
               (or  which  will  be  so  traded  or  quoted  when issued or
               exchanged in connection  with such Change in Control) and as
               a result of such transaction or transactions  the Securities
               become convertible solely into such  common  stock  and  any
               such  other consideration.

3.09 CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION.

     In connection  with any redemption of Securities,  the Company may arrange,
in lieu of redemption,  for the purchase and conversion of any Securities called
for  redemption  by an agreement  with one or more  investment  bankers or other
purchasers  to  purchase  all or a portion of such  Securities  by paying to the
Trustee in trust for the Holders whose Securities are to be so purchased,  on or
before the close of business on the  redemption  date, an amount that,  together
with any amounts  deposited  with the Trustee by the Company for  redemption  of
such Securities,  is not less than the Redemption Price, together with interest,
if any,  accrued to the  redemption  date, of such  Securities.  Notwithstanding
anything to the contrary  contained in this Article III, the  obligation  of the
Company to pay the Redemption  Price of such  Securities,  including all accrued
interest,  if any,  shall be deemed to be satisfied and discharged to the extent
such amount is so paid by such  purchasers,  but no such agreement shall relieve
the Company of its  obligation  to pay such  Redemption  Price and such  accrued
interest,  if any. If such an agreement is entered into, 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 X) surrendered by such purchasers for conversion, all as of
immediately  prior to the close of business on the redemption  date,  subject to
payment of the above amount as aforesaid.  The Trustee shall hold and pay to the
Holders whose  Securities are selected for redemption any such amount paid to it
for purchase and conversion in the same manner as it would moneys deposited with
it by the Company for the redemption of Securities.  Without the Trustee'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, rights,  immunities,  responsibilities or obligations of
the Trustee as set forth in this Indenture,  and the Company agrees to indemnify
the Trustee from, and hold it harmless against,  any and all loss,  liability or
expense  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  (including  counsel  fees and
expenses)  incurred  by the  Trustee 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

                                       21
<PAGE>

under  this  Indenture  except to the extent arising from its bad faith, willful
misconduct or negligence.

                                 IV. COVENANTS

4.01 PAYMENT OF SECURITIES.

     The Company shall pay all amounts due with respect to the Securities on the
dates and in the manner  provided in the  Securities.  All such amounts shall be
considered paid on the date due if the Paying Agent holds (or, if the Company is
acting as Paying  Agent,  if the  Company has  segregated  and holds in trust in
accordance  with Section  2.04) on that date money  sufficient to pay the amount
then due with respect to the Securities.

            The Company shall pay interest on any overdue amount (including, to
the extent permitted by applicable law, overdue interest) at the rate borne by
the Securities.

4.02                    MAINTENANCE OF OFFICE OR AGENCY.

     The Company  will  maintain in the  Borough of  Manhattan,  the City of New
York, an office or agency (which may be an office of the Trustee or an affiliate
of the Trustee,  Registrar or co-Registrar)  where Securities may be surrendered
for  registration  of transfer or exchange or  conversion  and where notices and
demands to or upon the Company in respect of the  Securities  and this Indenture
may be served. The Company will give prompt written notice to the Trustee of the
location,  and any change in the location,  of such 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
Office of the Trustee.

     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. The Company will give prompt
written  notice to the Trustee of any such  designation or rescission and of any
change in the location of any such other office or agency.

     The Company hereby  designates the Corporate Trust Office of the Trustee as
an agency of the Company in accordance with Section 2.03.

4.03 REPORTS.

     (A)  The Company (at its own expense) will deliver to the Trustee within 15
days after the filing of the same with the  Commission,  copies of the quarterly
and annual reports and of the information,  documents and other reports, if any,
which the  Company  may be  required  to file with the  Commission  pursuant  to
Section  13 or  15(d)  of  the  Exchange  Act  or  which  it  furnishes  to  its
stockholders.  In addition, the Company will promptly provide to the Trustee and
shall, upon request,  provide to any Holder or beneficial owner of Securities or
prospective  purchaser of Securities that so requests,  the information required
to be delivered  pursuant to Rule  144A(d)(4)  until such time as the Securities
and the underlying  Common Stock have been  registered by the Company for resale
under the  Securities  Act pursuant to the  Registration  Rights  Agreement.  In
addition,  the Company will furnish such Rule

                                       22
<PAGE>

144A(d)(4)  information if, at any time while the Securities or the Common Stock
issuable upon  conversion of the Securities are restricted securities within the
meaning of the Securities Act, the  Company is not subject to the  informational
requirements  of the  Exchange Act.

     (B)  The Company will comply with the provisions of TIA ss. 314(a).

     (C)  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 the Officers' Certificate).

4.04 COMPLIANCE CERTIFICATE.

     The Company shall  deliver to the Trustee  within 120 days after the end of
each fiscal year of the Company an Officers'  Certificate stating whether or not
the signers know of any Default or Event of Default by the Company in performing
any of its obligations  under this Indenture or the Securities.  If they do know
of any such  Default or Event of Default,  the  certificate  shall  describe the
Default or Event of Default and its status.

4.05 STAY, EXTENSION AND USURY LAWS.

     The Company  covenants  (to the extent that it may  lawfully do so) that it
will not at any time insist upon,  plead, or in any manner  whatsoever  claim or
take the benefit or  advantage  of, any stay,  extension  or usury law  wherever
enacted,  now or at any time hereafter in force,  which may affect the covenants
or the  performance  of this  Indenture;  and the Company (in each case,  to the
extent  that it may  lawfully  do so) hereby  expressly  waives  all  benefit or
advantage of any such law, and covenants that it will not, by resort to any such
law,  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 has been enacted.

4.06 CORPORATE EXISTENCE.

     Subject to Article  V, the  Company  will do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate  existence
in accordance  with its  organizational  documents  and the rights  (charter and
statutory), licenses and franchises of the Company.

4.07 NOTICE OF DEFAULT.

            In the event that any Default or Event of Default shall occur, the
Company will give prompt written notice of such Default or Event of Default to
the Trustee setting forth the details of such Default or Event of Default and
the action the Company proposes to take with respect thereto.

                                       23
<PAGE>

                                 V. SUCCESSORS

5.01 WHEN COMPANY MAY MERGE, ETC.

     The Company shall not consolidate  with or merge into, or transfer or lease
all or substantially  all of its properties and assets to, another person unless
such  other  person is a  corporation  organized  under  the laws of the  United
States,  any State thereof or the District of Columbia;  such person  assumes by
supplemental  indenture all the obligations of the Company, under the Securities
and this Indenture;  and immediately after giving effect to the transaction,  no
Default or Event of Default shall exist.

     The Company shall deliver to the Trustee prior to the  consummation  of the
proposed  transaction an Officers'  Certificate  to the foregoing  effect and an
Opinion of Counsel,  which may rely upon such  Officers'  Certificate  as to the
absence of Defaults and Events of Default, stating that the proposed transaction
and  such  supplemental  indenture  will,  upon  consummation  of  the  proposed
transaction, comply with this Indenture.

5.02 SUCCESSOR SUBSTITUTED.

     Upon  any   consolidation  or  merger  or  transfer  or  lease  of  all  or
substantially  all of the assets of the Company in accordance with Section 5.01,
the successor  person formed by such  consolidation or into which the Company is
merged or to which such transfer or lease is made shall succeed to, and,  except
in the case of a lease,  be  substituted  for, and may exercise  every right and
power of, and shall assume every duty and  obligation of, the Company under this
Indenture  with the  same  effect  as if such  successor  had been  named as the
Company  herein.  When the  successor  assumes  all  obligations  of the Company
hereunder,  except in the case of a lease,  all  obligations of the  predecessor
shall terminate.

                           VI. DEFAULTS AND REMEDIES

6.01 EVENTS OF DEFAULT.

     An "Event of Default" occurs if:

          (i) the Company defaults in the payment of interest or liquidated
     damages on any Security  when the same becomes due and payable and the
     default continues for a period of 30 days, whether or not such payment
     shall be prohibited by the provisions of Article XI hereof;

          (ii) the  Company  defaults in the  payment of the  principal  or
     Repurchase  Price or  Redemption  Price of any Security  when the same
     becomes  due  and  payable,   whether  on  the  Maturity  Date,   upon
     redemption,  on the Repurchase Date or otherwise,  whether or not such
     payment shall be prohibited by the provisions of Article XI hereof;

          (iii)  the  Company  fails  to  comply  with  any  of  its  other
     agreements  in the  Securities  or  this  Indenture  and  the  default
     continues for the period and after the notice specified below;

                                    24
<PAGE>

          (iv) the Company  defaults  in the payment at the final  maturity
     thereof,  after the  expiration of any  applicable  grace  period,  of
     principal of, or premium,  if any, on indebtedness for money borrowed,
     other  than  Non-Recourse  Indebtedness,  in the  aggregate  principal
     amount then outstanding of $25,000,000 or more, or the acceleration of
     indebtedness for money borrowed in such aggregate  principal amount so
     that it becomes  due and  payable  prior to the date on which it would
     otherwise  become  due  and  payable  and  such  acceleration  is  not
     rescinded or such  default is not cured within 30 business  days after
     notice to the Company in accordance with this Indenture;

          (v)  the  Company  pursuant  to or  within  the  meaning  of  any
     Bankruptcy Law:

          (A) commences a voluntary case,

          (B) consents to the entry of an order for relief against it in an
     involuntary case,

          (C) consents to the  appointment  of a Custodian of it or for all
     or substantially all of its property, or

          (D) makes a general  assignment for the benefit of its creditors;
     or

          (vi) a court of competent  jurisdiction enters an order or decree
     under any Bankruptcy Law that:

          (A) is for relief against the Company in an  involuntary  case or
     proceeding, or adjudicates the Company insolvent or bankrupt,

          (B) appoints a Custodian of the Company for all or  substantially
     all of the property of the Company, or

          (C) orders the winding up or liquidation of the Company,

     and the order or decree  remains  unstayed and in effect for 90 consecutive
days.

     The term  "Bankruptcy Law" means Title 11, U.S. Code or any similar Federal
or State law for the relief of debtors. The term "Custodian" means any receiver,
trustee, assignee, liquidator or similar official under any Bankruptcy Law.

     A default  under clause (iii) is not an Event of Default  until the Trustee
or the Holders of at least 25% in aggregate  principal  amount of the Securities
then  outstanding  notify the  Company  and the  Trustee of the  default and the
default is not cured within 60 days after receipt of the notice. The notice must
specify the  default,  demand that it be remedied and state that the notice is a
"Notice of Default".  If the Holders of 25% in aggregate principal amount of the
outstanding  Securities request the Trustee to give such notice on their behalf,
the Trustee shall do so. When a default is cured, it ceases.

                                       25
<PAGE>

6.02 ACCELERATION.

     If an Event of Default (other than an Event of Default specified in Section
6.01(v)  or (vi)  with  respect  to the  Company)  as to which the  Trustee  has
received  notice  pursuant to the  provisions  of this  Indenture  occurs and is
continuing,  the Trustee by notice to the Company or the Holders of at least 25%
in principal  amount of the Securities then outstanding by notice to the Company
and the  Trustee may declare the  Securities  to be due and  payable.  Upon such
declaration such principal and interest shall be due and payable immediately. If
an Event of Default  specified  in Section  6.01(v) or (vi) with  respect to the
Company  occurs,  the  principal of and accrued  interest on all the  Securities
shall  ipso  facto  become  and be  immediately  due  and  payable  without  any
declaration or other act on the part of the Trustee or any  Securityholder.  The
Holders of a majority  in  aggregate  principal  amount of the  Securities  then
outstanding by written notice to the Trustee may rescind an acceleration and its
consequences  if the rescission  would not conflict with any order or decree and
if all existing Events of Default have been cured or waived except nonpayment of
principal or interest that has become due solely because of the acceleration and
if all amounts due to the Trustee under Section 7.07 have been paid.

6.03 OTHER REMEDIES.

     Notwithstanding  any  other  provision  of this  Indenture,  if an Event of
Default occurs and is continuing, the Trustee may pursue any available remedy by
proceeding  at law or in equity to  collect  the  payment  of  amounts  due with
respect to the Securities or to enforce the  performance of any provision of the
Securities or this Indenture.

     The Trustee may  maintain a  proceeding  even if it does not possess any of
the  Securities  or does not produce any of them 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. All remedies are
cumulative.

6.04 WAIVER OF PAST DEFAULTS.

     Subject to Sections  6.07 and 9.02,  the Holders of a majority in aggregate
principal amount of the Securities then outstanding by notice to the Trustee may
waive any past Default or Event of Default and its consequences.  When a Default
or an Event of Default is  waived,  it is cured and ceases for every  purpose of
this Indenture.

6.05 CONTROL BY MAJORITY.

     The Holders of a majority in aggregate  principal  amount of the Securities
then  outstanding  may  direct  the time,  method  and place of  conducting  any
proceeding  for any remedy  available to the Trustee or exercising  any trust or
power conferred on it.  However,  the Trustee may refuse to follow any direction
that conflicts with law or this Indenture,  is unduly  prejudicial to the rights
of other  Securityholders  or would  involve the Trustee in personal  liability;
provided that the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.

                                       26
<PAGE>

6.06 LIMITATION ON SUITS.

     Except as provided in Section  6.07, a  Securityholder  may pursue a remedy
with respect to this Indenture or the Securities only if:

          (i)  the  Holder  gives  to  the  Trustee  written  notice  of  a
     continuing Event of Default;

          (ii) the Holders of at least 25% in aggregate principal amount of
     the Securities then  outstanding make a written request to the Trustee
     to pursue the remedy;

          (iii) such Holder or Holders offer and, if requested,  provide to
     the Trustee  indemnity  satisfactory  to the Trustee against any loss,
     liability or expense;

          (iv) the Trustee does not comply with the request  within 60 days
     after receipt of the request and the offer of indemnity; and

          (v) during  such  60-day  period,  the  Holders of a majority  in
     aggregate  principal  amount of the Securities then outstanding do not
     give the Trustee a direction inconsistent with the request.

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

6.07 RIGHTS OF HOLDERS TO RECEIVE PAYMENT.

     Notwithstanding  any other  provision of this  Indenture,  the right of any
Holder to receive payment of all amounts due with respect to the Securities,  on
or after the respective due dates expressed in the Securities,  or to bring suit
for the enforcement of any such payment on or after such respective dates, shall
not be impaired or affected without the consent of the Holder.

     Notwithstanding  any other  provision of this  Indenture,  the right of any
Holder to bring suit for the  enforcement  of the right to convert the  Security
shall not be impaired or affected without the consent of the Holder.

6.08 COLLECTION SUIT BY TRUSTEE.

     If an Event of Default  specified in Section  6.01(i) or (ii) 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 due with respect to
the Securities, including any unpaid and accrued interest.

6.09 TRUSTEE MAY FILE PROOFS OF CLAIM.

     The Trustee may file such proofs of claim and other  papers or documents as
may be necessary  or  advisable in order to have the claims of the Trustee,  any
predecessor Trustee and the Securityholders  allowed in any judicial proceedings
relative to the Company or its creditors or properties.

                                       27
<PAGE>

     The Trustee may collect and receive any moneys or other property payable or
deliverable  on any such claims and to distribute  the same,  and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or similar official in any
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.

     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 claim of any Holder in any such proceeding.

                                       27
<PAGE>

6.10 PRIORITIES.

     If the Trustee collects any money pursuant to this Article VI, 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 XI;

          Third:    to Securityholders for all amounts due and unpaid on the
                    Securities,  without preference or priority of any kind,
                    according  to  the  amounts  due  and   payable  on  the
                    Securities; and

          Fourth:   to the Company.

     The Trustee, upon prior written notice to the Company may fix a record date
and  payment  date for any  payment by it to  Securityholders  pursuant  to this
Section 6.10.

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
in the suit other than the  Trustee  of an  undertaking  to pay the costs of the
suit,  and the court in its discretion may assess  reasonable  costs,  including
reasonable  attorneys' fees,  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 outstanding Securities.

                                       28
<PAGE>

                                  VII. TRUSTEE

7.01 DUTIES OF TRUSTEE.

     (A)  If an Event of Default has  occurred  and is  continuing,  the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same  degree of care and skill in their  exercise,  as a prudent  person
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:

          (i)  the  Trustee   need  perform  only  those  duties  that  are
     specifically  set forth in this Indenture and no implied  covenants or
     obligations shall be read into this Indenture against the Trustee; and

          (ii)  in  the  absence  of  bad  faith,   willful  misconduct  or
     negligence 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;  but 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 examine the  certificates  and opinions 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).

     (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:

          (i) this paragraph does not limit the effect of Section 7.01(B);

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

          (iii) 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; and

          (iv) 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 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.

     (D)  Every  provision  of this  Indenture  that in any way  relates  to the
Trustee is subject to the provisions of this Section 7.01.

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<PAGE>

     (E) The Trustee  shall not be liable for interest on any money  received by
it except as the Trustee may agree in writing  with the  Company.  Money held in
trust by the  Trustee  need not be  segregated  from other  funds  except to the
extent required by law.

7.02 RIGHTS OF TRUSTEE.

     (A)  Subject to Section  7.01,  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;  if,  however,  the Trustee  shall  determine to make such further
inquiry or  investigation,  it shall be entitled during normal business hours to
examine the relevant books,  records and premises of the Company,  personally or
by agent or attorney upon reasonable prior notice.

     (B) Before the Trustee  acts or  refrains  from  acting,  it may require an
Officers'  Certificate  and/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
such Officers' Certificate or Opinion of Counsel.

     (C) Any request or  direction  of the  Company  mentioned  herein  shall be
sufficiently  evidenced by a Company Request or Company Order and any resolution
of the Board of Directors shall be sufficiently evidenced by a Board Resolution.

     (D) The Trustee may consult with counsel of its selection and the advice of
such counsel or any Opinion of Counsel shall be full and complete  authorization
and  protection  in  respect  of any  action  taken,  suffered  or omitted by it
hereunder in good faith and in reliance thereon.

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

     (F) 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  discretion,
rights or powers conferred upon it by this Indenture.

     (G) Except with respect to Section 6.01,  the Trustee shall have no duty to
inquire as to the  performance  of the  Company  with  respect to the  covenants
contained  in Article IV. In addition,  the Trustee  shall not be deemed to have
knowledge  of an Event of  Default  except  (i) any  Default or Event of Default
occurring pursuant to Sections 6.01(i) and 6.01(ii) or (ii) any Default or Event
of Default of which a  Responsible  Officer of the Trustee  shall have  received
written  notification  or  obtained  actual  knowledge.   Delivery  of  reports,
information  and  documents to the Trustee under Article IV (other than Sections
4.04 and 4.07) is for  informational  purposes only and the Trustee's receipt of
the  foregoing  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).

     (H) The Trustee  shall be under no obligation to exercise any of the rights
or powers  vested by this  Indenture  at the request or  direction of any of the
Holders pursuant to this Indenture unless such Holders shall have

                                       30
<PAGE>

offered  to  the  Trustee  security  or indemnity reasonably satisfactory to the
Trustee against the costs, expenses and  liabilities  which might be incurred by
it in compliance with such request or direction.

     (I) The rights, privileges,  protections,  immunities and benefits given to
the Trustee,  including  without  limitation,  its right to be indemnified,  are
extended to, and shall be enforceable  by, the Trustee in each of its capacities
hereunder, and each agent, custodian and other Person employed to act hereunder.

     (J)  The  Trustee  may  request  that  the  Company  deliver  an  Officers'
Certificate  setting  forth the names of  individuals  and/or titles of officers
authorized at such time to take specified  actions  pursuant to this  Indenture,
which Officers'  Certificate  may be signed by any person  authorized to sign an
Officers'  Certificate,  including any person  specified as so authorized in any
such certificate previously delivered and not superseded.

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 any of its
Affiliates with the same rights it would have if it were not Trustee.  Any Agent
may do the same with  like  rights.  The  Trustee,  however,  must  comply  with
Sections 7.10 and 7.11.

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 the Company's use
of the proceeds from the  Securities;  and it shall not be  responsible  for any
statement in the Securities other than its certificate of authentication.

7.05                    NOTICE OF DEFAULTS.

            If a Default or Event of Default occurs and is continuing as to
which the Trustee has received notice pursuant to the provisions of this
Indenture, the Trustee shall mail to each Securityholder a notice of the Default
or Event of Default within 30 days after it occurs unless such Default or Event
of Default has been cured or waived. Except in the case of a Default or Event of
Default in payment of any amounts due with respect to any Security, the Trustee
may withhold the notice if and so long as it in good faith determines that
withholding the notice is in the interests of Securityholders.

7.06 REPORTS BY TRUSTEE TO HOLDERS.

     Within 60 days after each May 15 beginning  with May 15, 2002,  the Trustee
shall mail to each  Securityholder  if required by TIA ss. 313(a) a brief report
dated as of such May 15 that complies with TIA ss.  313(c).  In such event,  the
Trustee also shall comply with TIA ss. 313(b).

     A copy of each report at the time of its mailing to  Securityholders  shall
be mailed to the Company  and filed by the  Trustee  with the SEC and each stock
exchange,  if  any,  on  which  the  Securities  are  listed.   The  Company

                                       31
<PAGE>

shall  promptly notify the Trustee when the  Securities  are listed on any stock
exchange and of any delisting thereof.

7.07 COMPENSATION AND INDEMNITY.

     The Company  shall pay to the Trustee  from time to time such  compensation
for its services as shall be agreed upon in writing. The Trustee's  compensation
shall not be  limited  by any law on  compensation  of a trustee  of an  express
trust.  The Company shall  reimburse the Trustee upon request for all reasonable
out-of-pocket   expenses  incurred  by  it.  Such  expenses  shall  include  the
reasonable  compensation and out-of-pocket  expenses of the Trustee's agents and
counsel.

     The Company shall  indemnify the Trustee and its agents against any and all
loss,  liability,  damage,  claim or expense  (including the reasonable fees and
expenses  of counsel  and taxes  other  than those  based upon the income of the
Trustee)  incurred by it in connection with the acceptance or  administration of
this trust and the performance of its duties hereunder, including the reasonable
costs and expenses of defending  itself against any claim  (whether  asserted by
the Company, any Holder or any other Person) or liability in connection with the
exercise or performance of any of its powers and duties  hereunder.  The Company
need not pay for any  settlement  made  without its consent.  The Trustee  shall
notify the Company promptly of any claim for which it may seek  indemnification.
The Company  need not  reimburse  any expense or  indemnify  against any loss or
liability incurred by the Trustee through the Trustee's negligence, bad faith or
willful misconduct.

     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 amounts due on
particular Securities.

     The  indemnity  obligations  of the  Company  with  respect to the  Trustee
provided for in this Section 7.07 shall  survive any  resignation  or removal of
the Trustee.

     When the  Trustee  incurs  expenses or renders  services  after an Event of
Default  specified  in Section  6.01(v) or (vi)  occurs,  the  expenses  and the
compensation   for  the  services  are  intended  to   constitute   expenses  of
administration under any Bankruptcy Law.

7.08 REPLACEMENT OF TRUSTEE.

     A  resignation  or removal of the  Trustee and  appointment  of a successor
Trustee shall become effective only upon the successor  Trustee's  acceptance of
appointment as provided in this Section 7.08.

     The Trustee may resign by so  notifying  the Company in writing 30 business
days prior to such resignation. The Holders of a majority in aggregate principal
amount of the Securities then outstanding may remove the Trustee by so notifying
the Trustee and the Company in writing and may appoint a successor  Trustee with
the Company's consent. The Company may remove the Trustee if:

          (i) the Trustee fails to comply with Section 7.10;

                                       32
<PAGE>

          (ii) the Trustee is adjudged a bankrupt or an insolvent;

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

          (iv) the Trustee 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 a successor
Trustee.

     If a  successor  Trustee  does not take  office  within  30 days  after the
retiring  Trustee resigns or is removed,  the retiring Trustee (at the Company's
expense),  the  Company or the  Holders of at least 10% in  aggregate  principal
amount  of the  outstanding  Securities  may  petition  any  court of  competent
jurisdiction for the appointment of a successor Trustee.

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

7.09 SUCCESSOR TRUSTEE BY MERGER, ETC.

     If the Trustee consolidates with, merges or converts into, or transfers all
or  substantially  all of its corporate trust business to, another  corporation,
the  successor  corporation  without  any  further  act  shall be the  successor
Trustee, if such successor corporation is otherwise eligible hereunder.

7.10 ELIGIBILITY; DISQUALIFICATION.

     There  shall at all  times be a  Trustee  hereunder  that is a  corporation
organized and doing  business  under the laws of the United States of America or
of any state  thereof that is authorized  under such laws to exercise  corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least $100 million
as set  forth in its most  recent  published  annual  report of  condition.  The
Trustee shall comply with TIA ss. 310(b).

7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.

     The  Trustee  shall  comply with TIA ss.  311(a),  excluding  any  creditor
relationship  listed in TIA ss.  311(b).  A  Trustee  who has  resigned  or been
removed shall be subject to TIA ss. 311(a) to the extent indicated.

                                    33
<PAGE>

                          VIII. DISCHARGE OF INDENTURE

8.01 TERMINATION OF THE OBLIGATIONS OF THE COMPANY.

     The Company may terminate all of its  obligations  under this  Indenture if
all Securities  previously  authenticated  and delivered  (other than mutilated,
destroyed,  lost or  stolen  Securities  which  have  been  replaced  or paid as
provided in Section 2.07) have been delivered to the Trustee for cancellation or
if:

          (i) the  Securities  mature within one year or all of them are to
     be  called  for   redemption   within  one  year  under   arrangements
     satisfactory to the Trustee for giving the notice of redemption;

          (ii) the Company  irrevocably  deposits in trust with the Trustee
     money or U.S. Government  Obligations  sufficient to pay the principal
     or  Redemption  Price of and any unpaid and  accrued  interest  on the
     Securities to maturity or redemption,  as the case may be. Immediately
     after making the deposit,  the Company shall give notice of such event
     to the Securityholders;

          (iii)  the  Company  has paid or  caused to be paid all sums then
     payable by the Company to the Trustee hereunder as of the date of such
     deposit; and

          (iv) the  Company  has  delivered  to the  Trustee  an Opinion of
     Counsel  and an  Officers'  Certificate  stating  that all  conditions
     precedent  provided  for  herein  relating  to  the  satisfaction  and
     discharge of this  Indenture  have been complied with. The Company may
     make the deposit only during the  one-year  period and only if Article
     XI permits it.

However, the Company's obligations in Sections 2.02, 2.03, 2.04, 2.05, 2.06,
2.07, 2.08, 2.15, 2.16, 2.17, 4.01, 4.02, 7.07, 7.08 and Article VIII and
Article X shall survive until the Securities are no longer outstanding.
Thereafter the obligations of the Company in Sections 7.07 and 8.03 shall
survive.

     After a deposit  pursuant  to this  Section  8.01,  the  Trustee  upon
request shall  acknowledge  in writing the discharge of the  obligations of
the  Company  under the  Securities  and this  Indenture,  except for those
surviving obligations specified above.

     In  order  to  have  money  available  on a  payment  date  to pay the
principal or Redemption Price of and any unpaid and accrued interest on the
Securities,  the  U.S.  Government  Obligations  shall  be  payable  as  to
principal  and any unpaid and accrued  interest  on or before such  payment
date in such amounts as will provide the necessary money.

     "U.S.  Government  Obligations" means direct non-callable  obligations
of, or non-callable obligations guaranteed by, the United States of America
for the payment of which the full faith and credit of the United  States of
America is pledged.

                                    34
<PAGE>

8.02 APPLICATION OF TRUST MONEY.

     The Trustee shall hold in trust money or U.S.  Government  Obligations
deposited  with it pursuant to Section  8.01.  It shall apply the deposited
money and the money from U.S.  Government  Obligations  through  the Paying
Agent and in accordance with this Indenture to the payment of the principal
or  Redemption  Price  of  and  any  unpaid  and  accrued  interest  on the
Securities.  Money and  securities  so held in trust are not subject to the
subordination provisions of Article XI.

8.03 REPAYMENT TO COMPANY.

     The Trustee and the Paying Agent shall promptly notify the Company of,
and pay to the Company upon the request of the Company, any excess money or
securities held by them at any time. The Trustee and the Paying Agent shall
pay to the Company  upon the written  request of the Company any money held
by them for the payment of the  principal  or  Redemption  Price of and any
unpaid and accrued interest that remains unclaimed for two years; provided,
however,  that the Trustee or such Paying Agent,  before being  required to
make any such  repayment,  may, at the expense and request of the  Company,
cause to be  published  once in a newspaper of general  circulation  in the
City of New York or cause to be mailed to each Holder,  notice stating that
such money remains 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  balance  of such  money  then  remaining  will be  repaid to the
Company.  After  payment to the  Company,  Securityholders  entitled to the
money must look to the Company for payment as general  creditors  unless an
applicable  abandoned  property  law  designates  another  person  and  all
liability of the Trustee and the Paying Agent shall cease.

8.04 REINSTATEMENT.

     If the  Trustee  or Paying  Agent is unable to apply any money or U.S.
Government  Obligations in accordance with Sections 8.01 and 8.02 by reason
of any legal  proceeding or by reason of any order or judgment of any court
or governmental  authority enjoining,  restraining or otherwise prohibiting
such  application,  the obligations of the Company under this Indenture and
the  Securities  shall be revived and  reinstated  as though no deposit had
occurred  pursuant to Sections 8.01 and 8.02 until such time as the Trustee
or Paying  Agent is  permitted  to apply all such money or U.S.  Government
Obligations in accordance with Sections 8.01 and 8.02;  provided,  however,
that if the Company has made any payment of amounts due with respect to any
Securities  because of the  reinstatement of its  obligations,  the Company
shall be  subrogated  to the rights of the  Holders of such  Securities  to
receive such payment from the money or U.S. Government  Obligations held by
the Trustee or Paying Agent.

     The Company shall pay and  indemnify the Trustee  against any tax, fee
or  other  charge  imposed  on or  assessed  against  the  U.S.  Government
Obligations  deposited  pursuant  to  Section  8.01  or the  principal  and
interest  received in respect thereof other than any such tax, fee or other
charge  which  by law is for the  account  of the  Holders  of  outstanding
Securities.

                                    35
<PAGE>

                              IX. AMENDMENTS

9.01 WITHOUT CONSENT OF HOLDERS.

     The Company,  with the consent of the Trustee, may amend or supplement this
Indenture  or  the   Securities   without  notice  to  or  the  consent  of  any
Securityholder:

          (i) to cure any ambiguity,  inconsistency or other defect in this
     Indenture;

          (ii) to comply with Sections 5.01 and 10.12;

          (iii) to make any  changes  or  modifications  to this  Indenture
     necessary in connection with the  registration of the Securities under
     the Securities Act and the  qualification  of the Indenture  under the
     TIA;

          (iv) to secure the  obligations  of the Company in respect of the
     Securities;

          (v) to add to the  covenants  of the  Company  described  in this
     Indenture for the benefit of Securityholders or to surrender any right
     or power conferred upon the Company; or

          (vi) to make any changes or  modifications to this Indenture that
     do not adversely affect the rights of any Holder.

     Notwithstanding  the foregoing,  no supplemental  indenture pursuant to the
foregoing  clauses (i),  (iii),  (iv) or (v) of the  preceding  paragraph may be
entered  into  without the  consent of the  Holders of a majority  in  principal
amount of the Securities if such  supplemental  indenture  would  materially and
adversely affect the interests of the Holders of the Securities.

9.02 WITH CONSENT OF HOLDERS.

     The Company,  with the consent of the Trustee, may amend or supplement this
Indenture or the Securities  without notice to any  Securityholder  but with the
written  consent of the  Holders of at least a majority in  aggregate  principal
amount of the outstanding Securities.  Subject to Section 6.07, the Holders of a
majority in aggregate  principal amount of the outstanding  Securities may waive
compliance by the Company with any provision of this Indenture or the Securities
without notice to any other Securityholder. However, without the consent of each
Securityholder affected, an amendment,  supplement or waiver, including a waiver
pursuant to Section 6.04, may not:

          (i) reduce the amount of Securities whose Holders must consent to
     an amendment, supplement or waiver;

          (ii)  reduce  the  rate of or  change  the time  for  payment  of
     interest (including any liquidated damages) on any Security;

          (iii) reduce the principal,  Redemption Price or Repurchase Price
     of or change the stated maturity of any Security;

                                    36
<PAGE>

          (iv) make any Security  payable in money or securities other than
     as stated in such Security; or

          (v) make any change that adversely  affects the right to convert,
     or receive  payment  with  respect  to, any  Security  or the right to
     institute suit for the  enforcement of any payment with respect to, or
     conversion  of, any  Security  or the right to require  the Company to
     repurchase any of the Securities upon a Change in Control.

     An amendment under this Section 9.02 may not make any change that adversely
affects the rights under Article XI of any holder of Senior  Indebtedness unless
the holders of such  Senior  Indebtedness  pursuant to its terms  consent to the
change.

     Promptly  after an  amendment  under  Section  9.01 and this  Section  9.02
becomes  effective,  the Company shall mail to  Securityholders a notice briefly
describing the  amendment.  Any failure of the Company to mail such notice shall
not in any way impair or affect the validity of such  amendment,  supplement  or
waiver.

     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 or supplement, but
it shall be sufficient if such consent approves the substance thereof.

9.03 COMPLIANCE WITH TRUST INDENTURE ACT.

     Every  amendment,  waiver or supplement to this Indenture or the Securities
shall comply with the TIA as then in effect.

9.04 REVOCATION AND EFFECT OF CONSENTS.

     Until an amendment, supplement or waiver becomes effective, a consent to it
by a Holder is a continuing consent by the Holder and every subsequent Holder of
a  Security  or  portion  of a  Security  that  evidences  the same  debt as the
consenting Holder's Security, even if notation of the consent is not made on any
Security.  However,  any such Holder or subsequent Holder may revoke the consent
as to its  Security or portion of a Security if the Trustee  receives the notice
of  revocation  before  the date the  amendment,  supplement  or waiver  becomes
effective.  An amendment,  supplement or waiver becomes  effective in accordance
with its terms and thereafter binds every Securityholder.

     After an amendment,  supplement or waiver becomes effective with respect to
the  Securities,  it shall  bind every  Securityholder  unless it makes a change
described in Section 9.02.  In that case,  the  amendment,  supplement or waiver
shall bind each Holder of a Security who has consented to it and,  provided that
notice of such  amendment,  supplement or waiver is reflected on a Security that
evidences the same debt as the consenting  Holder's  Security,  every subsequent
Holder of a Security or portion of a Security  that  evidences  the same debt as
the consenting Holder's Security.

                                       37
<PAGE>

9.05 NOTATION ON OR EXCHANGE OF SECURITIES.

     If an amendment,  supplement or waiver changes the terms of a Security, the
Trustee may require the Holder of the Security to deliver it to the Trustee. The
Trustee  may place an  appropriate  notation on the  Security  as  directed  and
prepared  by the Company  about the  changed  terms and return it to the Holder.
Alternatively,  if the Company so  determines,  the Company in exchange  for the
Security  shall issue and the Trustee  shall  authenticate  a new Security  that
reflects the changed terms.

9.06 TRUSTEE PROTECTED.

     The Trustee need not sign any  amendment,  supplement or waiver  authorized
pursuant to this Article IX that adversely affects the Trustee's rights, duties,
liabilities  or  immunities.  The  Trustee  shall be  entitled  to  receive  and
conclusively  rely upon an Opinion of Counsel and an Officers'  Certificate that
any supplemental indenture, amendment or waiver complies with the Indenture.

                                 X. CONVERSION

10.01  CONVERSION PRIVILEGE; RESTRICTIVE LEGENDS.

     A Holder of a Security may convert such  Security  into Common Stock at any
time  during the period  stated in  paragraph 9 of the  Securities.  The initial
conversion rate is stated in paragraph 9 of the Securities.  The conversion rate
is subject to adjustment in accordance with Sections 10.06 through 10.12.

     A Holder may  convert a portion of the  principal  of such  Security if the
portion is $1,000  principal  amount or a positive  integral  multiple of $1,000
principal  amount.  Provisions of this Indenture that apply to conversion of all
of a Security also apply to conversion of a portion of it.

     Any shares  issued  upon  conversion  of a Security  shall bear the Private
Placement  Legend until after the second  anniversary  of the later of the issue
date for the  Securities and the last date on which the Company or any Affiliate
of the Company was the owner of such shares or the Security (or any  predecessor
security)  from which such shares were converted (or such shorter period of time
as permitted by Rule 144(k) under the Securities Act or any successor  provision
thereunder)  (or  such  longer  period  of time  as may be  required  under  the
Securities Act or applicable state securities laws in the Opinion of Counsel for
the Company, unless otherwise agreed by the Company and the Holder thereof).

10.02   CONVERSION PROCEDURE.

     To convert a Security,  a Holder must satisfy the requirements in paragraph
9 of the Securities.  The date on which the Holder satisfies those  requirements
is the Conversion  Date. As soon as practicable  following 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 a check in lieu of any fractional share. The person in whose name
the certificate is registered shall be treated as a stockholder of record on and
after the Conversion Date.

                                       38
<PAGE>

     Except as  described  below,  no  payment  or  adjustment  will be made for
accrued interest on, or liquidated damages with respect to, a converted Security
or for  dividends on any Common Stock issued on or prior to  conversion.  If any
Holder  surrenders a Security for conversion  after the close of business on the
record  date for the  payment of an  installment  of  interest  and prior to the
opening of business on the next  interest  payment date,  then,  notwithstanding
such  conversion,  the interest  payable on such interest  payment date shall be
paid to the Holder of such Security on such record date; provided, however, that
such Security,  when surrendered for conversion,  must be accompanied by payment
to the  Trustee  on behalf of the  Company  of an amount  equal to the  interest
payable on such  interest  payment date on the portion so  converted;  provided,
further,  however, that such payment to the Trustee described in the immediately
preceding  proviso shall not be required in connection  with any conversion of a
Security  called for redemption  pursuant to Section 3.04 hereof on a redemption
date that is after a record date for the  payment of  interest  and on or before
the day that is one business day following the  corresponding  interest  payment
date.

     If a Holder converts more than one Security at the same time, the number of
full shares  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 Trustee  shall
authenticate  for the Holder a new  Security  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 is not a Legal Holiday.

10.03  FRACTIONAL SHARES.

     The  Company  will  not  issue  fractional  shares  of  Common  Stock  upon
conversion of Securities  and instead will deliver a check in an amount equal to
the value of such  fraction  computed on the basis of the last sale price of the
Common Stock as reported on the NYSE (or if not listed for trading thereon, then
on the principal  securities  exchange or on the principal  automated  quotation
system on which the Common  Stock is listed or admitted to trading) at the close
of business on the last trading day prior to the date of  conversion.  If on the
date of conversion, the Common Stock is not quoted by any such organization, the
fair value of such Common Stock on such day, as  reasonably  determined  in good
faith by the Board of Directors shall be used.

10.04  TAXES ON CONVERSION.

     If a Holder converts its Security,  the Company shall pay any  documentary,
stamp or  similar  issue or  transfer  tax due on the  issue of shares of Common
Stock upon the conversion.  However,  the Holder shall pay any such tax which is
due because the shares are issued in a name other than the Holder's name.

                                       39
<PAGE>

10.05  COMPANY TO PROVIDE STOCK.

     The Company shall reserve out of its authorized  but unissued  Common Stock
or Common Stock held in its treasury enough shares of Common Stock to permit the
conversion of all of the Securities.

     All  shares of Common  Stock  which may be issued  upon  conversion  of the
Securities shall be validly issued, fully paid and non-assessable.

     The Company will endeavor to comply with all securities laws regulating the
offer and delivery of shares of Common Stock upon  conversion of Securities  and
will  endeavor  to list such  shares on each  national  securities  exchange  or
automated quotation system on which the Common Stock is listed.

10.06  ADJUSTMENT OF CONVERSION RATE.

     The  conversion  rate shall be subject to  adjustment  from time to time as
follows:

          (a) In case the  Company  shall (1) pay a  dividend  on shares of
     Common Stock in shares of Common  Stock,  (2) make a  distribution  on
     shares of Common Stock in shares of other Capital Stock, (3) subdivide
     the outstanding shares of Common Stock into a greater number of shares
     of Common Stock or (4) combine the outstanding  shares of Common Stock
     into a smaller number of shares of Common Stock,  the conversion  rate
     in effect  immediately  prior to such action 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 which he
     would have owned immediately following such action had such Securities
     been converted immediately prior thereto. Any adjustment made pursuant
     to this Section 10.06(a) shall become effective  immediately after the
     record date in the case of a dividend or distribution and shall become
     effective  immediately  after  the  effective  date  in the  case of a
     subdivision or combination.

          (b) In case the  Company  shall  issue  rights or warrants to all
     holders of Common Stock  entitling  them (for a period  commencing  no
     earlier  than the  record  date for the  determination  of  holders of
     Common Stock  entitled to receive such rights or warrants and expiring
     not more than 60 days  after such  record  date) to  subscribe  for or
     purchase shares of Common Stock (or securities convertible into Common
     Stock),  at a price per share less than the then current  market price
     (as determined  pursuant to Section 10.06(g) below) of Common Stock on
     such  record  date,  the   conversion   rate  shall  be  increased  by
     multiplying  the conversion rate in effect  immediately  prior to such
     record date by a fraction of which the  numerator  shall be the number
     of shares of Common Stock  outstanding  on such record date,  plus the
     number of  shares  of Common  Stock so  offered  for  subscription  or
     purchase,  and the  denominator of which shall be the number of shares
     of Common  Stock  outstanding  at the close of business on such record
     date plus the number of shares of Common Stock which the  aggregate of
     the  offering  price of the total  number of shares of Common Stock so
     offered for  subscription  or purchase  would purchase at such current
     market price.  Such  adjustments  shall become

                                    40
<PAGE>

     effective  immediately  after  such  record  date;  provided  that the
     conversion rate will be readjusted  to the  extent  that  such  rights
     or  warrants  are  not exercised prior to their expiration.

          (c) In case the Company shall distribute to all holders of Common
     Stock debt  securities or other assets (other than cash  dividends out
     of current or retained  earnings),  or shall distribute to all holders
     of Common Stock rights or warrants to subscribe for securities  (other
     than those referred to in Section 10.06(b)  above),  then in each such
     case  the  conversion  rate  shall be  increased  by  multiplying  the
     conversion rate in effect  immediately  prior to the close of business
     on the record date for the  determination of shareholders  entitled to
     such  distribution  by a fraction of which the numerator  shall be the
     current  market  price of Common  Stock  (determined  as  provided  in
     subsection (g) below),  on such date and the denominator shall be such
     current  market price less the fair market value (as determined by the
     Board  of  Directors  whose  determination  shall  be  conclusive  and
     described  in a Board  Resolution)  on such date of the portion of the
     evidences of  indebtedness,  shares of capital  stock,  cash and other
     assets to be  distributed or of such  subscription  rights or warrants
     applicable  to one  share of Common  Stock,  such  increase  to become
     effective  immediately  prior to the  opening of  business  on the day
     following  such record date.  Notwithstanding  the  foregoing,  in the
     event that the Company shall distribute rights or warrants (other than
     those referred to in Section  10.06(b)  above)  ("Rights") pro rata to
     holders  of Common  Stock,  the  Company  may,  in lieu of making  any
     adjustment pursuant to this Section 10.06(c), make proper provision so
     that each Holder of a Security  who  converts  such  Security  (or any
     portion thereof) after the record date for such distribution and prior
     to the  expiration  or  redemption  of the Rights shall be entitled to
     receive  upon such  conversion,  in  addition  to the shares of Common
     Stock  issuable upon such  conversion  (the  "Conversion  Shares"),  a
     number of Rights to be determined as follows:  (i) if such  conversion
     occurs on or prior to the date for the  distribution to the holders of
     Rights  of   separate   certificates   evidencing   such  Rights  (the
     "Distribution Date"), the same number of Rights to which a holder of a
     number  of shares of  Common  Stock  equal to the  number of shares of
     Conversion  Shares  is  entitled  at the  time of such  conversion  in
     accordance  with the terms and  provisions  of and  applicable  to the
     Rights;  and (ii) if such  conversion  occurs  after the  Distribution
     Date,  the same  number of  Rights to which a holder of the  number of
     shares of Common Stock into which the principal amount of the Security
     so converted was  convertible  immediately  prior to the  Distribution
     Date would have been entitled on the  Distribution  Date in accordance
     with the terms and provisions of and applicable to the Rights.

          (d) In case the Company shall,  by dividend or otherwise,  at any
     time  make a  distribution  (the  "Triggering  Distribution,"  and the
     amount of the  Triggering  Distribution,  together with the sum of (w)
     and (x) below,  the  "Combined  Amount") to all or  substantially  all
     holders of its Common Stock of cash  (including any  distributions  of
     cash out of current or retained earnings of the Company, but excluding
     any cash that is  distributed  as part of a  distribution  requiring a
     conversion  rate  adjustment  pursuant  to  subsection

                                    41
<PAGE>

     (c) above  or  subsection  (e)  below) in  an aggregate  amount  that,
     together with the sum of (w) the aggregate  amount of any cash and the
     fair  market  value  (as  determined  in good  faith  by the  Board of
     Directors,   whose  determination  shall  be  conclusive  thereof  and
     described in a Board  Resolution),  as of the expiration of the tender
     or  exchange  offer  referred  to below,  of any  other  consideration
     payable in respect of any tender or exchange offer by the Company or a
     subsidiary  of the Company for all or any portion of the Common  Stock
     consummated  within the 12 months preceding the date of payment of the
     Triggering  Distribution  and in respect of which no  conversion  rate
     adjustment has been made pursuant to this Section  10.06,  and (x) the
     aggregate   amount  of  all  other  cash   distributions   to  all  or
     substantially  all  holders of Common  Stock made within the 12 months
     preceding the date of payment of the  Triggering  Distribution  and in
     respect of which no conversion  rate adjustment has been made pursuant
     to this  Section  10.06,  exceeds  10% of the  product of the  current
     market price per share (as  determined in accordance  with  subsection
     (g) of this  Section  10.06)  of the  Common  Stock  on the  close  of
     business,  New York City time, on the business day (the  "Distribution
     Declaration  Date")  immediately   preceding  the  day  on  which  the
     Triggering  Distribution  is declared by the Company and the number of
     shares of Common Stock  outstanding  on the  Distribution  Declaration
     Date  (excluding  shares  held in the  treasury of the  Company),  the
     conversion  rate shall be adjusted by multiplying  the conversion rate
     in effect  immediately  prior to the  effectiveness  of the conversion
     rate adjustment  contemplated by this subsection (d) by a fraction (y)
     the numerator of which shall be such current market price per share of
     Common  Stock  on  the  Distribution  Declaration  Date  and  (z)  the
     denominator  of which shall be (I) such current market price per share
     of Common  Stock on the  Distribution  Declaration  Date less (II) the
     number  obtained by  dividing  the  Combined  Amount by such number of
     shares of Common  Stock  outstanding.  Such  adjustment  shall  become
     effective  immediately  prior to the  opening of  business  on the day
     following the Distribution Declaration Date.

          (e) In case a tender offer or exchange  offer made by the Company
     or any of its  subsidiaries for all or any portion of the Common Stock
     shall expire and such tender offer or exchange  offer (as amended upon
     the  expiration  thereof)  shall  require the payment to  stockholders
     (based on the acceptance (up to any maximum  specified in the terms of
     the tender offer or exchange  offer) of  Purchased  Shares (as defined
     below)) of an aggregate  consideration  having a fair market value (as
     determined by the Board of  Directors,  whose  determination  shall be
     conclusive and set forth in a Board Resolution) that combined together
     with:

     (1)  the  aggregate  of  the  cash  plus  the  fair  market  value (as
          determined  by  the  Board  of  Directors,  whose   determination
          shall be conclusive and set forth in a Board  Resolution),  as of
          the  expiration  of such  tender  offer  or  exchange  offer,  of
          consideration  payable in respect of any other  tender  offers or
          exchange  offers,  by the Company or any of its  subsidiaries for
          all or any  portion of the Common  Stock

                                    42
<PAGE>

          expiring  within  the  12  months  preceding  the  expiration  of
          such tender  offer or  exchange  offer and in respect of which no
          adjustment pursuant to this Section 10.06 has been made, and

     (2)  the    aggregate   amount   of   any   distributions  to  all  or
          substantially  all  holders of the  Company's  Common  Stock made
          exclusively in cash within the 12 months preceding the expiration
          of such tender offer or exchange offer and in respect of which no
          adjustment pursuant to Section 10.06 has been made,

          exceeds 10% of the product of the current  market price per share
          (as  determined in accordance with subsection (g) of this Section
          10.06)  as  of  the  last  time (the "Expiration Time")tenders or
          exchanges  could  have been made pursuant to such tender offer or
          exchange offer (as it may be amended) times the  number of shares
          of Common  Stock  outstanding  (including  any tendered shares or
          exchanged  shares  but  excluding  shares held in the treasury of
          the Company) at the Expiration Time,

     then, and in each such case,  immediately  prior to the opening of business
     on the day after the date of the Expiration Time, the conversion rate shall
     be adjusted by multiplying the conversion rate in effect  immediately prior
     to the close of business on the date of the Expiration Time by a fraction:

     (i)  the numerator of which 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  offer 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) at the Expiration  Time
          and  the  current  market  price  of  the Common  Stock as of the
          Expiration Time; and

     (ii) the  denominator of which shall be the number of shares of Common
          Stock outstanding (including any tendered or exchanged shares but
          excluding  shares  held  in  the  treasury  of the Company)at the
          Expiration  Time  multiplied  by  the current market price of the
          Common Stock as of the Expiration Time.

          Such adjustment (if any) shall become effective immediately prior
          to the opening of business on the day  following  the  Expiration
          Time.  In the event that the  Company is  obligated  to  purchase
          shares pursuant to any such tender offer or exchange  offer,  but
          the  Company is  permanently  prevented  by  applicable  law from
          effecting any such purchases or all such purchases are rescinded,

                                    43
<PAGE>

          the conversion  rate shall again be adjusted to be the conversion
          rate  which  would  then be in  effect  if such  tender  offer or
          exchange  offer had not been  made.  If the  application  of this
          Section  10.06(e)  to any tender  offer or  exchange  offer would
          result in a decrease in the conversion  rate, no adjustment shall
          be made for  such  tender  offer or  exchange  offer  under  this
          Section 10.06(e).

          (f) In addition to the foregoing  adjustments in subsections (a),
     (b), (c), (d) and (e) above, the Company, from time to time and to the
     extent  permitted  by law, may  increase  the  conversion  rate by any
     amount for at least 20 days or such  longer  period as may be required
     by  law,  if  the  Board  of  Directors  of  the  Company  has  made a
     determination,  which  determination  shall be  conclusive,  that such
     increase would be in the best interests of the Company,  provided that
     the  effective  Conversion  Price is not less  than the par value of a
     share of Common  Stock.  The Company  shall give notice to the Trustee
     and cause  notice  of such  increase  to be  mailed to each  Holder of
     Securities  at  such  Holder's  address  as the  same  appears  on the
     registry books of the Registrar, at least 15 days prior to the date on
     which such increase commences.  Such conversion rate increase shall be
     irrevocable during such period.

          (g) For the purpose of any  computation  under  subsections  (a),
     (b), (c), (d) and (e) above of this Section 10.06,  the current market
     price per share of Common Stock on the date fixed for determination of
     the  stockholders  entitled  to receive the  issuance or  distribution
     requiring such computation (the "Determination  Date") shall be deemed
     to be the average of the Daily Market  Prices for the ten  consecutive
     trading days immediately  preceding the Determination Date;  provided,
     however,  that (i) if the  "ex"  date for any  event  (other  than the
     issuance or distribution  requiring such computation) that requires an
     adjustment to the  conversion  rate  pursuant to subsection  (a), (b),
     (c), (d) or (e) above  occurs on or after the tenth  trading day prior
     to the Determination  Date and prior to the "ex" date for the issuance
     or distribution requiring such computation, the Daily Market Price for
     each  trading day prior to the "ex" date for such other event shall be

                                    45
<PAGE>

     adjusted by  multiplying  such Daily Market Price by the reciprocal of
     the  fraction  by  which  the  conversion  rate is so  required  to be
     adjusted  as a result of such other  event,  (ii) if the "ex" date for
     any event  (other than the  issuance or  distribution  requiring  such
     computation)  that  requires  an  adjustment  to the  conversion  rate
     pursuant to  subsection  (a),  (b), (c), (d) or (e) above occurs on or
     after the "ex" date for the issuance or  distribution  requiring  such
     computation  and on or  prior to the  Determination  Date,  the  Daily
     Market Price for each business day on and after the "ex" date for such
     other event shall be adjusted by  multiplying  such Daily Market Price
     by the same fraction by which the conversion rate is so required to be
     adjusted as a result of such other  event,  and (iii) if the "ex" date
     for the issuance or distribution  requiring such  computation is on or
     prior  to the  Determination  Date,  after  taking  into  account  any
     adjustment  required  pursuant to clause (i) or (ii) of this  proviso,
     the Daily Market Price for each trading day on and after the "ex" date
     shall be  adjusted  by adding  thereto  the amount of any cash and the
     fair market value (as determined by the Board of Directors in a manner
     consistent  with any  determination  of such value for the purposes of
     this  Section  10.06,  whose  determination  shall be  conclusive  and
     described in a Resolution  of the Board of Directors) of the evidences
     of indebtedness, shares of capital stock or other securities or assets
     being  distributed (in the  distribution  requiring such  computation)
     applicable to one share of Common Stock as of the close of business on
     the day before  such "ex"  date.  For the  purpose of any  computation
     under  subsection (e) of this Section 10.06,  the current market price
     per share of Common Stock at the expiration  time for the tender offer
     requiring  such  computation  shall be deemed to be the average of the
     Daily Market Price for the ten consecutive  trading days commencing on
     the business day  immediately  following the  expiration  time of such
     tender offer (the "Commencement Date"); provided, however, that if the
     "ex" date for any event  (other than the tender offer  requiring  such
     computation)  that  requires  an  adjustment  to the  conversion  rate
     pursuant to  subsection  (a),  (b), (c), (d) or (e) above occurs on or
     after  the  expiration  time  for  the  tender  offer  requiring  such
     computation  and prior to the day in question,  the Daily Market Price
     for each trading day on or after to the "ex" date for such other event
     shall be adjusted by  multiplying  such Daily Market Price by the same
     fraction by which the conversion rate is so required to be adjusted as
     a result of such other  event.  For purposes of this  subsection,  the
     term  "ex"  date,  (i) when  used  with  respect  to any  issuance  or
     distribution,  means the first date on which the Common  Stock  trades
     regular way on the relevant  exchange or in the  relevant  market from
     which the Daily Market Price was obtained without the right to receive
     such  issuance  or  distribution,  (ii) when used with  respect to any
     subdivision or combination of shares of Common Stock,  means the first
     date on which the Common Stock trades  regular way on such exchange or
     in such market after the time at which such subdivision or combination
     becomes  effective,  and (iii)  when used with  respect  to any tender
     offer means the first date on which the Common  Stock  trades  regular
     way on such  exchange or in such market after the  expiration  time of
     such tender offer (as it may be amended or extended).

10.07  NO ADJUSTMENT.

     No adjustment in the  conversion  rate shall be required  until  cumulative
adjustments  amount  to 1% or more  of the  conversion  rate  as last  adjusted;
provided,  however,  that any adjustments  which by reason of this Section 10.07
are not  required to be made shall be carried  forward and taken into account in
any subsequent  adjustment.  All calculations under this Article X shall be made
to the nearest cent or to the nearest  one-hundredth of a share, as the case may
be. 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 of the Common Stock.

     If any rights,  options or warrants  issued by the Company as  described in
Section 10.06 are only  exercisable  upon the  occurrence of certain  triggering
events,  then the  conversion  rate will not be  adjusted as provided in Section
10.06 until the earliest of such triggering event occurs. Upon the expiration or
termination  of any  rights,  options or warrants  without the

                                       45
<PAGE>

     exercise of such rights,  options or warrants,  the conversion rate then in
     effect shall be adjusted  immediately  to the  conversion  rate which would
     have been in effect at the time of such  expiration or termination had such
     rights, options or warrants, to the extent outstanding immediately prior to
     such expiration or termination, never been issued.

     No adjustment need be made for a transaction  referred to in this Article X
if Securityholders are to participate in the transaction without conversion on a
basis and with  notice  that the Board of  Directors  determines  to be fair and
appropriate  in light of the basis and notice on which  holders of Common  Stock
participate in the transaction.

10.08  OTHER ADJUSTMENTS.

     In the event that,  as a result of an  adjustment  made pursuant to Section
10.06 hereof, the Holder of any Security  thereafter  surrendered for conversion
shall become  entitled to receive any shares of Capital  Stock other than shares
of  Common  Stock,  thereafter  the  conversion  rate of such  other  shares  so
receivable  upon  conversion of any Security shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to Common Stock contained in this Article X.

10.09  ADJUSTMENTS FOR TAX PURPOSES.

     The Company may make such increases in the conversion  rate, in addition to
those  required by Section  10.06  hereof,  as it  determines to be advisable in
order that any stock dividend,  subdivision of shares, distribution or rights to
purchase stock or securities or distribution of securities  convertible  into or
exchangeable  for stock made by the Company or to its  stockholders  will not be
taxable to the recipients thereof.

10.10  NOTICE OF ADJUSTMENT.

     Whenever the conversion  rate is adjusted,  the Company shall promptly mail
to Holders at the addresses  appearing on the Registrar's  books a notice of the
adjustment and file with the Trustee an Officers'  Certificate  briefly  stating
the  facts  requiring  the  adjustment  and the  manner  of  computing  it.  The
certificate shall be conclusive evidence of the correctness of such adjustment.

10.11  NOTICE OF CERTAIN TRANSACTIONS.

       In the event that:

          (1)  the  Company   takes  any  action  which  would  require  an
     adjustment in the conversion rate;

          (2)  the  Company   takes  any  action   that  would   require  a
     supplemental indenture pursuant to Section 10.12; or

          (3) there is a dissolution or liquidation of the Company;

a Holder of a Security may wish to convert such  Security  into shares of Common
Stock prior to the record date for or the effective  date of the  transaction so
that he may receive the rights, warrants, securities or assets

                                       46
<PAGE>

which a holder of shares of Common  Stock on that date may  receive.  Therefore,
the Company shall mail to Holders at the addresses  appearing on the Registrar's
books and the Trustee a notice stating the proposed record or effective date, as
the case may be, of any  transaction  referred to in clause  (1),  (2) or (3) of
this Section  10.11.  The Company shall mail such notice at least 15 days before
such date; however,  failure to mail such notice or any defect therein shall not
affect the validity of any transaction  referred to in clause (1), (2) or (3) of
this Section 10.11.

10.12  EFFECT  OF  RECLASSIFICATIONS,  CONSOLIDATIONS,  MERGERS,  BINDING  SHARE
       EXCHANGES OR SALES ON CONVERSION PRIVILEGE.

     If any of the following shall occur,  namely: (i) any  reclassification  or
change in the Common Stock issuable upon conversion of Securities  (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),  or (ii)  any
consolidation,  merger or binding share exchange to which the Company is a party
other than a merger in which the Company is the continuing corporation and which
does not result in any  reclassification  of, or change  (other than a change in
name, or 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)  in, the Common Stock,
then the Company or such  successor or purchasing  corporation,  as the case may
be,  shall,  as  a  condition  precedent  to  such   reclassification,   change,
consolidation,  merger or binding  share  exchange,  execute  and deliver to the
Trustee a supplemental indenture in form reasonably  satisfactory to the Trustee
providing that the Holder of each Security then outstanding shall have the right
to convert such  Security  into the kind and amount of shares of stock and other
securities and property (including cash) receivable upon such  reclassification,
change,  consolidation,  merger,  binding or share  exchange  by a holder of the
number of shares of Common Stock,  deliverable  upon conversion of such Security
immediately prior to such  reclassification,  change,  consolidation,  merger or
binding  share  exchange.   Such   supplemental   indenture  shall  provide  for
adjustments of the conversion rate which shall be as nearly equivalent as may be
practicable  to the  adjustments  of the  conversion  rate  provided for in this
Article  X. The  foregoing,  however,  shall not in any way  affect  the right a
Holder of a Security  may  otherwise  have,  pursuant to clause (ii) of the last
sentence of  subsection  (c) of Section  10.06  hereof,  to receive  Rights upon
conversion of a Security.  If, in the case of any such consolidation,  merger or
binding share exchange,  the stock or other  securities and property  (including
cash) receivable  thereupon by a holder of Common Stock includes shares of stock
or other  securities  and property of a corporation  other than the successor or
purchasing  corporation,  as the case may be, in such  consolidation,  merger or
binding share exchange,  then such supplemental indenture shall also be executed
by such other  corporation  and shall  contain  such  additional  provisions  to
protect the interests of the Holders of the Securities as the Board of Directors
shall reasonably consider necessary by reason of the foregoing. The provision of
this Section 10.12 shall similarly apply to successive  consolidations,  mergers
or binding share exchanges.

     In the event the Company shall execute a supplemental indenture pursuant to
this  Section  10.12,  the  Company  shall  promptly  file with the  Trustee  an
Officers'  Certificate briefly stating the reasons therefor,  the kind or amount
of shares of stock or  securities  or property  (including  cash)  receivable by
Holders of the Securities upon the conversion of their Securities after any such
reclassification, change, consolidation, merger,

                                       48
<PAGE>

binding share  exchange,  sale or conveyance  and any adjustment to be made with
respect thereto.

10.13  TRUSTEE'S DISCLAIMER.

     The Trustee has no duty to determine when an adjustment  under this Article
X should be made, how it should be made or what such  adjustment  should be, but
may accept as conclusive evidence of the correctness of any such adjustment, and
shall be  protected  in relying  upon the  Officers'  Certificate  with  respect
thereto  which the Company is  obligated  to file with the  Trustee  pursuant to
Section 10.10 hereof.  The Trustee makes no representation as to the validity or
value of any securities or assets issued upon conversion of Securities,  and the
Trustee shall not be  responsible  for the failure by the Company to comply with
any provisions of this Article X.

     The  Trustee  shall  not be  under  any  responsibility  to  determine  the
correctness of any provisions  contained in any supplemental  indenture executed
pursuant  to  Section  10.12,  but may  accept  as  conclusive  evidence  of the
correctness  thereof,  and shall be protected  in relying  upon,  the  Officers'
Certificate with respect thereto which the Company is obligated to file with the
Trustee pursuant to Section 10.12 hereof.

                               XI. SUBORDINATION

11.01  AGREEMENT TO SUBORDINATE.

     The Company agrees, and each Securityholder by accepting a Security agrees,
that  the  payment  of  all  amounts  due  with  respect  to the  Securities  is
subordinated  in right of payment,  to the extent and in the manner  provided in
this  Article XI, to the prior  payment in full of all Senior  Indebtedness  and
that the subordination is for the benefit of the holders of Senior Indebtedness.

     Money and securities held in trust pursuant to Article VIII are not subject
to the subordination provisions of this Article XI.

11.02  CERTAIN DEFINITIONS.

     "Indebtedness"  means,  with respect to any person,  the  principal of, and
premium,  if any,  and  interest  on (a) all  indebtedness  of such  person  for
borrowed money (including all indebtedness evidenced by notes, bonds, debentures
or other  securities  sold by such person for money),  (b) all debt  obligations
incurred by such person in the acquisition (whether by way of purchase,  merger,
consolidation  or otherwise and whether by such person or another person) of any
business,  real  property or other assets  (except  inventory  and related items
acquired in the ordinary  course of conduct of the acquiror's  usual  business),
(c) guarantees by such person of indebtedness  described in clause (a) or (b) of
another   person,   (d)  all  renewals,   extensions,   refundings,   deferrals,
restructurings,   amendments  and   modifications  of  any  such   indebtedness,
obligation or guarantee,  (e) all reimbursement  obligations of such person with
respect to letters of credit,  bankers' acceptances or similar facilities issued
for the account of such person, (f) all capital lease obligations of such person
and (g) all net  obligations of such person under  interest rate swap,  currency
exchange or similar agreements of such person.

                                       48
<PAGE>

     "Representative"  means the indenture  trustee or other  trustee,  agent or
representative for an issue of Senior Indebtedness.

     "Senior  Indebtedness" means all Indebtedness of the Company outstanding at
any time, except (a) the Securities, (b) Indebtedness that by its terms provides
that it shall not be  "senior"  in right of  payment  to the  Securities  or (c)
Indebtedness  that by its  terms  provides  that it  shall be  "pari  passu"  or
"junior" in right of payment to the  Securities.  Senior  Indebtedness  does not
include Indebtedness of the Company to any of its subsidiaries.

11.03  LIQUIDATION; DISSOLUTION; BANKRUPTCY.

     Upon  any  distribution  of  assets  to  creditors  of  the  Company  in  a
liquidation or dissolution of the Company,  or in a bankruptcy,  reorganization,
insolvency,  receivership or similar  proceeding  relating to the Company or its
property:

          (i) holders of Senior  Indebtedness  shall be entitled to receive
     payment in full of the principal of and interest  (including  interest
     accruing after the commencement of any such proceeding) to the date of
     payment on the Senior  Indebtedness  before  Securityholders  shall be
     entitled to receive  any payment  from the Company of amounts due with
     respect  to  the  Securities   (other  than  cash  payments  due  upon
     conversion of Securities in lieu of fractional shares); and

          (ii)  until  the  Senior   Indebtedness  is  paid  in  full,  any
     distribution  to  which  Securityholders  would be  entitled  from the
     Company  but for this  Article  XI shall be made to  holders of Senior
     Indebtedness,    as   their   interests   may   appear,   except   the
     Securityholders may receive securities that are subordinated to Senior
     Indebtedness  to at  least  the  same  extent  as the  Securities  and
     payments made pursuant to Sections 8.01 and 8.02.

     Upon any  distribution  of assets or proceeds  thereof of any subsidiary of
the  Company  in a  liquidation  or  dissolution  of  such  subsidiary,  or in a
bankruptcy,  reorganization,  insolvency,  receivership  or  similar  proceeding
relating to such subsidiary or its property,  the Securityholders shall not have
any right to  participate  in such assets or  proceeds  until the holders of the
Indebtedness, including trade payables, of such subsidiary are paid in full.

11.04  COMPANY  NOT TO MAKE  PAYMENTS  WITH  RESPECT  TO  SECURITIES  IN CERTAIN
       CIRCUMSTANCES.

     No  payment  of  amounts  due  may be  made  by the  Company,  directly  or
indirectly, with respect to the Securities (including any repurchase pursuant to
the exercise of the Repurchase Right) or to acquire any of the Securities at any
time if a default in payment of the principal of or premium, if any, or interest
on Senior  Indebtedness  exists  unless and until such  default  shall have been
cured or waived or shall have  ceased to exist.  During the  continuance  of any
default  with  respect to any Senior  Indebtedness  pursuant to which any Senior
Indebtedness  has been issued (other than default in payment of the principal of
or premium,  if any, or interest  on any Senior  Indebtedness),  permitting  the
holders  thereof to accelerate the maturity  thereof,  no payment may be made by
the  Company,  directly  or  indirectly,  of

                                       49
<PAGE>

any amount due with respect to the Securities (a "Payment  Blockage")  until the
earlier of (i) the date on which such default has been cured or waived or ceases
to exist and (ii) 180 days  following  receipt  of  written  notice (a  "Payment
Blockage  Notice")  to the  Company  from any holder or  holders  thereof or its
Representative or Representatives or the trustee or trustees under any indenture
under which any instrument evidencing any such Senior Indebtedness may have been
issued, that such a default has occurred and is continuing and (iii) the date on
which such Senior  Indebtedness  is discharged or paid in full.  Notwithstanding
the foregoing, only one Payment Blockage Notice with respect to the same default
may be given during any period of 360  consecutive  days unless such default has
been  cured or  waived  or has  ceased to exist for a period of not less than 90
consecutive days; provided that in no event shall more than one interest payment
be blocked during any such 360-day period. No new Payment Blockage notice may be
delivered by the holders of Senior Indebtedness during any 360-day period unless
all defaults which  triggered the preceding  Payment  Blockage period shall have
been cured,  waived or shall have ceased to exist.  However,  if the maturity of
such Senior  Indebtedness is accelerated,  no payment may be made by the Company
on the Securities until such Senior  Indebtedness that has matured has been paid
or such acceleration has been cured or waived.

     Regardless  of anything to the contrary  herein,  nothing shall prevent (a)
any payment by the Trustee to the  Securityholders  of amounts deposited with it
pursuant to Article  VIII or (b) any payment by the Trustee or the Paying  Agent
as permitted by Section 11.12.  Nothing  contained in this Article XI will limit
the right of the Trustee or the Securityholders to take any action to accelerate
the maturity of the Securities  pursuant to Section 6.02 or to pursue any rights
or remedies hereunder.

11.05  ACCELERATION OF SECURITIES.

     If payment of the Securities is accelerated because of an Event of Default,
the  Company  shall  promptly  notify  holders  of  Senior  Indebtedness  of the
acceleration.

11.06  WHEN DISTRIBUTION MUST BE PAID OVER.

     In the event that the Company  shall make any  payment to the Trustee  with
respect to the  Securities  at a time when such payment is prohibited by Section
11.03 or 11.04,  such  payment  shall be held by the  Trustee,  in trust for the
benefit of, and shall be paid  forthwith  over and  delivered to, the holders of
Senior  Indebtedness  (pro rata as to each of such  holders  on the basis of the
respective amounts of Senior Indebtedness held by them) or their  Representative
or the trustee under the indenture or other agreement (if any) pursuant to which
Senior  Indebtedness  may have been issued,  as their  respective  interests may
appear,  for  application  to the payment of all Senior  Indebtedness  remaining
unpaid  to the  extent  necessary  to pay  all  Senior  Indebtedness  in full in
accordance  with its terms,  after giving  effect to any  concurrent  payment or
distribution to or for the holders of Senior Indebtedness.

     If a distribution is made to Securityholders,  that because of this Article
XI should  not have been  made to them,  the  Securityholders  who  receive  the
distribution  shall hold it in trust for holders of Senior  Indebtedness and pay
it over to them as their interests may appear.

                                       50
<PAGE>

11.07  NOTICE BY COMPANY.

     The Company  shall  promptly  notify the  Trustee  and the Paying  Agent in
writing of any facts  known to the  Company  that  would  cause a payment of any
amount  due with  respect to the  Securities  to violate  this  Article  XI, but
failure to give such notice shall not affect the subordination of the Securities
to the Senior Indebtedness provided in this Article XI.

11.08  SUBROGATION.

     After all Senior  Indebtedness is paid in full and until the Securities are
paid in full,  Securityholders shall be subrogated (equally and ratably with all
other Indebtedness of the Company ranking pari passu with the Securities) to the
rights of holders of Senior Indebtedness to receive distributions  applicable to
Senior  Indebtedness to the extent that  distributions  otherwise payable to the
Securityholders  have been  applied  to the  payment of Senior  Indebtedness.  A
distribution made under this Article XI to holders of Senior  Indebtedness which
otherwise would have been made to Securityholders is not, as between the Company
and Securityholders, a payment by the Company on Senior Indebtedness.

11.09  RELATIVE RIGHTS.

     This Article XI defines the relative rights of Securityholders  and holders
of Senior Indebtedness. Nothing in this Indenture shall:

          (i)  impair,  as  between  the  Company,  on the  one  hand,  and
     Securityholders,  on the other hand,  the  obligation  of the Company,
     which is  absolute  and  unconditional,  to pay all  amounts  due with
     respect to the Securities in accordance with their terms;

          (ii) affect the relative rights of Securityholders  and creditors
     of the Company other than holders of Senior Indebtedness; or

          (iii) prevent the Trustee or any  Securityholder  from exercising
     its available remedies upon a Default or Event of Default,  subject to
     the rights of holders of Senior Indebtedness to receive  distributions
     otherwise payable to Securityholders.

     Upon any  distribution of assets of the Company referred to in this Article
XI, the Trustee,  subject to the  provisions of Sections 7.01 and 7.02,  and the
Holders of the Securities  shall be entitled to rely upon any order or decree by
any court of  competent  jurisdiction  in which such  dissolution,  winding  up,
liquidation or reorganization  proceedings are pending,  or a certificate of the
liquidating  trustee or agent or other  person  making any  distribution  to the
Trustee or the Holders of the Securities,  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 XI. Nothing contained in this Article
XI or  elsewhere  in this  Indenture  or in any Security is intended to or shall
affect the  obligation  of the  Company to make,  or prevent  the  Company  from
making,  at any time except during the pendency of any dissolution,  winding up,
liquidation or reorganization  proceeding,

                                       51
<PAGE>

and except during the continuance of any default specified in Section 11.04 (not
cured or waived),  payments  at any time of all amounts due with  respect to the
Securities.

11.10  SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY.

            No right of any holder of Senior Indebtedness to enforce the
subordination of the indebtedness evidenced by the Securities shall be impaired
by any act or failure to act by the Company or by the failure of the Company to
comply with this Indenture.

11.11  DISTRIBUTION OR NOTICE TO REPRESENTATIVE.

     Whenever  a  distribution  is to be made or a notice  given to  holders  of
Senior Indebtedness,  the distribution may be made and the notice given to their
Representatives.

11.12  RIGHTS OF TRUSTEE AND PAYING AGENT.

     The Trustee or Paying Agent may continue to make payments on the Securities
until it receives  written notice of facts that would cause a payment of amounts
due with respect to the  Securities to violate this Article XI. Only the Company
or a Representative  or a holder of an issue of Senior  Indebtedness that has no
Representative may give the notice.

     The Trustee shall be entitled to conclusively rely on the delivery to it of
a  written  notice  by a person  representing  himself  to be a holder of Senior
Indebtedness  (or a  Representative  on behalf of such holder) to establish that
such  notice  has  been  given  by  a  holder  of  Senior   Indebtedness   or  a
Representative  on behalf of any such  holder.  In the  event  that the  Trustee
determines  in good faith that further  evidence is required with respect to the
right of any person who is a holder of Senior Indebtedness to participate in any
payment or  distribution  pursuant  to this  Article XI, the Trustee may request
such person to furnish evidence to the reasonable satisfaction of the Trustee as
to the amount of 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 XI, 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 or until such time as the Trustee shall be otherwise satisfied as to the
right of such person to receive such payment.

     The  Trustee  in its  individual  or any  other  capacity  may hold  Senior
Indebtedness  with the same  rights it would  have if it were not  Trustee.  Any
Agent may do the same with like rights.

     The Trustee shall not be deemed to owe any fiduciary duty to the holders of
Senior  Indebtedness  and shall  not be  liable  to any such  holder if it shall
mistakenly pay over or distribute to Securityholders or the Company or any other
person  money or assets to which any  holders  of Senior  Indebtedness  shall be
entitled by virtue of this Article XI or otherwise.

                                       52
<PAGE>

11.13  OFFICERS' CERTIFICATE.

     If there occurs an event referred to in Section 11.03 or 11.04, the Company
shall  promptly  give to the  Trustee  an  Officers'  Certificate  (on which the
Trustee may conclusively rely) identifying all holders of Senior Indebtedness or
their  Representatives  and the  principal  amount of Senior  Indebtedness  then
outstanding  held by each such holder and stating the reasons why such Officers'
Certificate is being delivered to the Trustee.

11.14  NOT TO PREVENT EVENTS OF DEFAULT.

     The  failure to make any  payment  due with  respect to the  Securities  by
reason of any  provision of this Article XI shall not be construed as preventing
the occurrence of an Event of Default under Section 6.01

                               XII. MISCELLANEOUS

12.01  TRUST INDENTURE ACT CONTROLS.

     If any  provision of this  Indenture  limits,  qualifies or conflicts  with
another provision which is required to be included in this Indenture by the TIA,
the required provision of the TIA shall control.

12.02  NOTICES.

     Any notice or communication by the Company or the Trustee to one or both of
the others is duly  given if in  writing  and  delivered  in  person,  mailed by
first-class mail or by express  delivery to the other parties'  addresses stated
in this  Section  12.02.  The Company or the Trustee by notice to the others may
designate   additional  or  different   addresses  for  subsequent   notices  or
communications.

     Any  notice or  communication  to a  Securityholder  shall be mailed to its
address shown on the register kept by the Registrar. Failure to mail a notice or
communication  to a  Securityholder  or any  defect in it shall not  affect  its
sufficiency with respect to other Securityholders.

     If a notice or  communication is mailed in the manner provided above, it is
duly given, whether or not the addressee receives it.

     If the Company mails a notice or communication to Securityholders, it shall
mail a copy to the other and to the Trustee and each Agent at the same time.

     All notices or communications shall be in writing.

     The Company's address is:

                         Lennox International Inc.
                         2140 Lake Park Blvd.
                         Richardson, Texas 75080
                         Facsimile: (972) 497-6660
                         Attention:  General Counsel

     The Trustee's address is:

                         The Bank of New York
                         101 Barclay Street
                         New York, NY 10286
                         Facsimile: (212) 896-7299
                         Attention: Corporate Trust Department

12.03  COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.

     Securityholders  may  communicate  pursuant  to TIA ss.  312(b)  with other
Securityholders  with  respect  to their  rights  under  this  Indenture  or the
Securities.  The Company,  the Trustee, the Registrar and anyone else shall have
the protection of TIA ss. 312(c).

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:

          (i) 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

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

     Each signer of an Officers' Certificate or an Opinion of Counsel may (if so
stated) rely, effectively, upon an Opinion of Counsel as to legal matters and an
Officers'  Certificate  as to factual  matters if such signer  reasonably and in
good faith believes in the accuracy of the document relied upon.

12.05  STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.

     Each Officers' Certificate or Opinion of Counsel with respect to compliance
with a condition or covenant provided for in this Indenture shall include:

          (i) a  statement  that the  person  making  such  certificate  or
     opinion has read such covenant or condition;

          (ii)  a  brief  statement  as to  the  nature  and  scope  of the
     examination  or  investigation  upon which the  statements or opinions
     contained in such certificate or opinion are based;

          (iii) a statement that, in the opinion of such person,  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

          (iv) a  statement  as to whether or not,  in the  opinion of such
     person, such condition or covenant has been complied with.

                                       54
<PAGE>

12.06  RULES BY TRUSTEE AND AGENTS.

     The  Trustee  may make  reasonable  rules for  action by or at a meeting of
Securityholders.  The  Registrar,  Paying  Agent or  Conversion  Agent  may make
reasonable rules and set reasonable requirements for their respective functions.

12.07  LEGAL HOLIDAYS.

     A  "Legal  Holiday"  is a  Saturday,  a Sunday  or a day on  which  banking
institutions  are not required to be open in the City of New York,  in the State
of New York or in the city in which the Trustee  administers its corporate trust
business.  If a payment date is a Legal  Holiday at a place of payment,  payment
may be  made  at that  place  on the  next  succeeding  day  that is not a Legal
Holiday,  and no  interest  shall  accrue on that  payment  for the  intervening
period.

     A "business day" is a day other than a Legal Holiday.

12.08  NO RECOURSE AGAINST OTHERS.

     No past,  present or future director,  officer,  employee,  incorporator or
stockholder  of  the  Company,  as  such,  shall  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.  Each Holder by  accepting  a Security  waives and  releases  all such
liability. The waiver and release are part of the consideration for the issuance
of the Securities.

12.09  DUPLICATE 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.  Delivery of an executed  counterpart by facsimile shall be effective
as delivery of a manually executed counterpart thereof.

12.10  GOVERNING LAW.

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

12.11  NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.

     This Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company or any of its subsidiaries. Any such indenture, loan or
debt agreement may not be used to interpret this Indenture.

12.12  SUCCESSORS.

     All agreements of the Company in this  Indenture and the  Securities  shall
bind  their  respective  successors.  All  agreements  of the  Trustee  in  this
Indenture shall bind its successors.

                                       55
<PAGE>

12.13  SEPARABILITY.

     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
and a Holder shall have no claim therefor against any party hereto.

12.14  TABLE OF CONTENTS, HEADINGS, ETC.

     The Table of Contents,  Cross-Reference  Table and headings of the Articles
and Sections of this Indenture  have been inserted for  convenience of reference
only,  are not to be  considered  a part  hereof  and shall in no way  modify or
restrict any of the terms or provisions hereof.

                                       56
<PAGE>

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

                                            LENNOX INTERNATIONAL INC.

                                            By: /s/ Richard A. Smith
                                                ---------------------
                                                Executive Vice President,
                                                Chief Financial Officer and
                                                Treasurer

                                            THE BANK OF NEW YORK

                                            By: /s/ Terence Rawlins
                                                -------------------
                                                Vice President

<PAGE>

                                                                       EXHIBIT A
                                                                       ---------

                               [Face of Security]

                            LENNOX INTERNATIONAL INC.

Certificate No.  ____________

          [INSERT PRIVATE PLACEMENT LEGEND AND GLOBAL SECURITY LEGEND
                                  AS REQUIRED]

                  6 1/4% Convertible Subordinated Note due 2009
                             CUSIP No. ____________

     LENNOX  INTERNATIONAL  INC.,  a  Delaware  corporation  (herein  called the
"Company"),  for  value  received,  hereby  promises  to  pay to  Cede & Co.  or
registered assigns, the principal sum of  _____________________________  Dollars
($____________) on June 1, 2009, and to pay interest thereon, as provided on the
reverse hereof,  until the principal and any unpaid and accrued interest is paid
or duly  provided  for.  The right to  payment  of the  principal  and all other
amounts  due with  respect  hereto  is  subordinated  to the  rights  of  Senior
Indebtedness  as set forth in the  Indenture  referred  to on the  reverse  side
hereof.

     Interest Payment Dates: June 1 and December 1, with the first payment to be
made on December 1, 2002.

     Record Dates: May 15 and November 15.

     The provisions on the back of this  certificate are  incorporated as if set
forth on the face hereof.

     IN WITNESS WHEREOF, LENNOX INTERNATIONAL INC. has caused this instrument to
be duly signed.

                                            LENNOX INTERNATIONAL INC.

                                            By:  /s/ Richard A. Smith
                                               ---------------------------------
                                               Executive Vice President,
                                               Chief Financial Officer and
                                               Treasurer
Dated:  _______________

<PAGE>

TRUSTEE'S CERTIFICATE OF AUTHENTICATION

This is one of the Securities referred to in the within-mentioned Indenture.

THE BANK OF NEW YORK, as Trustee

By: /s/ Terence Rawlins
    ---------------------
    Authorized Signatory

Dated:  ________________

                                      A-2
<PAGE>

                              [REVERSE OF SECURITY]

                            LENNOX INTERNATIONAL INC.

                  6 1/4% Convertible Subordinated Note due 2009

     1.  Interest.  LENNOX  INTERNATIONAL  INC.,  a  Delaware  corporation  (the
"Company"), promises to pay interest on the principal amount of this Security at
the rate per annum shown above.  The Company will pay interest  semi-annually on
June 1 and  December  1 of each  year,  with  the  first  payment  to be made on
December 1, 2002. Interest on the Securities will accrue on the principal amount
from the most recent date to which interest has been paid or provided for or, if
no interest has been paid,  from May 8, 2002.  Interest  will be computed on the
basis of a 360-day year of twelve 30-day months.

     2. Maturity. The Securities will mature on June 1, 2009.

     3.  Method of  Payment.  The Company  will pay  interest on the  Securities
(except  defaulted  interest)  to the  persons  who are  registered  Holders  of
Securities  at the close of business on the record date set forth on the face of
this Security next preceding the applicable  interest  payment date.  Holders of
Securities must surrender Securities to a Paying Agent to collect the principal,
Redemption Price or Repurchase Price of the Securities. The Company will pay all
amounts due with respect to the Securities in money of the United States that at
the time of payment is legal tender for payment of public and private debts. The
Company  will pay interest on the  Securities  by wire  transfer of  immediately
available  funds to the account  specified by the Holder,  or, at the  Company's
option, by mailing a check to the Holders registered address.

     4. Paying Agent, Registrar,  Conversion Agent.  Initially,  THE BANK OF NEW
YORK (the "Trustee") will act as Paying Agent,  Registrar and Conversion  Agent.
The Company may change any Paying Agent,  Registrar or Conversion  Agent without
notice. The Company may act in any such capacity.

     5. Indenture. The Company issued the Securities under an Indenture dated as
of May 8, 2002 (the "Indenture")  between the Company and the Trustee. The terms
of the  Securities  include those stated in the Indenture and those made part of
the  Indenture  by reference to the Trust  Indenture  Act of 1939 (15 U.S.  Code
ss.ss.  77aaa-77bbbb) (the "Act") as in effect on the date of the Indenture. The
Securities are subject to all such terms,  and  Securityholders  are referred to
the  Indenture  and the Act for a statement of such terms.  The  Securities  are
general   unsecured   subordinated   obligations  of  the  Company   limited  to
$125,000,000  aggregate principal amount ($143,750,000 if the Initial Purchasers
(as defined in the  Indenture)  have  elected to exercise  their  over-allotment
option to purchase  an  additional  $18,750,000  of the  Securities),  except as
otherwise   provided  in  the  Indenture   (except  for  Securities   issued  in
substitution for destroyed,  mutilated,  lost or stolen Securities).  Terms used
herein which are defined in the Indenture have the meanings  assigned to them in
the Indenture.

     6. Optional Redemption. The Securities will be redeemable prior to maturity
at the option of the Company,  in whole or in part, at any time on or after June
3, 2005;  provided that the Daily Market Price of the Company's

                                      A-3
<PAGE>

Common Stock has  exceeded  130% of the  Conversion  Price then in effect for at
least 20 trading days within a period of 30  consecutive  trading days ending on
the trading day prior to the date of mailing of notice of redemption pursuant to
paragraph 7. The redemption prices for the Securities  (expressed as percentages
of the principal  amount thereof),  if redeemed during the  twelve-month  period
commencing on the dates set forth below,  in each case together with accrued and
unpaid interest to, but excluding, the redemption date:

                                                   Redemption
                           Date                       Price
                       -------------               ----------
                       June 3, 2005                 103.571%
                       June 1, 2006                 102.679%
                       June 1, 2007                 101.786%
                       June 1, 2008
                       and thereafter               100.893%

     7. Notice of  Redemption.  Notice of redemption  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 its registered address. Securities in denominations
larger than $1,000 principal amount may be redeemed in part but only in positive
integral  multiples of $1,000 principal amount. On and after the redemption date
interest  ceases  to  accrue  on  Securities  or  portions  of them  called  for
redemption.

     8. Repurchase at Option of Holder. In the event of a Change in Control with
respect to the Company, then each Holder of the Securities shall have the right,
at  the  Holder's  option,  subject  to the  rights  of the  holders  of  Senior
Indebtedness  under  Article  XI of the  Indenture,  to require  the  Company to
repurchase  such  Holder's  Securities  including  any portion  thereof which is
$1,000 in principal  amount or any positive  integral  multiple thereof on a day
(the  "Repurchase  Date") no later than 30  business  days after the date of the
mailing of the Change in Control Notice, unless otherwise required by applicable
law,  at a price  equal  to 100% of the  outstanding  principal  amount  of such
Security,  plus accrued and unpaid  interest to, but  excluding,  the Repurchase
Date.

     Within 30 business days after the occurrence of the Change in Control,  the
Company is obligated to give notice of the  occurrence of such Change in Control
to each Holder. Such notice shall include, among other things, the date by which
Holder must  notify the  Company of such  Holder's  intention  to  exercise  the
Repurchase  Right and of the procedure which such Holder must follow to exercise
such right.  To exercise  the  Repurchase  Right,  a Holder of  Securities  must
deliver on or before the close of business on the third business day immediately
preceding  the  Repurchase  Date  written  notice  to the  Company  (or an agent
designated  by the Company  for such  purpose)  and the

                                      A-5
<PAGE>

Trustee of the Holder's exercise of such right together with the Securities with
respect to which the right is being  exercised,  duly  endorsed  for transfer in
accordance with the provisions of the Indenture.

     A "Change in Control" of the  Company  shall be deemed to have  occurred at
such time as:

          (i) any  "person" or "group" (as such terms are used for purposes
     of Sections 13(d) and 14(d) of the Exchange Act), other than an Exempt
     Person, is or becomes the "beneficial  owner" (as such term is used in
     Rule 13d-3 under the Exchange Act), directly or indirectly,  of 50% or
     more of the voting power of the Company's Common Stock;

          (ii) the  individuals  who on the  issue  date of the  Securities
     constituted  the  Company's  Board of Directors  and any new directors
     whose election by the Company's Board of Directors or whose nomination
     for election by the Company's  stockholders was approved by at least a
     majority  of the  directors  then  still in  office  who  were  either
     directors  on the issue date of the  Securities  or whose  election or
     nomination  for  election  was  previously  so approved  cease for any
     reason to constitute a majority of the  Company's  Board of Directors;
     or

          (iii) the sale, lease or transfer of all or substantially  all of
     the assets and  property of the Company to any "person" or "group" (as
     such terms are used in Sections  13(d) and 14(d) of the Exchange Act),
     including  any group acting for the purpose of  acquiring,  holding or
     disposing of securities  within the meaning of Rule 13d-5(b)(1)  under
     the Exchange Act;  provided  that the grant of a security  interest in
     the  Company's  properties  or assets in  connection  with a financing
     arrangement is not a conveyance, transfer or lease for the purposes of
     this subsection (iii).

     However, a Change in Control will not be deemed to have occurred if either:

     (X)  the Daily Market Price of the Company's Common Stock for any five
          trading  days during the ten trading days  immediately  preceding
          the  Change  in  Control  is at  least  equal to 105% of the then
          effective Conversion Price on such trading date; or

     (Y)  in the case of a merger or consolidation, all of the consideration
          (excluding cash payments for fractional  shares and cash payments
          pursuant  to  dissenters'  appraisal  rights)  in the  merger  or
          consolidation  constituting  the  Change in Control  consists  of
          common stock  traded on a U.S.  national  securities  exchange or
          quoted on the Nasdaq  National Market (or which will be so traded
          or quoted when issued or exchanged in connection with such Change
          in Control) and as a result of such  transaction or  transactions
          the Securities become  convertible  solely into such common stock
          and any such other consideration.

     9.  Conversion.  A Holder of Securities may, convert a Security into Common
Stock of the Company as follows:

                                      A-5
<PAGE>

          A. A Holder of Securities  may  surrender  Securities  for  conversion
     during any conversion period, if the Daily Market Price of the Common Stock
     for at least 20 consecutive trading days in the 30 consecutive  trading-day
     period ending on the first day of the conversion  period was more than 110%
     of the  Conversion  Price  in  effect  on that  thirtieth  trading  day.  A
     "conversion  period" will be the period from and  including  the  thirtieth
     trading day in a fiscal quarter to, but not including the thirtieth trading
     day in the immediately following fiscal quarter.

          B. A Holder of Securities  may  surrender  Securities  for  conversion
     during  the  five   business-day   period   following  any  10  consecutive
     trading-day period in which the daily average of the trading prices for the
     Securities for that 10 trading-day  period was less than 95% of the average
     conversion  value for the  Securities  during that period.  As used in this
     paragraph  B, the  "conversion  value" is equal to the product of the Daily
     Market  Price for the Common  Stock on a given day  multiplied  by the then
     current conversion rate, which is the number of shares of Common Stock into
     which each Security is then  convertible.  As used in this paragraph B, the
     "trading  price" of the Securities on any date of  determination  means the
     average of the secondary market bid quotations per Security obtained by the
     Company  or the  Calculation  Agent  for  $10,000,000  principal  amount of
     Securities  at  approximately  3:30  p.m.,  New  York  City  time,  on such
     determination date from three independent  nationally recognized securities
     dealers  the  Company  selects,  provided  that if at least three such bids
     cannot reasonably be obtained by the Company or the Calculation  Agent, but
     two such bids are obtained, then the average of the two bids shall be used,
     and if only one such bid can  reasonably  be obtained by the Company or the
     Calculation Agent, this one bid shall be used. If either the Company or the
     Calculation Agent cannot reasonably obtain at least one bid for $10,000,000
     principal  amount of  Securities  from a nationally  recognized  securities
     dealer or, in the Company's reasonable judgment, the bid quotations are not
     indicative  of the  secondary  market  value  of the  Securities,  then the
     trading  price  of  the  Securities  will  equal  (i)  the  then-applicable
     conversion rate of the Securities multiplied by (ii) the Daily Market Price
     of the Common Stock on such determination  date.  "Calculation Agent" means
     UBS Warburg LLC, First Union  Securities,  Inc. or J.P.  Morgan  Securities
     Inc., or any other securities dealer selected by the Company.

          C. A Holder of Securities  may surrender  Securities for conversion if
     (i) the Company has called the Securities for redemption;  provided that if
     a Security is called for redemption by the Company,  the Holder may convert
     it at any time before the close of business on the business day immediately
     preceding the date fixed for such redemption, or (ii) the Securities are to
     be repurchased by the Company pursuant to paragraph 8 hereof; provided that
     (x) the Holder may convert the  Securities  at any time before the close of
     business on the business day immediately  preceding the Repurchase Date and
     (y) if a Holder  already  has  delivered  a Change in Control  Notice  with
     respect to a  Security,  the Holder may not  surrender  that  Security  for
     conversion until the Holder has withdrawn the Change in Control Notice.

          D. A Holder of Securities  may surrender  Securities for conversion if
     (i) the  Company  distributes  rights or  warrants to all holders of Common
     Stock  entitling  them (for a period  commencing no

                                      A-6
<PAGE>

     earlier  than the record  date for the  determination  of holders of Common
     Stock  entitled to receive  such rights or warrants  and  expiring not more
     than 60 days after such record date) to subscribe for or purchase shares of
     Common Stock (or securities  convertible into Common Stock), at a price per
     share less than the then current  market price (as  determined  pursuant to
     Section  10.06(g) of the  Indenture)  of Common  Stock on such record date,
     (ii) the Company  distributes  to all holders of Common Stock cash or other
     assets,  debt  securities or rights or warrants to subscribe for securities
     (other than those referred to in clause (i) above),  which distribution has
     a per share value  exceeding  10% of the Daily  Market  Price of the Common
     Stock  on  the  trading  day  preceding  the   declaration   date  of  such
     distribution, or (iii) a Change in Control has occurred other than pursuant
     to a transaction  described in paragraph E below; provided that the Company
     shall mail to Holders of Securities a notice of such distribution or Change
     in  Control  at  least  20  days  prior  to the  ex-dividend  date  for the
     distribution  or within 30 days of the occurrence of the Change in Control,
     as the case may be.  Once such  notice to  Holders of  Securities  has been
     provided,  Holders may convert their  Securities  any time until either (x)
     the earlier of close of business on the business day  immediately  prior to
     the ex-dividend date and the Company's  announcement  that the distribution
     will not take place, in the case of a  distribution,  or (y) within 30 days
     of the Change in Control notice, in the case of a Change in Control. In the
     case of a  distribution,  no  adjustment  to the  ability  of a  Holder  of
     Securities  to  convert  will be made if the  holder  participates  or will
     participate in the distribution without conversion.

          E. If the Company is party to a consolidation, merger or binding share
     exchange or transfer of all or  substantially  all of the Company's  assets
     pursuant to which the Common Stock will be  converted  into or the right to
     receive cash,  securities  or other  property,  a Holder of Securities  may
     surrender  Securities  for  conversion  at any time from and after the date
     which is 15 days prior to the anticipated effective date of the transaction
     until  15 days  after  the  effective  date of the  transaction  and at the
     effective  time of the  transaction,  the right to convert a Security  into
     Common  Stock will be deemed to have  changed  into a right to convert  the
     Security  into or the  right  to  receive  the  kind  and  amount  of cash,
     securities  or other  property  which the Holder would have received if the
     Holder had converted the Security immediately prior to the transaction.  If
     the  transaction  also  constitutes  a Change in  Control,  the  Holder may
     require  the  Company  to  repurchase  all or a portion  of its  Securities
     pursuant to paragraph 8.

     The initial  conversion  rate is 55.2868  shares of Common Stock per $1,000
principal  amount of Securities,  or an effective  initial  Conversion  Price of
approximately  $18.09 per share,  subject to  adjustment in the event of certain
circumstances as specified in the Indenture. The Company will deliver a check in
lieu of any  fractional  share.  On conversion no payment or adjustment  for any
unpaid  and  accrued  interest,  or  liquidated  damages  with  respect  to, the
Securities  will be made.  If a Holder of  Securities  surrenders a Security for
conversion  between the record  date for the  payment of  interest  and the next
interest payment date, such Security,  when surrendered for conversion,  must be
accompanied  by payment of an amount  equal to the  interest  thereon  which the
registered  Holder of Securities  on such record date is to receive,  unless the
Securities have been called for redemption as described in the Indenture.

                                      A-7
<PAGE>

     To convert a Security,  a Holder of  Securities  must (1) complete and sign
the Conversion Notice, with appropriate signature guarantee,  on the back of the
Security,  (2)  surrender  the  Security  to a  Conversion  Agent,  (3)  furnish
appropriate  endorsements and transfer documents if required by the Registrar or
Conversion Agent, (4) pay the amount of interest, if any, the Holder may be paid
as provided in the last sentence of the above paragraph and (5) pay any transfer
or similar tax if required.  A Holder of  Securities  may convert a portion of a
Security  if the  portion  is $1,000  principal  amount or a  positive  integral
multiple of $1,000 principal amount.

     Any shares  issued  upon  conversion  of a Security  shall bear the Private
Placement  Legend until after the second  anniversary  of the later of the issue
date for the  Securities and the last date on which the Company or any Affiliate
of the Company was the owner of such shares or the Security (or any  predecessor
security)  from which such shares were converted (or such shorter period of time
as permitted by Rule 144(k) under the Securities Act or any successor  provision
thereunder)  (or  such  longer  period  of time  as may be  required  under  the
Securities Act or applicable state securities laws in the Opinion of Counsel for
the  Company,  unless  otherwise  agreed by the  Company  and the Holder of such
Security).

     10. Subordination.  The Securities are subordinated in right of payment, in
the manner and to the extent set forth in the Indenture, to the prior payment in
full of all Senior  Indebtedness.  Each  Holder of  Securities  by  accepting  a
Security  agrees to such  subordination  and  authorizes  the Trustee to give it
effect.

     11.  Denominations,  Transfer,  Exchange.  The Securities are in registered
form without coupons in  denominations  of $1,000  principal amount and positive
integral multiples of $1,000 principal amount. The transfer of Securities may be
registered and  Securities  may be exchanged as provided in the  Indenture.  The
Registrar  may require a Holder,  among  other  things,  to furnish  appropriate
endorsements  and transfer  documents.  No service  charge shall be made for any
such  registration of transfer or exchange,  but the Company may require payment
of a sum  sufficient to cover any tax or other  governmental  charge  payable in
connection  therewith.  The Registrar need not exchange or register the transfer
of any  Security  selected  for  redemption  in  whole or in  part,  except  the
unredeemed  portion of  Securities  to be  redeemed in part.  Also,  it need not
exchange or register  the  transfer  of any  Securities  for a period of 15 days
before the mailing of a notice of  redemption of the  Securities  selected to be
redeemed and in certain other circumstances provided in the Indenture.

     12.  Persons  Deemed  Owners.  The  registered  Holder of a Security may be
treated as the owner of such Security for all purposes.

     13.  Merger or  Consolidation.  The Company shall not  consolidate  with or
merge into, or transfer or lease all or substantially  all of its properties and
assets to,  another  person unless such other person is a corporation  organized
under the laws of the  United  States,  any State  thereof  or the  District  of
Columbia;  such person assumes by supplemental  indenture all the obligations of
the Company,  under the Securities and this  Indenture;  and  immediately  after
giving effect to the transaction, no Default or Event of Default shall exist.

                                      A-8
<PAGE>

     14. Amendments, Supplements and Waivers. Subject to certain exceptions, the
Indenture or the Securities may be amended or  supplemented  with the consent of
the  Holders  of at  least a  majority  in  aggregate  principal  amount  of the
Securities then outstanding, and any existing Default or Event of Default may be
waived  with the consent of the  Holders of a majority  in  aggregate  principal
amount of the Securities then  outstanding.  Without notice to or the consent of
any  Securityholder,   the  Indenture  or  the  Securities  may  be  amended  or
supplemented to cure any ambiguity or inconsistency to comply with Sections 5.01
and  10.12  of the  Indenture,  to make  any  changes  or  modifications  to the
Indenture  necessary in connection with the registration of the Securities under
the  Securities  Act and the  qualification  of the Indenture  under the TIA, to
secure the  obligations of the Company in respect of the  Securities,  to add to
covenants  of the  Company  described  in  the  Indenture  for  the  benefit  of
Securityholders,  to surrender any right or power  conferred upon the Company or
to make any changes or  modifications  to the  Indenture  that do not  adversely
affect the rights of any Holder of Securities.

     15. Defaults and Remedies.  An Event of Default  includes the occurrence of
any of the  following:  default  in  payment  of  principal  at  maturity,  upon
redemption or exercise of a Repurchase  Right or otherwise;  default for 30 days
in payment of interest or other amounts due;  failure by the Company for 60 days
after notice to it to comply with any of its other  agreements  in the Indenture
or the  Securities;  certain  payment  defaults  or the  acceleration  of  other
Indebtedness  of the Company  and certain  events of  bankruptcy  or  insolvency
involving the Company.  If any Event of Default  occurs and is  continuing,  the
Trustee or the  Holders  of at least 25% in  aggregate  principal  amount of the
Securities then outstanding may declare all the Securities to be due and payable
immediately,  except  as  provided  in the  Indenture.  If an Event  of  Default
specified  in  Section  6.01(v)  or (vi) of the  Indenture  with  respect to the
Company  occurs,  the  principal of and accrued  interest on all the  Securities
shall  ipso  facto  become  and be  immediately  due  and  payable  without  any
declaration  or other  act on the  part of the  Trustee  or any  Securityholder.
Securityholders  may not  enforce  the  Indenture  or the  Securities  except as
provided in the Indenture.  The Trustee may require indemnity satisfactory to it
before  it  enforces  the  Indenture  or  the  Securities.  Subject  to  certain
limitations,  Holders of a majority in principal  amount of the Securities  then
outstanding  may direct the Trustee in its  exercise of any trust or power.  The
Trustee may withhold from  Securityholders  notice of any continuing  Default or
Event of  Default  (except a  Default  or Event of  Default  in  payment)  if it
determines that withholding  notice is in the interests of the  Securityholders.
The Company must furnish an annual compliance certificate to the Trustee.

     16. Registration Rights. The Holders are entitled to registration rights as
set forth in the  Registration  Rights  Agreement (as defined in the Indenture).
The  Holders  shall  be  entitled  to  receive  liquidated  damages  in  certain
circumstances, all as set forth in the Registration Rights Agreement.

     17. Trustee Dealings with the Company. The Trustee under the Indenture,  or
any  banking  institution  serving  as  successor  Trustee  thereunder,  in  its
individual or any other  capacity,  may make loans to, accept deposits from, and
perform services for the Company or its Affiliates,  and may otherwise deal with
the Company or its Affiliates, as if it were not Trustee.

                                      A-9
<PAGE>

     18. No  Recourse  Against  Others.  No past,  present  or future  director,
officer,  employee  or  stockholder,  as such,  of the  Company  shall  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.  Each  Securityholder  by  accepting a Security
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 authenticated by
the manual signature of the Trustee or an authenticating agent.

     20.  Abbreviations.  Customary  abbreviations  may be used in the name of a
Securityholder or an assignee,  such as: TEN COM (= tenants in common),  TEN ENT
(= tenants by the entirety),  JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (Uniform Gifts to
Minors Act).

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

     THE COMPANY WILL  FURNISH TO ANY  SECURITYHOLDER  UPON WRITTEN  REQUEST AND
WITHOUT CHARGE A COPY OF THE INDENTURE. REQUESTS MAY BE MADE TO:

                         Lennox International Inc.
                         2140 Lake Park
                         Richardson, Texas 75080
                         Attention:  Investor Relations

                                      A-10
<PAGE>

                              [FORM OF ASSIGNMENT]
I or we assign to

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER

__________________________________________________________

___________________________________________________________________________
(please print or type name and address)

________________________________________________________________________________
the  within   Security  and  all  rights  thereunder,  and  hereby   irrevocably
constitutes and appoints

________________________________________________________________________________
Attorney to transfer the Security on the books of the Company with full power of
substitution in the premises.

Dated:_____________________________________ ____________________________________

                                            NOTICE:   The     signature  on this
                                            assignment must correspond  with the
                                            name as it appears upon the  face of
                                            the    within   Security   in  every
                                            particular   without  alteration  or
                                            enlargement or any change whatsoever
                                            and  be   guaranteed by a guarantror
                                            institution   participating  in  the
                                            Securities Transfer Agents Medallion
                                            Program  or  in such other guarantee
                                            program acceptable to the Trustee.

Signature Guarantee: ______________________________________________________

     In  connection  with any transfer of this Security  occurring  prior to the
date which is the earlier of (i) the date of the  declaration  by the Commission
of the  effectiveness  of a registration  statement  under the Securities Act of
1933, as amended (the "Securities Act") covering resales of this Security (which
effectiveness  shall not have been  suspended or  terminated  at the date of the
transfer) and (ii) the Resale  Restriction  Termination  Date,  the  undersigned
confirms  that  it  has  not  utilized  any  general   solicitation  or  general
advertising in connection with transfer:

                                      A-11
<PAGE>
   [CHECK ONE]

     (1) ____ to the Company or any subsidiary thereof; or

     (2) ____ pursuant to and in compliance  with Rule 144A under the Securities
Act of 1933, as amended; or

     (3) ____ outside the United  States to a person other than a "U.S.  person"
in compliance with Rule 904 of Regulation S under the Securities Act of 1933, as
amended; or

     (4) ____ pursuant to the exemption from  registration  provided by Rule 144
under the Securities Act of 1933, as amended; or

     (5)  ____  pursuant  to  an  effective  registration  statement  under  the
Securities Act of 1933, as amended.

and unless the box below is checked, the undersigned confirms that 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. (If  the  Security  is
transferred to an Affiliate,  the restrictive legend must remain on the Security
for two years following the date of the transfer).

     Unless one of the items is checked, the Trustee will refuse to register any
of the Securities  evidenced by this certificate in the name of any person other
than the  registered  Holder  thereof;  provided,  however,  that if item (4) is
checked,  the Company or the Trustee may require,  prior to registering any such
transfer  of the  Securities,  in their  sole  discretion,  such  written  legal
opinions,  certifications  and other  information  as the Trustee or the Company
have  reasonably  requested 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 of 1933, as amended.

     If none of the foregoing items are checked,  the Trustee or Registrar shall
not be obligated to register  this Security in the name of any person other than
the  Holder  hereof  unless and until the  conditions  to any such  transfer  of
registration  set forth herein and in Section 2.16 of the  Indenture  shall have
been satisfied.

Dated: __________________________      Signed:__________________________________
                                              (Sign exactly as name appears on
                                               the other side of this Security)

Signature Guarantee: ___________________________________________________________

                                      A-12
<PAGE>

TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED

     The undersigned represents and warrants that it is purchasing this Security
for its own  account  or an account  with  respect  to which it  exercises  sole
investment  discretion  and  that  it  and  any  such  account  is a  "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended,  and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges  that it has received such information  regarding the
Company as the undersigned has requested pursuant to Rule 144A or has determined
transferor is relying upon the undersigned's foregoing  representations in order
to claim the exemption from registration provided by Rule 144A.

Dated: _________________________       _________________________________________
                                       NOTICE: To  be  executed  by an executive
                                               officer

                                      A-13
<PAGE>

                                CONVERSION NOTICE

To convert this Security into Common Stock of the, check the box: [  ]

To  convert  only  part of this  Security,  state  the  principal  amount  to be
converted (must be in multiples of $1,000):

                               $------------------

If you want the stock certificate made out in another person's name, fill in the
form below:

________________________________________________________________________________
(Insert other person's soc. sec. or tax I.D. no.)

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________
(Print or type other person's name, address and zip code)

Date:______________    Signature(s): ___________________________________________
                                     (Sign  exactly as your name(s) appear(s) on
                                      the other side of this Security)

Signature(s) guaranteed by: ____________________________________________________
                          All  signatures  must  be  guaranteed  by  a guarantor
                          institution  participating  in the Securities Transfer
                          Agents  Medallion  Program  or in such other guarantee
                          program acceptable to the Trustee.)

                                      A-14
<PAGE>

                    OPTION OF HOLDER TO ELECT PURCHASE NOTICE

Certificate No. of Security:  ___________

     If you want to elect to have this  Security  purchased  by the  pursuant to
Section 3.08 of the Indenture, check the box:  [  ]

     If you want to elect to have only part of this  Security  purchased  by the
Company pursuant to Section 3.08 of the Indenture, state the principal amount:

                         $ ----------------------------------
                           (in an integral multiple of $1,000)

Date:______________   Signature(s): ____________________________________________
                                    (Sign exactly as your name(s) appear(s) on
                                     the other side of this Security)

Signature(s) guaranteed by: ____________________________________________________
                            (All signatures must be guaranteed  by  a  guarantor
                            institution participating in the Securities Transfer
                            Agents Medallion Program or in  such other guarantee
                            program acceptable to the Trustee.)

                                      A-15
<PAGE>

                                   SCHEDULE A

          SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL SECURITY(a).
           ---------------------------------------------------------

     The following  exchanges of a part of this Global  Security for an interest
in another Global  Security or for Securities in  certificated  form,  have been
made:
                                                  Principal
               Amount of          Amount of     amount of this    Signature or
              decrease in        increase in       Global          authorized
               Principal          Principal       Security        signatory of
             amount of this    amount of this    following         Trustee or
    Date         Global            Global      such decrease    Note Custodian
  Exchange     Security           Security     (or increase)

____________________
(a)  This is included in Global Notes only.

<PAGE>

                                                                     EXHIBIT B-1
                                                                     -----------

                        FORM OF PRIVATE PLACEMENT LEGEND

THIS  SECURITY AND THE COMMON STOCK  ISSUABLE  UPON  CONVERSION OF THIS SECURITY
HAVE NOT BEEN  REGISTERED  UNDER THE  SECURITIES  ACT OF 1933,  AS AMENDED  (THE
"SECURITIES  ACT"),  AND  MAY  NOT  BE  OFFERED,   SOLD,  PLEDGED  OR  OTHERWISE
TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION
HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER:

     (1)  REPRESENTS THAT:

          (A)  IT AND  ANY  ACCOUNT  FOR  WHICH  IT IS  ACTING  IS A  "QUALIFIED
               INSTITUTIONAL  BUYER"  (WITHIN THE MEANING OF RULE 144A UNDER THE
               SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT  DISCRETION
               WITH RESPECT TO EACH SUCH ACCOUNT; OR

          (B)  IT  IS  NOT  A  UNITED  STATES  PERSON  (WITHIN  THE  MEANING  OF
               REGULATION S UNDER THE SECURITIES ACT),

     (2)  AGREES THAT IT WILL NOT  DIRECTLY OR INDIRECTLY  ENGAGE IN ANY HEDGING
          TRANSACTIONS INVOLVING THIS SECURITY OR THE COMMON STOCK ISSUABLE UPON
          CONVERSION OF THIS SECURITY  UNLESS IN COMPLIANCE  WITH THE SECURITIES
          ACT, AND

     (3)  AGREES FOR THE  BENEFIT OF THE COMPANY  THAT IT WILL NOT OFFER,  SELL,
          PLEDGE OR OTHERWISE  TRANSFER THIS SECURITY,  ANY BENEFICIAL  INTEREST
          HEREIN OR ANY SHARES OF COMMON STOCK ISSUABLE UPON  CONVERSION OF THIS
          SECURITY,  PRIOR TO THE DATE THAT IS THE LATER OF (X) TWO YEARS  AFTER
          THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH
          THE  COMPANY OR ANY  AFFILIATE  OF THE  COMPANY  WAS THE OWNER OF THIS
          SECURITY (OR ANY  PREDECESSOR OF THIS SECURITY) OR SUCH SHORTER PERIOD
          OF TIME AS PERMITTED BY RULE 144(K)  UNDER THE  SECURITIES  ACT OR ANY
          SUCCESSOR  PROVISION  THEREUNDER,  AND (Y) SUCH LATER DATE, IF ANY, AS
          MAY BE REQUIRED BY APPLICABLE LAW, EXCEPT ONLY:

               (A)  TO THE COMPANY OR ANY SUBSIDIARY THEREOF;

               (B)  PURSUANT  TO  A  REGISTRATION  STATEMENT  WHICH  HAS  BECOME
                    EFFECTIVE UNDER THE SECURITIES ACT;

               (C)  TO A QUALIFIED INSTITUTIONAL  BUYER IN COMPLIANCE  WITH RULE
                    144A UNDER THE SECURITIES ACT;

               (D)  IN AN OFFSHORE TRANSACTION  IN  COMPLIANCE  WITH RULE 904 OF
                    REGULATION S UNDER THE SECURITIES ACT; OR

               (E)  PURSUANT  TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE
                    144 UNDER THE SECURITIES ACT.

          PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH (3)(C) OR
          (D) ABOVE, A DULY COMPLETED AND SIGNED  CERTIFICATE (THE FORM OF WHICH
          MAY BE OBTAINED  FROM THE TRUSTEE OR TRANSFER  AGENT,  AS  APPLICABLE)
          MUST BE DELIVERED  TO THE TRUSTEE OR TRANSFER  AGENT,  AS  APPLICABLE.
          PRIOR TO

                                     B-1-1
<PAGE>

          THE  REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH (3)(E) ABOVE, THE
          COMPANY AND THE TRUSTEE OR TRANSFER AGENT, AS APPLICABLE,  RESERVE THE
          RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL  OPINIONS,  CERTIFICATIONS
          OR OTHER  EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE
          THAT THE  PROPOSED  TRANSFER  IS  BEING  MADE IN  COMPLIANCE  WITH THE
          SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION
          IS MADE AS TO THE  AVAILABILITY OF ANY EXEMPTION FROM THE REGISTRATION
          REQUIREMENTS  OF THE  SECURITIES  ACT.  THIS  SECURITY AND ANY RELATED
          DOCUMENTATION  MAY BE  AMENDED  OR  SUPPLEMENTED  FROM TIME TO TIME TO
          MODIFY  THE  RESTRICTIONS  ON AND  PROCEDURES  FOR  RESALES  AND OTHER
          TRANSFERS OF THIS SECURITY TO REFLECT ANY CHANGE IN APPLICABLE  LAW OR
          REGULATION (OR THE INTERPRETATION THEREOF) OR IN PRACTICES RELATING TO
          THE RESALE OR TRANSFER OF RESTRICTED SECURITIES GENERALLY.  THE HOLDER
          OF THIS SECURITY SHALL BE DEEMED BY THE ACCEPTANCE OF THIS SECURITY TO
          HAVE AGREED TO ANY SUCH AMENDMENT OR SUPPLEMENT.

          THE  HOLDER OF THIS  SECURITY  IS  SUBJECT  TO,  AND  ENTITLED  TO THE
          BENEFITS OF, A REGISTRATION RIGHTS AGREEMENT, DATED AS OF MAY 8, 2002,
          ENTERED  INTO BY THE  COMPANY  FOR THE  BENEFIT OF CERTAIN  HOLDERS OF
          SECURITIES FROM TIME TO TIME.

                                     B-1-2
<PAGE>

                                                                     EXHIBIT B-2

                       FORM OF LEGEND FOR GLOBAL SECURITY

     Any Global  Security  authenticated  and delivered  hereunder  shall bear a
legend (which would be in addition to any other legends  required in the case of
a Restricted Security) in substantially the following form:

          THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
     HEREINAFTER  REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
     NOMINEE OF A DEPOSITARY  OR A SUCCESSOR  DEPOSITARY.  THIS  SECURITY IS NOT
     EXCHANGEABLE  FOR SECURITIES  REGISTERED IN THE NAME OF A PERSON OTHER THAN
     THE DEPOSITARY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED
     IN THE INDENTURE,  AND NO TRANSFER OF THIS SECURITY  (OTHER THAN A TRANSFER
     OF  THIS  SECURITY  AS A  WHOLE  BY  THE  DEPOSITARY  TO A  NOMINEE  OF THE
     DEPOSITARY OR BY A NOMINEE OF THE  DEPOSITARY TO THE  DEPOSITARY OR ANOTHER
     NOMINEE  OF  THE  DEPOSITARY)  MAY BE  REGISTERED  EXCEPT  IN  THE  LIMITED
     CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

          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.

          TRANSFERS  OF THIS GLOBAL  SECURITY  SHALL BE LIMITED TO  TRANSFERS IN
     WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF
     OR SUCH  SUCCESSOR'S  NOMINEE  AND  TRANSFERS  OF  PORTIONS  OF THIS GLOBAL
     SECURITY  SHALL  BE  LIMITED  TO  TRANSFERS  MADE IN  ACCORDANCE  WITH  THE
     RESTRICTIONS SET FORTH IN SECTION 2.16 OF THE INDENTURE.

                                     B-2-1
<PAGE>

                                                                     EXHIBIT C-1
                                                                     -----------

                       Form of Certificate To Be Delivered
                          in Connection with Transfers
                            Pursuant to Regulation S

The Bank of New York
101 Barclay Street, Floor 21W
New York, NY 10286
Facsimile:  (212) 896-7299
Attention: Corporate Trust Administration

     Re:  LENNOX   INTERNATIONAL   INC.  (the  "Company")  6  1/4%   Convertible
          Subordinated Notes due 2009 (the "Securities")

Ladies and Gentlemen:

     In  connection  with our proposed sale of  $_________  aggregate  principal
amount of the Securities,  we confirm that such sale has been effected  pursuant
to and in accordance with Regulation S under the U.S. Securities Act of 1933, as
amended (the "Securities Act"), and, accordingly, we represent that:

          (1) the offer of the Securities was made in an "offshore  transaction"
     to a person other than a "U.S. person" (as defined in Regulation S);

          (2)  either  (a) at  the  time  the  buy  offer  was  originated,  the
     transferee was outside the United States or we and any person acting on our
     behalf  reasonably  believed  that the  transferee  was  outside the United
     States,  or  (b)  the  transaction  was  executed  in,  on or  through  the
     facilities of a designated  off-shore  securities market and neither we nor
     any  person  acting  on our  behalf  knows  that the  transaction  has been
     pre-arranged with a buyer in the United States;

               (3) no  directed  selling  efforts  have been made in the  United
          States in  contravention  of the  requirements  of Rule 903(b) or Rule
          904(b) of Regulation S, as applicable;

               (4) the  transaction is not part of a plan or scheme to evade the
          registration requirements of the Securities Act;

               (5) we have advised the  transferee of the transfer  restrictions
          applicable to the Securities; and

                                     C-1-1
<PAGE>

               (6) if we are a dealer in  securities  or have received a selling
          concession,  fee or other  remuneration  in respect of the Securities,
          and the transfer is to occur during the  Restricted  Period,  then the
          requirements of Rule 904(c)(1) have been satisfied.

     You, the Company and counsel for the Company are entitled to rely upon this
letter and are irrevocably authorized to produce this letter or a copy hereof to
any  interested  party in any  administrative  or legal  proceedings or official
inquiry  with  respect  to the  matters  covered  hereby.  Terms  used  in  this
certificate have the meanings set forth in Regulation S.

                               Very truly yours,

                               [Name of Transferor]

                               By:
                                  ----------------------------------------------
                                  Authorized Signature

                                     C-1-2
<PAGE>

                                                                     EXHIBIT C-2
                                                                     -----------

                       Form of Certificate To Be Delivered
                          in Connection with Transfers
                            Pursuant to Regulation S

The Bank of New York
101 Barclay Street, Floor 21W
New York, NY 10286
Facsimile:  (212) 896-7299
Attention: Corporate Trust Administration

     Re:  LENNOX   INTERNATIONAL   INC.  (the  "Company")  6  1/4%   Convertible
          Subordinated Notes due 2009 (the "Securities")

Ladies and Gentlemen:

     In connection with our proposed purchase of $_________  aggregate principal
amount of the Securities,  we confirm that such sale has been effected  pursuant
to and in accordance with Regulation S under the U.S. Securities Act of 1933, as
amended (the "Securities Act"), and, accordingly, we represent that:

          (1) the  undersigned is not a U.S. person (as defined in Regulation S)
     and has not acquired the  Securities for the account or benefit of any U.S.
     person;

          (2)  the  undersigned  is not a  distributor  within  the  meaning  of
     Regulation S; and

          (3) the undersigned agrees to resell the Securities only in accordance
     with the  provisions of Regulation  S, pursuant to  registration  under the
     Securities  Act, or pursuant to an exemption from  registration  and agrees
     not to engage in hedging  transactions with regard to the Securities unless
     in compliance with the Securities Act.

     You, the Company and counsel for the Company are entitled to rely upon this
letter and are irrevocably authorized to produce this letter or a copy hereof to
any  interested  party in any  administrative  or legal  proceedings or official
inquiry  with  respect  to the  matters  covered  hereby.  Terms  used  in  this
certificate have the meanings set forth in Regulation S.

                               Very truly yours,

                               [Name of Transferee]

                               By:
                                  ----------------------------------------------
                                  Authorized Signature

<PAGE>
                                                                       EXHIBIT D
                                                                       ---------

          Form of Notice of Transfer Pursuant to Registration Statement

Lennox International Inc.
2140 Lake Park
Richardson, Texas 75080
Attention:  General Counsel

The Bank of New York
101 Barclay Street, Floor 21W
New York, NY 10286
Facsimile:  (212) 896-7299
Attention: Corporate Trust Administration

     Re:  LENNOX   INTERNATIONAL   INC.  (the  "Company")  6  1/4%   Convertible
          Subordinated Notes due 2009 (the "Securities")

Ladies and Gentlemen:

     Please be advised that _____________ has transferred $___________ aggregate
principal  amount of the Securities or __ shares of the Common Stock,  $0.01 par
value per  share,  of the  Company  issuable  on  conversion  of the  Securities
("Stock")  pursuant to an  effective  Shelf  Registration  Statement on Form S-3
(File No. 333-________).

     We hereby certify that the prospectus delivery requirements, if any, of the
Securities  Act of 1933 as  amended,  have been  satisfied  with  respect to the
transfer  described  above  and that  the  above-named  beneficial  owner of the
Securities or Stock is named as a "Selling  Security  Holder" in the  Prospectus
dated _________, or in amendments or supplements thereto, and that the aggregate
principal amount of the Securities, or number of shares of Stock transferred are
[a portion of] the Securities or Stock listed in such Prospectus,  as amended or
supplemented, opposite such owner's name.

                               Very truly yours,

                               -------------------------------------------------
                               (Name)

1 This is included in Global Notes only.EXHIBIT 10.3

                         REGISTRATION RIGHTS AGREEMENT

     THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and entered
into as of May 8, 2002 by and between Lennox International Inc., a Delaware
corporation (the "Company") and UBS Warburg LLC and the other Initial Purchasers
named in the Purchase Agreement referred to below (each an "Initial Purchaser"
and collectively, the "Initial Purchasers"), for whom UBS Warburg LLC is acting
as representative, pursuant to that certain Purchase Agreement, dated as of May
2, 2002 (the "Purchase Agreement") between the Company and the Initial
Purchasers.

     In order to induce the Initial Purchasers to enter into the Purchase
Agreement, the Company has agreed to provide the registration rights set forth
in this Agreement. The execution of this Agreement is a condition to the closing
under the Purchase Agreement.

     The Company agrees with the Initial Purchasers (i) for their benefit as
Initial Purchasers and (ii) for the benefit of the beneficial owners (including
the Initial Purchasers) from time to time of the Notes (as defined herein) and
the beneficial owners from time to time of the Underlying Common Stock (as
defined herein) issued upon conversion of the Notes (each of the foregoing a
"Holder" and together the "Holders"), as follows:

     Section 1. Definitions. Capitalized terms used herein without definition
shall have their respective meanings set forth in the Purchase Agreement. As
used in this Agreement, the following terms shall have the following meanings:

     "Affiliate" means with respect to any specified person, an "affiliate," as
defined in Rule 144, of such person.

     "Amendment Effectiveness Deadline Date" has the meaning set forth in
Section 2(d) hereof.

     "Applicable Conversion Price" means, as of any date of determination,
$1,000 divided by the Conversion Rate then in effect as of the date of
determination or, if no Notes are then outstanding, the Conversion Rate that
would be in effect were Notes then outstanding.

     "Notes" means the 6 1/4% Convertible Subordinated Notes due 2009 of the
Company to be purchased pursuant to the Purchase Agreement.

     "Business Day" means each day on which the New York Stock Exchange is open
for trading.

     "Common Stock" means the shares of common stock, par value $0.01 per share,
of the Company and any other shares of capital stock as may constitute "Common
Stock" for purposes of the Indenture, including the Underlying Common Stock.

     "Conversion Rate" has the meaning assigned to such term in the Indenture.

     "Damages Accrual Period" has the meaning set forth in Section 2(e) hereof.

     "Damages Payment Date" means each interest payment date under the Indenture
in the case of Notes, and each June 1 and December 1 in the case of the
Underlying Common Stock.

                                       1
<PAGE>

     "Effectiveness Deadline Date" has the meaning set forth in Section 2(a)
hereof.

     "Effectiveness Period" means a period (subject to extension pursuant to
Section 3(i) hereof ) of two years after the original issuance of the Notes or
such shorter time (x) as permitted by Rule 144(k) under the Securities Act or
any successor provisions thereunder or (y) that will terminate when each of the
Registrable Securities covered by the Shelf Registration Statement ceases to be
a Registrable Security.

     "Event" has the meaning set forth in Section 2(e) hereof.

     "Event Date" has the meaning set forth in Section 2(e) hereof.

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

     "Filing Deadline Date" has the meaning set forth in Section 2(a) hereof.

     "Holder" has the meaning set forth in the third paragraph of this
Agreement.

     "Indenture" means the Indenture, dated as of May 8, 2002, between the
Company and The Bank of New York as trustee, pursuant to which the Notes are
being issued.

     "Initial Purchasers" has the meaning set forth in the preamble hereto.

     "Initial Shelf Registration Statement" has the meaning set forth in Section
2(a) hereof.

     "Issue Date" means the first date of original issuance of the Notes.

     "Liquidated Damages Amount" has the meaning set forth in Section 2(e)
hereof.

     "Material Event" has the meaning set forth in Section 3(i) hereof.

     "Notice and Questionnaire" means a written notice and questionnaire
delivered to the Company containing substantially the information called for by
the Selling Securityholder Notice and Questionnaire attached as Annex A to the
Offering Memorandum dated May 3, 2002 relating to the Notes.

     "Notice Holder" means, on any date, any Holder that has delivered a Notice
and Questionnaire to the Company on or prior to such date, so long as all of
their Registrable Securities that have been registered for resale pursuant to a
Notice and Questionnaire have not been sold in accordance with a Shelf
Registration Statement.

     "Purchase Agreement" has the meaning set forth in the preamble hereof.

     "Prospectus" means the prospectus included in any Shelf Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a

                                       2
<PAGE>

prospectus filed as part of an effective registration statement in reliance upon
Rule 415 promulgated under the Securities Act), as amended or supplemented by
any amendment or prospectus supplement, including post-effective amendments, and
all materials incorporated by reference or explicitly deemed to be incorporated
by reference in such Prospectus.

     "Record Holder" means (i) with respect to any Damages Payment Date relating
to any Notes as to which any such Liquidated Damages Amount has accrued, the
holder of record of such Note on the record date with respect to the interest
payment date under the Indenture on which such Damages Payment Date shall occur
and (ii) with respect to any Damages Payment Date relating to the Underlying
Common Stock as to which any such Liquidated Damages Amount has accrued, the
registered holder of such Underlying Common Stock fifteen (15) days prior to
such Damages Payment Date.

     "Registrable Securities" means the Notes until such Notes have been
converted into the Underlying Common Stock and, at all times the Underlying
Common Stock until the earliest of (x) the date on which such security has been
effectively registered under the Securities Act and disposed of, whether or not
in accordance with the Shelf Registration Statement, (y) the date that is two
years after the original issuance of the Notes and (z) the date on which such
Note or Underlying Common Stock ceases to be outstanding or such shorter period
of time as permitted by Rule 144(k) under the Securities Act or any successor
provisions thereunder.

     "Registration Expenses" has the meaning set forth in Section 5 hereof.

     "Registration Statement" means any registration statement of the Company
that covers any of the Registrable Securities pursuant to the provisions of this
Agreement including the Prospectus, amendments and supplements to such
registration statement, including post-effective amendments, all exhibits, and
all materials incorporated by reference or explicitly deemed to be incorporated
by reference in such registration statement.

     "Rule 144" means Rule 144 under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC.

     "Rule 144A" means Rule 144A under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC.

     "SEC" means the Securities and Exchange Commission.

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

     "Shelf Registration Statement" has the meaning set forth in Section 2(a)
hereof.

     "Subsequent Shelf Registration Statement" has the meaning set forth in
Section 2(b) hereof.

     "Suspension Notice" has the meaning set forth in Section 3(i) hereof.

     "Suspension Period" has the meaning set forth in Section 3(i) hereof.

                                       3
<PAGE>
     "TIA" means the Trust Indenture Act of 1939, as amended.

     "Trustee" means The Bank of New York, the Trustee under the Indenture.

     "Underlying Common Stock" means the Common Stock into which the Notes are
convertible or issued upon any such conversion.

     Section 2. Shelf Registration. The Company shall prepare and file or cause
to be prepared and filed with the SEC on or before the date (the "Filing
Deadline Date") that is ninety (90) days after the Issue Date, a Registration
Statement for an offering to be made on a delayed or continuous basis pursuant
to Rule 415 of the Securities Act (a "Shelf Registration Statement") registering
the resale from time to time by Holders thereof of all of the Registrable
Securities (the "Initial Shelf Registration Statement"). The Initial Shelf
Registration Statement shall be on Form S-3 or another appropriate form
permitting registration of such Registrable Securities for resale by such
Holders in accordance with the reasonable methods of distribution elected by the
Holders, approved by the Company, and set forth in the Initial Shelf
Registration Statement. The Company shall use commercially reasonable efforts to
cause the Initial Shelf Registration Statement to be declared effective under
the Securities Act as promptly as is practicable but in any event by the date
(the "Effectiveness Deadline Date") that is one hundred eighty (180) days after
the Issue Date, and to keep the Initial Shelf Registration Statement (or any
Subsequent Shelf Registration Statement) continuously effective under the
Securities Act until the expiration of the Effectiveness Period. At the time the
Initial Shelf Registration Statement is declared effective, each Holder that
became a Notice Holder on or prior to the date that is ten (10) Business Days
prior to such time of effectiveness shall be named as a selling securityholder
in the Initial Shelf Registration Statement and the related Prospectus in such a
manner as to permit such Holder to deliver such Prospectus to purchasers of
Registrable Securities in accordance with applicable law.

     (b) If the Initial Shelf Registration Statement or any Subsequent Shelf
Registration Statement ceases to be effective for any reason at any time during
the Effectiveness Period, the Company shall use its commercially reasonable
efforts to obtain the prompt withdrawal of any order suspending the
effectiveness thereof, and in any event shall within thirty (30) days of such
cessation of effectiveness amend the Shelf Registration Statement in a manner
reasonably expected to obtain the withdrawal of the order suspending the
effectiveness thereof, or file an additional Shelf Registration Statement
covering all of the securities that as of the date of such filing are
Registrable Securities (a "Subsequent Shelf Registration Statement"). If a
Subsequent Shelf Registration Statement is filed, the Company shall use
commercially reasonable efforts to cause the Subsequent Shelf Registration
Statement to become effective as promptly as is practicable after such filing
and to keep such Shelf Registration Statement (or subsequent Shelf Registration
Statement) continuously effective until the end of the Effectiveness Period.

     (c) The Company shall supplement and amend the Shelf Registration Statement
if required by the rules, regulations or instructions applicable to the
registration form used by the Company for such Shelf Registration Statement, if
required by the Securities Act or as reasonably requested by the Initial
Purchasers or by the Trustee on behalf of the Holders of the Registrable
Securities covered by such Shelf Registration Statement.

                                       4
<PAGE>

     (d) Each Holder of Registrable Securities agrees that if such Holder wishes
to sell Registrable Securities pursuant to a Shelf Registration Statement and
related Prospectus, it will do so only in accordance with this Section 2(d) and
Section 3(i). Each Holder of Registrable Securities wishing to sell Registrable
Securities pursuant to a Shelf Registration Statement and related Prospectus
agrees to deliver a completed and executed Notice and Questionnaire to the
Company prior to any attempted or actual distribution of Registrable Securities
under the Shelf Registration Statement; provided that Holders of Registrable
Securities shall have at least twenty (20) Business Days from the date on which
the Notice and Questionnaire is first sent to such Holders by the Company to
complete and return the Notice and Questionnaire to the Company. From and after
the date the Initial Shelf Registration Statement is declared effective, the
Company shall, as promptly as practicable after the date a Notice and
Questionnaire is delivered, and in any event within the later of (x) five (5)
Business Days after such date or (y) five (5) Business Days after the expiration
of any Suspension Period (1) in effect when the Notice and Questionnaire is
delivered or (2) put into effect within five (5) Business Days of such delivery
date, (i) if required by applicable law, file with the SEC a post-effective
amendment to the Shelf Registration Statement or, if required by applicable law,
prepare and file a supplement to the related Prospectus or a supplement or
amendment to any document incorporated therein by reference or file any other
required document so that the Holder delivering such Notice and Questionnaire is
named as a selling securityholder in the Shelf Registration Statement and the
related Prospectus in such a manner as to permit such Holder to deliver such
Prospectus to purchasers of the Registrable Securities in accordance with
applicable law and, if the Company shall file a post-effective amendment to the
Shelf Registration Statement, use commercially reasonable efforts to cause such
post-effective amendment to be declared effective under the Securities Act as
promptly as is practicable, but in any event by the date (the "Amendment
Effectiveness Deadline Date") that is thirty (30) days after the date such
post-effective amendment is required by this clause to be filed; (ii) provide
such Holder a reasonable number of copies of any documents filed pursuant to
Section 2(d)(i); and (iii) notify such Holder as promptly as practicable after
the effectiveness under the Securities Act of any post-effective amendment filed
pursuant to Section 2(d)(i); provided that if such Notice and Questionnaire is
delivered during a Suspension Period, or a Suspension Period is put into effect
within five (5) Business Days after such delivery date, the Company shall so
inform the Holder delivering such Notice and Questionnaire and shall take the
actions set forth in clauses (i), (ii) and (iii) above within five (5) Business
Days after expiration of the Suspension Period in accordance with Section 3(i);
provided further that if under applicable law, the Company has more than one
option as to the type or manner of making any such filing, the Company shall, if
commercially reasonable, make the required filing or filings in the manner or of
a type that is reasonably expected to result in the earliest availability of the
Prospectus for effecting resales of Registrable Securities. Notwithstanding
anything contained herein to the contrary, the Company shall be under no
obligation to name any Holder that is not a Notice Holder as a selling
securityholder in any Shelf Registration Statement or related Prospectus;
provided, however, that any Holder that becomes a Notice Holder pursuant to the
provisions of this Section 2(d) (whether or not such Holder was a Notice Holder
at the time the Shelf Registration Statement was declared effective) shall be
named as a selling securityholder in the Shelf Registration Statement or related
Prospectus in accordance with the requirements of this Section 2(d).

     (e) The parties hereto agree that the Holders of Registrable Securities
will suffer damages, and that it would not be feasible to ascertain the extent
of such damages with precision,

                                       5
<PAGE>

if (i) the Initial Shelf Registration Statement has not been filed on or prior
to the Filing Deadline Date, (ii) the Initial Shelf Registration Statement has
not been declared effective under the Securities Act on or prior to the
Effectiveness Deadline Date or (iii) the Initial Shelf Registration Statement is
filed and declared effective but shall thereafter cease to be effective (without
being succeeded immediately by an additional registration statement filed and
declared effective) or usable for the offer and sale of Registrable Securities
for a period of time (including any Suspension Period) which shall exceed
forty-five (45) days in the aggregate in any three (3) month period or ninety
(90) days in the aggregate in any twelve (12) month period (each of the events
of a type described in any of the foregoing clauses (i) through (iii) are
individually referred to herein as an "Event," and the Filing Deadline Date in
the case of clause (i), the Effectiveness Deadline Date in the case of clause
(ii), the date on which the duration of the ineffectiveness or unusability of
the Initial Shelf Registration Statement in any period exceeds the number of
days permitted by clause (iii) hereof in the case of clause (iii), being
referred to herein as an "Event Date"). Events shall be deemed to continue until
the following dates with respect to the respective types of Events: the date the
Initial Shelf Registration Statement is filed in the case of an Event of the
type described in clause (i), the date the Initial Shelf Registration Statement
is declared effective under the Securities Act in the case of an Event of the
type described in clause (ii), and the date the Initial Shelf Registration
Statement becomes effective or usable again in the case of an Event of the type
described in clause (iii).

     Accordingly, commencing on (and including) any Event Date and ending on
(but excluding) the next date on which there are no Events that have occurred
and are continuing (a "Damages Accrual Period"), the Company agrees to pay, as
liquidated damages and not as a penalty, an amount (the "Liquidated Damages
Amount") at the rate described below, payable periodically on each Damages
Payment Date to Record Holders of Notes that are Registrable Securities and of
shares of Underlying Common Stock issued upon conversion of Notes that are
Registrable Securities, as the case may be, to the extent of, for each such
Damages Payment Date, accrued and unpaid Liquidated Damages Amount to (but
excluding) such Damages Payment Date (or, if the Damages Accrual Period shall
have ended prior to such Damages Payment Date, the date of the end of the
Damages Accrual Period); provided that any Liquidated Damages Amount accrued
with respect to any Note or portion thereof called for redemption on a
redemption date or converted into Underlying Common Stock on a conversion date
prior to the Damages Payment Date, shall, in any such event, be paid instead to
the Holder who submitted such Note or portion thereof for redemption or
conversion on the applicable redemption date or conversion date, as the case may
be, on such date (or promptly following the conversion date, in the case of
conversion). The Liquidated Damages Amount shall accrue at a rate per annum
equal to one-quarter of one percent (0.25%) for the first 90-day period from the
Event Date, at a rate per annum equal to one-half of one percent (0.5%) for the
next succeeding 90-day period from the Event Date and thereafter at a rate per
annum equal to three-quarters of one percent (0.75%) of (i) the aggregate
principal amount of such Notes or, without duplication, (ii) in the case of
Notes that have been converted into Underlying Common Stock, the Applicable
Conversion Price of such shares of Underlying Common Stock, as the case may be,
in each case determined as of the Business Day immediately preceding the next
Damages Payment Date. Notwithstanding the foregoing, no Liquidated Damages
Amounts shall accrue as to any Registrable Security from and after the earlier
of (x) the date such security is no longer a Registrable Security and (y)
expiration of the Effectiveness Period. The rate of accrual of the Liquidated
Damages Amount with respect to any period shall not exceed the rate provided for
in

                                       6
<PAGE>

this paragraph notwithstanding the occurrence of multiple concurrent Events.
Following the cure of all Events requiring the payment by the Company of
Liquidated Damages Amounts to the Holders of Registrable Securities pursuant to
this Section, the accrual of Liquidated Damages Amounts shall cease (without in
any way limiting the effect of any subsequent Event requiring the payment of
Liquidated Damages Amount by the Company).

     The Trustee shall be entitled, on behalf of Holders of Notes, to seek any
available remedy for the enforcement of this Agreement, including for the
payment of any Liquidated Damages Amount. Notwithstanding the foregoing, the
parties agree that the sole damages payable for a violation of the terms of this
Agreement with respect to which liquidated damages are expressly provided shall
be such liquidated damages.

     All of the Company's obligations set forth in this Section 2(e) that are
outstanding with respect to any Registrable Security at the time such security
ceases to be a Registrable Security shall survive until such time as all such
obligations with respect to such security have been satisfied in full
(notwithstanding termination of this Agreement pursuant to Section 8(k)).

     The parties hereto agree that the liquidated damages provided for in this
Section 2(e) constitute a reasonable estimate of the damages that may be
incurred by Holders of Registrable Securities by reason of the failure of the
Shelf Registration Statement to be filed or declared effective or available for
effecting resales of Registrable Securities in accordance with the provisions
hereof.

     Section 3. Registration Procedures. In connection with the registration
obligations of the Company under Section 2 hereof, the Company shall:

     (a) Prepare and file with the SEC a Shelf Registration Statement or Shelf
Registration Statements on Form S-3 or any other appropriate form under the
Securities Act available for the sale of the Registrable Securities by the
Holders thereof in accordance with the intended method or methods of
distribution thereof, and use commercially reasonable efforts to cause each such
Shelf Registration Statement to become effective and remain effective as
provided herein; provided that before filing any Shelf Registration Statement or
Prospectus or any amendments or supplements thereto with the SEC, the Company
shall furnish to the Initial Purchasers and counsel for the Holders and for the
Initial Purchasers (or, if applicable, separate counsel for the Holders) copies
of all such documents proposed to be filed.

     (b) Subject to its rights under subsections (c) and (i) of this Section 3,
prepare and file with the SEC such amendments and post-effective amendments to
each Shelf Registration Statement as may be necessary to keep such Shelf
Registration Statement continuously effective until the expiration of the
Effectiveness Period; cause the related Prospectus to be supplemented by any
required Prospectus supplement, and as so supplemented to be filed pursuant to
Rule 424 (or any similar provisions then in force) under the Securities Act; and
use reasonable best efforts to comply with the provisions of the Securities Act
applicable to it with respect to the disposition of all securities covered by
such Shelf Registration Statement during the Effectiveness Period in accordance
with the intended methods of disposition by the sellers thereof set forth in
such Shelf Registration Statement as so amended or such Prospectus as so
supplemented.

                                       7
<PAGE>

     (c) As promptly as practicable give notice to the Notice Holders and the
Initial Purchasers (i) when any Prospectus, Prospectus supplement, Shelf
Registration Statement or any post-effective amendment to a Shelf Registration
Statement has been filed with the SEC and, with respect to a Shelf Registration
Statement or any post-effective amendment, when the same has been declared
effective, (ii) of any request, following the effectiveness of the Initial Shelf
Registration Statement under the Securities Act, by the SEC or any other federal
or state governmental authority for amendments or supplements to any Shelf
Registration Statement or related Prospectus or for additional information,
(iii) of the issuance by the SEC or any other federal or state governmental
authority of any stop order suspending the effectiveness of any Shelf
Registration Statement or the initiation of any proceedings for that purpose,
(iv) of the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction or the initiation of any
proceeding for such purpose, (v) after the effective date of any Shelf
Registration Statement filed pursuant to this Agreement of the occurrence of
(but not the nature of or details concerning) a Material Event and (vi) of the
determination by the Company that a post-effective amendment to a Shelf
Registration Statement will be filed with the SEC, which notice may, at the
discretion of the Company (or as required pursuant to Section 3(i)), state that
it constitutes a Suspension Notice, in which event the provisions of Section
3(i) shall apply.

     (d) Use commercially reasonable efforts to prevent the issuance of, and, if
issued, to obtain the withdrawal of any order suspending the effectiveness of a
Shelf Registration Statement or the lifting of any suspension of the
qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction in which they have been qualified for
sale, in either case as promptly as practicable, and provide prompt notice to
each Notice Holder and the Initial Purchasers of the withdrawal of any such
order.

     (e) If requested by the Initial Purchasers or the Holders of a majority of
the aggregate principal amount of then outstanding Notes held by Notice Holders,
as promptly as practicable incorporate in a Prospectus supplement or
post-effective amendment to a Shelf Registration Statement such information as
the Initial Purchasers, such Holders or counsel for the Initial Purchasers and
such Holders shall determine to be required to be included therein by applicable
law and make any required filings of such Prospectus supplement or such
post-effective amendment; provided that the Company shall not be required to
include information the disclosure of which at the time would have a material
adverse effect on the business or operations of the Company and or its
subsidiaries taken as a whole, as determined in good faith by the Board of
Directors of the Company or to take any actions under this Section 3(e) that, in
the written opinion of counsel for the Company, are not in compliance with
applicable law.

     (f) As promptly as practicable furnish to each Notice Holder, counsel for
the Holders and for the Initial Purchasers and the Initial Purchasers, without
charge, at least one (1) conformed copy of the Shelf Registration Statement and
any amendment thereto, including financial statements but excluding schedules,
all documents incorporated or deemed to be incorporated therein by reference and
all exhibits (unless requested in writing to the Company by such Notice Holder,
such counsel or the Initial Purchasers).

     (g) During the Effectiveness Period, deliver to each Notice Holder, counsel
for the Holders and for the Initial Purchasers and the Initial Purchasers, in
connection with any sale

                                       8
<PAGE>

of Registrable Securities pursuant to a Shelf Registration Statement,
without charge, as many copies of the Prospectus or Prospectuses relating to
such Registrable Securities (including each preliminary prospectus) and any
amendment or supplement thereto as such Notice Holder and the Initial Purchasers
may reasonably request; and the Company hereby consents (except during such
periods that a Suspension Notice is outstanding and has not been revoked) to the
use of such Prospectus or each amendment or supplement thereto by each Notice
Holder, in connection with any offering and sale of the Registrable Securities
covered by such Prospectus or any amendment or supplement thereto in the manner
set forth therein in compliance with the Securities Act and the Exchange Act.

     (h) Prior to any public offering of the Registrable Securities pursuant to
the Shelf Registration Statement, use commercially reasonable efforts to
register or qualify or cooperate with the Notice Holders in connection with the
registration or qualification (or exemption from such registration or
qualification) of such Registrable Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions within the United States as
any Notice Holder reasonably requests in writing (which request may be included
in the Notice and Questionnaire); provided that the Company will not be required
to (i) qualify as a foreign corporation or as a dealer in securities in any
jurisdiction where it would not otherwise be required to qualify but for this
Agreement or (ii) take any action that would subject it to general service of
process in suits or to taxation in any such jurisdiction where it is not then so
subject.

     (i) Upon (A) the issuance by the SEC of a stop order suspending the
effectiveness of the Shelf Registration Statement or the initiation of
proceedings with respect to the Shelf Registration Statement under Section 8(d)
or 8(e) of the Securities Act, (B) the occurrence, in the opinion of the Company
or its auditors or as determined by the SEC, of any event or the existence of
any fact as a result of which any Shelf Registration Statement, or any amendment
or supplement thereto, shall contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, or any Prospectus, or any amendment
or supplement thereto, shall contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or (C) the occurrence or existence of any pending corporate
development (a "Material Event") that, in the reasonable discretion of the
Company, makes it appropriate to suspend the availability of the Shelf
Registration Statement and the related Prospectus, (i) in the case of clause (B)
or (C) above, subject to the next sentence, as promptly as reasonably
practicable, prepare and file, if necessary pursuant to applicable law, a
post-effective amendment to such Shelf Registration Statement or a supplement to
the related Prospectus or any document incorporated therein by reference or file
any other required document that would be incorporated by reference into such
Shelf Registration Statement and Prospectus so that such Shelf Registration
Statement does not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading, and such Prospectus does not contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading (it being understood that the Company may
rely on information provided by each Notice Holder with respect to such Notice
Holder), as thereafter delivered to the purchasers of the Registrable Securities
being sold thereunder, and, in the case of a post-effective amendment to a Shelf
Registration Statement,

                                       9
<PAGE>

subject to the next sentence, use commercially reasonable efforts to cause it to
be declared effective as promptly as is reasonably practicable, and (ii) give
notice to the Notice Holders and counsel for the Holders and for the Initial
Purchasers (or, if applicable, separate counsel for the Holders) that the
availability of the Shelf Registration Statement is suspended (a "Suspension
Notice") and, upon receipt of any Suspension Notice, each Notice Holder agrees
not to sell any Registrable Securities pursuant to such Shelf Registration
Statement until such Notice Holder's receipt of copies of the supplemented or
amended Prospectus provided for in clause (i) above, or until it is advised in
writing by the Company that the Prospectus may be used, and has received copies
of any additional or supplemental filings that are incorporated or deemed
incorporated by reference in such Prospectus. The Company will use commercially
reasonable efforts to ensure that the use of the Prospectus may be resumed (x)
in the case of clause (A) above, as promptly as is reasonably practicable, (y)
in the case of clause (B) above, as soon as, in the reasonable judgment of the
Company, the Shelf Registration Statement does not contain any untrue statement
of a material fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein not misleading and the
Prospectus does not contain any untrue statement of a material fact or omits to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading, and
(z) in the case of clause (C) above, as soon as, in the reasonable discretion of
the Company, such suspension is no longer appropriate. The period during which
the availability of the Shelf Registration Statement and any Prospectus may be
suspended (the "Suspension Period") without the Company incurring any obligation
to pay liquidated damages pursuant to Section 2(e) shall not exceed forty-five
(45) days in any three (3) month period and ninety (90) days in any twelve (12)
month period. The Effectiveness Period shall be extended by the number of days
from and including the date of the giving of the Suspension Notice to and
including the date on which the Notice Holder received copies of the
supplemented or amended Prospectus provided in clause (i) above, or the date on
which it is advised in writing by the Company that the Prospectus may be used,
and has received copies of any additional or supplemental filings that are
incorporated or deemed incorporated by reference in such Prospectus.

     (j) Make available for inspection during normal business hours by
representatives for the Notice Holders of such Registrable Securities, and any
broker-dealers, attorneys and accountants retained by such Notice Holders, all
relevant financial and other records and pertinent corporate documents and
properties of the Company and its subsidiaries, and cause the appropriate
officers, directors and employees of the Company and its subsidiaries to make
available for inspection during normal business hours all relevant information
reasonably requested by such representatives for the Notice Holders, or any such
broker-dealers, attorneys or accountants in connection with such disposition, in
each case as is customary for similar "due diligence" examinations; provided,
however, that such persons shall, at the Company's request, first agree in
writing with the Company that any information that is reasonably and in good
faith designated by the Company in writing as confidential at the time of
delivery of such information shall be kept confidential by such persons and
shall be used solely for the purposes of exercising rights under this Agreement,
unless (i) disclosure of such information is required by court or administrative
order or is necessary to respond to inquiries of regulatory authorities, (ii)
disclosure of such information is required by law (including any disclosure
requirements pursuant to federal securities laws in connection with the filing
of any Shelf Registration Statement or the use of any Prospectus referred to in
this Agreement), (iii) such information

                                       10
<PAGE>

becomes generally available to the public other than as a result of a disclosure
or failure to safeguard by any such person or (iv) such information becomes
available to any such person from a source other than the Company and such
source is not bound by a confidentiality agreement or is not otherwise under a
duty of trust to the Company, and provided that the foregoing inspection and
information gathering shall, to the greatest extent possible, be coordinated on
behalf of all the Notice Holders and the other parties entitled thereto by the
counsel referred to in Section 5.

     (k) Comply with all applicable rules and regulations of the SEC and make
generally available to its securityholders earning statements (which need not be
audited) satisfying the provisions of Section 11(a) of the Securities Act and
Rule 158 thereunder (or any similar rule promulgated under the Securities Act)
no later than 45 days after the end of any 12-month period (or 90 days after the
end of any 12-month period if such period is a fiscal year) commencing on the
first day of the first fiscal quarter of the Company commencing after the
effective date of a Shelf Registration Statement, which statements shall cover
said 12-month periods; provided that the Company shall be allowed to fulfill its
obligations pursuant to this Section 3(k) by publicly filing such reports on the
SEC's EDGAR database.

     (l) Cooperate with each Notice Holder to facilitate the timely preparation
and delivery of certificates representing Registrable Securities sold pursuant
to a Shelf Registration Statement, which certificates shall not bear any
restrictive legends, and cause such Registrable Securities to be in such
denominations as are permitted by the Indenture and registered in such names as
such Notice Holder may request in writing at least (2) Business Days prior to
any sale of such Registrable Securities.

     (m) Provide a CUSIP number for all Registrable Securities covered by each
Shelf Registration Statement not later than the effective date of such Shelf
Registration Statement and provide the Trustee and the transfer agent for the
Common Stock with certificates for the Registrable Securities that are in a form
eligible for deposit with The Depository Trust Company.

     (n) Cooperate and assist in any filings required to be made with the
National Association of Securities Dealers, Inc.

     (o) Upon each of (i) the filing of the Initial Shelf Registration Statement
and (ii) the effectiveness of the Initial Shelf Registration Statement, announce
the same, in each case by release to Reuters Economic Services and Bloomberg
Business News.

     (p) Subject to the terms and provisions of this Agreement, enter into such
customary agreements and take all such other necessary actions in connection
therewith as may be reasonably requested by the holders of a majority of the
Registrable Securities being sold in order to expedite or facilitate disposition
of such Registrable Securities.

     (q) Cause the Indenture to be qualified under the TIA not later than the
effective date of any Shelf Registration Statement; and in connection therewith,
cooperate with the Trustee to effect such changes to the Indenture as may be
required for the Indenture to be so qualified in accordance with the terms of
the TIA and execute, and use commercially reasonable efforts to cause the
Trustee to execute, all documents as may be required to effect such changes, and
all

                                       11
<PAGE>

other forms and documents required to be filed with the SEC to enable the
Indenture to be so qualified in a timely manner.

     Section 4. Holder's Obligations. Each Holder agrees, by acquisition of the
Registrable Securities, that (i) that upon receipt of any Suspension Notice, it
will keep the fact of such notice confidential, (ii) if so directed by the
Company, upon receipt of any Suspension Notice, such Holder shall return all
copies, other than permanent file copies, of the Prospectus, (iii) sales of
Restricted Securities shall only be made in the manner set forth in the
currently effective Shelf Registration Statement or the Indenture and (iv) it
shall be entitled to sell any of its Registrable Securities pursuant to a Shelf
Registration Statement or to receive a Prospectus relating thereto, unless such
Holder has furnished the Company with a Notice and Questionnaire as required
pursuant to Section 2(d) hereof (including the information required to be
included in such Notice and Questionnaire) and the information set forth in the
next sentence. Each Holder agrees promptly to furnish to the Company all
information required to be disclosed in order to make the information previously
furnished to the Company by such Holder not misleading and any other information
regarding such Holder and the distribution of such Registrable Securities as the
Company may from time to time reasonably request. Any sale of any Registrable
Securities by any Holder shall constitute a representation and warranty by such
Holder that the information relating to such Holder and its plan of distribution
is as set forth in the Prospectus delivered by such Holder in connection with
such disposition, that such Prospectus does not as of the time of such sale
contain any untrue statement of a material fact relating to or provided by such
Holder or its plan of distribution and that such Prospectus does not as of the
time of such sale omit to state any material fact relating to or provided by
such Holder or its plan of distribution necessary in order to make the
statements in such Prospectus, in the light of the circumstances under which
they were made, not misleading.

     Section 5. Registration Expenses. The Company shall bear all fees and
expenses incurred in connection with the performance by the Company of its
obligations under Section 2 and 3 of this Agreement whether or not any of the
Shelf Registration Statements are declared effective. Such fees and expenses
("Registration Expenses") shall include, without limitation, (i) all
registration and filing fees (including, without limitation, fees and expenses
(x) with respect to filings required to be made with the National Association of
Securities Dealers, Inc. and (y) of compliance with federal and state securities
or Blue Sky laws, (ii) printing expenses (including, without limitation,
expenses of printing certificates for Registrable Securities in a form eligible
for deposit with The Depository Trust Company), (iii) duplication and mailing
expenses relating to copies of any Shelf Registration Statement or Prospectus
delivered to any Holders hereunder, (iv) fees and disbursements of counsel for
the Company and the fees and disbursements of counsel for the Initial Purchasers
in connection with the Shelf Registration Statement, (v) fees and disbursements
of the Trustee and its counsel and of the registrar and transfer agent for the
Common Stock and (vi) Securities Act liability insurance obtained by the Company
in its sole discretion. In addition, the Company shall pay the internal expenses
of the Company (including, without limitation, all salaries and expenses of
officers and employees performing legal or accounting duties), the expense of
any annual audit, the fees and expenses incurred in connection with the listing
by the Company of the Registrable Securities on any securities exchange on which
similar securities of the Company are then listed and the fees and expenses of
any person, including special experts, retained by the Company. Notwithstanding
the foregoing, or anything

                                       13
<PAGE>

in this Agreement to the contrary, each Holder shall pay all underwriting
discounts and commissions of any underwriters with respect to Registrable
Securities sold by it.

     Section 6. Indemnification; Contribution.

     (a) The Company agrees to indemnify, defend and hold harmless each Holder
and each person who controls any Holder within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act (each, a "Holder Indemnified
Party"), from and against any loss, damage, expense, liability or claim
(including the reasonable cost of investigation) which such Holder Indemnified
Party may incur under the Securities Act, the Exchange Act or otherwise, insofar
as such loss, damage, expense, liability or claim arises out of or is based upon
any untrue statement or alleged untrue statement of a material fact contained in
any Shelf Registration Statement or Prospectus or in any amendment or supplement
thereto or in any preliminary prospectus, or arises out of or is based upon any
omission or alleged omission to state a material fact required to be stated in
any Shelf Registration Statement or in any amendment or supplement thereto or
necessary to make the statements therein not misleading, or arises out of or is
based upon any omission or alleged omission to state a material fact necessary
in order to make the statements made in any Prospectus or in any amendment or
supplement thereto or in any preliminary prospectus, in the light of the
circumstances under which they were made, not misleading, except insofar as any
such loss, damage, expense, liability or claim arises out of or is based upon
any untrue statement or omission or alleged untrue statement or omission of a
material fact contained in, or omitted from, and in conformity with information
furnished in writing by or on behalf of any Holder to the Company expressly for
use therein.

     (b) Each Holder, severally and not jointly, agrees to indemnify, defend and
hold harmless the Company, its directors and officers and any person who
controls the Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act (each, a "Company Indemnified Party") from and
against any loss, damage, expense, liability or claim (including the reasonable
cost of investigation) which such Company Indemnified Party may incur under the
Securities Act, the Exchange Act or otherwise, insofar as such loss, damage,
expense, liability or claim arises out of or is based upon any untrue statement
or alleged untrue statement of a material fact contained in information
furnished in writing by or on behalf of such Holder to the Company expressly for
use in any Shelf Registration Statement or Prospectus or in any amendment or
supplement thereto or in any preliminary prospectus, or arises out of or is
based upon any omission or alleged omission to state a material fact required to
be stated in any Shelf Registration Statement or in any amendment or supplement
thereto or necessary to make the statements therein not misleading, or arises
out of or is based upon any omission or alleged omission to state a material
fact necessary in order to make the statements in any Prospectus or in any
amendment or supplement thereto or in any preliminary prospectus, in the light
of the circumstances under which they were made, not misleading, in connection
with such information. In no event shall the liability of any selling Holder of
Registrable Securities hereunder be greater in amount than the dollar amount of
the proceeds received by such Holder upon the sale of the Registrable Securities
pursuant to the Shelf Registration Statement giving rise to such indemnification
obligation.

     (c) If any action, suit or proceeding (each, a "Proceeding") is brought
against any person in respect of which indemnity may be sought pursuant to
either subsection (a) or (b) of this

                                       13
<PAGE>

Section 6, such person (the "Indemnified Party") shall promptly notify the
person against whom such indemnity may be sought (the "Indemnifying Party") in
writing of the institution of such Proceeding and the Indemnifying Party shall
assume the defense of such Proceeding; provided, however, that the omission to
notify such Indemnifying Party shall not relieve such Indemnifying Party from
any liability which it may have to such Indemnified Party or otherwise, except
to the extent that the indemnifying party was materially prejudiced by such
failure to notify. Such Indemnified Party shall have the right to employ its own
counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of such Indemnified Party unless the employment of such counsel
shall have been authorized in writing by such Indemnifying Party in connection
with the defense of such Proceeding or such Indemnifying Party shall not have
employed counsel to have charge of the defense of such Proceeding within 30 days
of the receipt of notice thereof or such Indemnified Party shall have reasonably
concluded upon the written advice of counsel that there may be defenses
available to it that may be in conflict with those available to such
Indemnifying Party (in which case such Indemnifying Party shall not have the
right to direct that portion of the defense of such Proceeding on behalf of the
Indemnified Party, but such Indemnifying Party may employ counsel and
participate in the defense thereof but the fees and expenses of such counsel
shall be at the expense of such Indemnifying Party), in any of which events such
reasonable fees and expenses shall be borne by such Indemnifying Party and paid
as incurred (it being understood, however, that such Indemnifying Party shall
not be liable for the expenses of more than one separate counsel in any one
Proceeding or series of related Proceedings together with reasonably necessary
local counsel representing the Indemnified Parties who are parties to such
action). An Indemnifying Party shall not be liable for any settlement of such
Proceeding effected without the written consent of such Indemnifying Party, but
if settled with the written consent of such Indemnifying Party, such
Indemnifying Party agrees to indemnify and hold harmless an Indemnified Party
from and against any loss or liability by reason of such settlement.
Notwithstanding the foregoing sentence, if at any time an Indemnified Party
shall have requested an Indemnifying Party to reimburse such Indemnified Party
for fees and expenses of counsel as contemplated by the second sentence of this
paragraph, then the Indemnified Party may settle such proceeding upon receipt of
the written consent of the Indemnifying Party (which consent shall not
unreasonably be withheld) and the Indemnifying Party agrees that it shall be
liable for any such settlement if (i) such settlement is entered into more than
60 Business Days after receipt by such Indemnifying Party of the aforesaid
request, (ii) such Indemnifying Party shall not have reimbursed such Indemnified
Party in accordance with such request prior to the date of such settlement and
(iii) such Indemnified Party shall have given such Indemnifying Party at least
30 days' prior notice of its intention to settle. No Indemnifying Party shall,
without the prior written consent of any Indemnified Party, effect any
settlement of any pending or threatened Proceeding in respect of which such
Indemnified Party is or could have been a party and indemnity could have been
sought hereunder by such Indemnified Party, unless such settlement (x) includes
an unconditional release of such Indemnified Party from all liability on claims
that are the subject matter of such Proceeding and (y) does not include an
admission of fault, culpability or a failure to act, by or on behalf of such
Indemnified Party.

     (d) If the indemnification provided for in this Section 6 is unavailable to
an Indemnified Party under subsections (a) and (b) of this Section 6 in respect
of any losses, damages, expenses, liabilities or claims referred to therein,
then each applicable Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or

                                       14
<PAGE>

payable by such Indemnified Party as a result of such losses, damages, expenses,
liabilities or claims (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Holders on the
other hand from the offering of the Registrable Securities or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and of the Holders on the other in connection with the statements
or omissions which resulted in such losses, damages, expenses, liabilities or
claims, as well as any other relevant equitable considerations. The relative
fault of the Company on the one hand and of the Holders on the other shall be
determined by reference to, among other things, whether the untrue statement or
alleged untrue statement of a material fact or omission or alleged omission
relates to information supplied by the Company or by the Holders and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The amount paid or payable by a
party as a result of the losses, damages, expenses, liabilities and claims
referred to above shall be deemed to include any reasonable legal or other fees
or expenses reasonably incurred by such party in connection with investigating
or defending any Proceeding.

     (e) The Company and the Holders agree that it would not be just and
equitable if contribution pursuant to this Section 6 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in subsection (d) above.
Notwithstanding the provisions of this Section 6, no Holder shall be required to
contribute any amount in excess of the amount by which the total price at which
the Registrable Securities sold by it were offered to the public exceeds the
amount of any damages which it has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Holders' respective
obligations to contribute pursuant to this Section 6 are several in proportion
to the respective amount of Registrable Securities they have sold pursuant to a
Shelf Registration Statement, and not joint. The remedies provided for in this
Section 6 are not exclusive and shall not limit any rights or remedies which may
otherwise be available to any indemnified party at law or in equity.

     (f) The indemnity and contribution provisions contained in this Section 6
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
any Holder or any person controlling any Holder, or the Company, or the
Company's officers or directors or any person controlling the Company and (iii)
the sale of any Registrable Security by any Holder.

     Section 7. Information Requirements. (a) The Company covenants that, if at
any time before the end of the Effectiveness Period it is not subject to the
reporting requirements of the Exchange Act, it will cooperate with any Holder of
Registrable Securities and take such further action as any Holder of Registrable
Securities may reasonably request in writing (including, without limitation,
making such representations as any such Holder may reasonably request), all to
the extent required from time to time to enable such Holder to sell Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by Rule 144, Rule 144A and Regulation S under the
Securities Act and customarily taken in connection with sales pursuant to such
exemptions. Upon the written request of any Holder of

                                       15
<PAGE>

Registrable Securities, the Company shall deliver to such Holder a written
statement as to whether it has complied with such filing requirements, unless
such a statement has been included in the Company's most recent report filed
with the SEC pursuant to Section 13 or Section 15(d) of Exchange Act.
Notwithstanding the foregoing, nothing in this Section 7 shall be deemed to
require the Company to register any of its securities (other than the Common
Stock) under any section of the Exchange Act.

     (b) The Company shall file the reports required to be filed by it under the
Exchange Act and shall comply with all other requirements set forth in the
instructions to Form S-3 or another appropriate form permitting registration of
such Registrable Securities for resale by the Holders, as the case may be, in
order to allow the Company to be eligible to file registration statements on
Form S-3 or such other appropriate form permitting registration of such
Registrable Securities for resale by the Holders.

     Section 8. Miscellaneous.

     (a) No Conflicting Agreements. The Company is not, as of the date hereof, a
party to, nor shall it, on or after the date of this Agreement, enter into, any
agreement with respect to its securities that conflicts with the rights granted
to the Holders of Registrable Securities in this Agreement. The Company
represents and warrants that the rights granted to the Holders of Registrable
Securities hereunder do not in any way conflict with the rights granted to the
holders of the Company's securities under any other agreements.

     (b) Amendments and Waivers. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
unless the Company has obtained the written consent of Holders of a majority of
the then outstanding Underlying Common Stock constituting Registrable Securities
(with Holders of Notes deemed to be the Holders, for purposes of this Section,
of the number of outstanding shares of Underlying Common Stock into which such
Notes are or would be convertible as of the date on which such consent is
requested). Notwithstanding the foregoing, a waiver or consent to depart from
the provisions hereof with respect to a matter that relates exclusively to the
rights of Holders of Registrable Securities whose securities are being sold
pursuant to a Shelf Registration Statement and that does not directly or
indirectly affect the rights of other Holders of Registrable Securities may be
given by Holders of at least a majority of the Registrable Securities being sold
by such Holders pursuant to such Shelf Registration Statement; provided that the
provisions of this sentence may not be amended, modified, or supplemented except
in accordance with the provisions of the immediately preceding sentence. Each
Holder of Registrable Securities outstanding at the time of any such amendment,
modification, supplement, waiver or consent or thereafter shall be bound by any
such amendment, modification, supplement, waiver or consent effected pursuant to
this Section 8(b), whether or not any notice, writing or marking indicating such
amendment, modification, supplement, waiver or consent appears on the
Registrable Securities or is delivered to such Holder.

     (c) Notices. All notices and other communications provided for or permitted
hereunder shall be made in writing by hand delivery, by facsimile, by courier
guaranteeing overnight delivery or by first-class mail, return receipt
requested, and shall be deemed

                                       16
<PAGE>

given (i) when made, if made by hand delivery, (ii) upon confirmation, if made
by facsimile, (iii) one (1) Business Day after being deposited with such
courier, if made by overnight courier or (iv) on the date indicated on the
notice of receipt, if made by first-class mail, to the parties as follows:

     (x) if to a Holder of Registrable Securities, at the most current address
given by such Holder to the Company in a Notice and Questionnaire or any
amendment thereto;

     (y) if to the Company, to:

                      Lennox International Inc.
                      2140 Lake Park Blvd.
                      Richardson, Texas 75080
                      Attention: General Counsel
                      Facsimile No.: (972) 497-6660

     (z) if to the Initial Purchasers, to:

                      c/o UBS Warburg LLC
                      299 Park Avenue
                      New York, New York 10171
                      Attention: Syndicate Department
                      Facsimile No.: (212) 713-3460

                      with a copy to (for informational purposes only):

                      c/o UBS Warburg LLC
                      299 Park Avenue
                      New York, New York 10171
                      Attention: Legal Department
                      Facsimile No.: (212) 821-4042

or to such other address as such person may have furnished to the other persons
identified in this Section 8(c) in writing in accordance herewith.

     (d) Approval of Holders. Whenever the consent or approval of Holders of a
specified percentage of Registrable Securities is required hereunder,
Registrable Securities held by the Company or its affiliates (as such term is
defined in Rule 405 under the Securities Act) (other than the Initial Purchasers
or subsequent Holders of Registrable Securities if such subsequent Holders are
deemed to be such affiliates solely by reason of their holdings of such
Registrable Securities) shall not be counted in determining whether such consent
or approval was given by the Holders of such required percentage.

     (e) Successors and Assigns. Any person who purchases any Registrable
Securities from the Initial Purchasers or any Holder shall be deemed, for
purposes of this Agreement, to be an assignee of the Initial Purchasers or such
Holder, as the case may be. This Agreement shall inure to the benefit of and be
binding upon the successors and assigns of each of the parties and shall inure
to the benefit of and be binding upon each Holder of any Registrable Securities.

                                       17
<PAGE>

     (f) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

     (g) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

     (h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES THEREOF.

     (i) Severability. If any term, provision, covenant or restriction of this
Agreement is held to be invalid, illegal, void or unenforceable, the remainder
of the terms, provisions, covenants and restrictions set forth herein shall
remain in full force and effect and shall in no way be affected, impaired or
invalidated thereby, and the parties hereto shall use its best efforts to find
and employ an alternative means to achieve the same or substantially the same
result as that contemplated by such term, provision, covenant or restriction, it
being intended that all of the rights and privileges of the parties shall be
enforceable to the fullest extent permitted by law.

     (j) Entire Agreement. This Agreement is intended by the parties as a final
expression of their agreement and is intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein and the registration rights granted by the
Company with respect to the Registrable Securities. Except as provided in the
Purchase Agreement, there are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein, with respect to
the registration rights granted by the Company with respect to the Registrable
Securities. This Agreement supersedes all prior agreements and undertakings
among the parties with respect to such registration rights. No party hereto
shall have any rights, duties or obligations other than those specifically set
forth in this Agreement.

     (k) Termination. This Agreement and the obligations of the parties
hereunder shall terminate upon the end of the Effectiveness Period, except for
any liabilities or obligations under Section 4, 5 or 6 hereof and the
obligations to make payments of and provide for liquidated damages under Section
2(e) hereof to the extent such damages accrue prior to the end of the
Effectiveness Period, each of which shall remain in effect in accordance with
its terms.

     (l) Submission to Jurisdiction. Any claim may be commenced, prosecuted or
continued in the courts of the State of New York located in the City and County
of New York or in the United States District Court for the Southern District of
New York, and the Company hereby accepts for itself and in respect of its
property, generally and unconditionally, the nonexclusive jurisdiction of the
aforesaid courts. The Company hereby irrevocably waives any objections,
including, without limitation, any objection to the laying of venue or based on
the grounds of forum non conveniens, which it may now or hereafter have to the
bringing of any such action or proceeding in such respective jurisdictions. Each
of UBS Warburg and the Company (on its behalf and, to the extent permitted by
applicable law, on behalf of its stockholders and affiliates) waives all right

                                       18
<PAGE>

to trial by jury in any action, proceeding or counterclaim (whether based upon
contact, tort or otherwise) in any way arising out of or relating to this
Agreement.

                                       19
<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

                                             LENNOX INTERNATIONAL INC.
                                             By: /s/ Richard A. Smith
                                                 ---------------------
                                                 Executive Vice President,
                                                 Chief Financial Officer and
                                                 Treasurer

Confirmed and accepted as of the date first above written on behalf of itself
and the other several Initial Purchasers:

UBS WARBURG LLC

By: /s/ Adam Reeder
   ----------------
   Managing Director

By: /s/ Harry A. Shaw
   ------------------
   Executive Director

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