Document:

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED THE "SECURITIES ACT"), OR ANY
APPLICABLE STATE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED
FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES
UNDER SUCH ACT AND APPLICABLE LAWS OR SOME OTHER EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF SUCH ACT AND APPLICABLE LAWS OR
AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.

     THIS CONVERTIBLE NOTE, AND PAYMENT AND ENFORCEMENT HEREOF,
IS SUBJECT TO THE TERMS AND PROVISIONS OF THAT CERTAIN
SUBORDINATION AGREEMENT DATED JULY 19, 2002, BETWEEN THE FROST
NATIONAL BANK, A NATIONAL BANKING ASSOCIATION DOING BUSINESS AS
FROST CAPITAL GROUP, JAMES E. UPFIELD, THE HOLDER OF THIS
CONVERTIBLE NOTE, AND THE HOLDERS OF ALL OF THE OTHER CONVERTIBLE
NOTES ISSUED UNDER THE NOTE PURCHASE AGREEMENT REFERRED TO IN
THIS CONVERTIBLE NOTE, AND ACKNOWLEDGED BY TEMTEX INDUSTRIES,
INC. AND TEMCO FIREPLACE PRODUCTS, INC., AS SUCH AGREEMENT MAY BE
AMENDED FROM TIME TO TIME, WHICH AGREEMENT IS INCORPORATED HEREIN
BY REFERENCE. NOTWITHSTANDING ANY STATEMENT TO THE CONTRARY
CONTAINED IN THIS INSTRUMENT, NO PAYMENT OF ANY NATURE ON ACCOUNT
OF THE OBLIGATIONS, WHETHER OF PRINCIPAL OR INTEREST OR
OTHERWISE, SHALL BE DEMANDED, MADE, PAID, RECEIVED OR ACCEPTED
EXCEPT IN ACCORDANCE WITH THE EXPRESS TERMS OF SUCH AGREEMENT.

                     TEMTEX INDUSTRIES, INC.
            CONVERTIBLE SUBORDINATED PROMISSORY NOTE

                                                    Dallas, Texas
                                                    July 19, 2002

     TEMTEX INDUSTRIES, INC., a Delaware corporation (the
"Company"), the principal office of which is located at One
Lincoln Centre, 5400 LBJ Freeway, Suite 1375, Dallas, Texas 75240-
2602, for value received hereby promises to pay to
__________________________, or its registered assigns, the sum of
__________________________________________ Dollars ($________),
or such other amount as shall then equal the outstanding
principal amount hereof and any unpaid accrued interest hereon,
as set forth below, which shall be due and payable on the earlier
to occur of (i) July 19, 2007, (ii) when declared due and payable
by the Holder upon the occurrence of an Event of Default (as
defined below) or (iii) when declared due and payable by the
Holder in a Pay-Off Election (as defined below). Payment for all
amounts due hereunder shall be made by mail to the registered
address of the Holder. This Note is issued in connection with the
transactions described in that certain Note Purchase Agreement
between the Company and the Investors described therein, dated as
of the date hereof, as the same may from time to time be amended,
modified or supplemented (the "Note Purchase Agreement"). The
Holder of this Note is subject to certain restrictions set forth
in the Note Purchase Agreement and shall be entitled to certain
rights and privileges set forth in the Note Purchase Agreement,
the Investors' Rights Agreement and the Voting Agreement (as
defined below). This Note is one of the Notes referred to as the
"Notes" in the Note Purchase Agreement.

<PAGE>

     The following is a statement of the rights of the Holder of
this Note and the conditions to which this Note is subject, and
to which the Holder hereof, by the acceptance of this Note,
agrees:

     1.   Definitions.  As used in this Note, the following terms,
unless the context otherwise requires, have the following
meanings:

          (i)  "Automatic Conversion Event" shall mean any transaction or
     series of transactions effecting the consolidation or merger of
     the Company with or into any other corporation or other entity or
     person, or any other corporate reorganization in which the
     Company shall not be the continuing or surviving entity of such
     consolidation, merger or reorganization or any transaction or
     series of related transactions by the Company in which in excess
     of 50% of the Company's voting power is transferred, or a sale of
     all or substantially all of the assets of the Company.

         (ii) "Company" includes any corporation that, to the extent
     permitted by this Note or the Note Purchase Agreement shall
     succeed to or assume the obligations of the Company under this
     Note.

         (iii)     "Existing Credit Facility" shall refer to that certain
     $4,000,000 Loan Agreement by and among The Frost National Bank
     d/b/a Frost Capital Group, as lender and the Company and its
     wholly-owned subsidiary, Temco Fireplace Products, Inc., as
     borrowers, dated as of September 6, 2000, as amended, extended,
     renewed or increased from time to time, including any "over-line"
     or loan facility related thereto.

          (iv) "Holder" when the context refers to a holder of this Note,
     shall mean any person who shall at the time be the registered
     holder of this Note.

          (v)  "Investors' Rights Agreement" shall refer to that Investors'
     Rights Agreement, dated as of the date hereof, which has been
     executed by the Company in connection with the transactions
     contemplated by the Note Purchase Agreement.

         (vi) "Voting Agreement" shall refer to that Voting Agreement,
     dated as of the date hereof, which has been executed by the
     Company in connection with the transactions contemplated by the
     Note Purchase Agreement.

         (vii)     Other capitalized terms shall have the meanings
     ascribed thereto elsewhere herein.

                               -2-

<PAGE>

     2.   Interest.  Commencing on September 1, 2002, and on the first
calendar day of each month thereafter until all outstanding
principal and interest on this Note shall have been paid in full
or converted, the Company shall pay interest at the rate of six
percent (6%) per annum or, if less, the maximum rate permitted by
applicable law (the "Initial Interest Rate") on the principal of
this Note outstanding during the period beginning on the date of
issuance of this Note and ending on the date that the principal
amount of this Note becomes due and payable. In the event that
the principal amount of this Note is not paid in full when such
amount becomes due and payable, interest at the same rate as the
Initial Interest Rate plus three percent (3%) or, if less, the
maximum rate permitted by applicable law, shall continue to
accrue on the balance of any unpaid principal until such balance
is paid or converted.

3.   Events of Default. If any of the events specified in this
Section 3 shall occur (herein individually referred to as an
"Event of Default"), the Holders possessing more than one-half of
the face amount of all then outstanding Notes issued pursuant to
the Note Purchase Agreement may, so long as such condition
exists, declare the entire principal and unpaid accrued interest
hereon immediately due and payable, by notice in writing to the
Company, signed by such number of Holders:

          (i)  Default in the payment of the principal of or unpaid accrued
     interest on this Note when due and payable if such default is not
     cured by the Company within fifteen (15) calendar days after the
     Holder has given the Company written notice of such default; or

         (ii) Breach by the Company of any material representation,
     warranty, or covenant in this Note, the Note Purchase Agreement
     or the Voting Agreement; provided, that, in the event of any such
     breach, to the extent such breach is susceptible to cure, such
     breach shall not have been cured by the Company within thirty
     (30) calendar days after written notice to the Company of such
     breach; or

         (iii)     The institution by the Company of proceedings to be
     adjudicated as bankrupt or insolvent, or the consent by it to
     institution of bankruptcy or insolvency proceedings against it or
     the filing by it of a petition or answer or consent seeking
     reorganization or release under the Federal Bankruptcy Act, or
     any other applicable federal or state law, or the consent by it
     to the filing of any such petition or the appointment of a
     receiver, liquidator, assignee, trustee or other similar official
     of the Company, or of any substantial part of its property, or
     the making by it of an assignment for the benefit of creditors,
     or the taking of corporate action by the Company in furtherance
     of any such action; or

         (iv) If, within sixty (60) calendar days after the commencement
     of an action against the Company (and service of process in
     connection therewith on the Company) seeking any bankruptcy,
     insolvency, reorganization, liquidation, dissolution or similar
     relief under any present or future statute, law or regulation,
     such action shall not have been resolved in favor of the Company
     or all orders or proceedings thereunder affecting the operations
     or the business of the Company stayed, or if the stay of any such
     order or proceeding shall thereafter be set aside, or if, within
     sixty (60) days after the appointment without the consent or
     acquiescence of the Company of any trustee, receiver or
     liquidator of the Company or of all or any substantial part of
     the properties of the Company, such appointment shall not have
     been vacated; or

         (v)  Any default of the Company under any Senior Indebtedness (as
     defined below) that results in the holder thereof accelerating
     the maturity of such Senior Indebtedness.

                               -3-

<PAGE>

     4.   Subordination. The indebtedness evidenced by this Note is
hereby expressly subordinated, to the extent and in the manner
hereinafter set forth, in right of payment to the prior payment
in full of all the Company's Senior Indebtedness and in
accordance with and pursuant to that certain Subordination
Agreement of even date herewith among Holder and each of the
Investors party to the Note Purchase Agreement and the holders of
certain Senior Indebtedness of the Company (the "Subordination
Agreement").

          4.1  Senior Indebtedness. As used in this Note, the term
"Senior Indebtedness" shall mean the principal of and unpaid accrued
interest (including post-petition interest) on: (i) all
indebtedness of the Company to banks, commercial finance lenders,
insurance companies or other financial institutions regularly
engaged in the business of lending money, which is for money
borrowed by the Company (whether or not secured) including,
without limitation, any indebtedness of the Company and its
subsidiary Temco Fireplace Products, Inc. under the Existing
Credit Facility, and any indebtedness of the Company and its
subsidiary Temco Fireplace Products, Inc. to James E. Upfield
evidenced by that Secured Term Note dated the date hereof in the
principal amount of $750,000 (the "Upfield Note"), (ii) any
indebtedness or any debentures, notes or other evidence of
indebtedness issued in exchange for or to refinance such Senior
Indebtedness, or any indebtedness arising from the satisfaction
of such Senior Indebtedness by a guarantor and (iii) any other
amounts constituting "Senior Debt" as defined in the
Subordination Agreement.

         4.2  Default on Senior Indebtedness. If there should occur
any receivership, insolvency, assignment for the benefit of
creditors, bankruptcy, reorganization or arrangements with
creditors (whether or not pursuant to bankruptcy or other
insolvency laws), sale of all or substantially all of the assets,
dissolution, liquidation or any other marshalling of the assets
and liabilities of the Company, or if this Note shall be declared
due and payable upon the occurrence of an event of default with
respect to any Senior Indebtedness, then (i) no amount shall be
paid by the Company in respect of the principal of or interest on
this Note at the time outstanding, unless and until the principal
of and interest on the Senior Indebtedness then outstanding shall
be satisfied, and (ii) no claim or proof of claim shall be filed
with the Company by or on behalf of the Holder of this Note that
shall assert any right to receive any payments in respect of the
principal of and interest on this Note, except subject to the
satisfaction of the principal of and interest on all of the
Senior Indebtedness then outstanding. If there occurs an event of
default that has been declared in writing with respect to any
Senior Indebtedness, or in the instrument under which any Senior
Indebtedness is outstanding, permitting the holder of such Senior
Indebtedness to accelerate the maturity thereof, then, unless and
until such event of default shall have been cured or waived or
shall have ceased to exist, or all Senior Indebtedness shall have
been satisfied, no payment shall be made in respect of the
principal of or interest on this Note, unless within three (3)
months after the happening of such event of default, the maturity
of such Senior Indebtedness shall not have been accelerated.
4.3  Effect of Subordination. Subject to the rights, if any, of
the holders of Senior Indebtedness under this Section 4 to
receive cash, securities or other properties otherwise payable or
deliverable to the Holder of this Note, nothing contained in this
Section 4 shall impair, as between the Company and the Holder,
the obligation of the Company, subject to the terms and
conditions hereof, to pay to the Holder the principal hereof and
interest hereon as and when the same become due and payable, or
shall prevent the Holder of this Note, upon default hereunder,
from exercising all rights, powers and remedies otherwise
provided herein or by applicable law.

                               -4-

<PAGE>

         4.4  Subrogation. Subject to the payment in full of all Senior
Indebtedness and until this Note shall be paid in full, the
Holder shall be subrogated to the rights of the holders of Senior
Indebtedness (to the extent of payments or distributions
previously made to such holders of Senior Indebtedness pursuant
to the provisions of Section 4.2 above) to receive payments or
distributions of assets of the Company applicable to the Senior
Indebtedness. No such payments or distributions applicable to the
Senior Indebtedness shall, as between the Company and its
creditors, other than the holders of Senior Indebtedness and the
Holder, be deemed to be a payment by the Company to or on account
of this Note; and for the purposes of such subrogation, no
payments or distributions to the holders of Senior Indebtedness
to which the Holder would be entitled except for the provisions
of this Section 4 shall, as between the Company and its
creditors, other than the holders of Senior Indebtedness and the
Holder, be deemed to be a payment by the Company to or on account
of the Senior Indebtedness.

         4.5  Undertaking. By its acceptance of this Note, the Holder
agrees to execute and deliver such documents as may be reasonably
requested from time to time by the Company or the lender of any
Senior Indebtedness in order to implement the foregoing
provisions of this Section 4 and/or the Subordination Agreement.
It is expressly acknowledged and agreed by the Holder that with
respect to the Senior Debt evidenced by the Existing Credit
Facility and the Upfield Note, the subordination provisions
contained in the Subordination Agreement shall control and be
applicable to the parties thereto with regard to the Existing
Credit Facility and the Upfield Note.

     5.   Prepayment. This Note may not be prepaid prior to the date
that the principal amount of this Note becomes due and payable except
with the express written consen of Holders of more than one-half of
the face amount of all then outstanding Notes issued pursuant to the
Note Purchase Agreement.

     6.   Conversion.

          6.1  Conversion Shares.  The number of shares of Common Stock
into which this Note may be converted ("Conversion Shares") shall
be determined by dividing the aggregate principal amount together
with all accrued interest to the date of conversion by the
Conversion Price (as defined below) in effect at the time of such
conversion. The Conversion Price shall be equal to $0.60, subject
to adjustment pursuant to Section 7 below.

               6.1.1     Voluntary Conversion. Any Holder of this Note has the
right, at the Holder's option, at any time after July 19, 2003
but prior to payment in full of the principal balance of this
Note, to convert this Note, in accordance with the provisions
hereof, in whole or in part, into fully paid and nonassessable
shares of common stock of the Company (the "Common Stock").

                               -5-

<PAGE>

               6.1.2     Right of Conversion Upon Default.  In addition to the
right of any Holder to convert such Holder's Note pursuant to the
provisions in Section 6.1.1 above, any Holder of this Note has
the right, at the Holder's option, at any time prior to July 19,
2003, but prior to payment in full of the principal balance of
the Note, upon an Event of Default, to convert this Note in
accordance with the provisions hereof into fully paid and
nonasssessable shares of Common Stock.

          6.2  Automatic Conversion Event Provisions.

               6.2.1     Notice of Automatic Conversion Event.  The Company
shall provide written notice to each Holder at least twenty (20)
calendar days prior to the consummation of an Automatic
Conversion Event.

              6.2.2     Pay-Off Election.  Upon receipt of the notice set forth
in Section 6.2.1 above, Holders possessing more than one-half of
the face amount of all then outstanding Notes issued pursuant to
the Note Purchase Agreement may, at their option (but without
obligation), submit a written notice (the "Pay-Off Election") to
be received by the Company at least three (3) calendar days prior
to the consummation of the Automatic Conversion Event, that the
Holders voluntarily elect to accelerate the maturity of the Notes
(including those Notes not held by Holders participating in such
notice) on and as of the effective date of the Automatic
Conversion Event, whereupon, subject to the Subordination
Agreement, the entire principal and unpaid accrued interest
hereon shall be due and payable. Upon exercise in accordance with
a Pay-Off Election provided for herein, such Holder shall
surrender such Holder's Note, duly endorsed, at the office of the
Company against receipt of full payment of all principal of and
unpaid interest thereon.

          6.2.3     Automatic Conversion.  To the extent the Holders do not
timely submit the Pay-Off Election, the entire principal amount
of this Note and any unpaid accrued interest shall be
automatically converted into shares of Common Stock at the
Conversion Price at the time in effect immediately prior to the
applicable Automatic Conversion Event.

          6.3  Conversion Procedure.

               6.3.1     Notice of Conversion Pursuant to Section 6.1.1 and
6.1.2. Before the Holder shall be entitled to convert this Note
into shares of Common Stock pursuant to Section 6.1.1 or 6.1.2
hereof, it shall surrender this Note, duly endorsed, at the
office of the Company and shall give written notice by mail,
postage prepaid, to the Company at its principal corporate
office, of the election to convert the same pursuant to Section
6.1.1 or 6.1.2, as applicable, and shall state therein the name
or names in which the certificate or certificates for shares of
Common Stock are to be issued.  At its expense, the Company
shall, as soon as practicable thereafter, issue and deliver to
such Holder at such principal office a certificate or
certificates for the number of shares of such Common Stock to
which the Holder shall be entitled upon such conversion (bearing
such legends as are required by the Note Purchase Agreement and
applicable state and federal securities laws in the opinion of
counsel to the Company), together with a check payable to the
Holder for any cash amounts payable for fractional shares as
provided in Section 6.4 below.  Such conversion shall be deemed
to have been made immediately prior to the close of business on
the date of such surrender of this Note, and the person or
persons entitled to receive the shares of Common Stock issuable
upon such conversion shall be treated for all purposes as the
record holder or holders of such shares of Common Stock as of
such date.

                               -6-

<PAGE>

               6.3.2     Notice of Conversion Pursuant to Section 6.2.3.
If this Note is automatically converted pursuant to the provisions of
Section 6.2.3 above, written notice shall be delivered to the
Holder of this Note at the address last shown on the records of
the Company for the Holder or given by the Holder to the Company
for the purpose of notice or, if no such address appears or is
given, at the place where the principal executive office of the
Company is located, notifying the Holder of the conversion to be
effected, specifying the Conversion Price, the principal amount
of the Note to be converted, the amount of accrued interest to be
converted, the date on which such conversion will occur and
calling upon such Holder to surrender to the Company, in the
manner and at the place designated, the Note. Upon any such
automatic conversion, the Holder shall surrender this Note, duly
endorsed, at the principal office of the Company. At its expense,
the Company shall, as soon as practicable thereafter, issue and
deliver to such Holder at such principal office a certificate or
certificates for the number of shares of such Common Stock to
which the Holder shall be entitled upon such conversion (bearing
such legends as are required by the Note Purchase Agreement and
applicable state and federal securities laws in the opinion of
counsel to the Company), together with any other securities and
property to which the Holder is entitled upon such conversion
under the terms of this Note, including a check payable to the
Holder for any cash amounts payable for fractional shares as
provided in Section 6.4 below.

          6.4  Fractional Shares and Effect of Conversion. No fractional
shares of Common Stock shall be issued upon conversion of this
Note. In lieu of the Company issuing any fractional shares to the
Holder upon the conversion of this Note, the Company shall pay to
the Holder the amount of outstanding principal that is not so
converted, after giving effect to the maximum number of whole
shares into which this note may be converted at the time of any
conversion thereof. Upon conversion of this Note, the Company
shall be forever released from all its obligations and
liabilities under this Note, except that the Company shall be
obligated to pay the Holder, within ten (10) days after the date
of such conversion, any interest accrued and unpaid or
unconverted to and including the date of such conversion, and no
more.

     7.   Conversion Price Adjustments.

          7.1  Adjustments for Stock Splits and Subdivisions. In the event
the Company should at any time or from time to time after the
date of issuance hereof fix a record date for a split or
subdivision of the outstanding shares of Common Stock or the
determination of holders of Common Stock entitled to receive a
dividend or other distribution payable in additional shares of
Common Stock or other securities or rights convertible into, or
entitling the holder thereof to receive directly or indirectly,
additional shares of Common Stock (hereinafter referred to as
"Common Stock Equivalents") without payment of any consideration
by such holder for the additional shares of Common Stock or the
Common Stock Equivalents (including the additional shares of
Common Stock issuable upon conversion or exercise thereof), then,
as of such record date (or the date of such dividend
distribution, split or subdivision if no record date is fixed),
the Conversion Price of this Note shall be appropriately
decreased so that the number of shares of Common Stock issuable
upon conversion of this Note shall be increased in proportion to
such increase of outstanding shares.

                               -7-

<PAGE>

          7.2  Adjustments for Reverse Stock Splits. If the number of
shares of Common Stock outstanding at any time after the date
hereof is decreased by a combination of the outstanding shares of
Common Stock, then, following the record date of such
combination, the Conversion Price for this Note shall be
appropriately increased so that the number of shares of Common
Stock issuable on conversion hereof shall be decreased in
proportion to such decrease in outstanding shares.

          7.3  Notices of Record Date, etc. In the event of:

               7.3.1     any taking by the Company of a record of the holders
of any class of securities of the Company for the purpose of
determining the holders thereof who are entitled to receive any
dividend (other than a cash dividend payable out of earned
surplus at the same rate as that of the last such cash dividend
theretofore paid) or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock
of any class or any other securities or property, or to receive
any other right; or

               7.3.2     any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the
Company or any transfer of all or substantially all of the assets
of the Company to any other person or any consolidation or merger
involving the Company; or

              7.3.3     any voluntary or involuntary dissolution,
liquidation or winding up of the Company, the Company will mail to
the holder of this Note at least ten (10) days prior to the earliest
date specified therein, a notice specifying:

                    7.3.3.1   the date on which any such record is to be taken
for the  purpose  of  such dividend, distribution or right,  and  the
amount and character of such dividend, distribution or right; and

                    7.3.3.2   the date on which any such reorganization,
reclassification, transfer, consolidation, merger, dissolution,
liquidation or winding up is expected to become effective and the
record date for determining stockholders entitled to vote
thereon.

          7.4  Reservation of Stock Issuable Upon Conversion. The Company
shall at all times reserve and keep available out of its
authorized but unissued shares of Common Stock, solely for the
purpose of effecting the conversion of the Note, a number of its
shares of Common Stock as shall from time to time be sufficient
to effect the conversion of the Note; and if at any time the
number of authorized but unissued shares of Common Stock shall
not be sufficient to effect the conversion of the entire
outstanding principal amount of this Note, in addition to such
other remedies as shall be available to the holder of this Note,
the Company will use reasonable efforts to take such corporate
action as may, in the opinion of its counsel, be necessary to
increase its authorized but unissued shares of Common Stock to
such number of shares as shall be sufficient for such purposes.

                               -8-

<PAGE>

     8.   Assignment. Subject to the restrictions on transfer
described elsewhere herein, the rights and obligations of the
Company and the Holder of this Note shall be binding upon and
benefit the successors, assigns, heirs, administrators and
transferees of the parties.

     9.   Waiver and Amendment. Any provision of this Note may be
amended, waived or modified upon the written consent of the
Company and holders of more than one-half of the face amount of
all then outstanding Notes issued pursuant to the Note Purchase
Agreement.

     10.  Transfer of This Note or Securities Issuable on Conversion
Hereof. With respect to any offer, sale or other disposition of
this Note or securities into which such Note may be converted,
the Holder will give written notice to the Company prior thereto,
describing briefly the manner thereof, together with a written
opinion of such Holder's counsel, to the effect that such offer,
sale or other distribution may be effected without registration
or qualification (under any federal or state law then in effect).
Promptly upon receiving such written notice and reasonably
satisfactory opinion, if so requested, the Company, as promptly
as practicable, shall notify such Holder that such Holder may
sell or otherwise dispose of this Note or such securities, all in
accordance with the terms of the notice delivered to the Company.
If a determination has been made pursuant to this paragraph that
the opinion of counsel for the Holder is not reasonably
satisfactory to the Company, the Company shall so notify the
Holder promptly after such determination has been made. Each Note
thus transferred and each certificate representing the securities
thus transferred shall bear a legend as to the applicable
restrictions on transferability in order to ensure compliance
with the Securities Act, unless in the opinion of counsel for the
Company such legend is not required. The Company may issue stop
transfer instructions to its transfer agent in connection with
such restrictions. In addition, each certificate representing
shares of Common Stock received upon conversion hereof shall be
endorsed by the Company with a legend reading substantially as
follows:
          "The Shares evidenced hereby are subject to a
          Voting Agreement (a copy of which may be
          obtained upon written request from the
          issuer), and by accepting any interest in
          such shares the person accepting such
          interest shall be deemed to agree to and
          shall become bound by all the provisions of
          said Voting Agreement."

     11.  Notices. Any notice, request or other communication required
or permitted hereunder shall be in writing and shall be deemed to
have been duly given if personally delivered or if faxed with
confirmation of receipt by telephone or if mailed by registered
or certified mail, postage prepaid, at the respective addresses
of the parties as set forth herein. Any party hereto may by
notice so given change its address for future notice hereunder.
Notice shall conclusively be deemed to have been given when
personally delivered, faxed, or when deposited in the mail.

     12.  No Stockholder Rights. Nothing contained in this Note shall
be construed as conferring upon the Holder or any other person
the right to vote or to consent or to receive notice as a
stockholder in respect of meetings of stockholders for the
election of directors of the Company or any other matters or any
rights whatsoever as a stockholder of the Company; and no
dividends shall be payable or accrued in respect of this Note or
the interest represented hereby or the shares of Common stock to
be obtained upon conversion hereunder until, and only to the
extent that, this Note shall have been converted.

                               -9-

<PAGE>

     13.  Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware,
excluding that body of law relating to conflict of laws.

     14.  Heading; References. All headings used herein are used for
convenience only and shall not be used to construe or interpret
this Note. Except where otherwise indicated, all references
herein to Sections or Paragraphs refer to Sections and Paragraphs
hereof.
                    (Signature Page Follows)

                              -10-

<PAGE>

     IN WITNESS WHEREOF, the Company has caused this Note to be
issued this 19th day of July, 2002.

                              TEMTEX INDUSTRIES, INC.

                              By:  /s/  E.R. BUFORD
                                 ---------------------------
                                   President

Name of Holder:
               -------------------------

Address:
        --------------------------------

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

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

                              -11-

<PAGE>

                      NOTICE OF CONVERSION

           (To Be Signed Only Upon Conversion of Note)

TO TEMTEX INDUSTRIES, INC.

     The undersigned, the holder of the foregoing Note, hereby
surrenders such Note for conversion into _______ shares of Common
Stock of TEMTEX INDUSTRIES, INC., to the extent of $____________
unpaid principal amount of and interest on such Note, and
requests that the certificates for such shares be issued in the
name of, and delivered to, _____________, whose address
is_______________________.

Dated:

                              (Signature must conform in all
                              respects to name of holder as
                              specified on the face of the Note)

                                             (Address)THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAWS (COLLECTIVELY, THE "ACTS").
THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE ACTS OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY THAT REGISTRATION UNDER SUCH ACTS IS
NOT REQUIRED OR IF THE COMPANY IS OTHERWISE SATISFIED THAT
REGISTRATION UNDER SUCH ACTS IS NOT REQUIRED.

Warrant No. _____                                 July  ___, 2002

                     TEMTEX INDUSTRIES, INC.

                WARRANT TO PURCHASE COMMON STOCK

     This certifies that, for value received,
____________________________ or his affiliates or assigns (the
"Holder") is entitled, on the terms and subject to the conditions
set forth below, to purchase from Temtex Industries, Inc., a
Delaware corporation (the "Company"), _________________ (_______)
shares of the common stock (the "Common Stock") of the Company
(the "Warrant Shares"), as constituted on the date hereof (the
"Warrant Issue Date"), upon surrender hereof, at the principal
office of the Company referred to below, with the notice of
exercise form attached hereto duly executed, and simultaneous
payment therefor in lawful money of the United States or
otherwise as hereinafter provided, at the Exercise Price as set
forth in Section 2 below.  The number, character and Exercise
Price of such shares of Common Stock are subject to adjustment as
provided below.  The term "Warrant" as used herein shall include
this Warrant and any warrants delivered in substitution or
exchange herefor or therefor as provided herein.

     This  Warrant  is  one  of several Warrants  issued  by  the
Company  in connection with and in consideration for the Holder's
execution of a Note Purchase Agreement, dated July 19,  2002,  by
and  among  the  Company  and certain  investors,  including  the
Holder.

     1.   Term of Warrant.

          (a)  On the terms and conditions set forth herein, this
Warrant shall be exercisable in whole or in part from and after
the date hereof until sixty (60) months after the date hereof
(the date of expiration of the Warrant being referred to as the
"Expiration Date").

          (b)  In the event that the Expiration Date of this
Warrant falls on a day which is not a Business Day, the
Expiration Date shall be adjusted to the Business Day immediately
following such Expiration Date.  As used herein, the term
"Business Day" means each day other than a Saturday, Sunday or
other day on which banks in the location of the principal office
of the Company or the Holder are legally authorized to close.

                               -1-

<PAGE>

     2.   Exercise Price.  The price at which this Warrant may be
exercised shall be Sixty Cents ($0.60) per share of Common Stock,
as adjusted from time to time pursuant to Section 12 hereof (the
"Exercise Price").

     3.   Exercise of Warrant.

          (a)  The purchase rights represented by this Warrant
are exercisable by the Holder in whole or in part, at any time
and from time to time, commencing with the date hereof, by the
surrender of this Warrant and the Notice of Exercise and the
Investment Representation Statement (attached hereto as
Attachments 1 and 3, respectively), all duly completed and
executed by the Holder, at the office of the Company at the
address set forth in Section 8 (or such other office or agency of
the Company as it may designate by notice in writing to the
Holder at the address of the Holder appearing on the books of the
Company), upon payment in cash or by wire transfer or check
payable to the Company.

          (b)  This Warrant shall be deemed to have been
exercised immediately prior to the close of business on the date
of its surrender for exercise as provided above, and the person
entitled to receive the shares of Common Stock issuable upon such
exercise shall be treated for all purposes as the holder of
record of such shares as of the close of business on such date.
As promptly as practicable on or after such date and in any event
within five (5) Business Days thereafter, the Company, at its
expense, shall issue and deliver to the person or persons
entitled to receive the same a certificate or certificates for
the number of shares issuable upon such exercise.  In the event
that this Warrant is exercised in part, the Company, at its
expense, will execute and deliver a new Warrant of like tenor
exercisable for the remaining number of shares for which this
Warrant may then be exercised following such partial exercise.

          (c)  Notwithstanding the payment provisions set forth
in subsection (a) above, the Holder may elect to receive Warrant
Shares equal to the value (as determined below) of this Warrant
by surrender of this Warrant together with the Notice of Net
Exercise and the Investment Representation Statement (attached
hereto as Attachments 2 and 3) at the principal office of the
Company, in which event the Company shall issue to the Holder the
number of Warrant Shares determined by use of the following
formula:

               X = Y(A-B)
              ----------
                  A

              Where:    X =  the number of Warrant Shares
                                   to be issued to the Holder

                        Y =  the number of Warrant Shares
                             purchasable under the Warrant or, if only a
                             portion of the Warrant is being exercised,
                             the portion of the Warrant being canceled (at
                             the date of such calculation).

                        A =  the "fair market value" (as defined
                             below) of one (1) share of the Company's
                             Common Stock (on the date of such
                             calculation).

                        B =  the Exercise Price (as adjusted to
                             the date of such calculation).

                               -2-

<PAGE>

For purposes of this Section 3, the "fair market value" of a
share of the Company's Common Stock as of a particular date shall
mean:

          If the Company is a public company whose Common Stock
is traded on a nationally recognized exchange (such as the NYSE,
AMEX, NASDAQ National or SmallCap Markets or OTCBB), then the
"fair market value" of a share of the Company's Common Stock
shall be the average trading price of the Common Stock for a five
(5) day period ending the date immediately preceding the delivery
of any Notice of Exercise.  In the event the Company's Common
Stock is not traded on any such nationally recognized exchange,
then the "net exercise" provisions of this Section 3(c) shall not
be available for use by the Holder.

     4.   Fractional Shares or Scrip.  No fractional shares or
scrip will be issued in connection with any exercise of this
Warrant.  In lieu of any fractional shares to which Holder would
otherwise be entitled, the Company shall make a cash payment
equal to the fair market value and, if none, the Exercise Price,
multiplied by such fraction.

     5.   Replacement of Warrant.  On receipt of evidence
reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant and, in the case of
loss, theft or destruction, on delivery of an indemnity agreement
reasonably satisfactory in form and substance to the Company or,
in the case of mutilation, on surrender and cancellation of this
Warrant, the Company at its expense shall execute and deliver, in
lieu of this Warrant, a new warrant of like tenor and amount.

     6.   No Rights as Stockholder.  The Holder shall not be
entitled to vote or receive dividends pursuant to this Warrant or
be deemed the holder of Common Stock or any other securities of
the Company pursuant to this Warrant, nor shall anything
contained herein be construed to confer upon the Holder, as such,
any of the rights of a stockholder of the Company or any right to
vote for the election of directors or upon any matter submitted
to stockholders at any meeting thereof, or to give or withhold
consent to any Company action (whether upon any recapitalization,
issuance of stock, reclassification of stock, change of par
value, or change of stock to no par value, consolidation, merger,
share exchange reorganization, conveyance, or otherwise) or to
receive notice of meetings, or to receive dividends or
subscription rights or otherwise until the Warrant shall have
been exercised as provided herein.

     7.   Taxes and Expense.  Issuance of certificates for shares
of Common Stock upon the exercise of this Warrant shall be made
without charge to the Holder for any issue or transfer tax or
other incidental expense in respect of the issuance of such
certificate, all of which taxes and expenses shall be paid by the
Company, and such certificates shall be issued in the name of the
Holder.

                               -3-

<PAGE>

     8.   Transfer of Warrant.

          (a)  Warrant Register.  The Company will maintain a
register (the "Warrant Register") containing the names and
addresses of the Holder or Holders.  Any Holder of this Warrant
or any portion thereof may change his address as shown on the
Warrant Register by written notice to the Company requesting such
change.  Any notice or written communication required or
permitted to be given to the Holder may be delivered or given by
personal delivery, facsimile or certified mail, return receipt
requested, to such Holder as shown on the Warrant Register and at
the address shown on the Warrant Register.  Until this Warrant is
transferred on the Warrant Register of the Company, the Company
may treat the Holder as shown on the Warrant Register as the
absolute owner of this Warrant for all purposes, notwithstanding
any notice to the contrary.

          (b)  Warrant Agent.  The Company may, by written notice
to the Holder, appoint an agent for the purpose of maintaining
the Warrant Register referred to in Section 8(a) above, issuing
the Common Stock or other securities then issuable upon the
exercise of this Warrant, exchanging this Warrant, replacing this
Warrant, or any or all of the foregoing.  Thereafter, any such
registration, issuance, exchange, or replacement, as the case may
be, shall be made at the office of such agent.

          (c)  Transferability.  This Warrant may be transferred
or assigned in whole or in part subject to compliance with
applicable federal and state securities laws by the transferor
and the transferee (including the delivery of investment
representation letters and legal opinions reasonably satisfactory
to the Company) by the holder of record in person or by duly
authorized attorney on the books of the Company upon surrender of
this Warrant, with an assignment duly executed and endorsed, to
the Company.

          (d)  Exchange of Warrant.  On surrender of this Warrant
for exchange, properly endorsed on the Assignment Form annexed
hereto as Attachment 4 and subject to the provisions of this
Warrant with respect to compliance with the Securities Act and
with the limitations on assignments and transfers contained in
this Section 8, the Company at its expense shall issue to or on
the order of the Holder a new warrant or warrants of like tenor,
in the name of the Holder or as the Holder (on payment by the
Holder of any applicable transfer taxes) may direct, for the
number of shares issuable upon exercise hereof.

          (e)  Compliance with Securities Laws.  (i)  The Holder
of this Warrant, by acceptance hereof, acknowledges that this
Warrant and the shares of Common Stock to be issued upon exercise
hereof are being acquired solely for the Holder's own account and
not as a nominee for any other party, and for investment, and
that the Holder will not offer, sell or otherwise dispose of this
Warrant or any shares of Common Stock to be issued upon exercise
hereof except under circumstances that will not result in a
violation of the Securities Act or any state securities laws.

                               -4-

<PAGE>

                (ii)  All  shares  of Common  Stock  issued  upon
exercise  hereof  (unless registered under  the  Securities  Act)
shall be stamped or imprinted with a legend in substantially  the
following form:

      THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
      NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
      1933, AS AMENDED, OR ANY STATE SECURITIES LAWS
      (COLLECTIVELY, THE "ACTS").  THE SECURITIES HAVE
      BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED,
      SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR
      HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
      REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
      ACTS OR AN OPINION OF COUNSEL REASONABLY
      SATISFACTORY TO THE CORPORATION THAT REGISTRATION
      UNDER SUCH ACTS IS NOT REQUIRED OR IF THE COMPANY IS
      OTHERWISE SATISFIED THAT REGISTRATION UNDER SUCH
      ACTS IS NOT REQUIRED.

     9.   Representations and Warranties; Covenants.

          (a)  The Company shall at all times during the term
this Warrant is exercisable reserve and keep available from its
authorized but unissued shares of Common Stock a sufficient
number of shares to provide for the issuance of Common Stock upon
the exercise in whole or in part of this Warrant.  The Company
covenants that all shares of Common Stock that may be issued upon
the exercise of this Warrant, upon such exercise and payment of
the Exercise Price, all as set forth herein, will be duly and
validly authorized and issued, fully paid and nonassessable, will
be free from all taxes, liens and charges in respect of the
issuance thereof (other than liens or charges created by or
imposed upon the person or persons receiving the Common Stock)
and will be issued in compliance with all applicable federal and
state securities laws.

          (b)  The issuance of this Warrant shall constitute full
authority to the Company's officers who are charged with the duty
of executing stock certificates to execute and issue the
necessary certificates for the shares of Common Stock issuable
upon exercise of this Warrant.

          (c)  The Company has all requisite legal and corporate
power to execute and deliver this Warrant, to sell and issue the
Common Stock hereunder, and to carry out and perform its
obligations under the terms of this Warrant.

          (d)  All corporate action on the part of the Company,
its directors and shareholders necessary for the authorization,
execution, delivery and performance of this Warrant by the
Company, the authorization, sale, issuance and delivery of the
Common Stock and the performance of the Company's obligations
hereunder has been taken.

          (e)  The issuance of the Common Stock will not be
subject to any preemptive rights, rights of first refusal or
similar rights.

     10.  Notices.

          (a)  In case:

               (i)  the Company shall take a record of the
holders of its Common Stock (or other stock or securities at the
time receivable upon the exercise of this Warrant) for the
purpose of entitling them to receive any dividend or other
distribution, or any right to subscribe for or purchase any
shares of stock of any class or any other securities, or to
receive any other right, or

                               -5-

<PAGE>

               (ii) of any capital reorganization of the Company,
any stock split or subdivision, or reverse stock split or
combination, or any similar event involving the Common Stock, any
reclassification of the capital stock of the Company, any share
exchange reorganization, consolidation or merger of the Company
with or into another corporation, or any sale, transfer or other
conveyance of all or substantially all of the assets or stock of
the Company to another corporation, or

               (iii  of any voluntary or involuntary
dissolution, liquidation or winding-up of the Company,

               then, and in each such case, the Company will
deliver or cause to be delivered to the Holder or Holders a
notice specifying, as the case may be, (A) the date on which a
record is to be taken for the purpose of such dividend,
distribution or right, and stating the amount and character of
such dividend, distribution or right, or (B) the date on which a
record is to be taken for determining stockholders entitled to
vote upon such reorganization, reclassification, consolidation,
merger, share exchange reorganization, conveyance, dissolution,
liquidation or winding-up is to take place, and the time, if any
is to be fixed, as of which the holders of record of Common Stock
(or such stock or securities at the time receivable upon the
exercise of this Warrant) shall be entitled to exchange their
shares of Common Stock (or such other stock or securities) for
securities or other property deliverable upon such
reorganization, reclassification, consolidation, share exchange
reorganization, merger, conveyance, dissolution, liquidation or
winding-up.  Such notice shall be delivered at least twenty (20)
days prior to the date therein specified.

     (b)  Except as otherwise permitted herein, whenever this
Agreement requires or permits any consent, approval, notice,
request, or demand from one party to another, the consent,
approval, notice, request, or demand must be in writing to be
effective and shall be deemed to have been given or made when
personally delivered, or, if mailed, five (5) days after being
sent by registered or certified mail, return receipt requested
and postage prepaid, or if transmitted by facsimile machine, on
the day that such notice is received.  The address of each party
for the purposes hereof is as follows:

          Holder:        __________________________
                         __________________________
                         __________________________
                         Phone:    _________________
                         Fax: _________________

          Company:       Temtex Industries, Inc.
                         5400 LBJ Freeway, Suite 1375
                         Phone:    (972) 726-7175
                         Fax: (972) 726-0315
                         Attn:  General Counsel

Notice given by personal delivery, courier service or mail shall
be effective upon actual receipt.  Notice given by telecopier
shall be confirmed by appropriate answer-back and shall be
effective upon actual receipt if received during the recipient's
normal business hours, or at the beginning of the recipient's
next business day after receipt if not received during the
recipient's normal business hours.  Any party may change any
address to which notice is to be given to it by giving notice as
provided above of such change of address.

                               -6-

<PAGE>

     11.  Waiver.

          (a)  This Warrant and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of such change,
waiver, discharge or termination is sought.

          (b)  No waivers of, or exceptions to, any term,
condition or provision of this Warrant, in any one or more
instances, shall be deemed to be, or construed as, a further or
continuing waiver of any such term, condition or provision.

     12.  Adjustments.  The Exercise Price and the number of
shares purchasable hereunder shall be subject to adjustment from
time to time as follows:

          (a)  Subdivisions, Combinations and Other Issuances.
If the Company shall at any time prior to the expiration of this
Warrant subdivide its outstanding capital stock, by split-up or
otherwise, or combine its outstanding capital stock, or issue
additional shares of its capital stock as a dividend with respect
to any shares of capital stock, the number of Warrant Shares
issuable upon the exercise of this Warrant shall forthwith be
proportionately increased in the case of a subdivision or stock
dividend, or proportionately decreased in the case of a
combination.  Appropriate adjustments shall also be made to the
Exercise Price, but the aggregate purchase price payable for the
total amount of Warrant Shares purchasable under this Warrant (as
adjusted) shall remain the same.  Any adjustment under this
Section 12(a) shall become effective at the close of business on
the date the subdivision or combination becomes effective, or as
of the record date of such dividend, or in the event that no
record date is fixed, upon the making of such dividend.

          (b)  Reclassification, Exchange and Substitution.  If
the Warrant Shares issuable upon exercise of this Warrant shall
be changed into a different form or class of securities of the
Company, whether by capital reorganization, reclassification,
exchange, or otherwise (other than a subdivision or combination
of shares provided for above), the Holder of this Warrant shall,
on its exercise, be entitled to purchase, in lieu of the Warrant
Shares that the Holder would have become entitled to purchase but
for such change, an amount of such other securities equivalent to
the amount that the Holder would have received had this Warrant
been exercised immediately before that change, all subject to
further adjustment as provided in paragraphs (a) and (c) hereof.

          (c)  Reorganizations, Mergers, Consolidations or Sale
of Assets.  If at any time there shall be a capital
reorganization of the Company's outstanding equity securities
(other than a combination, reclassification, exchange, or
subdivision of shares provided for elsewhere in this Warrant) or
merger, share exchange reorganization or consolidation of the
Company with or into another corporation, as a part of such
capital reorganization, merger, share exchange reorganization or
consolidation, lawful provision shall be made so that the Holder
of this Warrant shall thereafter be entitled to receive upon
exercise of this Warrant, upon payment of the Exercise Price then
in effect, the number of shares of stock or other securities or
property of the Company, or of the successor corporation
resulting from such merger, share exchange reorganization or
consolidation, to which a holder of the Warrant Shares issuable
upon exercise of this Warrant would have been entitled in such
capital reorganization, merger, share exchange reorganization or
consolidation if this Warrant had been exercised immediately
prior thereto.  In any such case, appropriate adjustment (as
determined reasonably and in good faith by the Company's Board of
Directors) shall be made in the application of the provisions of
this Warrant with respect to the rights and interests of the
Holder of this Warrant after the capital reorganization, merger,
share exchange reorganization or consolidation such that the
provisions of this Warrant (including adjustment of the Exercise
Price then in effect and number of shares purchasable upon
exercise of this Warrant) shall be applicable after that event,
as near as reasonably may be, in relation to any shares or other
property deliverable after that event upon exercise of this
Warrant.  The provisions of this paragraph shall similarly apply
to successive capital reorganizations, mergers, share exchange
reorganizations or consolidations.

                               -7-

<PAGE>

           (d) Certificate as to Adjustments.  In case of any
adjustment in the Exercise Price or number and type of securities
issuable on the exercise of this Warrant, the Company will
promptly give written notice thereof to the Holder in the form of
a certificate, certified and confirmed by an officer of the
Company, setting forth such adjustment and showing in reasonable
detail the facts upon which adjustment is based.  Notwithstanding
anything to the contrary herein, in no event shall the Exercise
Price be adjusted to be below the amount of the par value of the
Common Stock.

          (e)  No Change Necessary.  The form of this Warrant
need not be changed because of any adjustment in the amount of
Warrant Shares issuable upon its exercise.  A Warrant issued
after any adjustment upon any partial exercise or in replacement
may continue to express the same amount of Warrant Shares
(appropriately reduced in the case of partial exercise) as are
stated on the face of this Warrant as initially issued, and that
number of shares shall be considered to have been so changed at
the close of business on the date of adjustment.

     13.  Governing Law.  This Warrant shall be governed by,
construed, and enforced in accordance with the internal laws of
the State of Delaware without regard to its conflicts of law
principles.

                               -8-

<PAGE>

     IN WITNESS WHEREOF, Temtex Industries, Inc., has caused this
Warrant to be executed by its officers thereunto duly authorized.

Dated: July 19, 2002

                              TEMTEX INDUSTRIES, INC.

                              By:  ______________________________
                              Name:______________________________
                              Title:_____________________________

                              -10-

<PAGE>

                          ATTACHMENT 1

                       NOTICE OF EXERCISE

TO:  TEMTEX INDUSTRIES, INC.

     (1)  The undersigned hereby elects to purchase ________
shares of Common Stock of Temtex Industries, Inc. pursuant to the
terms of the attached Warrant, and tenders herewith payment of
the purchase price for such shares in full.

     (2)  Please issue a certificate or certificates representing
said shares of Common Stock in the name of the undersigned or in
such other name as is specified below:

                                     ___________________________
                                             (Name)
                                     ___________________________
                                     ___________________________
                                             (Address)

Attachment 1

<PAGE>

                          ATTACHMENT 2

                     NOTICE OF NET EXERCISE

TO:  TEMTEX INDUSTRIES, INC.

     (1)  The undersigned hereby elects to convert the right to
acquire shares of the Common Stock of Temtex Industries, Inc.
(the "Company") pursuant to the terms of the attached Warrant,
into ____________, duly and validly authorized and issued, fully-
paid and non-assessable shares of the Company without further
payment.  The fair market value used for purposes of this
calculation was ____________ (determined in accordance with the
procedures specified in Section 3(c)).

     (2)  Please issue a certificate or certificates representing
said shares of Warrant Stock in the name of the undersigned or in
such other name as is specified below:

                               (Name)

                               (Address)

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

(Date)                         (Name of Warrant Holder)

                               By:

                               Title:
                                  (Name of purchaser, title and
                                   signature of authorized
                                   person)

Attachment 2

<PAGE>

                          ATTACHMENT 3

               INVESTMENT REPRESENTATION STATEMENT
               -----------------------------------

                    Shares of Common Stock of
                     TEMTEX INDUSTRIES, INC.

     In connection with the purchase of the above-listed
securities, the undersigned hereby represents to Temtex
Industries, Inc.  (the "Company") as follows:

     The securities to be received upon the exercise of the
Warrant (the "Securities") will be acquired for investment for
its own account, not as a nominee or agent, and not with a view
to the sale or distribution of any part thereof, and the
undersigned has no present intention of selling, granting
participation in or otherwise distributing the same, in any
transaction which would be in violation of federal or state
securities laws, but subject, nevertheless, to any requirement of
law that the disposition of its property shall at all times be
within its control.  By executing this Statement, the undersigned
further represents that it does not have any contract,
undertaking, agreement or arrangement with any person to sell,
transfer, or grant participations to such person or to any third
person, with respect to any Securities issuable upon exercise of
the Warrant.

     The undersigned understands that the Securities issuable
upon exercise of the Warrant at the time of issuance may not be
registered under the Securities Act of 1933, as amended (the
"Act"), and applicable state securities laws, on the ground that
the issuance of such securities is exempt pursuant to
Section 4(2) of the Act and state law exemptions relating to
offers and sales not by means of a public offering, and that the
Company's reliance on such exemptions is predicated on the
undersigned's representations set forth herein.  The undersigned
represents that it is an "accredited investor" within the meaning
of the Securities and Exchange Commission ("SEC") Rule 501 of
Regulation D under the Act, as presently in effect.

     The undersigned agrees that in no event will it make a
disposition of any Securities acquired upon the exercise of the
Warrant unless and until (i) it shall have notified the Company
of the proposed disposition, and (ii) it shall have furnished the
Company with an opinion of counsel satisfactory to the Company
and Company's counsel to the effect that (A) appropriate action
necessary for compliance with the Act and any applicable state
securities laws has been taken or an exemption from the
registration requirements of the Act and such laws is available,
and (B) the proposed transfer will not violate any of said laws.

     The undersigned acknowledges that an investment in the
Company is highly speculative and represents that it is able to
fend for itself in the transactions contemplated by this
Statement, has such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and
risks of its investments, and has the ability to bear the
economic risks (including the risk of a total loss) of its
investment.  The undersigned represents that it has had the
opportunity to ask questions of the Company concerning the
Company's business and assets and to obtain any additional
information which it considered necessary to verify the accuracy
of or to amplify the Company's disclosures, and has had all
questions which have been asked by it satisfactorily answered by
the Company.

Attachment 3 - Page 1

<PAGE>

     The undersigned acknowledges that the Securities issuable
upon exercise of the Warrant must be held indefinitely unless
subsequently registered under the Act or an exemption from such
registration is available.  The undersigned is aware of the
provisions of Rule 144 promulgated under the Act which permit
limited resale of shares purchased in a private placement subject
to the satisfaction of certain conditions, including, among other
things, the existence of a public market for the shares, the
availability of certain current public information about the
Company, the resale occurring not less than one year after a
party has purchased and paid for the security to be sold, the
sale being through a "broker's transaction" or in transactions
directly with a "market makers" (as provided by Rule 144(f)) and
the number of shares being sold during any three-month period not
exceeding specified limitations.

Dated: _________________

                                ___________________________
                                 (Typed or Printed Name)

                                By:________________________
                                  (Signature)

                                   ________________________
                                  (Title)

Attachment 3 - Page 2

<PAGE>

                          ATTACHMENT 4

                         ASSIGNMENT FORM

     FOR VALUE RECEIVED, the undersigned registered owner of this
Warrant hereby sells, assigns and transfers unto the Assignee
named below all of the rights of the undersigned under the within
Warrant, with respect to the number of shares of Common Stock set
forth below:

  Name of Assignee          Address
--------------------  --------------------

     and does hereby irrevocably constitute and appoint Attorney
_____________ to make such transfer on the books of Temtex
Industries, Inc. maintained for the purpose, with full power of
substitution in the premises.

Dated:

                                   ____________________________
                                   Signature of Holder

Signed in the presence of:

___________________________

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