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EXHIBIT 4.1    
  


    STEINWAY MUSICAL INSTRUMENTS, INC.  


(as Issuer) 


THE SELMER COMPANY, INC.

EMERSON MUSICAL INSTRUMENTS, INC.

THE STEINWAY PIANO COMPANY, INC.

STEINWAY, INC.

THE SMI TRUST

S&B RETAIL, INC.

BOSTON PIANO COMPANY, INC.

THE O.S. KELLY CORPORATION

THE O.S. KELLY COMPANY

UNITED MUSICAL INSTRUMENTS HOLDINGS, INC.

UNITED MUSICAL INSTRUMENTS USA, INC.


(each
a Guarantor) 


83/4% Senior Notes due 2011




INDENTURE  


 Dated as of April 19, 2001




FIRSTAR BANK, N.A.


(as
Trustee) 





 
 
  TABLE OF CONTENTS    
  



	 
	 	 
	 	Page

	ARTICLE I: DEFINITIONS AND INCORPORATION BY REFERENCE	 	2
	 	SECTION 1.1	 	DEFINITIONS	 	2
	 	SECTION 1.2	 	OTHER DEFINITIONS	 	25
	 	SECTION 1.3	 	INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT	 	25
	 	SECTION 1.4	 	RULES OF CONSTRUCTION	 	26
	
 ARTICLE II: THE NOTES	
 	

26
	 	SECTION 2.1	 	FORM AND DATING	 	26
	 	SECTION 2.2	 	EXECUTION AND AUTHENTICATION	 	27
	 	SECTION 2.3	 	REGISTRAR, PAYING AGENT AND DEPOSITARY	 	27
	 	SECTION 2.4	 	PAYING AGENT TO HOLD MONEY IN TRUST	 	28
	 	SECTION 2.5	 	HOLDER LISTS	 	28
	 	SECTION 2.6	 	TRANSFER AND EXCHANGE	 	28
	 	SECTION 2.7	 	REPLACEMENT NOTES	 	43
	 	SECTION 2.8	 	OUTSTANDING NOTES	 	43
	 	SECTION 2.9	 	TREASURY NOTES	 	43
	 	SECTION 2.10	 	TEMPORARY NOTES	 	44
	 	SECTION 2.11	 	CANCELLATION	 	44
	 	SECTION 2.12	 	DEFAULTED INTEREST	 	44
	 	SECTION 2.13	 	CUSIP NUMBERS	 	45
	 	SECTION 2.14	 	ISSUANCE OF ADDITIONAL NOTES	 	45
	
 ARTICLE III: REDEMPTION	
 	

46
	 	SECTION 3.1	 	NOTICES TO TRUSTEE	 	46
	 	SECTION 3.2	 	SELECTION OF NOTES TO BE REDEEMED	 	46
	 	SECTION 3.3	 	NOTICE OF REDEMPTION	 	46
	 	SECTION 3.4	 	EFFECT OF NOTICE OF REDEMPTION	 	47
	 	SECTION 3.5	 	DEPOSIT OF REDEMPTION PRICE	 	47
	 	SECTION 3.6	 	NOTES REDEEMED IN PART	 	48
	 	SECTION 3.7	 	OPTIONAL REDEMPTION	 	48
	 	SECTION 3.8	 	NO MANDATORY REDEMPTION	 	49



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 ARTICLE IV: COVENANTS	
 	

49
	 	SECTION 4.1	 	PAYMENT OF NOTES	 	49
	 	SECTION 4.2	 	MAINTENANCE OF OFFICE OR AGENCY	 	49
	 	SECTION 4.3	 	SEC REPORTS AND REPORTS TO HOLDERS	 	50
	 	SECTION 4.4	 	COMPLIANCE CERTIFICATE	 	51
	 	SECTION 4.5	 	TAXES	 	51
	 	SECTION 4.6	 	STAY, EXTENSION AND USURY LAWS	 	51
	 	SECTION 4.7	 	LIMITATION ON INCURRENCE OF ADDITIONAL INDEBTEDNESS AND DISQUALIFIED CAPITAL STOCK	 	52
	 	SECTION 4.8	 	LIMITATION ON LIENS	 	53
	 	SECTION 4.9	 	LIMITATIONS ON RESTRICTED PAYMENTS	 	54
	 	SECTION 4.10	 	LIMITATION ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES	 	55
	 	SECTION 4.11	 	LIMITATION ON LINES OF BUSINESS	 	56
	 	SECTION 4.12	 	LIMITATION ON TRANSACTIONS WITH AFFILIATES	 	56
	 	SECTION 4.13	 	LIMITATION ON SALE OF ASSETS AND SUBSIDIARY STOCK	 	56
	 	SECTION 4.14	 	REPURCHASE OF NOTES AT THE OPTION OF THE HOLDER UPON A CHANGE OF CONTROL	 	59
	 	SECTION 4.15	 	REPURCHASE OF NOTES AT THE OPTION OF THE HOLDER UPON THE FAILURE OF THE COMPANY TO REDEEM THE SELMER NOTES	 	60
	 	SECTION 4.16	 	SUBSIDIARY GUARANTORS	 	61
	 	SECTION 4.17	 	LIMITATION ON STATUS AS INVESTMENT COMPANY	 	61
	 	SECTION 4.18	 	MAINTENANCE OF PROPERTIES AND INSURANCE	 	62
	 	SECTION 4.19	 	CORPORATE EXISTENCE	 	62
	
 ARTICLE V: SUCCESSORS	
 	

63
	 	SECTION 5.1	 	MERGER, CONSOLIDATION OR SALE OF ASSETS	 	63
	 	SECTION 5.2	 	SUCCESSOR CORPORATION SUBSTITUTED	 	63



ii





 

	
 ARTICLE VI: DEFAULTS AND REMEDIES	
 	

63
	 	SECTION 6.1	 	EVENTS OF DEFAULT	 	64
	 	SECTION 6.2	 	ACCELERATION	 	65
	 	SECTION 6.3	 	OTHER REMEDIES	 	66
	 	SECTION 6.4	 	WAIVER OF PAST DEFAULTS	 	67
	 	SECTION 6.5	 	CONTROL BY MAJORITY	 	67
	 	SECTION 6.6	 	LIMITATION ON SUITS	 	68
	 	SECTION 6.7	 	RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT	 	68
	 	SECTION 6.8	 	COLLECTION SUIT BY TRUSTEE	 	68
	 	SECTION 6.9	 	TRUSTEE MAY FILE PROOFS OF CLAIM	 	69
	 	SECTION 6.10	 	PRIORITIES	 	69
	 	SECTION 6.11	 	UNDERTAKING FOR COSTS	 	70
	
 ARTICLE VII: TRUSTEE	
 	

70
	 	SECTION 7.1	 	DUTIES OF TRUSTEE	 	70
	 	SECTION 7.2	 	RIGHTS OF TRUSTEE	 	71
	 	SECTION 7.3	 	INDIVIDUAL RIGHTS OF TRUSTEE	 	72
	 	SECTION 7.4	 	TRUSTEE'S DISCLAIMER	 	72
	 	SECTION 7.5	 	NOTICE OF DEFAULTS	 	73
	 	SECTION 7.6	 	REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES	 	73
	 	SECTION 7.7	 	COMPENSATION AND INDEMNITY	 	73
	 	SECTION 7.8	 	REPLACEMENT OF TRUSTEE	 	74
	 	SECTION 7.9	 	SUCCESSOR TRUSTEE BY MERGER, ETC.	 	75
	 	SECTION 7.10	 	ELIGIBILITY; DISQUALIFICATION	 	75
	 	SECTION 7.11	 	PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY	 	76



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 ARTICLE VIII: LEGAL DEFEASANCE AND COVENANT DEFEASANCE	
 	

76
	 	SECTION 8.1	 	OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE	 	76
	 	SECTION 8.2	 	LEGAL DEFEASANCE AND DISCHARGE	 	76
	 	SECTION 8.3	 	COVENANT DEFEASANCE	 	77
	 	SECTION 8.4	 	CONDITIONS TO LEGAL OR COVENANT DEFEASANCE	 	77
	 	SECTION 8.5	 	DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS	 	79
	 	SECTION 8.6	 	REPAYMENT TO COMPANY	 	79
	 	SECTION 8.7	 	REINSTATEMENT	 	80
	
 ARTICLE IX: AMENDMENT, SUPPLEMENT AND WAIVER	
 	

80
	 	SECTION 9.1	 	WITHOUT CONSENT OF HOLDERS OF NOTES	 	80
	 	SECTION 9.2	 	WITH CONSENT OF HOLDERS OF NOTES	 	81
	 	SECTION 9.3	 	COMPLIANCE WITH TRUST INDENTURE ACT	 	83
	 	SECTION 9.4	 	REVOCATION AND EFFECT OF CONSENTS	 	83
	 	SECTION 9.5	 	NOTATION ON OR EXCHANGE OF NOTES	 	84
	 	SECTION 9.6	 	TRUSTEE TO SIGN AMENDMENTS, ETC.	 	84
	
 ARTICLE X: GUARANTEES	
 	

84
	 	SECTION 10.1	 	GUARANTEES	 	84
	 	SECTION 10.2	 	EXECUTION AND DELIVERY OF GUARANTEES	 	86
	 	SECTION 10.3	 	GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS	 	86
	 	SECTION 10.4	 	RELEASE OF GUARANTORS	 	88
	 	SECTION 10.5	 	LIMITATION OF GUARANTOR'S LIABILITY; CERTAIN BANKRUPTCY EVENTS	 	88
	 	SECTION 10.6	 	APPLICATION OF CERTAIN TERMS AND PROVISIONS TO THE GUARANTORS	 	89



iv





 

	
 ARTICLE XI: MISCELLANEOUS	
 	

8
	 	SECTION 11.1	 	TRUST INDENTURE ACT CONTROLS	 	89
	 	SECTION 11.2	 	NOTICES	 	90
	 	SECTION 11.3	 	COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES	 	91
	 	SECTION 11.4	 	CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT	 	91
	 	SECTION 11.5	 	STATEMENTS REQUIRED IN CERTIFICATE OR OPINION	 	91
	 	SECTION 11.6	 	RULES BY TRUSTEE AND AGENTS	 	92
	 	SECTION 11.7	 	NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS	 	92
	 	SECTION 11.8	 	GOVERNING LAW	 	92
	 	SECTION 11.9	 	NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS	 	92
	 	SECTION 11.10	 	SUCCESSORS	 	92
	 	SECTION 11.11	 	SEVERABILITY	 	93
	 	SECTION 11.12	 	COUNTERPART ORIGINALS	 	93
	 	SECTION 11.13	 	TABLE OF CONTENTS, HEADINGS, ETC.	 	93
	

EXHIBIT A	
 	

 	
 	

 
	 	FORM OF NOTE	 	A-1
	EXHIBIT B	 	 	 	 
	 	FORM OF CERTIFICATE OF TRANSFER	 	B-1
	EXHIBIT C	 	 	 	 
	 	FORM OF CERTIFICATE OF EXCHANGE	 	C-1
	EXHIBIT D	 	 	 	 
	 	FORM OF CERTIFICATE FROM ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR	 	D-1
	EXHIBIT E	 	 	 	 
	 	FORM OF SUPPLEMENTAL INDENTURE

TO BE DELIVERED BY SUBSEQUENT GUARANTORS	 	E-1




v






  



 
 

CROSS-REFERENCE TABLE*    
  



	TIA Section
 
	 	Indenture Section
 

	310(a)(1)	 	7.10
	 	(a)(2)	 	7.10
	 	(a)(3)	 	N.A.
	 	(a)(4)	 	N.A.
	 	(a)(5)	 	7.8; 7.10
	 	(b)	 	7.8; 7.10; 11.2
	 	(c)	 	N.A.
	311(a)	 	7.11
	 	(b)	 	7.11
	 	(c)	 	N.A.
	312(a)	 	2.5
	 	(b)	 	11.3
	 	(c)	 	11.3
	313(a)	 	7.6
	 	(b)(1)	 	N.A.
	 	(b)(2)	 	7.6
	 	(c)	 	7.6; 11.2
	 	(d)	 	7.6
	314(a)	 	4.3; 4.4; 11.2
	 	(b)	 	N.A.
	 	(c)(1)	 	11.4
	 	(c)(2)	 	11.4
	 	(c)(3)	 	N.A.
	 	(d)	 	N.A.
	 	(e)	 	11.5
	 	(f)	 	N.A.
	315(a)	 	7.1(b)
	 	(b)	 	7.5; 11.2
	 	(c)	 	7.1(a)
	 	(d)	 	7.1(c)
	 	(e)	 	6.11
	316(a)(last sentence)	 	2.9
	 	(a)(1)(A)	 	6.5
	 	(a)(1)(B)	 	6.4
	 	(a)(2)	 	N.A.
	 	(b)	 	6.7
	 	(c)	 	6.4
	317(a)(1)	 	6.8
	 	(a)(2)	 	6.9
	 	(b)	 	2.4
	318(a)	 	11.1
	 	(c)	 	11.1







    N.A.
means not applicable 


    *This
Cross-Reference table shall not, for any purpose, be deemed to be part of the Indenture. 


1





 


    INDENTURE, dated as of April 19, 2001, among Steinway Musical Instruments, Inc., a Delaware corporation (the "Company"), the Guarantors (as defined), and Firstar Bank,
N.A., as trustee (the "Trustee"). 


    Each
party agrees as follows for the benefit of each other and for the equal and ratable benefit of the Holders of the 83/4% Senior Notes due 2011 (the "Series A
Notes") and the 83/4% Series B Senior Notes due 2011 (the "Series B Notes" and, together with the Series A Notes, the "Notes"): 


 
 

ARTICLE I
  DEFINITIONS AND INCORPORATION
  BY REFERENCE    
  



SECTION
1.1 DEFINITIONS 


    "144A Global Note" means one or more Global Notes bearing the Private Placement Legend, that will be issued in an aggregate amount of
denominations equal in total to the outstanding principal amount of the Notes sold in reliance on Rule 144A. 


    "Accrued Bankruptcy Interest" means, with respect to any Indebtedness, all interest accruing thereon after the filing of a petition by
or against the Company or any of its Subsidiaries or any Parent under any Bankruptcy Law, in accordance with and at the rate (including any rate applicable upon any default or event of default, to the
extent lawful) specified in the documents evidencing or governing such Indebtedness, whether or not the claim for such interest is allowed as a claim after such filing in any proceeding under such
Bankruptcy Law. 


    "Acquired Indebtedness" means (i) Indebtedness (including Disqualified Capital Stock) of any Person existing at the time such
Person becomes a Subsidiary of the Company, including by designation, or is merged or consolidated into or with the Company or one of its Subsidiaries including, without limitation, Indebtedness
incurred in connection with, or in contemplation of such other Person merging with or into or becoming a Subsidiary of such specified Person and (ii) Indebtedness secured by a Lien encumbering
any asset acquired by the Company or any of its Subsidiaries. 


    "Acquisition" means the purchase or other acquisition of any Person or all or substantially all the assets of any Person by any other
Person, whether by purchase, merger, consolidation, or other transfer, and whether or not for consideration. 


    "Additional Notes" means additional Notes which may be issued after the Issue Date pursuant to this Indenture (other than pursuant to
an Exchange Offer or otherwise in exchange for or in replacement of outstanding Notes). All references herein to "Notes" shall be deemed to include Additional Notes. 



    "Affiliate" means any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the
referent Person. For purposes of this definition, the term "control" means the power to direct the management and policies of a Person, directly or through one or more intermediaries, whether through
the ownership of voting securities, by contract, or otherwise; provided that with respect to ownership interest in the Company and its Subsidiaries, a
Beneficial Owner of 10% or more of the total voting power normally entitled to vote in the election of directors, managers or trustees, as applicable, shall for such purposes be deemed to constitute
control. 


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


    "Applicable Procedures" means, with respect to any transfer or exchange of or for beneficial interests in any Global Note, the rules
and procedures of the Depositary, Euroclear and Clearstream that apply to such transfer or exchange at the relevant time. 


2





 


    "Average Life" means, as of the date of determination, with respect to any security or instrument, the quotient obtained by dividing
(i) the sum of the products (a) of the number of years from the date of determination to the date or dates of each successive scheduled principal (or redemption) payment of such security
or instrument multiplied by (b) the amount of each such respective principal (or redemption) payment by (ii) the sum of all such principal (or redemption) payments. 


    "Bankruptcy Code" means the United States Bankruptcy Code, codified at 11 U.S.C. §101-1330, as amended. 



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


    "Beneficial Owner" or "beneficial owner" for purposes of the definition of Change of
Control and Affiliate has the meaning attributed to it in Rules 13d-3 and 13d-5 under the Exchange Act (as in effect on the Issue Date), whether or not applicable. 


    "Board of Directors" means, with respect to any Person, the board of directors (or, if such Person is not a corporation, the equivalent
board of managers or members or body performing similar functions for such Person) of such Person or any committee of the Board of Directors of such Person authorized, with respect to any particular
matter, to exercise the power of the board of directors of such Person. 


    "Broker-Dealer" means any broker-dealer that receives Exchange Notes for its own account in the Exchange Offer in exchange for Notes
that were acquired by such broker-dealer as a result of market-making or other trading activities. 


    "Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in New York,
New York are authorized or obligated by law or executive order to close. 


    "Capitalized Lease Obligation" means, as to any Person, the obligations of such Person under a lease that are required to be classified
and accounted for as capital lease obligations under GAAP and, for purposes of this definition, the amount of such obligations at any date shall be the capitalized amount of such obligations at such
date, determined in accordance with GAAP. 


    "Capital Stock" means, with respect to any entity, any and all shares, interests, rights to purchase (other than convertible or
exchangeable Indebtedness that is not itself otherwise capital stock), warrants, options, participations or other equivalents of or interests (however designated) in stock issued by that entity. 


    "Cash Equivalent" means: 



    (a) securities
issued or directly and fully guaranteed or insured by the United States of America or any agency or instrumentality thereof
(provided, that the full faith and credit of the United States of America is pledged in support thereof), or 



    (b) eurodollar
time deposits, certificates of deposit, overnight bank deposits and bankers acceptances and commercial paper issued by the parent corporation of any
domestic commercial bank of recognized standing having capital and surplus in excess of $500,000,000, or 


    (c) commercial
paper issued by others having either of the two highest ratings obtainable from Standard & Poor's Corporation or Moody's Investors
Service, Inc., or 


    (d) repurchase
obligations with a term of not more than seven days for underlying securities of the types described in clauses (a) and (b) above entered
into with any financial institution meeting the qualifications specified in clause (b) above, 



3





 

    and
in the case of each of (a), (b), and (c) maturing within nine months after the date of acquisition. 


    "Change of Control" means: (1) the sale, lease, transfer, conveyance or other disposition (other than by way of merger or
consolidation), whether direct or indirect, of all or substantially all of the Company's assets, on a consolidated basis, in one transaction or a series of related transactions, to any "person"
(including any group that is deemed to be a "person"), other than either or both of the Principals or their Related Persons; (2) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that any "person" (including any group that is deemed to be a "person"), other than either or both of the Principals or their Related
Persons, becomes the beneficial owner, directly or indirectly, of more than 50% of the total voting power in the aggregate normally entitled to vote in elections of directors of the Company; or
(3) the Company adopts a plan relating to the liquidation or dissolution of the Company. As used in this definition, "person" (including any group that is deemed to be a "person"), has the
meaning given by Sections 13(d) and 14(d) of the Exchange Act, whether or not applicable. 


    "Clearstream" means Clearstream Banking Luxembourg, or its successors. 


    "Concert and Artist Piano Bank" means the worldwide piano bank maintained by the Company for its artists and other pianists in which
the average age of the pianos contained therein as of the Issue Date is approximately 3.3 years. 



    "Consolidation" means, with respect to the Company, the consolidation of the accounts of the Subsidiaries with those of the Company,
all in accordance with GAAP; provided that "consolidation" will not include consolidation of the accounts of any Unrestricted Subsidiary with the
accounts of the Company. The term "consolidated" has a correlative meaning to the foregoing. 


    "Consolidated Coverage Ratio" of any Person on any date of determination (the "Transaction Date") means the ratio, on a  pro forma basis, of (a) the aggregate amount
of Consolidated EBITDA of such Person attributable to continuing operations and businesses
(exclusive of amounts attributable to operations and businesses permanently discontinued or disposed of) for the Reference Period to (b) the aggregate Consolidated Fixed Charges of such Person
(exclusive of amounts attributable to operations and businesses permanently discontinued or disposed of, but only to the extent that the obligations giving rise to such Consolidated Fixed Charges
would no longer be obligations contributing to such Person's Consolidated Fixed Charges subsequent to the Transaction Date) during the Reference Period;  provided, that for purposes of such calculation:
(i) Acquisitions which occurred during the Reference Period or subsequent to the Reference
Period and on or prior to the Transaction Date shall be assumed to have occurred on the first day of the Reference Period; (ii) transactions giving rise to the need to calculate the
Consolidated Coverage Ratio shall be assumed to have occurred on the first day of the Reference Period; (iii) the incurrence of any Indebtedness (including issuance of any Disqualified Capital
Stock) during the Reference Period or subsequent to the Reference Period and on or prior to the Transaction Date (and the application of the proceeds therefrom to the extent used to refinance or
retire other Indebtedness)(other than Indebtedness incurred under any revolving credit facility) shall be assumed to have occurred on the first day of the Reference Period; and (iv) the
Consolidated Fixed Charges of such Person attributable to interest on any Indebtedness or dividends on any Disqualified Capital Stock bearing a floating interest (or dividend) rate shall be computed
on a pro forma basis as if the average rate in effect from the beginning of the Reference Period to the Transaction Date had been the applicable rate for the entire period, unless such Person or any
of its Subsidiaries is a party to an Interest Swap or Hedging Obligation (which shall remain in effect for the 12-month period immediately following the Transaction Date) that has the
effect of fixing the interest rate on the date of computation, in which case such rate (whether higher or lower) shall be used. 


    "Consolidated EBITDA" means, with respect to any Person, for any period, the Consolidated Net Income of such Person for such period
adjusted to add thereto (to the extent deducted from net 


4





 


revenues in determining Consolidated Net Income), without duplication, the sum of: (i) Consolidated income tax expense; (ii) Consolidated depreciation and amortization expense;
(iii) Consolidated Fixed Charges; and (iv) all other non-cash charges required to be reflected as expenses on the books and records of such Person and its Consolidated
Subsidiaries; less the amount of all cash payments made by such Person or any of its Subsidiaries during such period to the extent such payments relate
to non-cash charges that were added back in determining Consolidated EBITDA for such period or any prior period; provided, that consolidated
income tax expense and depreciation and amortization and all other such non-cash charges of a Subsidiary that is a less than Wholly Owned Subsidiary shall only be added to the extent of
the equity interest of the Company in such Subsidiary. 


    "Consolidated Fixed Charges" of any Person means, for any period, the aggregate amount (without duplication and determined in each case
in accordance with GAAP) of: (a) interest expensed or capitalized, paid, accrued, or scheduled to be paid or accrued (including, in accordance with the following sentence, interest attributable
to Capitalized Lease Obligations) of such Person and its Consolidated Subsidiaries during such period, including (1) original issue discount and non-cash interest payments or
accruals on any Indebtedness, (2) the interest portion of all deferred payment obligations, (3) all commissions, discounts and other fees and charges owed with respect to bankers'
acceptances and
letters of credit financings and currency and net payments (if any) pursuant to Interest Swap and Hedging Obligations, and (4) any interest expense on Indebtedness guaranteed by such Person or
one of its Subsidiaries (other than Guarantees of Indebtedness of such Person or one or more of its Subsidiaries, or secured by a Lien on assets of such Person or one or more of its Subsidiaries
(whether or not such Guarantee or Lien is called upon)) in each case to the extent attributable to such period, and (b) the product of (i) the amount of dividends accrued or payable (or
guaranteed) by such Person or any of its Consolidated Subsidiaries in respect of Preferred Stock (other than by Subsidiaries of such Person to such Person or such Person's Wholly Owned Subsidiaries),
and (ii) a fraction, the numerator of which is one and the denominator of which is one minus the then current combined federal, state and local statutory tax rate of such Person, expressed as a
decimal. For purposes of this definition, (x) interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined in good faith by the Company to be
the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP and (y) interest expense attributable to any Indebtedness represented by the guarantee by such Person
or a Subsidiary of such Person of an obligation of another Person shall be deemed to be the interest expense attributable to the Indebtedness guaranteed. 


    "Consolidated Net Income" means, with respect to any Person for any period, the net income (or loss) of such Person and its
Consolidated Subsidiaries (determined on a consolidated basis in accordance with GAAP and before any reduction in respect of Preferred Stock dividends) for such period, adjusted to exclude (only to
the extent included in computing such net income (or loss) and without duplication): (a) all gains or losses, together with any provision for taxes related thereto, which are either
(i) extraordinary (as determined in accordance with GAAP) or are nonrecurring or (ii) realized in connection with (A) any Asset Sale (including, without limitation, dispositions
pursuant to sale and leaseback transactions) or (B) the disposition of any securities by such Person or any of its Subsidiaries or the extinguishment of any Indebtedness of such Person or any
of its Subsidiaries), (b) the net income, if positive, of any Person, other than a Consolidated Subsidiary, in which such Person or any of its Consolidated Subsidiaries has an interest, except
to the extent of the amount of any dividends or distributions actually paid in cash to such Person or a Wholly Owned Consolidated Subsidiary of such Person that is a Guarantor during such period, but
in any case not in excess of such Person's pro rata share of such Person's net income for such period, (c) the net income or loss of any Person acquired in a pooling of interests transaction
for any period prior to the date of such acquisition, (d) the net income, if positive, of any of such Person's Consolidated Subsidiaries to the extent that the declaration or payment of
dividends or similar distributions is not at the time permitted by operation of the terms of its charter or bylaws or any other agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to such Consolidated Subsidiary, 


5





 


(e) the cumulative effect of a change in accounting principles, and (f) the net income of, and all dividends and distributions from, any Unrestricted Subsidiary. 


    "Consolidated Net Worth" means, with respect to any Person as of any date, the sum of (i) the consolidated equity of the common
stockholders of such Person and its consolidated Subsidiaries as of such date plus (ii) the respective amounts reported on such Person's balance sheet as of such date with respect to any series
of Preferred Stock (other than Disqualified Capital Stock) that by its terms is not entitled to the payment of dividends unless such dividends may be declared and paid only out of net earnings in
respect of the year of such declaration and payment, but only to the extent of any cash
received by such Person upon issuance of such Preferred Stock, less (x) all write-ups (other than write-ups resulting from foreign currency translations and
write-ups of tangible assets of a going concern business made within 12 months after the acquisition of such business) subsequent to the Issue Date in the book value of any asset
owned by such Person or a Consolidated Subsidiary of such Person, (y) all investments as of such date in unconsolidated Subsidiaries and in Persons that are not Subsidiaries (except, in each
case, Permitted Investments), and (z) all unamortized debt discount and expense and unamortized deferred charges as of such date, all of the foregoing determined in accordance with GAAP. 


    "Consolidated Subsidiary" means, for any Person, each Subsidiary of such Person (whether now existing or hereafter created or acquired)
the financial statements of which are Consolidated for financial statement reporting purposes with the financial statements of such Person in accordance with GAAP. 


    "Corporate Trust Office" shall be at the address of the Trustee specified in Section 11.2 hereof or such other address as to
which the Trustee may give notice to the Company. 


    "Credit Agreement" means the Second Amended and Restated Credit Agreement, dated as of September 14, 2000, by and among certain
of the Company's Subsidiaries, GMAC Commercial Credit LLC as administrative agent and the lenders party thereto, providing for a revolving credit facility and two term loan facilities, including any
related notes, guarantees, collateral documents, instruments and agreements executed in connection therewith, as such credit agreement and/or related documents may be amended, restated, supplemented,
renewed, replaced or otherwise modified from time to time whether or not with the same agent, trustee, representative lenders or holders, and, subject to the proviso to the next succeeding sentence,
irrespective of any changes in the terms and conditions thereof. Without limiting the generality of the foregoing, the term "Credit Agreement" shall include agreements in respect of Interest Swap and
Hedging Obligations with lenders (or Affiliates thereof) party to the Credit Agreement and shall also include any amendment, amendment and restatement, renewal, extension, restructuring, supplement or
modification to any Credit Agreement and all refundings, refinancings and replacements of any Credit Agreement, including any agreement: (1) extending the maturity of any Indebtedness incurred
thereunder or contemplated thereby, (2) adding or deleting borrowers or guarantors thereunder, so long as borrowers and issuers include one or more of the Company and its Subsidiaries and their
respective successors and assigns, (3) increasing the amount of Indebtedness incurred thereunder or available to be borrowed thereunder;  provided, that on the date any additional Indebtedness is
incurred it would not be prohibited by paragraph (c) of Section 4.7 hereof, or
(4) otherwise altering the terms and conditions thereof in a manner not prohibited by the terms hereof. 


    "Custodian" means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law. 



    "Default" means any event that is or with the passage of time or the giving of notice or both would be an Event of Default. 


6





 


    "Definitive Note" means one or more certificated Notes registered in the name of the Holder thereof and issued in accordance with
Section 2.6 hereof, in the form of Exhibit A hereto except that such Note shall not include the information called for by footnotes 3, 4 and 8 thereof. 



    "Depositary" means, with respect to the Notes issuable or issued in whole or in part in global form, the Person specified in
Section 2.3 hereof as the Depositary with respect to the Notes, until a successor will have been appointed and become such pursuant to the applicable provisions of this Indenture, and
thereafter "Depositary" will mean or include such successor. 


    "Disqualified Capital Stock" means with respect to any Person, (a) Equity Interests of such Person that, by its terms or by the
terms of any security into which it is convertible, exercisable or exchangeable, is, or upon the happening of an event or the passage of time or both would be, required to be redeemed or repurchased,
pursuant to a sinking fund obligation or otherwise (including at the option of the holder thereof) by such Person or any of its Subsidiaries, in whole or in part, on or prior to the date that is one
year after the Stated Maturity of the Notes and (b) with respect to any Subsidiary of the Company, any Equity Interests of such Subsidiary other than any common equity with no economic
preferences or privileges and no redemption or any repayment provisions. 


    "Distribution Compliance Period" means the 40-day restricted period as defined in Regulation S. 


    "Equity Interests" means Capital Stock or partnership, participation or membership interests and all warrants, options or other rights
to acquire Capital Stock or partnership, participation or membership interests (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock or partnership,
participation or membership interests). 


    "Euroclear" means Euroclear Bank S.A./N.V., or its successor, as operator of the Euroclear system. 


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


    "Exchange Notes" means Series B Notes issued pursuant to an Exchange Offer. 



    "Exchange Offer" means an offer that may be made by the Company pursuant to the Registration Rights Agreement to exchange Exchange
Notes for Series A Notes. 


    "Exchange Offer Registration Statement" shall have the meaning set forth in the Registration Rights Agreement. 


    "Excluded Default" means (i) any payment default under the Credit Agreement arising from a collateral deficiency that results in
the amount of obligations outstanding under the Credit Agreement (including loans, letters of credit and other extensions of credit) exceeding the borrowing base provided for therein.; or
(ii) any default under the Selmer Notes Indenture, prior to June 30, 2001. 


    "Existing Indebtedness" means all Indebtedness of the Company and its Subsidiaries (other than Indebtedness under the Credit Agreement)
in existence on the Issue Date, reduced to the extent such amounts are repaid, refinanced or retired. 


    "fair market value" means the price that would be paid in an arm's-length transaction between an informed and willing seller under no
compulsion to sell and an informed and willing buyer under no compulsion to buy, as determined in good faith by the Company. 


    "Foreign Subsidiary" means (a) any Subsidiary of the Company which (i) is not organized under the laws of the United
States, any state thereof or the District of Columbia and (ii) conducts substantially all of its business operations outside the United States of America, and (b) Steinway & Sons,
a New York corporation and United Musical Instruments VI, Inc., a U.S. Virgin Islands corporation. 



    "GAAP" means United States generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in 


7





 


such other statements by such other entity as approved by a significant segment of the accounting profession in the United States as in effect at the time. 



    "Global Notes" means one or more Notes in the form of Exhibit A hereto that includes the information referred to in footnotes 3,
4 and 8 to the form of Note, attached hereto as Exhibit A, issued under this Indenture, that is deposited with or on behalf of and registered in the name of the Depositary or its nominee. 


    "Global Note Legend" means the legend set forth in Section 2.6(g)(ii), which is required to be placed on all Global Notes issued
under this Indenture. 


    "Guarantee" means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business),
direct or indirect, in any manner (including, without limitation, letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness. When used with respect to
the Notes, a "Guarantee" means a guarantee by the Guarantors of all or any part of the Notes, in accordance with Article X hereof. 


    "Guarantor" means each of the Company's Subsidiaries that executes a Guarantee in accordance with this Indenture. 


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


    "Indebtedness" of any Person means, without duplication, 



    (a) all
liabilities and obligations, contingent or otherwise, of any such Person, to the extent such liabilities and obligations would appear as a liability upon the
consolidated balance sheet of such Person in accordance with GAAP, (1) in respect of borrowed money (whether or not the recourse of the lender is to the whole of the assets of such Person or
only to a portion thereof), (2) evidenced by bonds, notes, debentures or similar instruments, or (3) representing the balance deferred and unpaid of the purchase price of any property or
services, except those incurred in the ordinary course of its business that would constitute ordinarily a trade payable to trade creditors; 



    (b) all
liabilities and obligations, contingent or otherwise, of such Person (1) evidenced by bankers' acceptances or similar instruments issued or accepted by
banks, (2) relating to any Capitalized Lease Obligation, or (3) evidenced by a letter of credit or a reimbursement obligation of such Person with respect to any letter of credit; 


    (c) all
net obligations of such Person under Interest Swap and Hedging Obligations; 


    (d) all
liabilities and obligations of others of the kind described in the preceding clause (a), (b) or (c) that such Person has guaranteed or
provided credit support or that is otherwise its legal liability or which are secured by any assets or property of such Person; 



    (e) any
and all deferrals, renewals, extensions, refinancing and refundings (whether direct or indirect) of, or amendments, modifications or supplements to, any
liability of the kind described in any of the preceding clauses (a), (b), (c), (d) or (f), or this clause (e), whether or not between or among the same parties; and 


    (f)  all
Disqualified Capital Stock of such Person (measured at the greater of its voluntary or involuntary maximum fixed repurchase price plus accrued and unpaid
dividends). 




    For
purposes hereof, the "maximum fixed repurchase price" of any Disqualified Capital Stock which does not have a fixed repurchase price shall be calculated in accordance with the
terms of such Disqualified Capital Stock as if such Disqualified Capital Stock were purchased on any date on which Indebtedness shall be required to be determined pursuant to the Indenture, and if
such price is based upon, or measured by, the Fair Market Value of such Disqualified Capital Stock, such Fair Market 


8





 


Value to be determined in good faith by the board of directors of the issuer (or managing general partner of the issuer) of such Disqualified Capital Stock. 



    The
amount of any Indebtedness outstanding as of any date shall be (1) the accreted value thereof, in the case of any Indebtedness issued with original issue discount, but the
accretion of original issue discount in accordance with the original terms of Indebtedness issued with an original issue discount will not be deemed to be an incurrence and (2) the principal
amount thereof, together with any interest thereon that is more than 30 days past due, in the case of any other Indebtedness. 


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



    "Indirect Participant" means an entity that, with respect to DTC, clears through or maintains a direct or indirect, custodial
relationship with a Participant. 


    "Initial Purchasers" mean the initial purchasers of the Series A Notes under the Purchase Agreement, dated April 11,
2001, with respect to the Series A Notes. 


    "Institutional Accredited Investor" means an institution that is an "accredited investor" as defined in Rule 501(a)(1), (2),
(3) or (7) under the Securities Act, who is not also a QIB. 


    "Interest Payment Date" means the stated due date of an installment of interest on the Notes. 


    "Interest Swap and Hedging Obligation" means any obligation of any Person pursuant to any interest rate swap agreement, interest rate
cap agreement, interest rate collar agreement, interest rate exchange agreement, currency exchange agreement or any other agreement or arrangement designed to protect against fluctuations in interest
rates or currency values, including, without limitation, any arrangement whereby, directly or indirectly, such Person is entitled to receive from time to time periodic payments calculated by applying
either a fixed or floating rate of interest on a stated notional amount in exchange for periodic payments made by such Person calculated by applying a fixed or floating rate of interest on the same
notional amount. 


    "Investment" by any Person in any other Person means (without duplication): 



    (a) the
acquisition (whether by purchase, merger, consolidation or otherwise) by such Person (whether for cash, property, services, securities or otherwise) of Equity
Interests, Capital Stock, bonds, notes, debentures, partnership or other ownership interests or other securities, including any options or warrants, of such other Person or any agreement to make any
such acquisition; 


    (b) the
making by such Person of any deposit with, or advance, loan or other extension of credit to, such other Person (including the purchase of property from another
Person subject to an understanding or agreement, contingent or otherwise, to resell such property to such other Person) or any commitment to make any such advance, loan or extension (but excluding
(x) accounts receivable, endorsements for collection and deposits, and (y) commission, travel and similar advances to officers and employees of such Person, and in each of (x) and
(y) arising in the ordinary course of business); 


    (c) other
than Guarantees of Indebtedness of the Company or any Guarantor to the extent permitted by Section 4.7 hereof, the entering into by such Person of any
guarantee of, or other credit support or contingent obligation with respect to, Indebtedness or other liability of such other Person; 


    (d) the
making of any capital contribution by such Person to such other Person; and 


    (e) the
designation by the Board of Directors of the Company of any Person to be an Unrestricted Subsidiary. 



9





 

    The
Company shall be deemed to make an Investment in an amount equal to the fair market value of the net assets of any subsidiary (or, if neither the Company nor any of its
Subsidiaries has theretofore made an Investment in such subsidiary, in an amount equal to the Investments being made), at the time that such subsidiary is designated an Unrestricted Subsidiary, and
any property transferred to an Unrestricted Subsidiary from the Company or a Subsidiary of the Company shall be deemed an Investment valued at its fair market value at the time of such transfer. The
Company or any of its Subsidiaries shall be deemed to have made an Investment in a Person that is or was a Guarantor if, upon the issuance of Capital Stock of such Person, or the sale or other
disposition of any portion of the Company's or the Subsidiary's ownership in the Capital Stock of such Person, such Person ceases to be a Guarantor. 


    "Issue Date" means the date of first issuance of the Notes under the Indenture. 


    "Legal Holiday" means a Saturday, a Sunday or a day on which banking institutions in the City of New York, or the city in which the
principal corporate trust office of the Trustee is located, or at a place of payment are authorized by law, regulation or executive order to remain closed. If a payment date is a Legal Holiday,
payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period. 



    "Letter of Transmittal" means the letter of transmittal to be prepared by the Company and sent to all Holders of the Notes for use by
such Holders in connection with the Exchange Offer. 


    "Lien" means any mortgage, charge, pledge, lien (statutory or otherwise), security interest, hypothecation or other encumbrance upon or
with respect to any property of any kind, real or personal, movable or immovable, now owned or hereafter acquired. 


    "Liquidated Damages" means all Liquidated Damages then owing pursuant to the Registration Rights Agreement. 


    "Moody's" means Moody's Investors Service, Inc. and its successors. 


    "Net Cash Proceeds" means the aggregate amount of cash or Cash Equivalents received by the Company in the case of a sale of Qualified
Capital Stock and by the Company and its Subsidiaries in respect of an Asset Sale (including, without limitation, any cash received upon the sale or other disposition of any non-cash
consideration received in any Asset Sale) plus, in the case of an issuance of Qualified Capital Stock upon any exercise, exchange or conversion of securities (including options, warrants, rights and
convertible or exchangeable debt) of the Company that were issued for cash on or
after the Issue Date, the amount of cash originally received by the Company upon the issuance of such securities (including options, warrants, rights and convertible or exchangeable debt) less, in
each case, the sum of all payments, fees, commissions and expenses (including, without limitation, the fees and expenses of legal counsel and investment banking fees and expenses) incurred in
connection with such Asset Sale or sale of Qualified Capital Stock, and, in the case of an Asset Sale only, less (i) the amount (estimated reasonably and in good faith by the Company) of
income, franchise, sales and other applicable taxes required to be paid by the Company or any of its respective Subsidiaries as a result of such Asset Sale, the computation of which shall take into
account the reduction in tax liability resulting from any available operating losses and net operating loss carryovers, tax credits and tax credit carryforwards, and similar tax attributes,
(ii) amounts required to be applied to the repayment of Indebtedness (other than revolving borrowings under the Credit Agreement) secured by a Lien on the asset or assets that were the subject
of such Asset Sale and any reserve for adjustment in respect of the sale price of such asset or assets established in accordance with GAAP, and (iii) relocation expenses incurred by the Company
or any of its Subsidiaries as a result of such Asset Sale. 


    "Non-Recourse Indebtedness" means Indebtedness as to which neither the Company nor any of its Subsidiaries
(i) provides credit support of any kind (including any undertaking, agreement or 


10





 


instrument that would constitute Indebtedness), (ii) is directly or indirectly liable (as a guarantor or otherwise), or (iii) is the lender. 



    "Notes Custodian" means the Trustee, as custodian with respect to the Notes in global form, or any successor entity thereto. 


    "Obligation" means any principal, premium or interest payment, or monetary penalty, or damages, payable under the documentation
governing any Indebtedness, including, with respect to the Notes, any Liquidated Damages due pursuant to the terms of the Registration Rights Agreement. 


    "Offering" means the offering of the Notes by the Company. 



    "Offering Memorandum" means the final Offering Memorandum, dated April 11, 2001, relating to the offer and sale of the
Series A Notes. 


    "Officer" means, with respect to any Person, the Chairman of the Board, the Chief Executive Officer, the President, the Chief Operating
Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary, any Assistant Secretary or any Vice President of such Person. 


    "Officers' Certificate" means a certificate signed on behalf of the Company or any Guarantor by two Officers of the Company or such
Guarantor, one of whom must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of the Company or such Guarantor, that meets the
requirements of Sections 11.4 and 11.5 hereof. 


    "Opinion of Counsel" means an opinion from legal counsel who is reasonably acceptable to the Trustee, that meets the requirements of
Sections 11.4 and 11.5 hereof. The counsel may be an employee of or counsel to the Company or any Subsidiary of the Company. 


    "Participant" means, with respect to the Depositary, Euroclear or Clearstream, a Person who has an account with the Depositary,
Euroclear or Clearstream, respectively (and, with respect to The Depository Trust Company, shall include Euroclear and Clearstream). 


    "Permitted Indebtedness" means that: 



    (a) the
Company and the Guarantors may incur Indebtedness evidenced by the Notes and the Guarantees issued pursuant to the Indenture up to the amounts being issued on
the original Issue Date; 


    (b) the
Company and its Subsidiaries, as applicable, may incur Refinancing Indebtedness with respect to any Indebtedness (including Disqualified Capital Stock)
described in clause (a) or this clause (b) of this definition or properly incurred pursuant to the Debt Incurrence Ratio of Section 4.7 or which was refinanced pursuant to this
clause (b); 


    (c) the
Company and its Subsidiaries may incur Indebtedness solely in respect of bankers acceptances, letters of credit and performance bonds (to the extent that such
incurrence does not result in the incurrence of any obligation to repay any obligation relating to borrowed money of others), all in the ordinary course of business in accordance with customary
industry practices, in amounts and for the purposes customary in the Company's industry; provided, that the aggregate principal amount outstanding of
such Indebtedness (including any Refinancing Indebtedness and any other Indebtedness issued to retire, refinance, refund, defease or replace such Indebtedness) shall at no time exceed $5,000,000; 


    (d) the
Company may incur Indebtedness owed to (borrowed from) any Guarantor, and any Guarantor may incur Indebtedness owed to (borrowed from) any other Guarantor or
the Company; provided, that in the case of Indebtedness of the Company, such obligations shall be unsecured and contractually subordinated in all
respects to the Company's obligations pursuant to 



11





 


the Notes and any event that causes such Guarantor no longer to be a Guarantor (including by designation to be an Unrestricted Subsidiary), or any sale or other transfer of any of such Indebtedness to
a Person other than the Company or a Guarantor shall be deemed to be a new incurrence of Indebtedness subject to Section 4.7 hereof; 


    (e) the
Company and its Subsidiaries may incur Interest Swap and Hedging Obligations that are incurred for the purpose of fixing or hedging interest rate or currency
risk with respect to any fixed or floating rate Indebtedness that is permitted by the Indenture to be outstanding or any receivable or liability the payment of which is determined by reference to a
foreign currency; provided, that the notional amount of any such Interest Swap and Hedging Obligation does not exceed the principal amount of
Indebtedness to which such Interest Swap and Hedging Obligation relates; 


    (f)  the
Company and its Subsidiaries may remain liable in respect of Existing Indebtedness; 


    (g) the
Company and its Subsidiaries may guarantee Indebtedness in connection with the issuance of the Receivables Financing Notes in an aggregate principal amount at
any one time outstanding (plus any Refinancing Indebtedness incurred to retire, defease, refinance, replace or refund such Indebtedness) pursuant to this clause (g) not to exceed $60,000,000;
and 


    (h) Guarantees
of Indebtedness of musical instrument dealers not to exceed $2,000,000 in the aggregate at any one time outstanding (plus any Refinancing Indebtedness
incurred to retire, defease, refinance, replace or refund such Indebtedness) pursuant to this clause (h). 




    "Permitted Investment" means: 



    (a) any
Investment in any of the Notes; 


    (b) any
Investment in Cash Equivalents; 


    (c) any
Investment by the Company or any of its Subsidiaries in a Person in a Related Business if as a result of such Investment such Person immediately becomes a
Wholly Owned Subsidiary that is a Guarantor or such Person is immediately merged with or into the Company or a Wholly Owned Subsidiary that is a Guarantor; 


    (d) Investments
made as a result of the receipt of non-cash consideration from an Asset Sale that was made pursuant to and in compliance with
Section 4.13 hereof; 


    (e) extensions
of trade credit and advances to or deposits with customers and suppliers in the ordinary course of business; 


    (f)  any
Investment acquired solely in exchange for Qualified Capital Stock; 


    (g) any
Investments which do not exceed $15,000,000 in the aggregate at any one time outstanding (measured by the value attributed to the Investment at the time made or
returned, as applicable) in the Company's Subsidiaries that are not Guarantors and that are engaged in a Related Business, provided,  however, that, the
aggregate amount of such Investments outstanding shall be considered a Restricted Payment for the purposes of Section 4.9
hereof but shall not be prohibited by the provisions of the first paragraph under Section 4.9; and 


    (h) any
Investment by the Company or any of its Subsidiaries in the Receivables Financing Notes in an aggregate principal amount at any time outstanding not to exceed
$60,000,000. 




    "Permitted Lien" means: 



    (a) Liens
in favor of the Company or any Guarantor; 


    (b) Liens
existing on the Issue Date; 



12





 


    (c) Liens imposed by governmental authorities for taxes, assessments or other charges not yet subject to penalty or which are being contested in good faith and by
appropriate proceedings, if adequate reserves with respect thereto are maintained on the books of the Company in accordance with GAAP; 



    (d) Liens
securing the performance of bids, trade contracts (other than borrowed money), leases, statutory obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature incurred in the ordinary course of business; 


    (e) Liens
on property of a Person existing at the time such Person becomes a Subsidiary of the Company or is merged with or into the Company or a Subsidiary of the
Company, provided, that such Liens were in existence prior to the date of such acquisition, merger or consolidation, were not incurred in anticipation
or in connection with thereof, and do not extend to any other assets; 


    (f)  Liens
on property existing at the time of acquisition thereof by the Company or any of its Subsidiaries, provided that such Liens were not incurred in anticipation
thereof or in connection with such acquisition; 


    (g) Liens
arising from Purchase Money Indebtedness permitted to be incurred pursuant to clause (a) of the second paragraph of Section 4.7 hereof, provided
such Liens relate solely to the property which is subject to such Purchase Money Indebtedness; 


    (h) Liens
securing Refinancing Indebtedness incurred to refinance any Indebtedness that was previously so secured in a manner not materially more adverse (taken as a
whole) to the Holders of the Notes than the terms of the Liens securing such refinanced Indebtedness, and provided that the Indebtedness secured is not increased and the Lien is not extended to any
additional assets or property that would not have been security for the Indebtedness refinanced; 


    (i)  Liens
securing Indebtedness incurred under the Credit Agreement in accordance with the terms of Section 4.7 hereof; 


    (j)  Liens
securing Indebtedness of any Foreign Subsidiary incurred in accordance with the provisions of Section 4.7 hereof; 



    (k) Liens
securing the Notes and/or the Guarantees; 


    (l)  statutory
and common law Liens of landlords and carriers, warehousemen, mechanics, suppliers, materialmen, repairmen or other similar Liens arising in the ordinary
course of business and with respect to amounts not yet delinquent or being contested in good faith by appropriate legal proceedings and for which a reserve or other appropriate provision, if any, as
shall be required in conformity with GAAP shall have been made; 


    (m) Liens
incurred or deposits made in the ordinary course of business in connection with workers' compensation, unemployment insurance and other types of social
security; 


    (n) Liens
encumbering deposits made in the ordinary course of business to secure obligations arising from statutory, regulatory, contractual or warranty requirements; 


    (o) easements,
rights-of-way, municipal and zoning ordinances and similar charges, encumbrances, title defects or other irregularities that, in
the aggregate, are not substantial in amount and that do not in any case materially detract from the value of the property subject thereto or materially interfere with the ordinary course of the
business of the Company or that of the Guarantors or any of the Company's or the Guarantors' respective Subsidiaries; 



    (p) Liens
arising from the rendering of a final judgment or order against the Company or any of the Guarantors that does not give rise to an Event of Default; 



13





 


    (q) leases or subleases granted to other Persons in the ordinary course of business not materially interfering with the conduct of the Company's business or that of its
Subsidiaries or materially detracting from the value of the relative asset; and 


    (r) Liens
incurred in the ordinary course of business of the Company or any Subsidiary of the Company with respect to obligations that do not exceed $5,000,000 in the
aggregate at anyone time outstanding and that (a) are not incurred in connection with the borrowing of money or the obtaining of advances or credit (other than trade credit in the ordinary
course of business) and (b) do not in the aggregate materially detract from the value of the property or materially impair the use thereof in the operation of business by the Company or such
Subsidiary, as applicable. 




    "Person" or "person" means any corporation, individual, limited liability company,
joint stock company, joint venture, partnership, unincorporated association, governmental regulatory entity, country, state or political subdivision thereof, trust, municipality or other entity. 


    "Preferred Stock" means any Equity Interest of any class or classes of a Person (however designated) which is preferred as to payments
of dividends, or as to distributions upon any liquidation or dissolution, over Equity Interests of any other class of such Person. 


    "Principal" means each of Kyle Kirkland and Dana Messina. 



    "Private Placement Legend" means the legend set forth in Section 2.6(g)(i) to be placed on all Notes issued under this
Indenture except where specifically stated otherwise by the provisions of this Indenture. 


    "Pro Forma" or "pro forma" shall have the meaning set forth in
Regulation S-X of the Securities Act of 1933, as amended, unless otherwise specifically stated herein. 


    "Public Equity Offering" means an underwritten public offering of Qualified Capital Stock of the Company for cash pursuant to an
effective registration statement filed with the Commission under the Securities Act of 1933, as amended. 


    "Purchase Money Indebtedness" of any Person means any Indebtedness of such Person to any seller or other Person incurred solely to
finance the acquisition (including in the case of a Capitalized Lease Obligation, the lease), construction, installation or improvement of any real or personal tangible property which, in the
reasonable good faith judgment of the Board of Directors of the Company, is directly related to a Related Business of the Company and which is incurred concurrently with such acquisition,
construction, installation or improvement and is secured only by the assets so financed. 


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


    "Qualified Capital Stock" means any Capital Stock of the Company that is not Disqualified Capital Stock. 


    "Qualified Exchange" means (i) any legal defeasance, redemption, retirement, repurchase or other acquisition of Capital Stock or
Indebtedness of the Company issued on or after the Issue Date with the Net Cash Proceeds received by the Company from the substantially concurrent sale of Qualified Capital Stock or, to the extent
used to retire Indebtedness of the Company issued on or after the Issue Date, Subordinated Indebtedness of the Company or (ii) any exchange of Qualified Capital Stock for any Capital Stock or
Indebtedness of the Company issued on or after the Issue Date or (iii) any exchange of Subordinated Indebtedness of the Company for Subordinated Indebtedness of the Company issued after the
Issue Date. 


    "Receivables Financing Notes" means the notes which: (i) are issued by any of the Company's or its Subsidiaries' selected retail
dealers to the Company or such Subsidiary, as the case may be, in
connection with the sale or lease by such selected retail dealers of finished goods, merchandise or other personal property relating to the Company or such Subsidiary's business, as the case may be,
(ii) are 


14





 


secured by such finished goods, merchandise or other personal property, and, (iii) are sold to a third-party financing company on a full recourse basis. 


    "Record Date" means a Record Date specified in the Notes, whether or not such date is a Business Day. 



    "Reference Period" with regard to any Person means the four full fiscal quarters (or such lesser period during which such Person has
been in existence) ended immediately preceding any date upon which any determination is to be made pursuant to the terms of the Notes or the Indenture. 


    "Refinancing" shall have the meaning set forth in the definition of Refinancing Indebtedness. 


    "Refinancing Indebtedness" means Indebtedness including (Disqualified Capital Stock) (a) issued in exchange for, or the proceeds
from the issuance and sale of which are used substantially concurrently to repay, redeem, defease, refund, refinance, discharge or otherwise retire for value, in whole or in part, or
(b) constituting an amendment, modification, extension or supplement to, or a deferral or renewal of ((a) and (b) above are, collectively, a "Refinancing"), any Indebtedness (including
Disqualified Capital Stock) in a principal amount or, in the case of Disqualified Capital Stock, liquidation preference, not to exceed the lesser of (1) the principal amount or, in the case of
Disqualified Capital Stock, liquidation preference, of the Indebtedness (including Disqualified Capital Stock) so Refinanced plus all accrued interest thereon and (2) if such Indebtedness being
Refinanced was issued with an original issue discount, the accreted value thereof (as determined in accordance with GAAP) at the time of such Refinancing, plus, in the case of each of clauses
(1) and (2), all expenses incurred in connection with such Refinancing and all premiums incurred in connection with such Refinancing in accordance with the terms of the documents governing the
Indebtedness Refinanced without giving effect to any modification thereof made in connection with or in contemplation of such Refinancing; provided, that (A) such Refinancing Indebtedness shall
only be used to refinance outstanding Indebtedness (including Disqualified Capital Stock) of such Person issuing such Refinancing Indebtedness (except that the Company may refinance outstanding
Indebtedness of any Subsidiary), (B) such Refinancing Indebtedness shall (x) not have an Average Life shorter than the Indebtedness (including Disqualified Capital Stock) to be so
refinanced at the time of such Refinancing and (y) in all respects, be no less contractually subordinated or junior, if applicable, to the rights of Holders of the Notes than was the
Indebtedness (including Disqualified Capital Stock) to be refinanced, (C) such Refinancing Indebtedness shall have a final stated maturity or redemption date, as applicable, no earlier than the
final stated maturity or redemption date, as applicable, of the Indebtedness (including Disqualified Capital Stock) to be so refinanced and (D) such Refinancing Indebtedness shall be secured
(if secured) in a manner no more adverse (taken as a whole) to the
Holders of the Notes than the terms of the Liens (if any) securing such refinanced Indebtedness, including, without limitation, the amount of Indebtedness secured shall not be increased. 


    "Registration Rights Agreement" means the Registration Rights Agreement, dated as of April 19, 2001, by and among the Company
and the other parties named on the signature pages thereof, as such agreement may be amended, modified or supplemented from time to time. 



    "Reg S Permanent Global Note" means one or more permanent Global Notes bearing the Private Placement Legend, that will be issued in an
aggregate amount of denominations equal in total to the outstanding principal amount of the Reg S Temporary Global Note upon expiration of the Distribution Compliance Period. 


    "Reg S Temporary Global Note" means one or more temporary Global Notes bearing the Private Placement Legend and the Reg S Temporary
Global Note Legend, issued in an aggregate amount of denominations equal in total to the outstanding principal amount of the Notes initially sold in reliance on Rule 903 of Regulation S. 


15







  




    "Reg S Temporary Global Note Legend" means the legend set forth in Section 2.6(g)(iii), which is required to be placed on all
Reg S Temporary Global Notes issued under this Indenture. 


    "Regulation S" means Regulation S promulgated under the Securities Act, as it may be amended from time to time, and any
successor provision thereto. 


    "Regulation S Global Note" means a Reg S Temporary Global Note or a Reg S Permanent Global Note, as the case may be. 


    "Related Business" means the business conducted (or proposed to be conducted) by the Company and its Subsidiaries as of the Issue Date
and any and all businesses that in the good faith judgment of the Board of Directors of the Company are materially related businesses. 



    "Related Person" means with respect to a Principal, (i) a spouse or immediate family member of the Principal or (ii) a
trust, partnership or other entity, the beneficiaries, stockholders, partners, owners or Persons beneficially holding an 80% or greater controlling interest of which consist of the Principal and/or
the Principal's spouse or immediate family members. 


    "Restricted Definitive Note" means one or more Definitive Notes bearing the Private Placement Legend, issued under this Indenture. 


    "Restricted Global Note" means one or more Global Notes bearing the Private Placement Legend, issued under this Indenture;  provided, that in no case shall an Exchange
Note issued in accordance with this Indenture and the terms of the Registration Rights Agreement be a
Restricted Global Note. 


    "Restricted Investment" means, in one or a series of related transactions, any Investment, other than other Permitted Investments. 


    "Restricted Payment" means, with respect to any Person: 



    (a) the
declaration or payment of any dividend or other distribution in respect of Equity Interests of such Person or any parent of such Person, 


    (b) any
payment (except to the extent made with Qualified Capital Stock) on account of the purchase, redemption or other acquisition or retirement for value of Equity
Interests of such Person or any parent of such Person, 


    (c) other
than with the proceeds from the substantially concurrent sale of, or in exchange for, Refinancing Indebtedness, any purchase, redemption, or other acquisition
or retirement for value of, any payment in respect of any amendment or waiver of the terms of or any defeasance of, any Subordinated Indebtedness, directly or indirectly, by such Person or a parent or
Subsidiary of such Person prior to the scheduled maturity of such Indebtedness, and 


    (d) any
Restricted Investment by such Person; 




    provided,
however, that the term "Restricted Payment" does not include (1) any dividend, distribution or other payment on or with respect to Equity Interests of an issuer to
the extent payable solely in shares of Qualified Capital Stock of such issuer, (2) any dividend, distribution or other payment to the Company, or to any Guarantor, by any of the Company's, or
its, Subsidiaries, or (3) any Investment in any Guarantor so long as such Guarantor receives the consideration for such Investment, or (4) the Selmer Notes Redemption. 


    "Rule 144A" means Rule 144A promulgated under the Securities Act, as it may be amended from time to time, and any
successor provision thereto. 


    "SEC" means the United States Securities and Exchange Commission, or any successor agency. 


    "Selmer" means The Selmer Company, Inc., a Delaware corporation. 


16





 


    "Selmer Indenture," means the indenture, dated as of May 25, 1995, by and among Selmer, the Company and the other guarantors
party thereto, and American Bank National Association, as trustee, pursuant to which Selmer's 11% Senior Subordinated Notes due 2005 were issued, as amended by the
Supplemental Indenture, dated as of September 14, 2000, by and among United Musical Instruments Holdings, Inc. and United Musical Instruments USA, Inc., as new guarantors, Selmer
and Firstar Bank, N.A., (f/k/a Firstar Bank of Minnesota, N.A.), as successor trustee. 


    "Selmer Notes" means the $110 million aggregate principal amount of Selmer's 11% Senior Subordinated Notes due 2005 issued
pursuant to the Selmer Indenture. 


    "Selmer Notes Redemption" means the redemption by Selmer of all of the Selmer Notes in accordance with the terms of the Selmer
Indenture. 


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


    "Shelf Registration Statement" shall have the meaning set forth in the Registration Rights Agreement. 


    "S&P" means Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, and its successors. 


    "Special Record Date" means, for payment of any Defaulted Interest, a date fixed by the Paying Agent pursuant to Section 2.12. 



    "Stated Maturity," when used with respect to any Note, means April 15, 2011. 


    "Subordinated Indebtedness" means Indebtedness of the Company or a Guarantor that is subordinated in right of payment by its terms or
the terms of any document or instrument or instrument relating thereto ("contractually") to the Notes or any Guarantee, as applicable, in any respect or has a final stated maturity after the Stated
Maturity. 


    "Subsidiary," with respect to any Person, means (1) a corporation a majority of whose Equity Interests with voting power, under
ordinary circumstances, to elect directors is at the time, directly or indirectly, owned by such Person, by such Person and one or more Subsidiaries of such Person or by one or more Subsidiaries of
such Person, (2) any other Person (other than a corporation) in which such Person, one or more Subsidiaries of such Person, or such Person and one or more Subsidiaries of such Person, directly
or indirectly, at the date of determination thereof has at least majority ownership interest, or (3) a partnership in which such Person or a Subsidiary of such Person is, at the time, a general
partner and in which such Person, directly or indirectly, at the date of determination thereof has at least a
majority ownership interest. Notwithstanding the foregoing, an Unrestricted Subsidiary shall not be a Subsidiary of the Company or of any Subsidiary of the Company. Unless the context requires
otherwise, Subsidiary means each direct and indirect Subsidiary of the Company. 


    "TIA" means the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) as in effect on the date on
which this Indenture is qualified under the TIA. 


    "Transfer Restricted Notes" means Global Notes and Definitive Notes that bear or are required to bear the Private Placement Legend,
issued under this Indenture. 


    "Trustee" means the party named as such above until a successor replaces it in accordance with the applicable provisions of this
Indenture and thereafter means such successor serving hereunder. 


    "Unrestricted Definitive Note" means one or more Definitive Notes that do not bear and are not required to bear the Private Placement
Legend, issued under this Indenture. 


17





 


    "Unrestricted Global Note" means one or more permanent Global Notes representing a series of Notes that does not bear and is not
required to bear the Private Placement Legend, issued under this Indenture. 


    "Unrestricted Subsidiary" means any subsidiary of the Company (other than Subsidiaries of the Company existing on the date of the
Indenture, or any successor to any of them) that is designated by the Board of Directors as an Unrestricted Subsidiary pursuant to a Board Resolution; but only to the extent, that such subsidiary at
the time of such designation (a) has no Indebtedness other than Non-Recourse Indebtedness; (b) is not party to any agreement, contract, arrangement or understanding with the
Company or any Subsidiary of the Company unless the terms of any such agreement, contract, arrangement or understanding are no less favorable to the Company or such Subsidiary than those that might be
obtained at the time from Persons who are not Affiliates of the Company; and (c) is a Person with respect to which neither the Company nor any of its Subsidiaries has any direct or indirect
obligation (x) to subscribe for additional Equity Interests or (y) to maintain or preserve such Person's financial condition or to cause such Person to achieve any specified levels of
operating results. Each such designation shall be evidenced by filing with the Trustee a certified copy of the resolution giving effect to such designation and an Officers' Certificate certifying that
such designation complied with the foregoing conditions and Section 4.9. 


    The
Board of Directors of the Company may designate any Unrestricted Subsidiary to be a Subsidiary, provided, that (1) no Default or Event of Default is existing or will occur
as a consequence thereof, and (2) immediately after giving effect to such designation, on a pro forma basis, the Company could incur at least $1.00 of Indebtedness pursuant to the Debt
Incurrence Ratio of the first paragraph of Section 4.7 hereof. 


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



    "U.S. Person" means a U.S. person as defined in Rule 902(o) under the Securities Act. 


    "Voting Equity Interests" means Equity Interests which at the time are entitled to vote in the election of, as applicable, member or
partners generally. 


    "Wholly Owned Subsidiary" means a Subsidiary all the Equity Interests of which (other than directors' qualifying shares) are owned by
the Company or one or more Wholly Owned Subsidiaries of the Company or a combination thereof. 


18





 


SECTION 0.1 OTHER DEFINITIONS 



	Term
	 	Defined in Section

	"Affiliate Transaction"	 	4.12
	"Asset Sale"	 	4.13
	"Asset Sale Offer"	 	4.13
	"Authentication Order"	 	2.2
	"Benefitted Party"	 	10.1
	"Change of Control Offer"	 	4.14
	"Change of Control Offer Period"	 	4.14
	"Change of Control Purchase Date"	 	4.14
	"Change of Control Purchase Price"	 	4.14
	"Covenant Defeasance"	 	8.3
	"Debt Incurrence Ratio"	 	4.7
	"Defaulted Interest"	 	2.12
	"DTC"	 	2.3
	"Excess Proceeds"	 	4.13
	"Guarantee Obligations"	 	10.1
	"incur" or "incurrence"	 	4.7
	"Incurrence Date"	 	4.7
	"Legal Defeasance"	 	8.2
	"Paying Agent"	 	2.3
	"Registrar"	 	2.3






SECTION
0.2 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT 


    Whenever
this Indenture refers to a provision of the TIA, such 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 Securities and Exchange Commission; 


    "obligor" on the Notes means the Company, each Guarantor and any successor obligor upon the Notes. 



    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 have the meanings so assigned to
them. 


SECTION
0.3 RULES OF CONSTRUCTION 


    Unless
the context otherwise requires: 



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


    (2) an
accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP; 



    (3) "or"
is not exclusive; 


    (4) words
in the singular include the plural, and in the plural include the singular; 


    (5) provisions
apply to successive events and transactions; 


    (6) "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; and 



19





 


    (7) references to sections of or rules under the Securities Act and the Exchange Act shall be deemed to include substitute, replacement of successor sections or rules
adopted by the SEC from time to time. 



 
 

ARTICLE I
  THE NOTES    
  


SECTION
1.1 FORM AND DATING 


    (a)  General.  The Notes and the Trustee's certificate of authentication shall be substantially in the
form of Exhibit A hereto. The Notes may have notations, legends or endorsements required by law, stock exchange rule or usage. Each Note shall be dated the date of its authentication. The Notes
shall be in denominations of $1,000 and integral multiples thereof. 


    The
terms and provisions contained in the Notes shall constitute, and are hereby expressly made, a part of this Indenture and the Company, the Guarantors and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. However, to the extent any provision of any Note conflicts with the express provisions
of this Indenture, the provisions of this Indenture shall govern and be controlling. 


    (b)  Global Notes.  Notes issued in global form shall be substantially in the form of Exhibit A
attached hereto (including the Global Note Legend thereon and the "Schedule of Exchanges of Interests in the Global Note" attached thereto). Notes issued in definitive form shall be substantially in
the form of Exhibit A attached hereto (but without the Global Note Legend thereon and without the "Schedule of Exchanges of Interests in the Global Note" attached thereto). Each Global Note
shall represent such of the outstanding Notes as shall be specified therein and each shall provide that it shall represent the aggregate principal amount of outstanding Notes from time to time
endorsed thereon and that the aggregate principal amount of outstanding Notes represented thereby may from time to time be reduced or increased, as appropriate, to reflect exchanges and redemptions.
Any endorsement of a
Global Note to reflect the amount of any increase or decrease in the aggregate principal amount of outstanding Notes represented thereby shall be made by the Trustee or the Notes Custodian, at the
direction of the Trustee, in accordance with instructions given by the Holder thereof as required by Section 2.6 hereof. 


    (c)  Euroclear and Clearstream Procedures Applicable.  The provisions of the "Operating Procedures of the
Euroclear System" and "Terms and Conditions Governing Use of Euroclear" and the "General Terms and Conditions of Clearstream Banking Luxembourg" and "Customer Handbook" of Clearstream Banking
Luxembourg in effect at the relevant time shall be applicable to transfers of beneficial interests in the Regulation S Global Notes that are held by Participants through Euroclear or
Clearstream Banking Luxembourg. 


SECTION
1.2 EXECUTION AND AUTHENTICATION 


    Two
officers shall sign the Notes for the Company by manual or facsimile signature. In the case of Definitive Notes, such signatures may be imprinted or otherwise reproduced on such
Notes. If an Officer whose signature is on a Note no longer holds that office at the time a Note is authenticated, the Note shall nevertheless be valid. A Note shall not be valid until authenticated
by the manual signature of the Trustee. The signature shall be conclusive evidence that the Note has been authenticated under this Indenture. The Trustee shall, upon a written order of the Company
signed by an Officer (an "Authentication Order"), authenticate Notes for issuance up to the aggregate principal amount stated in such Authentication Order;  provided that Notes authenticated for issuance
on the Issue Date shall not exceed $150,000,000 in aggregate principal amount. The Trustee may appoint an
authenticating agent acceptable to the Company to authenticate Notes. An authenticating agent may 


20





 


authenticate Notes 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 Holders or an Affiliate of the Company. 


SECTION
1.3 REGISTRAR, PAYING AGENT AND DEPOSITARY 


    The
Company shall maintain an office or agency in the Borough of Manhattan, The City of New York, where Notes may be presented for registration of transfer or for exchange
("Registrar") and an office or agency where Notes may be presented for payment ("Paying Agent"). The Registrar shall keep a register of the Notes and of their transfer and exchange. The Company may
appoint one or more co-registrars and one or more additional paying agents. The term "Registrar" includes any co-registrar and the term "Paying Agent" includes any additional
paying agent. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company shall notify the Trustee in writing of the name and address of any Agent not a party to
this Indenture. If the Company fails to
appoint or maintain another entity as Registrar or Paying Agent, the Trustee shall act as such. The Company or any of its Subsidiaries may act as Paying Agent or Registrar. The Company initially
appoints The Depository Trust Company ("DTC") to act as Depositary with respect to the Global Notes. The Company initially appoints the Trustee to act as the Registrar and Paying Agent and to act as
Notes Custodian with respect to the Global Notes. 



SECTION
1.4 PAYING AGENT TO HOLD MONEY IN TRUST 


    The
Company shall require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will hold in trust for the benefit of Holders or the Trustee all money
held by the Paying Agent for the payment of principal, premium or Liquidated Damages, if any, or interest on the Notes, and will 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 (if other than the Company or a Subsidiary) shall have no further liability for the money. If the Company or a Subsidiary acts
as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy or reorganization proceedings relating to
the Company, the Trustee shall serve as Paying Agent for the Notes. 


SECTION
1.5 HOLDER LISTS 


    The
Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of all Holders and shall otherwise comply
with TIA § 312(a). If the Trustee is not the Registrar, the Company shall furnish, or shall cause the Registrar (if other than the Company) to furnish, to the Trustee at least seven
Business Days 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 the Holders of Notes and the Company shall otherwise comply with TIA § 312(a). 


SECTION
1.6 TRANSFER AND EXCHANGE 


    (a)  Transfer and Exchange of Global Notes.  A Global Note may not be transferred as a whole except by
the Depositary to a nominee of the Depositary, by a nominee of the Depositary to the Depositary or to another nominee of the Depositary, or by the Depositary or any such nominee to a successor
Depositary or a nominee of such successor Depositary. All Global Notes will be exchanged by the Company for Definitive Notes if (i) the Company delivers to the Trustee notice from the
Depositary that (x) the Depositary is unwilling or unable to continue to act as Depositary for the Global Notes and the Company thereupon fails to appoint a successor Depositary within
90 days or 


21





 


(y) the Depositary is no longer a clearing agency registered under the Exchange Act, (ii) the Company in its sole discretion determines that the Global Notes (in whole but not in part)
should be exchanged for Definitive Notes and delivers a written notice to such effect to the Trustee or (iii) upon request of the Trustee or Holders of a majority of the aggregate principal
amount of outstanding Notes if there shall have occurred and be continuing a Default or Event of Default with respect to the Notes; provided that in no
event shall the Reg S Temporary Global Note be exchanged by the Company for Definitive Notes prior to (x) the expiration of the Distribution Compliance Period and (y) the receipt by the
Registrar of any certificate identified by the Company and its counsel to be required pursuant to Rule 903 or Rule 904 under the Securities Act. Upon the occurrence of any of the
preceding events in (i), (ii) or (iii) above, Definitive Notes shall be issued in such names as the Depositary shall instruct the Trustee. Global Notes also may be exchanged or replaced,
in whole or in part, as provided in Sections 2.7 and 2.10 hereof. Every Note authenticated and delivered in exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to this
Section 2.6 or Section 2.7 or 2.10 hereof, shall be authenticated and delivered in the form of, and shall be, a Global Note. A Global Note may not be exchanged for another Note other
than as provided in this Section 2.6(a), however, beneficial interests in a Global Note may be transferred and exchanged as provided in Section 2.6(b), (c) or (f) hereof. 


    (b)  Transfer and Exchange of Beneficial Interests in the Global Notes.  The transfer and exchange of
beneficial interests in the Global Notes shall be effected through the Depositary, in accordance with the provisions of this Indenture and the Applicable Procedures. Beneficial interests in the
Restricted Global Notes shall be subject to restrictions on transfer comparable to those set forth herein to the extent required by the Securities Act. Transfers of beneficial interests in the Global
Notes also shall require compliance with either subparagraph (i) or (ii) below, as applicable, as well as one or more of the other following subparagraphs, as applicable: 



    (i)  Transfer of Beneficial Interests in the Same Global Note.  Beneficial interests in any Restricted
Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the same Restricted Global Note in accordance with the transfer restrictions set forth in
the Private Placement Legend; provided, however, that prior to the expiration of the Distribution Compliance Period, transfers of beneficial interests
in the Reg S Temporary Global Note may not be made to a U.S. Person or for the account or benefit of a U.S. Person (other than an Initial Purchaser). Beneficial interests in any Unrestricted Global
Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note. No written orders or instructions shall be required to be delivered to
the Registrar to effect the transfers described in this Section 2.6(b)(i). 


    (ii)  All Other Transfers and Exchanges of Beneficial Interests in Global Notes.  In connection with all
transfers and exchanges of beneficial interests that are not subject to Section 2.6(b)(i) above, the transferor of such beneficial interest must deliver to the Registrar either
(A) (1) an order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to credit or cause to be credited a
beneficial interest in another Global Note in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given in accordance with the Applicable Procedures
containing information regarding the Participant account to be credited with such increase or (B) (1) an order from a Participant or an Indirect Participant given to the Depositary in
accordance with the Applicable Procedures directing the
Depositary to cause to be issued a Definitive Note in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given by the Depositary to the Registrar
containing information regarding the Person in whose name such Definitive Note shall be registered to effect the transfer or exchange referred to in (B)(1) above;  provided, that in no event shall
Definitive Notes be issued upon the transfer or exchange of beneficial interests in the Reg S Temporary Global Note
prior to (x) the expiration of the Distribution Compliance Period and (y) the receipt by the Registrar of any 



22





 


certificates identified by the Company or its counsel to be required pursuant to Rule 903 and Rule 904 under the Securities Act. Upon consummation of an Exchange Offer by the Company in
accordance with Section 2.6(f) hereof, the requirements of this Section 2.6(b)(ii) shall be deemed to have been satisfied upon receipt by the Registrar of the instructions
contained in the Letter of Transmittal delivered by the Holder of such beneficial interests in the Restricted Global Notes. Upon satisfaction of all of the requirements for transfer or exchange of
beneficial interests in Global Notes contained in this Indenture and the Notes or otherwise applicable under the Securities Act, the Trustee shall adjust the principal amount of the relevant Global
Note(s) pursuant to Section 2.6(h) hereof. 


    (iii)  Transfer of Beneficial Interests to Another Restricted Global Note.  A beneficial interest in any
Restricted Global Note may be transferred to a Person who takes delivery thereof in the form of a beneficial interest in another Restricted Global Note if the transfer complies with the requirements
of Section 2.6(b)(ii) above and the Registrar receives the following: 



    (A) if
the transferee will take delivery in the form of a beneficial interest in the 144A Global Note, then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications in item (1) thereof; and 


    (B) if
the transferee will take delivery in the form of a beneficial interest in the Reg S Temporary Global Note or the Reg S Permanent Global Note, then the transferor
must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof. 




    (iv)  Transfer and Exchange of Beneficial Interests in a Restricted Global Note for Beneficial Interests in the Unrestricted Global
Note.  A beneficial interest in any Restricted Global Note may be exchanged by any holder thereof for a beneficial interest in an Unrestricted Global Note or
transferred to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note if the exchange or transfer complies with the requirements of
Section 2.6(b)(ii) above and: 



    (A) such
exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and Section 2.6(f) hereof, and the
holder of the beneficial interest to be transferred, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not
(1) a Broker-Dealer, (2) a Person participating in the
distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Company; 


    (B) such
transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement; 


    (C) such
transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or 


    (D) the
Registrar receives the following: (1) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest
for a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (1)(a) thereof; or (2) if
the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item (4) thereof; and, in each such case set forth in this
subparagraph (D), an Opinion of Counsel in form, and from legal counsel, reasonably acceptable to the Registrar and the Company to the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein and in the Private 




23





 



Placement Legend are no longer required in order to maintain compliance with the Securities Act. 





    If
any such transfer is effected pursuant to subparagraph (B) or (D) above at a time when an Unrestricted Global Note has not yet been issued, the Company shall issue
and, upon receipt of an Authentication Order in accordance with Section 2.2 hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal
to the aggregate principal amount of beneficial interests transferred pursuant to subparagraph (B) or (D) above. Beneficial interests in an Unrestricted Global Note cannot be exchanged
for, or transferred to Persons who take delivery thereof in the form of, a beneficial interest in a Restricted Global Note. 


    (c)  Transfer or Exchange of Beneficial Interests for Definitive Notes.  



    (i)  Beneficial Interests in Restricted Global Notes to Restricted Definitive Notes.  If any holder of a
beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note or to transfer such beneficial interest to a Person who takes delivery
thereof in the
form of a Restricted Definitive Note, then, upon receipt by the Registrar of the following documentation: 



    (A) if
the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note, a certificate
from such holder in the form of Exhibit C hereto, including the certifications in item (2)(a) thereof; 



    (B) if
such beneficial interest is being transferred to a QIB in accordance with Rule 144A under the Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (1) thereof; 


    (C) if
such beneficial interest is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904
under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2) thereof; 


    (D) if
such beneficial interest is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with
Rule 144 under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(a) thereof; 


    (E) if
such beneficial interest is being transferred to an Institutional Accredited Investor in reliance on an exemption from the registration requirements of the
Securities Act other than those listed in subparagraphs (B) through (D) above, a certificate to the effect set forth in Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3) thereof, if applicable; 


    (F) if
such beneficial interest is being transferred to the Company or any of its Subsidiaries, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(b) thereof; or 


    (G) if
such beneficial interest is being transferred pursuant to an effective registration statement under the Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (3)(c) thereof, 





the
Trustee shall cause the aggregate principal amount of the applicable Restricted Global Note to be reduced accordingly pursuant to Section 2.6(h) hereof, and the Company shall execute and,
upon receipt of an Authentication Order pursuant to Section 2.2, the Trustee shall authenticate and deliver to the Person designated in the instructions a Restricted Definitive Note in the
appropriate principal amount. Any Restricted Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.6(c) shall be registered in such
name or names and in such 


24





 


authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from the Depositary and the Participant or Indirect Participant.
The Trustee shall deliver such Restricted Definitive Notes to the Persons in whose names such Notes are so registered. Any Restricted Definitive Note issued in exchange for a beneficial interest in a
Restricted Global Note pursuant to this Section 2.6(c)(i) shall bear the Private Placement Legend and shall be subject to all restrictions on transfer contained therein. 



    (ii)  Beneficial Interests in Restricted Global Notes to Unrestricted Definitive Notes.  A holder of a
beneficial interest in a Restricted Global Note may exchange such beneficial interest for an Unrestricted Definitive Note or may transfer such beneficial interest to a Person who takes delivery
thereof in the form of an Unrestricted Definitive Note only if: 



    (A) such
exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and Section 2.6(f) hereof, and the
holder of such beneficial interest, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a
Broker-Dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Company; 


    (B) such
transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement; 



    (C) such
transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or 


    (D) the
Registrar receives the following: (1) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest
for a Definitive Note that does not bear the Private Placement Legend, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (1)(b) thereof; or
(2) if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of a Definitive
Note that does not bear the Private Placement Legend, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item (4) thereof; and, in each such
case set forth in this subparagraph (D), an Opinion of Counsel in form, and from legal counsel, reasonably acceptable to the Registrar and the Company to the effect that such exchange or transfer is
in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the
Securities Act. 




    (iii)  Beneficial Interests in Unrestricted Global Notes to Unrestricted Definitive Notes.  If any holder
of a beneficial interest in an Unrestricted Global Note proposes to exchange such beneficial interest for an Unrestricted Definitive Note or to transfer such beneficial interest to a Person who takes
delivery thereof in the form of an Unrestricted Definitive Note, then, upon satisfaction of the conditions set forth in Section 2.6(b)(ii) hereof, the Trustee shall cause the aggregate
principal amount of the applicable Unrestricted Global Note to be reduced accordingly pursuant to Section 2.6(h) hereof, and the Company shall execute and, upon receipt of an Authentication
Order pursuant to Section 2.2, the Trustee shall authenticate and deliver to the Person designated in the instructions an Unrestricted Definitive Note in the appropriate principal amount. Any
Unrestricted Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.6(c)(iii) shall be registered in such name or names and in such authorized
denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from the Depositary and the Participant or Indirect Participant. The Trustee
shall deliver such Unrestricted Definitive Notes to the Persons in whose names such Notes are so 



25





 


registered. Any Unrestricted Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.6(c)(iii) shall not bear the Private Placement Legend. 



    (iv)  Transfer or Exchange of Reg S Temporary Global Notes.  Notwithstanding the other provisions of this
Section 2.6, a beneficial interest in the Reg S Temporary Global Note may not be (A) exchanged for a Definitive Note prior to (x) the expiration of the Distribution Compliance
Period (unless such exchange is effected by the Company, does not require an investment decision on the part of the holder thereof and does not violate the provisions of Regulation S) and
(y) the receipt by the Registrar of any certificates identified by the Company or its counsel to be required pursuant to Rule 903(c)(3)(B) under the Securities Act or
(B) transferred to a Person who takes delivery thereof in the form of a Definitive Note prior to the events set forth in clause (A) above or unless the transfer is pursuant to an
exemption from the registration requirements of the Securities Act other than Rule 903 or Rule 904. 




    (d)  Transfer and Exchange of Definitive Notes for Beneficial Interests.  



    (i)  Restricted Definitive Notes to Beneficial Interests in Restricted Global Notes.  If any Holder of a
Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note or to transfer such Restricted Definitive Notes to a Person who takes delivery thereof
in the form of a beneficial interest in a Restricted Global Note, then, upon receipt by the Registrar of the following documentation: 



    (A) if
the Holder of such Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note, a certificate from such
Holder in the form of Exhibit C hereto, including the certifications in item (2)(b) thereof; 


    (B) if
such Restricted Definitive Note is being transferred to a QIB in accordance with Rule 144A under the Securities Act, a certificate to the effect set forth
in Exhibit B hereto, including the certifications in item (1) thereof; or 


    (C) if
such Restricted Definitive Note is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or
Rule 904 under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2) thereof, 





the
Trustee shall cancel the Restricted Definitive Note, increase or cause to be increased the aggregate principal amount of, in the case of clause (A) above, the appropriate Restricted Global
Note, in the case of clause (B) above, the 144A Global Note, and in the case of clause (C) above, the Regulation S Global Note. 



    (ii)  Restricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes.  A Holder of a
Restricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Restricted Definitive Note to a Person who takes delivery thereof in the
form of a beneficial interest in an Unrestricted Global Note only if: 



    (A) such
exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and Section 2.6(f) hereof, and the
Holder, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a Broker-Dealer, (2) a Person
participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Company; 


    (B) such
transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement; 




26





 



    (C) such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or 



    (D) the
Registrar receives the following: (1) if the Holder of such Restricted Definitive Notes proposes to exchange such Notes for a beneficial interest in the
Unrestricted Global Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (1)(c) thereof; or (2) if the Holder of such Restricted
Definitive Notes proposes to transfer such Notes to a Person who shall
take delivery thereof in the form of a beneficial interest in the Unrestricted Global Note, a certificate from such Holder in the form of Exhibit B hereto, including the certifications in item
(4) thereof; and, in each such case set forth in this subparagraph (D), an Opinion of Counsel in form, and from legal counsel, reasonably acceptable to the Registrar and the Company to the
effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in
order to maintain compliance with the Securities Act. Upon satisfaction of the conditions of any of the subparagraphs in this Section 2.6(d)(ii), the Trustee shall cancel the Restricted
Definitive Notes so transferred or exchanged and increase or cause to be increased the aggregate principal amount of the Unrestricted Global Note. 




    (iii)  Unrestricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes.  A Holder of
an Unrestricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Definitive Notes to a Person who takes delivery thereof in the form of
a beneficial interest in an Unrestricted Global Note at any time. Upon receipt of a request for such an exchange or transfer, the Trustee shall cancel the applicable Unrestricted Definitive Note and
increase or cause to be increased the aggregate principal amount of one of the Unrestricted Global Notes. If any such exchange or transfer from a Definitive Note to a beneficial interest is effected
pursuant to subparagraphs (ii)(B), (ii)(D) or (iii) of this Section 2.6(d) at a time when an Unrestricted Global Note has not yet been issued, the Company shall issue and, upon receipt
of an Authentication Order in accordance with Section 2.2 hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal
amount of Definitive Notes so transferred. 




    (e)  Transfer and Exchange of Definitive Notes for Definitive Notes.  Upon request by a Holder of
Definitive Notes and such Holder's compliance with the provisions of this Section 2.6(e), the Registrar shall register the transfer or exchange of Definitive Notes. Prior to such registration
of transfer or exchange, the requesting Holder shall present or surrender to the Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of transfer in form satisfactory
to the Registrar duly executed by such Holder or by its attorney, duly authorized in writing. In addition, the requesting Holder shall provide any additional certifications, documents and information,
as applicable, required pursuant to the following provisions of this Section 2.6(e). 



    (i)  Restricted Definitive Notes to Restricted Definitive Notes.  Any Restricted Definitive Note may be
transferred to and registered in the name of Persons who take delivery thereof in the form of a Restricted Definitive Note if the Registrar receives the following: 



    (A) if
the transfer will be made pursuant to Rule 144A under the Securities Act, then the transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (1) thereof; 


    (B) if
the transfer will be made pursuant to Rule 903 or Rule 904, then the transferor must deliver a certificate in the form of Exhibit B hereto,
including the certifications in item (2) thereof; and 




27





 



    (C) if the transfer will be made pursuant to any other exemption from the registration requirements of the Securities Act, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable. 




    (ii)  Restricted Definitive Notes to Unrestricted Definitive Notes.  Any Restricted Definitive Note may
be exchanged by the Holder thereof for an Unrestricted Definitive Note or transferred to a Person or Persons who take delivery thereof in the form of an Unrestricted Definitive Note if: 



    (A) such
exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and Section 2.6(f) hereof, and the
Holder, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a Broker-Dealer, (2) a Person
participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Company; 


    (B) any
such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement; 



    (C) any
such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or 


    (D) the
Registrar receives the following: (1) if the Holder of such Restricted Definitive Notes proposes to exchange such Notes for an Unrestricted Definitive
Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (1)(d) thereof; or (2) if the Holder of such Restricted Definitive Notes
proposes to transfer such Notes to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such Holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof; and, in each such case set forth in this subparagraph (D), an Opinion of Counsel in form, and from legal counsel, reasonably acceptable to the
Registrar and the Company to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement
Legend are no longer required in order to maintain compliance with the Securities Act. 




    (iii)  Unrestricted Definitive Notes to Unrestricted Definitive Notes.  A Holder of Unrestricted
Definitive Notes may transfer such Notes to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note. Upon receipt of a request to register such a transfer, the Registrar
shall register the Unrestricted Definitive Notes pursuant to the instructions from the Holder thereof. 




    (f)  Exchange Offer.  Upon the occurrence of the Exchange Offer in accordance with the Registration
Rights Agreement, the Company shall issue and, upon receipt of an Authentication Order in accordance with Section 2.2 and an Opinion of Counsel for the Company as to certain matters discussed
in this Section 2.6(f), the Trustee shall authenticate (i) one or more Unrestricted Global Notes in an aggregate principal amount equal to the sum of (A) the principal amount of
the beneficial interests in the Restricted Global Notes tendered for acceptance by Persons that certify in the applicable Letters of Transmittal that (x) they are not Broker-Dealers,
(y) they are not participating in a distribution of the Exchange Notes and (z) they are not affiliates (as defined in Rule 144) of the Company, and accepted for exchange in the
Exchange Offer and (B) the principal amount of Definitive Notes exchanged or transferred for beneficial interests in Unrestricted Global Notes in connection with the Exchange Offer pursuant to
Section 2.6(d)(ii) and (ii) Definitive Notes in an aggregate principal amount equal to the principal amount of the Restricted Definitive Notes accepted for exchange in the
Exchange Offer (other than Definitive Notes described in clause (i)(B) immediately above). 


28





 


Concurrently with the issuance of such Notes, the Trustee shall cause the aggregate principal amount of the applicable Restricted Global Notes to be reduced accordingly, and the Company shall execute
and, upon receipt of an Authentication Order pursuant to Section 2.2, the Trustee shall authenticate and deliver to the Persons designated by the Holders of Definitive Notes so accepted
Definitive Notes in the appropriate principal amount. 


    The
Opinion of Counsel for the Company referenced above shall state, in form and substance satisfactory to the Trustee, that: 



    (1) the
issuance and sale of the Exchange Notes by the Company have been duly authorized and, when executed and authenticated in accordance with the provisions of this
Indenture and delivered in exchange for Series A Notes in accordance with this Indenture and the Exchange Offer, will be entitled to the benefits of this Indenture and will be valid and binding
obligations of the Company, enforceable against the Company in accordance with their terms except as the enforceability thereof may be limited by (x) bankruptcy, fraudulent transfer,
insolvency, reorganization, moratorium or similar laws affecting creditors' rights generally and (y) equitable principles of general applicability (regardless of whether enforceability is
considered at equity or in law); and 


    (2) when
the Exchange Notes are executed and authenticated in accordance with the provisions of this Indenture and delivered in exchange for Series A Notes in
accordance with this Indenture and the Exchange Offer, the Guarantees by the Guarantors endorsed thereon will be entitled to the benefits of this Indenture and will be valid and binding obligations of
the Guarantors, enforceable against the Guarantors in accordance with their terms except as the enforceability thereof may be limited by (x) bankruptcy, fraudulent transfer, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights generally and (y) equitable principles of general applicability (regardless of whether enforceability is considered at
equity or in law). 




    (g)  Legends.  The following legends shall appear on the face of all Global Notes and Definitive Notes
issued under this Indenture unless specifically stated otherwise in the applicable provisions of this Indenture. 



    (i)  Private Placement Legend.  



    (A) Except
as permitted by subparagraph (B) below, each Global Note and each Definitive Note (and all Notes issued in exchange therefor or substitution thereof)
shall bear the legend in substantially the following form: 





"THIS
NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES
OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE NEXT SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER: 



    (1) REPRESENTS
THAT, IN CONNECTION WITH EXEMPT RESALES BY UBS WARBURG LLC (THE "INITIAL PURCHASER"), (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN
RULE 144A UNDER THE ACT)(A "QIB"), (B) IT HAS ACQUIRED THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE ACT, 


    (2) AGREES
THAT, IN CONNECTION WITH RESALES AND TRANSFERS OF THE NOTES OTHER THAN IN CONNECTION WITH EXEMPT RESALES BY THE INITIAL PURCHASER, IT WILL NOT RESELL OR
OTHERWISE TRANSFER THIS NOTE EXCEPT 



29





 


(A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF THE ACT, (D) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144
UNDER THE ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE ACT) THAT, PRIOR TO SUCH TRANSFER, FURNISHES
THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF THIS NOTE (THE FORM OF WHICH CAN BE OBTAINED FROM THE
TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
ACT, (F) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY) OR (G) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND 


    (3) AGREES
THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. 




    AS
USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE ACT. THE INDENTURE CONTAINS A PROVISION
REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING." 




    (B) Notwithstanding
the foregoing, any Global Note or Definitive Note issued pursuant to subparagraphs (b)(iv), (c)(ii), (c)(iii), (d)(ii), (d)(iii), (e)(ii),
(e)(iii) or (f) to this Section 2.6 (and all Notes issued in exchange therefor or substitution thereof) shall not bear the Private Placement Legend. 




    (ii)  Global Note Legend.  To the extent required by the Depositary, each Global Note shall bear legends
in substantially the following forms: 



"THIS
GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY
PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.6 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE
EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.6(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE
AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY." 


"UNLESS
AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A 




30





 



NOMINEE OF THE 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. UNLESS
THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("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 SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE 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." 




    (iii)  Reg S Temporary Global Note Legend.  To the extent required by the Depositary, each Reg S
Temporary Global Note shall bear a legend in substantially the following form: 



"THE
RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR DEFINITIVE NOTES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN).
NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE CASH PAYMENTS OF INTEREST DURING THE PERIOD WHICH SUCH HOLDER HOLDS THIS NOTE.
NOTHING IN THIS LEGEND SHALL BE DEEMED TO PREVENT INTEREST FROM ACCRUING ON THIS NOTE." 





    (h)  Cancellation and/or Adjustment of Global Notes.  At such time as all beneficial interests in a
particular Global Note have been exchanged for Definitive Notes or a particular Global Note has been redeemed, repurchased or cancelled in whole and not in part, each such Global Note shall be
returned to or retained and cancelled by the Trustee in accordance with Section 2.11 hereof. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for
or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes, the principal amount of Notes represented by such Global
Note shall be reduced accordingly and an endorsement may be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such reduction; and if the
beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note, such other Global Note shall be
increased accordingly and an endorsement may be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such increase. 



    (i)  General Provisions Relating to Transfers and Exchanges.  



     (i) To
permit registrations of transfers and exchanges, the Company shall execute and the Trustee shall authenticate Global Notes and Definitive Notes upon receipt of
an Authentication Order. 


    (ii) No
service charge shall be made to a holder of a beneficial interest in a Global Note or to a Holder of a Definitive Note for any registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or
similar governmental charge payable upon exchange or transfer pursuant to Sections 2.10, 3.6, 4.13, 4.14 and 4.15 hereof). 



31





 


    (iii) The Registrar shall not be required to register the transfer of or exchange any Note selected for redemption in whole or in part, except the unredeemed portion of
any Note being redeemed in part. 


    (iv) All
Global Notes and Definitive Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Notes shall be the valid obligations of
the Company, evidencing the same Indebtedness, and entitled to the same benefits under this Indenture, as the Global Notes or Definitive Notes surrendered upon such registration of transfer or
exchange. 


    (v) The
Company shall not be required (A) to issue, to register the transfer of or to exchange any Notes during a period beginning at the opening of business
15 days before the day of any selection of Notes for redemption under Section 3.2 hereof and ending at the close of business on the day of selection, (B) to register the transfer
of or to exchange any Note so selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part or (C) to register the transfer of or to exchange a
Note between a Record Date and the next succeeding Interest Payment Date. 


    (vi) Prior
to due presentment for the registration of a transfer of any Note, the Trustee, any Agent and the Company may deem and treat the Person in whose name any
Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest on such Notes and for all other purposes, and none of the Trustee, any Agent or
the Company shall be affected by notice to the contrary. 


   (vii) The
Trustee shall authenticate Global Notes and Definitive Notes in accordance with the provisions of Section 2.2 hereof. 



   (viii) All
certifications, certificates and Opinions of Counsel required to be submitted to the Registrar pursuant to this Section 2.6 to effect a registration
of transfer or exchange may be submitted by facsimile. 




    Notwithstanding
anything herein to the contrary, as to any certifications and certificates delivered to the Registrar pursuant to this Section 2.6, the Registrar's duties shall
be limited to confirming that any such certifications and certificates delivered to it are in the form of Exhibits A, B, C and D attached hereto. The Registrar shall not be responsible for confirming
the truth or accuracy of representations made in any such certifications or certificates. 



SECTION
1.7 REPLACEMENT NOTES 


    If
any mutilated Note is surrendered to the Trustee or the Company and the Trustee and the Company receive evidence (which evidence may be from the Trustee) to their satisfaction of
the destruction, loss or theft of any Note, the Company shall issue and the Trustee, upon receipt of an Authentication Order, shall authenticate a replacement Note if the Trustee's requirements are
met. If required by the Trustee or the Company, an indemnity bond must be supplied by the Holder that is sufficient in the judgment of the Trustee and the Company to protect the Company, the Trustee,
any Agent and any authenticating agent from any loss that any of them may suffer if a Note is replaced. The Company may charge for its expenses in replacing a Note. Every replacement Note is an
additional obligation of the Company and shall be entitled to all of the benefits of this Indenture equally and proportionately with all other Notes duly issued hereunder. 


SECTION
1.8 OUTSTANDING NOTES 


    The
Notes outstanding at any time are all the Notes authenticated by the Trustee (including any Note represented by a Global Note) except for those cancelled by it or at its
direction, those delivered to it for cancellation, those reductions in the interest in a Global Note effected by the Trustee in accordance with the provisions hereof, and those described in this
Section as not outstanding. Except as 


32





 


set forth in Section 2.9 hereof, a Note does not cease to be outstanding because the Company or an Affiliate of the Company holds the Note. If a Note is replaced pursuant to Section 2.7
hereof, such Note, together with the Guarantee of that particular Note endorsed thereon, ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Note is held by
a bona fide purchaser. If the principal amount of any Note is considered paid under Section 4.1 hereof, it ceases to be outstanding and interest
on it ceases to accrue. If the Paying Agent (other than the Company, a Subsidiary or an Affiliate of any thereof) holds, on a redemption date or the maturity date, money sufficient to pay Notes
payable on that date, then on and after that date such Notes shall be deemed to be no longer outstanding and shall cease to accrue interest. 


SECTION
1.9 TREASURY NOTES 


    In
determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Company, or by any Person directly
or indirectly controlling or controlled by or under direct or indirect common control with the Company, 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 Notes that the Trustee knows are so owned shall be so disregarded. 


SECTION
1.10 TEMPORARY NOTES 


    Until
certificates representing Notes are ready for delivery, the Company may prepare and the Trustee, upon receipt of an Authentication Order, shall authenticate temporary Notes.
Temporary Notes shall be substantially in the form of Definitive Notes but may have variations that the Company considers appropriate for temporary Notes and as shall be reasonably acceptable to the
Trustee. Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate Definitive Notes in exchange for temporary Notes. Holders of temporary Notes shall be entitled to all
of the benefits of this Indenture. 


SECTION
1.11 CANCELLATION 


    The
Company at any time may deliver Notes to the Trustee for cancellation. The Registrar and Paying Agent shall forward to the Trustee any Notes surrendered to them for registration
of transfer, exchange or payment. The Trustee, or at the direction of the Trustee, the Registrar or the Paying Agent (other than the Company or an Affiliate of the Company), and no one else shall
cancel all Notes surrendered for registration of transfer, exchange, payment, replacement or cancellation and shall destroy cancelled Notes (subject to the record retention requirement of the Exchange
Act). Certification of the destruction of all cancelled Notes shall be delivered to the Company. The Company may not issue new Notes to replace Notes that it has paid or that have been delivered to
the Trustee for cancellation. 


SECTION
1.12 DEFAULTED INTEREST 


    Any
interest on any Note which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date plus, to the extent lawful, any interest payable on the
defaulted interest at the rate and in the manner provided in Section 4.1 hereof and in the Note (herein called "Defaulted Interest") shall forthwith cease to be payable to the registered holder
on the relevant Record Date, and
such Defaulted Interest may be paid by the Company, at its election in each case, as provided in clause (1) or (2) below: 



    (1) The
Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Notes are registered at the close of business on a Special Record
Date for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Company 



33





 


shall notify the Trustee and the Paying Agent in writing of the amount of Defaulted Interest proposed to be paid on each Note and the date of the proposed payment, and at the same time the Company
shall deposit with the Paying Agent an amount of cash equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements reasonably satisfactory to the
Paying Agent for such deposit prior to the date of the proposed payment, such cash when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as provided in
this clause (1). Thereupon the Paying Agent shall fix a "Special Record Date" for the payment of such Defaulted Interest which shall be not more than 15 days and not less than
10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Paying Agent of the notice of the proposed payment. The Paying Agent shall promptly
notify the Company and the Trustee of such Special Record Date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special
Record Date therefor to be mailed, first-class postage prepaid, to each Holder at its address as it appears in the Note register maintained by the Registrar not less than 10 days prior to such
Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been mailed as aforesaid, such Defaulted Interest shall be paid to the
persons in whose names the Notes (or their respective predecessor Notes) are registered on such Special Record Date and shall no longer be payable pursuant to the following clause (2). 


    (2) The
Company may make payment of any Defaulted Interest in any other lawful manner not inconsistent with the requirements of any securities exchange on which the
Notes may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee and the Paying Agent of the proposed payment pursuant to this
clause, such manner shall be deemed practicable by the Trustee and the Paying Agent. 




    Subject
to the foregoing provisions of this Section, each Note delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Note shall
carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Note. 


SECTION
1.13 CUSIP NUMBERS 


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


SECTION
1.14 ISSUANCE OF ADDITIONAL NOTES 


    The
Company may, subject to Section 4.7 hereof and applicable law, issue Additional Notes under this Indenture. The Notes issued on the Closing Date and any additional Notes
subsequently issued shall be treated as a single class for all purposes under this Indenture. 


 
 

ARTICLE II
  REDEMPTION    
  


SECTION
2.1 NOTICES TO TRUSTEE 


    If
the Company elects to redeem Notes pursuant to the optional redemption provisions of Section 3.7 hereof, it shall furnish to the Trustee, at least 45 days (unless a
shorter period is acceptable to the Trustee) but not more than 60 days (unless a longer period is acceptable to the Trustee) before a 


34







  




redemption
date, an Officers' Certificate setting forth (i) the clause of this Indenture pursuant to which the redemption shall occur, (ii) the redemption date, (iii) the
principal amount of Notes to be redeemed and (iv) the redemption price. 


SECTION
2.2 SELECTION OF NOTES TO BE REDEEMED 


    If
less than all of the Notes are to be redeemed at any time, the Trustee shall select the Notes to be redeemed among the Holders of the Notes in compliance with the requirements of
the principal national securities exchange, if any, on which the Notes are listed or, if the Notes are not so listed, on a pro rata basis, by lot or in
accordance with any other method the Trustee considers fair and appropriate. In the event of partial redemption by lot, the particular Notes to be redeemed shall be selected, unless otherwise provided
herein, not less than 30 nor more than 60 days prior to the redemption date by the Trustee from the outstanding Notes not previously called for redemption. 



    The
Trustee shall promptly notify the Company in writing of the Notes selected for redemption and, in the case of any Note selected for partial redemption, the principal amount
thereof to be redeemed. Notes and portions of Notes in denominations of larger than $1,000 selected shall be in amounts of $1,000 or integral multiples of $1,000; except that if all of the Notes of a
Holder are to be redeemed, the entire outstanding amount of Notes held by such Holder, even if not an integral multiple of $1,000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for redemption also apply to portions of Notes called for redemption. 



SECTION
2.3 NOTICE OF REDEMPTION 


    Subject
to the provisions of Section 3.7 hereof, at least 30 days but not more than 60 days before a redemption date, the Company shall mail or cause to be
mailed, by first class mail, a notice of redemption to each Holder whose Notes are to be redeemed at its registered address. 


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


    (a) the
redemption date; 


    (b) the
redemption price; 


    (c) if
any Note is being redeemed in part, the portion of the principal amount of such Note to be redeemed and that, after the redemption date upon surrender of such
Note, a new Note or Notes in principal amount equal to the unredeemed portion shall be issued upon cancellation of the original Note; 


    (d) the
name and address of the Paying Agent; 


    (e) that
Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price; 


    (f)  that,
unless the Company defaults in making such redemption payment, interest on Notes called for redemption ceases to accrue on and after the redemption date; 



    (g) the
paragraph of the Notes and/or Section of this Indenture pursuant to which the Notes called for redemption are being redeemed; and 


    (h) that
no representation is made as to the correctness or accuracy of the CUSIP number, if any, listed in such notice or printed on the Notes. 


    At
the Company's request, the Trustee shall give the notice of redemption in the Company's name and at its expense; provided, however,
that the Company shall have delivered to the Trustee, at least 45 days prior to the redemption date (unless a shorter period shall be acceptable to the Trustee), an 


35





 


Officers' Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph. 


SECTION
2.4 EFFECT OF NOTICE OF REDEMPTION 


    Once
notice of redemption is mailed in accordance with Section 3.3 hereof, Notes called for redemption become irrevocably due and payable on the redemption date at the
redemption price. A notice of redemption may not be conditional. 



SECTION
2.5 DEPOSIT OF REDEMPTION PRICE 


    On
the Business Day immediately prior to the redemption date, the Company shall deposit with the Trustee or with the Paying Agent immediately available funds sufficient to pay the
redemption price of and accrued and unpaid interest (and Liquidated Damages, if any) on all Notes to be redeemed on that date. The Trustee or the Paying Agent shall promptly return to the Company any
money deposited with the Trustee or the Paying Agent by the Company in excess of the amounts necessary to pay the redemption price of, and accrued and unpaid interest (and Liquidated Damages, if any)
on, all Notes to be redeemed. 


    If
the Company complies with the provisions of the preceding paragraph, on and after the redemption date, interest shall cease to accrue on the Notes or the portions of Notes called
for redemption. If a Note is redeemed on or after an interest Record Date but on or prior to the related Interest Payment Date, then any accrued and unpaid interest (and Liquidated Damages, if any)
shall be paid to the Person in whose name such Note was registered at the close of business on such Record Date. If any Note called for redemption shall not be so paid upon surrender for redemption
because of the failure of the Company to comply with the preceding paragraph, interest shall be paid on the unpaid principal, from the redemption date until such principal is paid, and to the extent
lawful on any interest not paid on such unpaid principal, in each case at the rate provided in the Notes and in Section 4.1 hereof. 



SECTION
2.6 NOTES REDEEMED IN PART 


    Upon
surrender of a Note that is redeemed in part, the Company shall issue and, upon receipt of an Authentication Order, the Trustee shall authenticate for the Holder at the expense
of the Company a new Note equal in principal amount to the unredeemed portion of the Note surrendered. 


SECTION
2.7 OPTIONAL REDEMPTION 


    (a) Except
as set forth in clause (b) of this Section 3.7, the Company shall not have the option to redeem the Notes pursuant to this Section 3.7
prior to April 15, 2006. The Notes will be redeemable for cash at the option of the Company, in whole or in part, at any time on or after April 15, 2006, upon not less than
30 days nor more than 60 days prior notice mailed by first class mail to each Holder at its last registered address, at the following redemption prices (expressed as percentages of the
principal amount) if redeemed during the 12-month period commencing April 15 of the years indicated below, in each case (subject to the right of Holders of record on a Record Date
to receive the corresponding interest due (and the corresponding Liquidated Damages, if any) on the corresponding 


36





 


Interest Payment Date that is on or prior to such redemption date) together with accrued and unpaid interest and Liquidated Damages, if any, thereon to the redemption date: 



	Year
	 	Percentage
	 
	2006	 	104.375	%
	2007	 	102.917	%
	2008	 	101.458	%
	2009 and thereafter	 	100.000	%






    (b) Notwithstanding
the provisions of clause (a) of this Section 3.7, at any time or from time to time until April 15, 2004, up to 35% of the
aggregate principal amount of the Notes originally issued under this Indenture may be redeemed at the option of the Company within 60 days of a Public Equity Offering, on not less than
30 days, but not more than 60 days, prior notice to each Holder of the Notes to be redeemed, with cash from the Net Cash Proceeds of such Public Equity Offering, at a redemption price
equal to 108.750% of the principal amount thereof (subject to the right of Holders of record on a Record Date to receive the corresponding interest (and the corresponding Liquidated Damages, if any)
due on the Interest Payment Date that is on or prior to such redemption date) together with accrued and unpaid interest and Liquidated Damages, if any, thereon to the redemption
date; provided that immediately following such redemption not less than 65% of the aggregate principal amount of the Notes originally issued pursuant to
this Indenture remain outstanding. 


    (c) Any
redemption pursuant to this Section 3.7 shall be made pursuant to the provisions of Sections 3.1 through 3.6 hereof. 


SECTION
2.8 NO MANDATORY REDEMPTION 


    The
Company shall not be required to make mandatory redemption payments with respect to the Notes (however, the Company is required to offer to repurchase Notes in accordance with the
provisions of Sections 4.13, 4.14 and 4.15 below). The Notes shall not have the benefit of any sinking fund. 


 
 

ARTICLE III
  COVENANTS


SECTION
3.1 PAYMENT OF NOTES 


    The
Company shall pay or cause to be paid the principal of, premium, if any, and interest on the Notes on the dates and in the manner provided in the Notes. Principal, premium, if
any, and interest shall be considered paid on the date due if the Paying Agent, if other than the Company or a Subsidiary thereof, holds as of 12:00 noon Eastern time on the due date money deposited
by the Company in immediately available funds and designated for and sufficient to pay all principal, premium, if any, and interest then due. The Company shall pay all Liquidated Damages, if any, in
the same manner on the dates and in the amounts set forth in the Registration Rights Agreement and herein. 


    The
Company shall pay interest (including Accrued Bankruptcy Interest in any proceeding under any Bankruptcy Law) on overdue principal at the then applicable interest rate on the
Notes to the extent lawful; it shall pay interest (including Accrued Bankruptcy Interest in any proceeding under any Bankruptcy Law) on overdue installments of interest and Liquidated Damages, if any,
(without regard to any applicable grace period) at the same rate to the extent lawful. 


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SECTION 3.2 MAINTENANCE OF OFFICE OR AGENCY 


    The
Company and the Guarantors shall 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 Notes may be surrendered for registration of transfer or for exchange and where notices and demands to or upon the Company and the Guarantors in
respect of the Notes and this Indenture may be served. The Company and the Guarantors shall 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 and the Guarantors 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. 


    The
Company and the Guarantors may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes
and may from time to time rescind such additional designations; provided that no such designation or rescission shall in any manner relieve the Company
and the Guarantors of their obligation to maintain an office or agency in the Borough of Manhattan, The City of New York. The Company and the Guarantors shall 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 as one such office or agency of the Company in accordance with Section 2.3 hereof. 



SECTION
3.3 SEC REPORTS AND REPORTS TO HOLDERS 


    Whether
or not the Company is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company will deliver or make available to the Trustee and to
each Holder of Notes, within 5 days after the Company is or would have been (if the Company was subject to such reporting obligations) required to file such with the Commission,
(i) annual and quarterly financial statements substantially equivalent to financial statements that would have been included in reports on Forms 10-K or 10-Q and
(ii) all information that would have been included in current reports on Form 8-K filed with the Commission, if the Company was subject to the requirements of
Section 13 or 15(d) of the Exchange Act, including, with respect to annual information only, a report thereon by the Company's certified independent public accountants as such would be required
in such reports to the Commission, and, in each case, together with a management's discussion and analysis of financial condition and results of operations which would be so required and, unless the
Commission will not accept such reports, file with the Commission the annual, quarterly and other reports which it is or would have been required to file with the Commission. In addition, the Company
and the Guarantors agree that, prior to consummation of the Exchange Offer, they will make available to the holders and to securities analysts and prospective investors, upon their request, the
information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act. 



SECTION
3.4 COMPLIANCE CERTIFICATE 


    (a) The
Company shall deliver to the Trustee, within 120 days after the end of each fiscal year, an Officers' Certificate stating that a review of the activities
of the Company and its Subsidiaries during
the preceding fiscal year has been made under the supervision of the signing Officers with a view to determining whether the Company and its Subsidiaries have kept, observed, performed and fulfilled
their obligations under this Indenture, and further stating, as to each such Officer signing such certificate, that to his or her knowledge the Company and its Subsidiaries are not in default in the
performance or observance of any of the terms, provisions and conditions of this Indenture (or, if a Default or Event of Default shall have occurred and be continuing, describing all such Defaults or
Events of Default of which he or she may have knowledge and what action the Company is taking or 


38





 


proposes to take with respect thereto) and that to his or her knowledge no event has occurred and remains in existence by reason of which payments on account of the principal of or interest, if any,
on the Notes is prohibited or if such event has occurred, a description of the event and what action the Company is taking or proposes to take with respect thereto. The Company shall provide the
Trustee with timely written notice of any change in its fiscal year end, which is currently December 31. 


    (b) The
Company shall, so long as any of the Notes are outstanding, deliver to the Trustee, within five Business Days of any Officer becoming aware of any Default or
Event of Default, an Officers' Certificate specifying such Default or Event of Default and what action the Company is taking or proposes to take with respect thereto. 


SECTION
3.5 TAXES 


    The
Company shall pay, and shall cause each of its Subsidiaries to pay, prior to delinquency, all material taxes, assessments, and governmental levies except such as are contested in
good faith and by appropriate proceedings or where the failure to effect such payment would not have a material adverse effect on the ability of the Company and the Guarantors to satisfy their
obligations under the Notes, the Guarantees and this Indenture. 


SECTION
3.6 STAY, EXTENSION AND USURY LAWS 


    The
Company covenants (to the extent that it may lawfully do so) that it shall 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, that may affect the covenants or the performance of this Indenture; and the Company (to the extent that it
may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it shall not, by resort to any such law, hinder, delay or impede the execution of any power
herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law has been enacted. 


SECTION
3.7 LIMITATION ON INCURRENCE OF ADDITIONAL INDEBTEDNESS AND DISQUALIFIED CAPITAL STOCK 


    Except
as set forth in this Section 4.7, the Company and the Guarantors shall not, and shall not permit any of their Subsidiaries to, directly or indirectly, issue, assume,
guaranty, incur, become directly or indirectly liable with respect to (including as a result of an Acquisition), or otherwise become responsible for, contingently or otherwise (individually and
collectively, to "incur" or, as appropriate, an "incurrence"), any Indebtedness (including Disqualified Capital Stock and Acquired Indebtedness), other than Permitted Indebtedness. Notwithstanding the
foregoing if (i) no Default or Event of Default shall have occurred and be continuing at the time of, or would occur after giving effect on a pro forma basis to, such incurrence of
Indebtedness, and (ii) on the date of such incurrence (the "Incurrence Date"), the Consolidated Coverage Ratio of the Company for the Reference Period immediately preceding the Incurrence Date,
after giving effect on a pro forma basis to such incurrence of such Indebtedness and, to the extent set forth in the definition of Consolidated Coverage Ratio, the use of proceeds thereof, would be at
least 2.25 to 1.0 (the "Debt Incurrence Ratio"), then the Company and the Guarantors may incur such Indebtedness (including Disqualified Capital Stock). 


    In
addition, the foregoing limitations will not apply to: 


    (a) the
incurrence by the Company or any Subsidiary of Purchase Money Indebtedness; provided that (i) the
aggregate amount of such Indebtedness incurred and outstanding at any time pursuant to this paragraph (a) (plus any Refinancing Indebtedness issued to retire, defease, refinance, replace or
refund such Indebtedness) shall not exceed $15,000,000, and (ii) in each case, such Indebtedness shall not constitute more than 100% of the Company's cost or the cost to such Subsidiary
(determined in 


39





 


accordance with GAAP in good faith by the Board of Directors of the Company), as applicable, of the property so purchased, acquired, improved, constructed or leased; 


    (b) if
no Event of Default shall have occurred and be continuing, the incurrence by the Company or any Guarantor of Indebtedness in an aggregate amount incurred and
outstanding at any time pursuant to this paragraph (b) (plus any Refinancing Indebtedness incurred to retire, defease, refinance, replace or refund such Indebtedness) of up to $10,000,000; 


    (c) the
incurrence by the Company or any Guarantor of Indebtedness pursuant to the Credit Agreement in an aggregate amount incurred and outstanding at any time pursuant
to this paragraph (c) (plus any Refinancing Indebtedness incurred to retire, defease, refinance, replace or refund such Indebtedness) of up to $151,000,000, minus the amount of any such
Indebtedness (i) retired with the Net Cash Proceeds from any Asset Sale applied to permanently reduce the outstanding amounts or the commitments with respect to such Indebtedness pursuant to
clause (w), (x), (y) or (z) of the first
paragraph of Section 4.13 or (ii) assumed by a transferee in an Asset Sale to the extent that neither the Company nor any Guarantor continues to be an obligor under such Indebtedness;
and 


    (d) the
incurrence by a Foreign Subsidiary of Indebtedness in an aggregate principal amount incurred and outstanding at any time pursuant to this paragraph (d)
(plus any Refinancing Indebtedness incurred to refinance, retire, defease, refund or otherwise replace any such Indebtedness) of up to $25,000,000 (or the equivalent thereof, at the time of
incurrence, in the applicable foreign currencies). 


    Indebtedness
(including Disqualified Capital Stock) of any Person which is outstanding at the time such Person becomes a Subsidiary of the Company (including upon designation of any
subsidiary or other Person as a Subsidiary) or is merged with or into or consolidated with the Company or a Subsidiary of the Company shall be deemed to have been incurred at the time such Person
becomes such a Subsidiary of the Company or is merged with or into or consolidated with the Company or a Subsidiary of the Company, as applicable. 


    Notwithstanding
any other provision of this Section 4.7, but only to avoid duplication, a guarantee of Indebtedness of the Company or a Guarantor, incurred in accordance with
the terms of this Indenture (other than Indebtedness incurred pursuant to clause (a) of this Section 4.7) issued at the time such Indebtedness was incurred or if later at the time the
guarantor thereof became a Guarantor, will not constitute a separate incurrence, or amount outstanding, of Indebtedness. Upon each incurrence, the Company may designate pursuant to which provision of
this Section 4.7 such Indebtedness is being incurred and the Company may subdivide an amount of Indebtedness and designate more than one provision pursuant to which such amount of Indebtedness
is being incurred and such Indebtedness shall not be deemed to have been incurred or outstanding under any other provision of this Section 4.7, except as stated otherwise in the foregoing
provisions. 


    Notwithstanding
anything contained herein to the contrary, the Company will not and the Guarantors will not, and neither the Company nor the Guarantors will permit any of the
Company's Subsidiaries to, incur any Indebtedness that is contractually subordinated to any of the Company's other Indebtedness or the other Indebtedness of any Guarantor unless such Indebtedness is
at least as subordinated to the Notes and the Guarantees, as applicable. 


SECTION
3.8 LIMITATION ON LIENS 


    The
Company and the Guarantors shall not, and neither the Company nor the Guarantors shall permit any of their Subsidiaries to, create, incur, assume or suffer to exist any Lien of
any kind, other than Permitted Liens, upon any of their respective assets now owned or acquired on or after the date of this Indenture or upon any income or profits therefrom, unless the applicable
Guarantor and the Company provide, and cause their Subsidiaries to provide, concurrently therewith, that the Notes and 


40





 


the applicable Guarantees are equally and ratably so secured; provided that if such Indebtedness is Subordinated Indebtedness, the Lien securing such
Subordinated Indebtedness shall be subordinate and junior to the Lien securing the Notes with the same relative priority as such Subordinated Indebtedness shall have with respect to the Notes. 


SECTION
3.9 LIMITATIONS ON RESTRICTED PAYMENTS 


    The
Company and the Guarantors shall not, and neither the Company nor the Guarantors shall permit any of its Subsidiaries to, directly or indirectly, make any Restricted Payment if,
after giving effect to such Restricted Payment on a pro forma basis, (1) a Default or an Event of Default shall have occurred and be continuing, (2) the Company is not permitted to incur
at least $1.00 of additional Indebtedness pursuant to the Debt Incurrence Ratio test in Section 4.7 hereof, or (3) the aggregate amount of all Restricted Payments made by the Company and
its Subsidiaries, including after giving effect to such proposed Restricted Payment, on and after the Issue Date, would exceed, without duplication, the sum of (a) $20,000,000, plus,
(b) 50% of the aggregate Consolidated Net Income of the Company for the period (taken as one accounting period), commencing on April 1, 2001, to and including the last day of the fiscal
quarter ended immediately prior to the date of each such calculation for which consolidated financial statements of the Company are available (or, in the event Consolidated Net Income for such period
is a deficit, then minus 100% of such deficit), plus (c) 100% of the aggregate Net Cash Proceeds received by the Company from the sale of its Qualified Capital Stock or of its debt securities
that have been converted into Qualified Capital Stock (other than (i) to one of its Subsidiaries and (ii) to the extent applied in connection with clauses (x) and (y) in
the next succeeding paragraph), after the Issue Date, plus (d) to the extent that any Restricted Investment that was made after the Issue Date is sold for cash or otherwise liquidated or repaid
for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted
Investment, plus (e) 50% of any dividends received by the Company or a Guarantor after the Issue Date from an Unrestricted Subsidiary to the extent not included in Consolidated Net Income. 



    The
foregoing clauses of the immediately preceding paragraph of this Section 4.9, however, will not prohibit: (x) the redemption, repurchase, retirement or other
acquisition of any Equity Interests of the Company in exchange for, or out of the proceeds of, the substantially concurrent sale (other than to a Subsidiary of the Company) of the Company's Qualified
Capital Stock; (y) the defeasance, redemption or repurchase of Subordinated Indebtedness with the Net Cash Proceeds from an incurrence of Refinancing Indebtedness or the substantially
concurrent sale (other than to a Subsidiary of the Company) (or in exchange for) of Qualified Capital Stock; or (z) the payment of any dividend within 60 days after the date of its
declaration if such dividend could have been made on the date of such declaration in compliance with the foregoing provisions. 



    The
full amount of any Restricted Payment made pursuant to the foregoing clause (z) (but not pursuant to clauses (x) and (y)) of the immediately preceding sentence,
however, will be counted as Restricted Payments made for purposes of the calculation of the aggregate amount of Restricted Payments available to be made referred to in clause (3) of the first
paragraph of this Section 4.9. 


    For
purposes of this Section 4.9, the amount of any Restricted Payment made or returned, if other than in cash, shall be the fair market value thereof, as determined in the
good faith reasonable judgment of the Company's Board of Directors, unless stated otherwise, at the time made or returned, as applicable. Additionally, on the day of making any Restricted Payment,
other than the Restricted Payments set forth in clauses (x)-(z) above, the Company shall deliver an Officers' Certificate to the Trustee describing in reasonable detail the nature of such Restricted
Payment, stating the amount of such Restricted Payment, stating in reasonable detail the provisions of the Indenture pursuant to which such Restricted Payment was made and certifying that such
Restricted Payment was made in compliance with the terms of this Indenture. 


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SECTION 3.10 LIMITATION ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES 


    The
Company and the Guarantors shall not, and shall not permit any of their Subsidiaries to, directly or indirectly, create, assume or suffer to exist any consensual restriction on
the ability of any Subsidiary of the Company to pay dividends or make other distributions to or on behalf of, or to pay any obligation to or on behalf of, or otherwise to transfer assets or property
to or on behalf of, or make or pay loans or advances to or on behalf of, the Company or any Subsidiary of the Company, except (a) restrictions imposed by the Notes or this Indenture or by other
Indebtedness of the Company (which may also be guaranteed by the Guarantors) ranking equal in right of payment to the Notes or the Guarantees, as applicable;
provided that such restrictions are no more restrictive (taken as a whole) than those imposed by this Indenture and the Notes, (b) restrictions imposed by applicable
law, (c) existing restrictions under Existing Indebtedness, (d) restrictions under any Acquired Indebtedness not incurred in violation of this Indenture or any agreement (including any
Equity Interest) relating to any property, asset, or business acquired by the Company or any of its Subsidiaries, which restrictions in each case existed at the time of acquisition, were not put in
place in connection with or in anticipation of such acquisition and are not applicable to any Person, other than the Person (or Persons) acquired, or to any property, asset or business, other than the
property, assets and business so acquired, (e) any restriction or requirement imposed by Indebtedness incurred under the Credit Agreement or any guarantee thereof in accordance with
Section 4.7 hereof; provided that such restriction or requirement is no more restrictive (taken as a whole) than that imposed by the Credit Agreement or any such guarantee as of the Issue Date,
(f) restrictions on transfer contained in Purchase Money Indebtedness incurred pursuant to paragraph (a) of Section 4.7 hereof provided that such restrictions relate only to the
transfer of the property acquired with the proceeds of such Purchase Money Indebtedness, (g) in connection with and pursuant to permitted Refinancings, replacements of restrictions imposed
pursuant to clauses (a), (c), (d), (f), or this clause (g) of this Section 4.10 that are not more restrictive (taken as a whole) than those being replaced and do not apply to any other
Person or assets than those that would have been covered by the restrictions in the Indebtedness so refinanced, and (h) restrictions solely with respect to any of the Company's Subsidiaries
imposed pursuant to a binding agreement that has been entered into for the sale or disposition of all or substantially all of the Equity Interests or assets of such Subsidiary, provided that such
restrictions apply solely to the Subsidiary whose Equity Interests or assets are being sold. 


    Notwithstanding
anything contained herein to the contrary, the foregoing provisions will not prohibit, (a) customary provisions restricting subletting or assignment of any
lease entered into in the ordinary course of business, consistent with industry practice, and (b) any asset subject to a Lien which is not prohibited to exist with respect to such asset
pursuant to the terms of this Indenture may be subject to customary restrictions on the transfer or disposition thereof pursuant to such Lien. 



SECTION
3.11 LIMITATION ON LINES OF BUSINESS 


    Neither
the Company nor any of its Subsidiaries shall directly or indirectly engage to any substantial extent in any line or lines of business activity other than that which, in the
reasonable good faith judgment of the Board of Directors of the Company, is a Related Business. 


SECTION
3.12 LIMITATION ON TRANSACTIONS WITH AFFILIATES 


    Neither
the Company nor any of its Subsidiaries will be permitted on or after the Issue Date to enter into or suffer to exist any contract, agreement, arrangement or transaction with
any Affiliate (an "Affiliate Transaction"), or any series of related Affiliate Transactions, unless (1) it is determined that the terms of the Affiliate Transaction(s) are no less favorable to
the Company than could have been obtained in arm's length transaction(s) with a non-Affiliate, and (2) the Company delivers to the Trustee (a) with respect to any Affiliate
Transaction(s) involving aggregate consideration in excess of 


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$2,500,000, a resolution of the Board of Directors set forth in an Officers' Certificate certifying that the Affiliate Transaction(s) comply with clause (1) above and that the Affiliate
Transaction(s) have been approved by a majority of the disinterested members of the Board of Directors, and (b) with respect to Affiliate Transaction(s) involving aggregate consideration in
excess of $5,000,000, an opinion as to the fairness to the Company or the respective Subsidiary of such Affiliate Transaction(s) from a financial point of view from an independent investment banking
firm of national reputation in the United States or, if pertaining to a matter for which such investment banking firms do not customarily render such opinions, an appraisal or valuation firm of
national reputation in the United States; provided, however, that (y) transactions between or among the Company and its Subsidiaries and
(z) transactions permitted by Section 4.9 hereof, in each case, shall not be deemed Affiliate Transactions. 



SECTION
3.13 LIMITATION ON SALE OF ASSETS AND SUBSIDIARY STOCK 


    The
Company and the Guarantors shall not, and shall not permit any of their Subsidiaries to, in one or a series of related transactions, convey, sell, lease, transfer, assign or
otherwise dispose of, directly or indirectly, any of its property, business or assets, including by merger or consolidation (in the case of a Guarantor or a Subsidiary of the Company), and including
any sale or other transfer or issuance of any Equity Interests of any Subsidiary of the Company, whether by the Company or a Subsidiary or through the issuance, sale or transfer of Equity Interests by
a Subsidiary of the Company, and including any sale and leaseback transaction (any of the foregoing, an "Asset Sale"), unless (1) the Company (or a Subsidiary of the Company, as the case may
be) receives consideration at the time of such Asset Sale at least equal to the fair market value (evidenced by a resolution of the Board of Directors set forth in an Officers' Certificate delivered
to the Trustee) of the assets or Equity Interests issued or sold or otherwise disposed of; and (2) at least 75% (100% in the case of lease payments) of the consideration received by the Company
or the applicable Subsidiary for the Asset Sale is in the form of cash or Cash Equivalents; provided that the amount of: (a) any liabilities (as shown on the Company's or such Subsidiary's most
recent balance sheet or in the notes thereto) of the Company or any of its Subsidiaries that rank equal in right of payment to the Notes and that are assumed by the transferee of any such assets,  provided, that the Company and all of its Subsidiaries are unconditionally released from any further liability with respect to such assumed liabilities,
and (b) any securities, notes or other obligations received by the Company or any such Subsidiary from such transferee that are immediately (but in no event more than 30 days after
receipt, subject to customary settlement periods) converted by the Company or such Subsidiary into cash or Cash Equivalents (to the extent of the cash or Cash Equivalents, as the case may be,
received) shall be deemed to be cash or Cash Equivalents, as the case may be, for purposes of this provision. Within 360 days after the receipt of any Net Cash Proceeds from an Asset Sale, the
Company or the applicable Subsidiary, as the case may be, may apply such Net Cash Proceeds, at its option, to: (w) permanently reduce Indebtedness outstanding under the Credit Agreement;  provided,
that, in the case of a revolving credit facility or similar arrangement that makes credit
available under the Credit Agreement, such commitment is also permanently reduced by such amount, or (x) purchase one or more businesses or to purchase more than 50% of the Equity Interests of
a Person operating one or more businesses so long as such Person becomes a Subsidiary, (y) make capital expenditures, and/or (z) acquire other long-term assets, in each case,
so long as such business or businesses, capital expenditures or long-term assets are in a Related Business. Pending the final application of any such Net Cash Proceeds, the Company may
temporarily reduce revolving borrowings outstanding under the Credit Agreement or otherwise invest such Net Cash Proceeds in any manner that is not prohibited by the Indenture. 


    Any
Net Cash Proceeds from Asset Sales that are not so applied or invested will be considered "Excess Proceeds." When the aggregate amount of Excess Proceeds exceeds $10,000,000, the
Company shall make an offer, within such 360-day period, to all holders of Notes and all holders of the Company's other Indebtedness ranking equal in right of payment to the Notes with
similar provisions requiring the Company to make an offer to purchase (or otherwise repay) such Indebtedness with the 


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proceeds of such Asset Sale pursuant to a cash offer (subject only to conditions required by applicable law, if any) pro rata in proportion to the
respective principal amounts (or accreted values in the case of Indebtedness issued with original issue discount) of the Notes and such other Indebtedness then
outstanding (an "Asset Sale Offer") to purchase the maximum principal amount of Notes and such other Indebtedness that may be purchased out of the Excess Proceeds. The offer price for an Asset Sale
Offer will be 100% of the principal amount of the Notes plus accrued and unpaid interest and Liquidated Damages, if any, on the Notes to the date of purchase. The offer price will be paid in cash in
accordance with the procedures set forth herein. 


    To
the extent that the aggregate amount of Notes and such other Indebtedness tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any
remaining Excess Proceeds not so utilized for general corporate purposes. If the aggregate principal amount of Notes and such other Indebtedness surrendered by holder thereof exceeds the amount of
Excess Proceeds, the Trustee shall select the Notes to be purchased on a pro rata basis. Upon completion of a purchase of Notes pursuant to an Asset Sale Offer, the amount of Excess Proceeds shall be
reset at zero. 


    Notwithstanding,
and without complying with, the provisions of this Section 4.13: 


     (i) the
Company and its Subsidiaries may, in the ordinary course of business, (1) convey, sell, lease, transfer, assign or otherwise dispose of inventory,
receivables or pianos in the Company's Concert and Artist Piano Bank, in each case in the ordinary course of business consistent with past practice and (2) liquidate Cash Equivalents; 



    (ii) the
Company may, and its Subsidiaries may, convey, sell, lease, transfer, assign or otherwise dispose of assets pursuant to and in accordance with Article V
hereof; 


    (iii) the
Company may, and its Subsidiaries may, sell or dispose of damaged, worn out or other obsolete personal property in the ordinary course of business so long as
such property is no longer necessary for the proper conduct of the business of the Company or such Subsidiary, as applicable; 


    (iv) the
Company may convey, sell, lease, transfer, assign or otherwise dispose of assets to any of the Company's Wholly Owned Subsidiaries, and a Wholly Owned
Subsidiary may convey, sell, lease, transfer, assign or otherwise dispose of assets to the Company or to another Wholly Owned Subsidiary; 


    (v) a
Wholly Owned Subsidiary may issue Equity Interests to the Company or to another Wholly Owned Subsidiary; 


    (vi) the
Company may, and its Subsidiaries may, make Restricted Payments that are permitted by Section 4.9 hereof; 


   (vii) Foreign
Subsidiaries may convey, sell, transfer, assign or otherwise dispose of assets to the Company or any of its Subsidiaries, and 



   (viii) the
Company may, and its Subsidiaries may, sell or otherwise transfer to a third-party financing company any of the Receivables Financing Notes in an amount not
to exceed $60,000,000 in the aggregate at any one time outstanding. 


    To
the extent that the provisions of any securities laws or regulations conflict with the provisions of this Section 4.13, compliance by the Company or any of its Subsidiaries
with such laws and regulations shall not in and of itself cause a breach of its obligations under this Section 4.13. 


    If
the payment date in connection with an Asset Sale Offer hereunder is on or after an interest payment Record Date and on or before the associated Interest Payment Date, any accrued
and unpaid interest (and Liquidated Damages, if any, due on such Interest Payment Date) will be paid to the Person in whose name a Note is registered at the close of business on such Record Date, and
such interest (or Liquidated Damages, if applicable) will not be payable to Holders who tender Notes pursuant to such Asset Sale Offer. 


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SECTION 3.14 REPURCHASE OF NOTES AT THE OPTION OF THE HOLDER UPON A CHANGE OF CONTROL 


    In
the event that a Change of Control has occurred, each Holder of Notes will have the right, at such Holder's option, pursuant to an offer (subject only to conditions required by
applicable law, if any) by the Company (the "Change of Control Offer"), to require the Company to repurchase all or any part of such Holder's Notes (provided that the principal amount of such Notes
must be $1,000 or an integral multiple thereof) on a date (the "Change of Control Purchase Date") that is no later than 90 days after the occurrence of such Change of Control, at a cash price
equal to 101% of the principal amount thereof (the "Change of Control Purchase Price"), together with accrued and unpaid interest and Liquidated Damages, if any, to the Change of Control Purchase
Date. The Change of Control Offer shall be made within 30 days following a Change of Control and shall remain open for 20 Business Days following its commencement (the "Change of Control Offer
Period"). Upon expiration of the Change of Control Offer Period, the Company promptly shall purchase all Notes properly tendered in response to the Change of Control Offer. 



    On
or before the Change of Control Purchase Date, the Company shall, to the extent lawful, (i) accept for payment Notes or portions thereof properly tendered pursuant to the
Change of Control Offer,
(ii) deposit with the Paying Agent an amount in cash sufficient to pay the Change of Control Purchase Price (together with accrued and unpaid interest and Liquidated Damages, if any), of all
Notes so tendered and (iii) deliver to the Trustee the Notes so accepted together with an Officers' Certificate listing the Notes or portions thereof being purchased by the Company. The Paying
Agent promptly will pay the Holders of Notes so accepted an amount equal to the Change of Control Purchase Price (together with accrued and unpaid interest and Liquidated Damages, if any), and the
Trustee promptly will authenticate and deliver to such Holders a new Note equal in principal amount to any unpurchased portion of Note surrendered. Any Notes not so accepted will be delivered promptly
by the Company to the Holder thereof. The Company publicly will announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Purchase Date. 


    Any
Change of Control Offer will be made in compliance with all applicable laws, rules and regulations, including, if applicable, Rule 14e-1 under the Exchange Act
and the rules thereunder and all other applicable Federal and state securities laws. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this
Section 4.14, compliance by the Company or any of the Guarantors with such laws and regulations shall not in and of itself cause a breach of its obligations under this Section 4.14. 


    If
the Change of Control Purchase Date hereunder is on or after an interest payment Record Date and on or before the associated Interest Payment Date, any accrued and unpaid interest
(and Liquidated Damages, if any) due on such Interest Payment Date will be paid to the Person in whose name a Note is registered at the close of business on such Record Date, and such interest (and
Liquidated Damages, if applicable) will not be payable to Holders who tender the Notes pursuant to the Change of Control Offer. 


SECTION
3.15 REPURCHASE OF NOTES AT THE OPTION OF THE HOLDER UPON THE FAILURE OF THE COMPANY TO REDEEM THE SELMER NOTES 



    In
the event that the Selmer Notes Redemption has not occurred on or prior to June 30, 2001 each Holder of Notes will have the right, at such Holder's option, pursuant to an
offer (subject only to conditions required by applicable law, if any) by the Company (the "Selmer Notes Redemption Offer"), to require the Company to repurchase all or any part of such Holder's Notes
(provided, that the principal amount of such Notes must be $1,000 or an integral multiple thereof) on a date (the "Selmer Notes Redemption Purchase
Date") that is no later than 25 Business Days after June 30, 2001, at a 


45





 


cash price equal to 100% of the principal amount thereof (the "Selmer Notes Redemption Purchase Price"), together with accrued and unpaid interest to the Selmer Notes Redemption Purchase Date. 


    The
Selmer Notes Redemption Offer shall be made within 5 Business Days following June 30, 2001 and shall remain open for 20 Business Days following its commencement (the
"Selmer Notes Redemption Offer Period"). Upon expiration of the Selmer Notes Redemption Offer Period, the Company shall promptly purchase all Notes properly tendered in response to the Selmer Notes
Redemption Offer. 


    On
or before the Selmer Notes Redemption Purchase Date, the Company will: (1) accept for payment Notes or portions thereof properly tendered pursuant to the Selmer Notes
Redemption Offer, (2) deposit with the Paying Agent for the Company cash sufficient to pay the Selmer Notes Redemption Purchase Price (together with accrued and unpaid interest of all Notes so
tendered), and (3) deliver to the Trustee the Notes so accepted together with an Officers' Certificate listing the Notes or portions thereof being purchased by the Company. 


    The
Paying Agent promptly will pay the Holders of Notes so accepted an amount equal to the Selmer Notes Redemption Purchase Price (together with accrued and unpaid interest on such
Notes) and the Trustee promptly will authenticate and deliver to such Holders a new Note equal in principal amount to any unpurchased portion of a Note surrendered. Any Notes not so accepted will be
delivered promptly by the Company to the Holder thereof. The Company will publicly announce the results of the Selmer Notes Redemption Offer on or as soon as practicable after the Selmer Notes
Redemption Purchase Date. 


    Any
Selmer Notes Redemption Offer will be made in compliance with all applicable laws, rules and regulations, including, if applicable, Regulation 14E under the Exchange Act
and the rules thereunder and all other applicable Federal and state securities laws. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this
Section 4.15, the Company's compliance or compliance by any of the Guarantors with such laws and regulations shall not in and of itself cause a breach of their obligations under this
Section 4.15. 


SECTION
3.16 SUBSIDIARY GUARANTORS 


    All
future Subsidiaries of the Company, other than Foreign Subsidiaries, shall, subject to the limitations set forth in Article X, jointly, severally, irrevocably and
unconditionally, guarantee all principal, premium, if any, and interest on the Notes on a senior basis and shall execute a supplemental indenture substantially in the form of Exhibit E hereto
and deliver an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee regarding the due authorization, execution and delivery of the supplemental indenture. 



    If,
at any time, the Company or any of its Subsidiaries declares or pays any dividend to or makes any distribution or other payment or transfer to any Foreign Subsidiary in violation
of Section 4.9 hereof, then such Foreign Subsidiary shall, to the extent not prohibited by law, execute a supplemental indenture substantially in the form of Exhibit E hereto and deliver
an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee regarding the due authorization, execution and delivery of such supplemental indenture. 


    Notwithstanding
anything herein to the contrary, if any Subsidiary (including Foreign Subsidiaries) of the Company that is not a Guarantor Guarantees any other Indebtedness of the
Company or any Subsidiary (other than a Foreign Subsidiary that is not a Guarantor), or the Company or a Subsidiary of the Company, individually or collectively, pledges, directly or indirectly more
than 65% of the Voting Equity Interests of a Foreign Subsidiary that is not a Guarantor to a lender to secure the Indebtedness of the Company or any of the Guarantor's Indebtedness, then, to the
extent not prohibited by law, such Foreign Subsidiary must become a Guarantor and shall execute a supplemental indenture substantially 


46





 


in the form of Exhibit E hereto and deliver an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee regarding the due authorization, execution and delivery of the
supplemental indenture. 


SECTION
3.17 LIMITATION ON STATUS AS INVESTMENT COMPANY 


    The
Company and its Subsidiaries shall be prohibited from being required to register as an "investment company" (as that term is defined in the Investment Company Act of 1940, as
amended (the "Investment Company Act")), or from otherwise becoming subject to regulation under the Investment Company Act. 



SECTION
3.18 MAINTENANCE OF PROPERTIES AND INSURANCE 


    The
Company and the Guarantors shall cause all material properties used or useful to the conduct of their business and the business of each of their Subsidiaries to be maintained and
kept in good condition, repair and working order (reasonable wear and tear excepted) and supplied with all necessary equipment and shall cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in their reasonable judgment may be necessary, so that the business carried on in connection therewith may be properly conducted at all times;  provided, however, that nothing in this Section 4.18 shall prevent the Company or any Guarantor from discontinuing any operation or maintenance
of any of such properties, or disposing of any of them, if such discontinuance or disposal is (a) (i) in the judgment of the Board of Directors of the Company, desirable in the conduct of the
business of such entity and (ii) would not have a material adverse effect on the ability of the Company and the Guarantors to satisfy their obligations under the Notes, the Guarantees and this
Indenture, or (b) otherwise permitted under Section 4.13. 


    The
Company and Guarantors shall provide, or cause to be provided, for themselves and each of their Subsidiaries, insurance (including appropriate self-insurance) against
loss or damage of the kinds that, in
the reasonable, good faith opinion of the Board of Directors of the Company is adequate and appropriate for the conduct of the business of the Company, the Guarantors and such Subsidiaries. 


SECTION
3.19 CORPORATE EXISTENCE 


    Subject
to Article V hereof, the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect (i) its corporate existence, and
the corporate, partnership or other existence of each of its Subsidiaries, in accordance with the respective organizational documents (as the same may be amended from time to time) of the Company or
any such Subsidiary and (ii) the rights (charter and statutory), licenses and franchises of the Company and its Subsidiaries; provided, however,
that the Company shall not be required to preserve any such right, license or franchise, or the corporate, partnership or other existence of any of its Subsidiaries, if the Board of Directors shall
determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and its Subsidiaries, taken as a whole, and that the loss thereof would not have a material
adverse effect on the ability of the Company and the Guarantors to satisfy their obligations under the Notes, the Guarantees and this Indenture. 


 
 

ARTICLE IV
  SUCCESSORS    
  



SECTION
4.1 MERGER, CONSOLIDATION OR SALE OF ASSETS 


    The
Company shall not consolidate with or merge with or into another Person or, directly or indirectly, sell, lease, convey or transfer all or substantially all of its assets (such
amounts to be computed on a consolidated basis), whether in a single transaction or a series of related transactions, to another Person or group of affiliated Persons, unless (i) either
(a) the Company is the continuing entity 


47





 


or (b) the resulting, surviving or transferee entity is a corporation organized under the laws of the United States, any state thereof or the District of Columbia and expressly assumes by
supplemental indenture all of the obligations of the Company in connection with the Notes and this Indenture; (ii) no Default or Event of Default shall exist or shall occur immediately after
giving effect on a pro forma basis to such transaction; (iii) immediately after giving effect to such transaction on a  pro forma basis, the
Consolidated Net Worth of the consolidated surviving or transferee entity is at least equal to the Company's Consolidated Net Worth
immediately prior to such transaction, and (iv) immediately after giving effect to such transaction on a pro forma basis, the consolidated,
surviving or transferee entity
would immediately thereafter be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Debt Incurrence Ratio test set forth in Section 4.7. 


SECTION
4.2 SUCCESSOR CORPORATION SUBSTITUTED 


    Upon
any consolidation or merger or any transfer of all or substantially all of the assets of the Company in accordance with Section 5.1 hereof, the successor corporation
formed by such consolidation or into which the Company is merged or to which such transfer is made shall succeed to and (except in the case of a lease) be substituted for, and may exercise every right
and power of, the Company under this Indenture with the same effect as if such successor corporation had been named therein as the Company, and (except in the case of a lease) the Company shall be
released from the obligations under the Notes and this Indenture except with respect to any obligations that arise from, or are related to, such transaction. 


    For
purposes of the foregoing and of Section 5.1, the transfer (by lease, assignment, sale or otherwise) of all or substantially all of the properties and assets of one or more
Subsidiaries, the Company's interest in which constitutes all or substantially all of the properties and assets of the Company, shall be deemed to be the transfer of all or substantially all of the
properties and assets of the Company. 


 
 

ARTICLE V
  DEFAULTS AND REMEDIES    
  


SECTION
5.1 EVENTS OF DEFAULT 


    "Event
of Default," wherever used herein, means any one of the following events: 


    (a) the
failure of the Company to pay any installment of interest (or Liquidated Damages, if any) on the Notes as and when the same becomes due and payable and the
continuance of any such failure for 30 days; 


    (b) the
failure of the Company to pay all or any part of the principal, or premium, if any, on the Notes when and as the same becomes due and payable at maturity,
redemption, by acceleration or otherwise, including, without limitation, payment of the Change of Control Purchase Price or the Asset Sale Offer Price, on Notes validly tendered and not properly
withdrawn pursuant to a Change of Control Offer or Asset Sale Offer, as applicable; 


    (c) the
failure of the Company or the failure by any of the Guarantors to observe or perform any covenant, condition or agreement described under Section 4.7,
4.9, 4.13, 4.14, 4.15 and Article V hereof, which failure continues for a period of 30 days after notice is given to the Company by the Trustee or to the Company and the Trustee by the
Holders of at least 25% in aggregate principal amount of the Notes outstanding; 


    (d) the
failure of the Company or the failure by any of the Guarantors to comply with any of their respective other agreements in this Indenture or the Notes (including
the Guarantees) which failure continues for a period of 45 days after written notice is given to the Company by the Trustee or 


48





 


to the Company and the Trustee by the Holders of at least 25% in aggregate principal amount of the Notes outstanding (other than with respect to (a), (b) and (c) above); 


    (e) a
default under the Indebtedness of the Company or the Indebtedness of any the Company's Subsidiaries with an aggregate amount outstanding in excess of $5,000,000
(i) which is not an Excluded Default and is caused by a failure to pay principal of or premium, if any, on such Indebtedness when due (after giving effect to any applicable grace period,
excluding any extension thereof) or (ii) as a result of which the maturity of such Indebtedness has been accelerated prior to its stated maturity; 



    (f)  final
unsatisfied judgments not covered by insurance aggregating in excess of $5,000,000, at any one time rendered against the Company or any of its Subsidiaries
and not stayed, bonded or discharged within 60 days; 


    (g) any
Guarantee of a Guarantor shall be held in any judicial proceeding to be unenforceable or invalid, any Guarantor shall default on its Guarantee (other than in
accordance with the terms of the Indenture and the Guarantee) or any Guarantor denies or disaffirms its Obligations under its Guarantee; 


    (h) a
court having jurisdiction in the premises enters a decree or order for (A) relief in respect of the Company or any Subsidiary in an involuntary case under
any applicable Bankruptcy Law now or hereafter in effect, (B) appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Company or any
Subsidiary or for all or substantially all of the property and assets of the Company or any Subsidiary or (C) the winding up or liquidation of the affairs of the Company or any Subsidiary and,
in each case, such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or 


    (i)  the
Company or any Subsidiary (A) commences a voluntary case under any applicable Bankruptcy Law now or hereafter in effect, or consents to the entry of an
order for relief in an involuntary case under any such law, (B) consents to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official of the Company or any Subsidiary or for all or substantially all of the property and assets of the Company or any Subsidiary or (C) effects any general assignment for the
benefit of creditors. 


    If
a Default occurs and is continuing, the Trustee must, within 90 days after the occurrence of such Default, give to the Holders notice of such Default. 


SECTION
5.2 ACCELERATION 


    (a) If
an Event of Default (other than an Event of Default specified in clause (h) or (i) of Section 6.1 that occurs with respect to the Company or
any Subsidiary) occurs and is continuing under this Indenture, then in every such case, unless the principal of all of the Notes shall have already become due and payable, either the Trustee or the
Holders of at least 25% in aggregate principal amount of the Notes, then outstanding, by written notice to the Company (and to the Trustee if such notice is given by the Holders), may, and the Trustee
at the request of such Holders shall, declare the principal of, premium, if any, and accrued interest (and Liquidated Damages, if any) on the Notes to be immediately due and payable. Upon a
declaration of acceleration, such principal of, premium, if any, and accrued interest (and Liquidated Damages, if any) shall be immediately due and payable In the event a declaration of acceleration
resulting solely from an Event of Default described in clause (e) of Section 6.1 has occurred and is continuing, such declaration of acceleration shall be automatically annulled if such
default is cured or waived or the holders of the Indebtedness which is the subject of such default have rescinded their declaration of acceleration in respect of such Indebtedness within five days
thereof and the Trustee has received written notice of such cure, waiver or rescission and no other Event of Default described in clause (e) of Section 6.1 has occurred that has not been
cured or waived within five days of the declaration of such acceleration in respect of such Indebtedness. If an Event of 


49





 


Default specified in clause (h) or (i) of Section 6.1, relating to the Company or any of its Subsidiaries occurs, all principal and accrued interest (and Liquidated Damages, if
any) thereon will be immediately due and payable on all outstanding Notes without any declaration or other act on the part of the Trustee or the Holders. Holders of the Notes may not enforce the
Indenture or the Notes except as provided in the Indenture. 


    (b) In
the case of any Event of Default occurring by reason of any willful action (or inaction) taken (or not taken) by the Company or on behalf of the Company with the
intention of avoiding payment of the
premium that the Company would have had to pay if the Company had elected to redeem the Notes pursuant to Section 3.7 hereof, an equivalent premium shall also become and be immediately due and
payable to the extent permitted by law upon the acceleration of the Notes. If an Event of Default occurs prior to 2006 by reason of any willful action (or inaction) taken (or not taken) by the Company
or on behalf of the Company with the intention of avoiding the prohibition on redemption of the Notes prior to April 15, 2006 then the premium specified in the Indenture for redemptions
occurring during the 12 month period after April 15, 2006 shall also become immediately due and payable to the extent permitted by law upon the acceleration of the Notes. 


    (c) At
any time after such a declaration of acceleration being made and before a judgment or decree for payment of the money due has been obtained by the Trustee as
hereinafter provided in this Article VI, the Holders of not less than a majority in aggregate principal amount of then outstanding Notes, by written notice to the Company and the Trustee, may
rescind, on behalf of all Holders, any such declaration of acceleration if: 


    (1) the
Company has paid or deposited with the Trustee cash sufficient to pay: (a) all overdue interest and Liquidated Damages, if any, on all Notes;
(b) the principal of (and premium, if any, applicable to) any Notes which would become due other than by reason of such declaration of acceleration, and interest thereon at the rate borne by
the Notes; (c) to the extent that payment of such interest is lawful, interest upon overdue interest at the rate borne by the Notes; and (d) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee and its agents and counsel, and all other amounts due the Trustee under Section 7.7; and 



    (2) all
Events of Default, other than the non-payment of the principal of, premium, if any, and interest (and Liquidated Damages, if any) on the Notes which
have become due solely by such declaration of acceleration, have been cured or waived as provided in Section 6.4. 


    (d) Notwithstanding
clause (c)(2) of this Section 6.2, no waiver shall be effective against any Holder for any Event of Default or event which with notice
or lapse of time or both would be an Event of Default with respect to any covenant or provision which cannot be modified or amended without the consent of the Holder of each outstanding Note affected
thereby, unless all such affected Holders agree, in writing, to waive such Event of Default or other event. No such waiver shall cure or waive any subsequent default or impair any right consequent
thereon. 


SECTION
5.3 OTHER REMEDIES 


    If
an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal, premium, if any, and interest on the Notes or to
enforce the performance of any provision of the Notes or this Indenture. 


    The
Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder
of a Note 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 to the extent permitted by law. 


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SECTION 5.4 WAIVER OF PAST DEFAULTS 


    Subject
to Section 6.7, the Holders of at least a majority in principal amount of the outstanding Notes by written notice to the Company and to the Trustee, may, on behalf of
all Holders, waive any existing or past Default or Event of Default hereunder and its consequences under this Indenture, except a default: 


	(1)
	in
the payment of principal of, premium, if any, or interest on any Note not yet cured as specified in clauses (a) and (b) of Section 6.1 hereof;



	(2)
	in
respect of a covenant or provision hereof which, under Article IX, cannot be modified or amended without the consent of the Holder of each outstanding Note affected,
unless all such affected Holders agree, in writing, to waive such default; or



	(3)
	the
rescission of which would conflict with any judgment or decree of a court of competent jurisdiction. 



    Upon
any such waiver, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such
waiver shall extend to any subsequent or other default or impair any right arising therefrom. 


SECTION
5.5 CONTROL BY MAJORITY 


    Holders
of at least a majority in aggregate principal amount of the then outstanding Notes may direct the time, method and place of conducting any proceeding for exercising 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, that the Trustee
determines in good faith may be
unduly prejudicial to the rights of other Holders of Notes not joining in the giving of such direction or that may involve the Trustee in personal liability and the Trustee may take any other action
it deems proper that is not inconsistent with any such direction received from Holders of the Notes. 


SECTION
5.6 LIMITATION ON SUITS 


    A
Holder of a Note may pursue a remedy with respect to this Indenture or the Notes only if: 


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


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


    (c) such
Holder of a Note or Holders of Notes offer and, if requested, provide to the Trustee indemnity satisfactory to the Trustee against any costs, liability or
expense; 


    (d) the
Trustee does not comply with the request within 60 days after receipt of the request and the offer and, if requested, the provision of indemnity; and 



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


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


SECTION
5.7 RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT 


    Notwithstanding
any other provision of this Indenture, except as permitted by Section 9.2, the right of any Holder of a Note to receive payment of the principal of, premium and
Liquidated Damages, if any, and interest on the Note, on or after the respective due dates expressed in the Note (including in 


51





 


connection with an offer to purchase) 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 such Holder. 


SECTION
5.8 COLLECTION SUIT BY TRUSTEE 


    If
an Event of Default specified in Section 6.1 occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust
against the Company for the whole amount of principal of, premium and Liquidated Damages, if any, and interest remaining unpaid on the Notes and interest on overdue principal and, to the extent
lawful, interest and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel. 


SECTION
5.9 TRUSTEE MAY FILE PROOFS OF CLAIM 


    The
Trustee is authorized to 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 (including any claim
for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), its creditors or its property and shall be entitled and empowered to collect, receive and distribute any money or other property payable or deliverable on any
such claims and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to 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 7.7 hereof. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.7 hereof out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall
be paid out of, any and all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding whether in liquidation or under any plan of
reorganization or arrangement or otherwise. 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 Notes or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding; provided, however that the Trustee may, on behalf of the Holders, vote for the election of a trustee in bankruptcy or similar official and
may be a member of the creditor's committee. 


SECTION
5.10 PRIORITIES 


    If
the Trustee collects any money pursuant to this Article, it shall pay out the money in the following order: 


    First:  to the Trustee, its agents and attorneys for amounts due under Section 7.7 hereof, including payment of
all compensation, expense and liabilities incurred, and all advances made, by the Trustee and the costs and expenses of collection (including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel); 


    Second:  to Holders of Notes for amounts due and unpaid on the Notes for principal and Liquidated Damages, if any, and
interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal, premium and Liquidated Damages, if any, and interest, respectively;
and 


    Third:  to the Company or to such party as a court of competent jurisdiction shall direct. 


52







  




    The
Trustee may fix a Record Date and payment date for any payment to Holders of Notes pursuant to this Section 6.10. 


SECTION
5.11 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 a Trustee, a court in its
discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, 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 does not apply to a suit by
the Trustee, a suit by a Holder of a Note pursuant to Section 6.7 hereof, or a suit by Holders of more than 10% in principal amount of the then outstanding Notes. 


 
 

ARTICLE VI
  TRUSTEE    
  


SECTION 6.1  DUTIES OF TRUSTEE 



    (a) If
an Event of Default of which the Trustee has knowledge 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 its exercise, as a prudent man would exercise or use under the circumstances in the conduct of its own affairs. 


    (b) Except
during the continuance of an Event of Default of which the Trustee has knowledge: 



     (i) the
duties of the Trustee shall be determined solely by the express provisions of this Indenture and the Trustee need perform only those duties that are
specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and 


    (ii) in
the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture. 




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



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



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


    (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 6.5 hereof. 




    (d) Whether
or not therein expressly so provided, every provision of this Indenture that in any way relates to the
Trustee is subject to Sections 7.1 and 7.2. 


    (e) No
provision of this Indenture shall require the Trustee to expend or risk its own funds or incur any liability. The Trustee shall be under no obligation to
exercise any of its rights and 



53





 


powers under this Indenture at the request of any Holders, unless such Holder shall have offered to the Trustee security and indemnity satisfactory to it against any loss, liability or expense. 



    (f)  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. 




SECTION 6.2  RIGHTS OF TRUSTEE 



    (a) In
connection with the Trustee's rights and duties under this Indenture, the Trustee may conclusively rely upon any document believed by it to be genuine and to
have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document. 



    (b) Before
the Trustee acts or refrains from acting under this Indenture, it may require an Officers' Certificate or an Opinion of Counsel or both. 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. The Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon. 


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



    (d) The
Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within the rights or powers conferred
upon it by this Indenture. 


    (e) Unless
otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Company shall be sufficient if signed by an Officer of
the Company. 


    (f)  The
Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders
unless such Holders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities that might be incurred by it in compliance with such request or
direction. 


    (g) Except
with respect to Section 4.1 hereof, the Trustee shall have no duty to inquire as to the performance of the Company's covenants in Article IV
hereof. In addition, the Trustee shall not be deemed to have knowledge of any Default or Event of Default except (i) any Event of Default occurring pursuant to Sections 6.1(a), 6.1(b) and 4.1
or (ii) any Default or Event of Default of which
the Trustee shall have received written notification in the manner set forth in this Indenture or an officer in the corporate trust administration of the Trustee shall have obtained actual knowledge. 


    (h) The
Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee may, in its discretion, make such further inquiry or
investigation into such facts or matters as it may see fit. 




SECTION 6.3  INDIVIDUAL RIGHTS OF TRUSTEE 


    The
Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Company or any Affiliate of the Company with the same
rights it would have if it were not Trustee. However, in the event that the Trustee acquires any conflicting interest (as 


54





 


defined in the TIA) it must eliminate such conflict within 90 days, apply to the SEC for permission to continue as trustee or resign. Any Agent may do the same with like rights and duties. The
Trustee is also subject to Sections 7.10 and 7.11 hereof. 


SECTION 6.4  TRUSTEE'S DISCLAIMER 


    The
Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Notes, it shall not be accountable for the Company's use
of the proceeds from the Notes or any money paid to the Company or upon the Company's direction under any provision of this Indenture, it shall not be responsible for the use or application of any
money received by any Paying Agent other than the Trustee, and it shall not be responsible for any statement or recital herein or any statement in the Notes or any other document in connection with
the sale of the Notes or pursuant to this Indenture other than its certificate of authentication. 


SECTION 6.5  NOTICE OF DEFAULTS 


    If
a Default or Event of Default occurs and is continuing and if it is known to the Trustee, the Trustee shall mail to Holders of Notes a notice in the manner and to the extent
provided by Section 313(c) of the TIA of the Default or Event of Default within 90 days after it occurs. Except in the case of a Default or Event of Default in payment of principal of,
premium, if any, or interest on any Note, the
Trustee may withhold the notice if and so long as a committee of its Officers in good faith determines that withholding the notice is in the interests of the Holders of the Notes. 


SECTION 6.6  REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES 


    Within
60 days after each May 15 beginning with the May 15 following the date of this Indenture, and for so long as Notes remain outstanding, the Trustee shall
mail to the Holders of the Notes a brief report dated as of such reporting date that complies with TIA § 313(a) (but if no event described in TIA § 313(a) has occurred within
the 12 months preceding the reporting date, no report need be transmitted). The Trustee also shall comply with TIA § 313(b)(2). The Trustee shall also transmit by mail all reports
as required by TIA § 313(c). 


    A
copy of each report at the time of its mailing to the Holders of Notes shall be mailed to the Company and filed with the SEC and each stock exchange on which the Notes are listed in
accordance with TIA § 313(d). The Company shall promptly notify the Trustee when the Notes are listed on any stock exchange. 


SECTION 6.7  COMPENSATION AND INDEMNITY 


    The
Company shall pay to the Trustee from time to time reasonable compensation for its acceptance of this Indenture and services hereunder. 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 promptly upon request for all reasonable disbursements, advances and expenses incurred or
made by it in addition to the compensation for its services. Such expenses shall include the reasonable compensation, disbursements and expenses of the Trustee's agents and counsel. 


    The
Company shall indemnify the Trustee against any and all losses, liabilities or expenses (including reasonable attorneys' fees) incurred by it arising out of or in connection with
the acceptance or administration of its duties under this Indenture, including the costs and expenses of enforcing this Indenture against the Company (including this Section 7.7) and defending
itself against any claim (whether asserted by the Company or any Holder or any other Person) or liability in connection with the exercise or performance of any of its powers or duties hereunder,
except to the extent any such loss, liability or expense may be attributable to its negligence, bad faith or willful misconduct. The Trustee shall notify the Company promptly of any claim for which it
may seek indemnity. Failure by the 


55





 


Trustee to so notify the Company shall not relieve the Company of its obligations hereunder. The Company shall defend the claim and the Trustee shall cooperate in the defense. The Trustee may have
separate counsel and the Company shall pay the reasonable fees and expenses of such counsel. The Company need not pay for any settlement made without its consent, which consent shall not be
unreasonably withheld. 


    The
obligations of the Company under this Section 7.7 shall survive the satisfaction and discharge of this Indenture. 


    To
secure the Company's payment obligations in this Section, the Trustee shall have a Lien prior to the Notes on all money or property held or collected by the Trustee, except that
held in trust to pay principal and interest on particular Notes. Such Lien shall survive the satisfaction and discharge of this Indenture. 



    When
the Trustee incurs expenses or renders services after an Event of Default specified in Sections 6.1(h) or 6.1(i) hereof occurs, the expenses and the compensation for the
services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any Bankruptcy Law. 


    The
Trustee shall comply with the provisions of TIA § 313(b)(2) to the extent applicable. 


SECTION 6.8  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. 


    The
Trustee may resign in writing at any time and be discharged from the trust hereby created by so notifying the Company. The Holders of Notes of a majority in principal amount of
the then outstanding Notes may remove the Trustee by so notifying the Trustee and the Company in writing. The Company may remove the Trustee if: 



    (a) the
Trustee fails to comply with Section 7.10 hereof; 


    (b) the
Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law; 



    (c) a
Custodian or public officer takes charge of the Trustee or its property; or 


    (d) 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. Within one year after the
successor Trustee takes office, the Holders of a majority in principal amount of the then outstanding Notes may appoint a successor Trustee to replace the successor Trustee appointed by the Company. 


    If
a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company, or the Holders of Notes of at
least 10% in principal amount of the then outstanding Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee. 


    If
the Trustee, after written request by any Holder of a Note who has been a Holder of a Note for at least six months, fails to comply with Section 7.10, such Holder of a Note
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
Holders of the Notes. The 


56





 


retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee; provided all sums owing to the Trustee hereunder
have been paid and subject to the Lien provided for in Section 7.7 hereof. Notwithstanding replacement of the Trustee pursuant to this Section 7.8, the Company's obligations under
Section 7.7 hereof shall continue for the benefit of the retiring Trustee. 


SECTION 6.9  SUCCESSOR TRUSTEE BY MERGER, ETC. 


    If
the Trustee consolidates, 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. 



SECTION 6.10  ELIGIBILITY; DISQUALIFICATION 


    There
shall at all times be a Trustee hereunder that is a corporation or trust company (or a member of a bank holding company) 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 (or the bank holding company of which it is a member has) a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition. 



    This
Indenture shall always have a Trustee who satisfies the requirements of TIA § 310(a)(1), (2) and (5). The Trustee is subject to TIA §
310(b). 


SECTION 6.11  PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY 


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


 
 

ARTICLE VII
  LEGAL DEFEASANCE AND COVENANT DEFEASANCE    
  


SECTION 7.1  OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE 


    The
Company may, at the option of its Board of Directors evidenced by a resolution set forth in an Officers' Certificate, at any time, elect to have either Section 8.2 or 8.3
hereof be applied to all outstanding Notes upon compliance with the conditions set forth below in this Article VIII. 



SECTION 7.2  LEGAL DEFEASANCE AND DISCHARGE 


    Upon
the Company's exercise under Section 8.1 hereof of the option applicable to this Section 8.2, each of the Company and the Guarantors, as applicable, shall, subject
to the satisfaction of the applicable conditions set forth in Section 8.4 hereof, be deemed to have been discharged from its obligations with
respect to all outstanding Notes and Guarantees, as applicable, on the date the conditions set forth below are satisfied (hereinafter, "Legal Defeasance"). For this purpose, Legal Defeasance means
that the Company shall be deemed to have paid and discharged all amounts owed under the outstanding Notes and the Guarantors shall be deemed to have paid and discharged the entire Indebtedness
represented by the outstanding Guarantees, which shall thereafter be deemed to be "outstanding" only for the purposes of Section 8.5 hereof and the other Sections of this Indenture referred to
in (a) and (b) below, and to have satisfied all its other obligations under such Notes, such Guarantees and this Indenture (and the Trustee, on demand of and at the expense of the
Company, shall execute proper instruments acknowledging the same), except for the following provisions which shall survive until otherwise terminated or discharged hereunder: (a) the rights of
Holders of outstanding Notes to receive solely from the trust fund described in Section 8.4 hereof, and as more 


57





 


fully set forth in such Section, payments in respect of the principal of, premium, if any, and interest and Liquidated Damages, if any, on such Notes when such payments are due, (b) the
Company's obligations with respect to such Notes under Article II and Section 4.2 hereof, (c) the rights, powers, trusts, duties and immunities of the Trustee hereunder and the
Company's obligations in connection therewith and (d) this Article VIII. Subject to compliance with this Article VIII, the Company may exercise its option under this
Section 8.2 notwithstanding the prior exercise of its option under Section 8.3 hereof. 


SECTION 7.3  COVENANT DEFEASANCE 


    Upon
the Company's exercise under Section 8.1 hereof of the option applicable to this Section 8.3, subject to the satisfaction of the applicable conditions set forth in
Section 8.04 hereof, the Company and the Guarantors shall be released from their respective obligations under Sections 4.3, 4.4, 4.5, 4.7, 4.8, 4.9, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16 and
4.18 hereof and the Guarantors shall be released from their obligations under Section 10.3(b) hereof, in each case on and after the date the conditions set forth below are satisfied
(hereinafter, "Covenant Defeasance"), and the Notes and the Guarantees shall thereafter be deemed not "outstanding" for the purposes of any direction, waiver, consent or declaration or act of Holders
(and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed "outstanding" for all other purposes hereunder (it being understood that such Notes shall not
be deemed outstanding for accounting purposes). For this purpose, Covenant Defeasance means that, with respect to the outstanding Notes, the Company and the Guarantors may omit to comply with and
shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant
or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not constitute a Default or an Event of Default under
Section 6.1 hereof, but, except as specified above, the remainder of this Indenture and such Notes shall be unaffected thereby. In addition, upon the Company's exercise under Section 8.1
hereof of the option applicable to this Section 8.3 hereof, subject to the satisfaction of the applicable conditions set forth in Section 8.4 hereof, (x) Sections 6.1(c) through
6.1(g) hereof shall not constitute Events of Default and (y) Sections 6.1(h) and 6.1(i) shall not constitute an Event of Default as of the 91st day following the occurrence of the
Company's exercise of Covenant Defeasance; provided, however that for all other purposes as set forth herein, such Covenant Defeasance provisions shall
be effective. 


SECTION 7.4  CONDITIONS TO LEGAL OR COVENANT DEFEASANCE 



    The
following shall be the conditions to the application of either Section 8.2 or 8.3 hereof to the outstanding Notes: 


    In
order to exercise either Legal Defeasance or Covenant Defeasance: 



    (a) the
Company must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders, cash in United States legal tender, U.S. Government Obligations, or
a combination thereof, in amounts that will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, premium, if any, and Liquidated
Damages, if any, and interest on the outstanding Notes on the stated date for payment thereof or on the applicable redemption date, as the case may be, and the Trustee must have, for the benefit of
Holders of the Notes, a valid, perfected exclusive security interest in such trust; 


    (b) in
the case of an election under Section 8.2 hereof, the Company must deliver to the Trustee an Opinion of Counsel in the United States reasonably acceptable
to the Trustee confirming that (A) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (B) since the date of this Indenture, there has
been a change in the applicable federal income tax law, in either case to the effect that, the Holders of the outstanding 



58





 


Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such Legal Defeasance had not occurred; 


    (c) in
the case of an election under Section 8.3 hereof, the Company must deliver to the Trustee an Opinion of Counsel in the United States reasonably acceptable
to the Trustee confirming that Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred; 


    (d) in
the case of Legal Defeasance, (x) no Default or Event of Default shall have occurred and be continuing on the date of the deposit, and (y) no Event
of Default specified in Section 6.1(h) or (i) shall have occurred at any time from the date of the deposit to the 91st calendar day thereafter (it being
understood that this condition to Legal Defeasance may not be satisfied until such 91st calendar day after the date of deposit); 



    (e) the
Defeasance may not result in a breach or violation of, or constitute a default under this Indenture or any other material agreement or instrument to which the
Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound; 


    (f)  the
Company must deliver to the Trustee an Officers' Certificate stating that the deposit was not made by the Company with the intent to hinder, delay or defraud
any other of the Company's creditors; 


    (g) the
Company shall have delivered to the Trustee an Opinion of Counsel to the effect that after the 91st day following the deposit, the trust funds
(except as to trust funds that would be payable to holders of Notes who are "Insiders" as that term is defined by the United States Bankruptcy Code) will not be subject to Section 547 of the
United States Bankruptcy Code; and 


    (h) the
Company must deliver to the Trustee an Officers' Certificate confirming the satisfaction of the conditions in clauses (a) through (g) above, and
an Opinion of Counsel, confirming the satisfaction of the conditions in clauses (a) (with respect to the validity and perfection of the security interest) and (e). 




    Legal
Defeasance and Covenant Defeasance shall be deemed to occur on the date all of the applicable conditions set forth in this Section 8.4 are satisfied. 


SECTION 7.5  DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST; OTHER

                        MISCELLANEOUS PROVISIONS 


    Subject
to Section 8.6 hereof, all money and U.S. Government Obligations (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively
for purposes of this Section 8.5, the "Trustee") pursuant to Section 8.4 hereof in respect of the outstanding Notes shall be held in trust and applied by the Trustee, in accordance with
the provisions of such Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as Paying Agent) as the Trustee may determine, to the Holders
of such Notes of all sums due and to become due thereon in respect of principal, premium, if any, and interest (and Liquidated Damages, if any), but such money need not be segregated from other funds
except to the extent required by law. 


    The
Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or U.S. Government Obligations deposited pursuant to
Section 8.4 hereof 


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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 the outstanding Notes. 


    Anything
in this Article VIII to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon the request of the Company any money or
U.S. Government Obligations held by it as provided in Section 8.4 hereof which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee (which may be the opinion delivered under Section 8.4(a) hereof), are in excess of the amount thereof that would then be required to be deposited
to effect an equivalent Legal Defeasance or Covenant Defeasance. 


SECTION 7.6  REPAYMENT TO COMPANY 


    Any
money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of, premium, if any, Liquidated Damages, if any, or
interest on any Note and remaining unclaimed for two years after such principal, and premium, if any, Liquidated Damages, if any, or interest has become due and payable shall be paid to the Company on
its written request or (if then held by the Company) shall be discharged from such trust; and the Holder of such Note shall thereafter, as a creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided,
however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in the New York
Times and The Wall Street Journal (national edition), notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of
such notification or publication, any unclaimed balance of such money then remaining will be repaid to the Company. 


SECTION 7.7  REINSTATEMENT 


    If
the Trustee or Paying Agent is unable to apply any United States legal tender or U.S. Government Obligations in accordance with Section 8.2 or 8.3 hereof, as the case may
be, by reason of any order directing the repayment of the deposited money to the Company or otherwise making the deposit unavailable to make payments under the Notes when due, or if any court enters
an order avoiding the deposit of money with the Trustee or Paying Agent or otherwise requires the payment of the money so deposited to the Company or to a fund for the benefit of its creditors, then
(so long as the insufficiency exists or the order remains in effect) the Company's and the Guarantors' obligations under this Indenture and the Notes shall be revived and reinstated as though no
deposit had occurred pursuant to Section 8.2 or 8.3 hereof until such time as the Trustee or Paying Agent is permitted to apply all such
money in accordance with Section 8.2 or 8.3 hereof, as the case may be; provided, however, that, if the Company makes any payment of principal
of, premium, if any, or interest on any Note following the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Notes to receive such payment from the
money held by the Trustee or Paying Agent. 


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ARTICLE VIII
  AMENDMENT, SUPPLEMENT AND WAIVER    
  


SECTION 8.1  WITHOUT CONSENT OF HOLDERS OF NOTES 


    Notwithstanding
Section 9.2 hereof, the Company, the Guarantors and the Trustee may amend or supplement this Indenture, the Notes or any Guarantee, without the consent of any
Holder of a Note: 


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


    (b) to
provide for uncertificated Notes in addition to or in place of certificated Notes; 


    (c) to
provide for the assumption of the Company's obligations to the Holders of the Notes in the case of a merger or consolidation pursuant to Article V hereof; 


    (d) to
provide for additional Guarantors as set forth in Section 4.16 or for the release or assumption of a Guarantee in compliance with this Indenture; 



    (e) to
make any change that would provide any additional rights or benefits to the Holders of the Notes or that does not adversely affect the rights hereunder of any
Holder of the Note; 


    (f)  to
comply with the provisions of the Depositary, Euroclear or Clearstream or the Trustee with respect to the provisions of this Indenture or the Notes relating to
transfers and exchanges of Notes or beneficial interests therein; 


    (g) to
comply with requirements of the SEC in order to effect or maintain the qualification of this Indenture under the TIA; or 


    (h) to
provide for the issuance of Additional Notes in accordance with the limitations set forth in this Indenture as of the date hereof. 



    Upon
the request of the Company accompanied by a resolution of its Board of Directors authorizing the execution of any such amended or supplemental Indenture, and upon receipt by the
Trustee of the documents described in Section 9.6 hereof, the Trustee shall join with the Company in the execution of any amended or supplemental Indenture authorized or permitted by the terms
of this Indenture and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee shall not be obligated to enter into such amended or supplemental
Indenture that adversely affects its own rights, duties or immunities under this Indenture or otherwise. 



SECTION 8.2  WITH CONSENT OF HOLDERS OF NOTES 


    Except
as expressly stated otherwise in this Section 9.2, and subject to Sections 6.4 and 6.7 hereof, the Company, the Guarantors and the Trustee may amend or supplement this
Indenture, the Notes and the Guarantees, with the consent of the Holders of a majority in aggregate principal amount of the Notes then outstanding (including, without limitation, consents obtained in
connection with a purchase of, or tender offer or exchange offer for, the Notes), and, subject to Sections 6.4 and 6.7 hereof, any existing Default or Event of Default (other than a Default or Event
of Default in the payment of the principal of, premium, if any, or interest on the Notes, except a payment default resulting from an acceleration that has been rescinded) or compliance with any
provision of this Indenture or the Notes may be waived with the consent of the Holders of a majority in aggregate principal amount of the then outstanding Notes (including consents obtained in
connection with a purchase of, or tender offer or exchange offer for, the Notes). 


    Subject
to Sections 6.4 and 6.7 hereof, the Holders of a majority in aggregate principal amount of the Notes then outstanding may waive compliance in a particular instance by the
Company or any Subsidiary with any provision of this Indenture or the Notes. 


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    However, without the consent of each Holder affected (it being understood that, except as expressly stated otherwise in paragraphs (a) through (e) below,
Section 4.13 and 4.14 may be amended, waived or modified in accordance with the first paragraph of this Section 9.2) an amendment or waiver may not (with respect to any Notes held by a
non-consenting Holder): 


    (a) change
the final Stated Maturity on any Note, or reduce the principal amount thereof or the rate (or extend the time for payment) of interest thereon or any premium
payable upon the redemption thereof pursuant to Article III hereof, or change the place of payment where, or the coin or currency in which, any Note or any premium or the interest thereon (and
Liquidated Damages, if any) is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof (or in the case of redemption pursuant to
Article III hereof, on or after the redemption date), or, after the applicable Change of Control or Asset Sale occurs, reduce the corresponding Change of Control Purchase Price or the Asset
Sale Offer Price or alter the provisions (including the defined terms used herein) of Article III hereof in a manner adverse to the Holders; 


    (b) reduce
the percentage in principal amount of the outstanding Notes, the consent of whose Holders is required for any such amendment, supplemental indenture or
waiver provided for in this Indenture; 


    (c) modify
any of the waiver provisions, except to increase any required percentage or to provide that certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each outstanding Note affected thereby; 


    (d) cause
the Notes or any Guarantee to become subordinate in right of payment to any other Indebtedness; or 


    (e) make
any changes in the foregoing clauses (a) through (d) or this clause (e) hereof, in a manner adverse to the Holders of the Notes. 


    In
connection with any amendment, supplement or waiver under this Article IX, the Company may, but shall not be obligated to, offer to any Holder who consents to such
amendment, supplement or waiver, or to all Holders, consideration for such Holder's consent to such amendment, supplement or waiver. 


    Upon
the request of the Company accompanied by a resolution of its Board of Directors authorizing the execution of any such amended or supplemental Indenture, and upon the filing with
the Trustee of evidence satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by the Trustee of the documents described in Section 9.6 hereof, the
Trustee shall join with the Company in the execution of such amended or supplemental Indenture unless such amended or supplemental Indenture adversely affects the Trustee's own rights, duties or
immunities under this
Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such amended or supplemental Indenture. 


    It
shall not be necessary for the consent of the Holders of Notes under this Section 9.2 to approve the particular form of any proposed amendment or waiver, but it shall be
sufficient if such consent approves the substance thereof. 


    After
an amendment, supplement or waiver under this Section becomes effective, the Company shall mail to the Holders of Notes affected thereby a notice briefly describing the
amendment, supplement or waiver. Any failure of the Company to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amended or supplemental
Indenture or waiver. 


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SECTION 8.3  COMPLIANCE WITH TRUST INDENTURE ACT 



    Every
amendment or supplement to this Indenture or the Notes shall be set forth in an amended or supplemental Indenture that complies with the TIA as then in effect. 


SECTION 8.4  REVOCATION AND EFFECT OF CONSENTS 


    Until
an amendment, supplement or waiver becomes effective (as determined by the Company and which may be prior to any such amendment, supplement or waiver becoming operative), a
consent to it by a Holder of a Note is a continuing consent by the Holder of a Note and every subsequent Holder of a Note or portion of a Note that evidences the same Indebtedness as the consenting
Holder's Note, even if notation of the consent is not made on any Note. However, any such Holder of a Note or subsequent Holder of a Note may revoke the consent as to its Note if the Trustee receives
written notice of revocation before the date the waiver, supplement or amendment becomes effective (as determined by the Company). 


    The
Company may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to consent to any amendment, supplement or waiver, which record
date shall be the date so fixed by the Company notwithstanding the provisions of the TIA. If a record date is fixed, then notwithstanding the last sentence of the immediately preceding paragraph,
those Persons who were Holders at such record date, and only those Persons (or their duly designated proxies), shall be entitled to revoke any consent previously given, whether or not such Persons
continue to be Holders after such record date. 


    After
an amendment, supplement or waiver becomes effective, it shall bind every Holder unless it makes a change described in any of clauses (a) through (c) of
Section 9.2 hereof, in which case, the amendment, supplement or waiver shall bind only each Holder of a Note who has consented to it and every subsequent Holder of a Note or portion of a Note
that evidences the same debt as the consenting Holder's Note; provided, that any such waiver shall not impair or affect the right of any Holder to
receive payment of principal and premium of and interest (and Liquidated Damages, if any) on a Note, on or after the respective dates set for such amounts to become due and payable expressed in such
Note, or to bring suit for the enforcement of any such payment on or after such respective dates. 


SECTION 8.5  NOTATION ON OR EXCHANGE OF NOTES 


    The
Trustee may place an appropriate notation about an amendment, supplement or waiver on any Note thereafter authenticated. The Company in exchange for all Notes may issue and the
Trustee shall authenticate new Notes that reflect the amendment, supplement or waiver. 


    Failure
to make the appropriate notation or issue a new Note shall not affect the validity and effect of such amendment, supplement or waiver. 



SECTION 8.6  TRUSTEE TO SIGN AMENDMENTS, ETC. 


    The
Trustee shall sign any amended or supplemental Indenture authorized pursuant to this Article IX if the amendment or supplement does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. The Company may not sign an amendment or supplemental Indenture until the Board of Directors approves it. In executing any amended or supplemental indenture,
the Trustee shall be entitled to receive indemnity reasonably satisfactory to it and to receive and (subject to Section 7.1) shall be fully protected in relying upon, an Officers' Certificate
and an Opinion of Counsel stating that the execution of such amended or supplemental indenture is authorized or permitted by this Indenture. 


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ARTICLE IX
  GUARANTEES    
  



SECTION 9.1  GUARANTEES 


    By
its execution hereof, each of the Guarantors acknowledges and agrees that it receives substantial benefits from the Company and that such party is providing its Guarantee for good
and valuable consideration, including, without limitation, such substantial benefits and services. Accordingly, subject to the provisions of this Article X, each Guarantor, jointly and
severally, hereby unconditionally guarantees on a senior basis to each Holder of a Note authenticated and delivered by the Trustee and its successors and assigns that: (i) the principal of, and
premium and interest and Liquidated Damages, if any, on the Notes shall be duly and punctually paid in full when due, whether at maturity, by acceleration, call for redemption, upon a Change of
Control Offer, upon an Asset Sale Offer, upon a Selmer Notes Redemption Offer or otherwise, and interest on overdue principal, and premium, if any, and (to the extent permitted by law) interest on any
interest, if any, on the Notes and all other obligations of the Company to the Holders or the Trustee hereunder or under the Notes (including fees, expenses or other) shall be promptly paid in full or
performed, all in accordance with the terms hereof; and (ii) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, the same shall be promptly
paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration, call for redemption, upon a Change of Control, upon an Asset
Sale Offer, upon a Selmer Notes Redemption Offer or otherwise, subject, however, in the case of clauses (i) and (ii) above, to the limitations set forth in Section 10.5
(collectively, the "Guarantee Obligations"); provided, however, that The Selmer Company, Inc., Emerson Musical Instruments, Inc., The Steinway Piano Company, Inc.,
Steinway, Inc., The SMI Trust, S&B Retail, Inc., Boston Piano Company, Inc., The O.S. Kelly Corporation, The O.S. Kelly Company, United Musical Instruments Holdings, Inc.
and United Musical Instruments USA, Inc., guarantee the Guaranteed Obligations only to the extent: (1) the indebtedness represented by the Guarantee may be incurred pursuant to
Section 4.09 of the Selmer Indenture; (2) the investment represented by the Guarantee may be made pursuant to Section 4.07 of the Selmer Indenture; (3) the Guarantee is a
transaction permitted under Section 4.11 of the Selmer Indenture; and (4) the Guarantee is otherwise permitted by the Selmer Indenture; in each case, so long as the Selmer Indenture is
applicable, if at all; and, if the Selmer Notes are deemed to be no longer outstanding pursuant to the terms of the Selmer Indenture, including as a result of the redemption of all of the outstanding
Selmer Notes, then there shall be no such limit on such Guarantee. An Event of Default under this Indenture or the Notes shall constitute an event of default under this Guarantee, and shall entitle
the Trustee or the Holders of Notes to accelerate the obligations of each Guarantor hereunder in the same manner and to the same extent as the Guarantee Obligations of the Company. 


    Subject
to the provisions of this Article X, each Guarantor hereby agrees that its Guarantee hereunder shall be unconditional, irrespective of the validity, regularity or
enforceability of the Notes or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any thereof, the entry of any judgment
against the Company, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a Guarantor. Each Guarantor hereby waives
and relinquishes: (a) any right to require the Trustee, the Holders or the Company (each, a "Benefitted Party") to proceed against the Company, the Subsidiaries or any other Person or to
proceed against or exhaust any security held by a Benefitted Party at any time or to pursue any other remedy in any secured party's power before proceeding against the Guarantors; (b) any
defense that may arise by reason of the incapacity, lack of authority, death or disability of any other Person or Persons or the failure of a Benefitted Party to file or enforce a claim against the
estate (in administration, bankruptcy or any other proceeding) of any other Person or Persons; (c) demand, protest and notice of any kind (except as expressly required by this Indenture),
including but not limited to notice of the existence, creation or incurring of any new or 


64





 


additional Indebtedness or obligation or of any action or non-action on the part of the Guarantors, the Company, the Subsidiaries, any Benefitted Party, any creditor of the Guarantors, the
Company or the Subsidiaries or on the part of any other Person whomsoever in connection with any obligations the performance of which are hereby guaranteed; (d) any defense based upon an
election of remedies by a Benefitted Party, including but not limited to an election to proceed against the Guarantors for reimbursement; (e) any defense based upon any statute or rule of law
which provides that the obligation of a surety must be neither larger in amount nor in other respects more burdensome than that of the principal; (f) any defense arising because of a Benefitted
Party's election, in any proceeding instituted under the Bankruptcy Law, of the application of Section 1111(b)(2) of the Bankruptcy Code; and (g) any defense based on any borrowing or
grant of a security interest under Section 364 of the Bankruptcy Code. The Guarantors hereby covenant that, except as otherwise provided therein, the Guarantees shall not be discharged except
by payment in full of all Guarantee Obligations, including the principal, premium, if any, and interest on the Notes and all other costs provided for under this Indenture or as provided in
Article VIII. 


    If
any Holder or the Trustee is required by any court or otherwise to return to either the Company or the Guarantors, or any trustee or similar official acting in relation to either
the Company or the Guarantors, any amount paid by the Company or the Guarantors to the Trustee or such Holder, the Guarantees, to the extent theretofore discharged, shall be reinstated in full force
and effect. Each of the Guarantors agrees that it shall not be entitled to any right of subrogation in relation to the Holders in respect of any Guarantee Obligations hereby until payment in full of
all such obligations guaranteed hereby. Each Guarantor agrees that, as between it, on the one hand, and the Holders of Notes and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article VI hereof for the purposes hereof, notwithstanding any stay, injunction or other prohibition preventing such acceleration
in respect of the Guarantee Obligations, and (y) in the event of any acceleration of such obligations as provided in Article VI hereof, such Guarantee Obligations (whether or not due and
payable) shall forthwith become due and payable by such Guarantor for the purpose of the Guarantee. 



SECTION 9.2  EXECUTION AND DELIVERY OF GUARANTEES 


    To
evidence the Guarantees set forth in Section 10.1 hereof, each of the Guarantors agrees that a notation of the Guarantees substantially in the form included in
Exhibit A hereto shall be endorsed on each Note authenticated and delivered by the Trustee and that this Indenture shall be executed on behalf of each of the Guarantors by an Officer of each of
the Guarantors. 


    Each
of the Guarantors agree that the Guarantees set forth in this Article X shall remain in full force and effect and apply to all the Notes notwithstanding any failure to
endorse on each Note a notation of the Guarantees. 


    If
an Officer whose facsimile signature is on a Note or a notation of Guarantee no longer holds that office at the time the Trustee authenticates the Note on which the Guarantees are
endorsed, the Guarantees shall be valid nevertheless. 


    The
delivery of any Note by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Guarantees set forth in this Indenture on behalf of the
Guarantors. 



SECTION 9.3  GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS 


    (a) Nothing
contained in this Indenture or in the Notes shall prevent any consolidation or merger of any Guarantor with or into each other or with or into the Company.
Upon any such consolidation or merger, the Subsidiary Guarantee of the Subsidiary Guarantor that does not survive the consolidation or merger shall no longer be of any force or effect. 


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    (b) Except for a merger or consolidation in which a Guarantor is sold and its Guarantee is released in compliance with the provisions of Section 10.4, no
Guarantor shall consolidate or merge with or into (whether or not such Guarantor is the surviving Person) another Person unless, subject to the provisions of the following paragraph and the other
provisions of this Indenture, (i) the Person formed by or surviving any such consolidation or merger (if other than such Guarantor) assumes all the obligations of such Guarantor pursuant to a
supplemental indenture in form reasonably satisfactory to the Trustee, pursuant to which such person shall unconditionally guarantee, on a senior basis, all of such Guarantor's obligations under such
Guarantor's Guarantee on the terms set forth in this Indenture; (ii) immediately after giving effect to such transaction on a pro forma basis, no
Default or Event of Default shall have occurred or be continuing; and (iii) the Guarantor, or any Person formed by or surviving the consolidation or merger, (A) would have a Consolidated
Net Worth (immediately after giving effect to the transaction), equal to or greater than the Consolidated Net Worth of the Guarantor immediately preceding the transaction and (B) would be
permitted by virtue of the Company's pro forma Consolidated Coverage Ratio to incur, immediately after giving effect to the transaction, at least $1.00 of additional Indebtedness pursuant to the Debt
Incurrence Ratio test set forth in the first paragraph of Section 4.7 hereof; provided, however, the provisions of this clause (iii)(B)
shall not apply to the merger of any Guarantors with and into each other or with or into the Company. In case of any such consolidation or merger and upon the assumption by the successor corporation,
by supplemental indenture, executed and delivered to the Trustee and reasonably satisfactory in form to the Trustee, of the Guarantees endorsed upon the Notes and the due and punctual performance of
all of the covenants and conditions of this Indenture to be performed by such Guarantor, such successor corporation shall succeed to and be substituted for such Guarantor with the same effect as if it
had
been named herein as a Guarantor. Such successor corporation thereupon may cause to be signed any or all of the Guarantees to be endorsed upon all of the Notes issuable hereunder which theretofore
shall not have been signed by the Company and delivered to the Trustee. All the Guarantees so issued shall in all respects have the same legal rank and benefit under this Indenture as the Guarantees
theretofore and thereafter issued in accordance with the terms of this Indenture as though all of such Guarantees had been issued at the date of the execution hereof. 


    (c) The
Trustee, subject to the provisions of Section 11.4 hereof, shall be entitled to receive an Officers' Certificate as conclusive evidence that any such
consolidation or merger, and any such assumption of Guarantee Obligations, comply with the provisions of this Section 10.3. Such Officers' Certificate shall comply with the provisions of
Section 11.5. 


SECTION 9.4  RELEASE OF GUARANTORS 


    Notwithstanding
Section 10.3(b), upon the sale or disposition (whether by merger, stock purchase, Asset Sale or otherwise) of a Guarantor to an entity which is not and is not
required to become a Guarantor, or the designation of a Subsidiary of the Company to become an Unrestricted Subsidiary, which transaction is in compliance with the Indenture (including, without
limitation, the provisions of Section 4.7) and Section 10.3(b), such Guarantor will be deemed released from its obligations under its Guarantee of the Notes; provided, however, that any
such termination shall occur only to the extent that all obligations of such Guarantor under all of its guarantees of, and under all of its pledges of assets or other security interests which secure,
any of the Company's Indebtedness or any Indebtedness of any other of the Company's Subsidiaries (other than Subsidiaries that are contemporaneously sold or disposed of, or designated as Unrestricted
Subsidiaries) shall also terminate upon such release, sale or transfer and none of its Equity Interests are pledged for the benefit of any holder of any of the Company's Indebtedness or any
Indebtedness of any of the Company's Subsidiaries (other than Subsidiaries that are contemporaneously sold or disposed of, or designated as Unrestricted Subsidiaries). 


66





 


    Upon delivery by the Company to the Trustee of an Officer's Certificate, to the effect that such sale or other disposition or that such designation was made by the Company in
accordance with the provisions of this Indenture, the Trustee shall execute any documents reasonably required in order to evidence the release of any such Guarantor from its obligations under its
Guarantee. Except as provided in Section 10.3(a), any Guarantor not released from its obligations under its Guarantee shall remain liable for the full amount of principal of and interest on the
Notes and for the other obligations of any Guarantor under this Indenture as provided in this Article X. 


    Notwithstanding
the foregoing provisions of this Article X, (i) any Guarantor whose Guarantee would otherwise be released pursuant to the provisions of this
Section 10.4 may elect, at its sole discretion, by
written notice to the Trustee, to maintain such Guarantee in effect notwithstanding the event or events that otherwise would cause the release of such Guarantee (which election to maintain such
Guarantee in effect may be conditional or for a limited period of time), and (ii) any Subsidiary of the Company which is not a Guarantor may elect, at its sole discretion, by written notice to
the Trustee, to become a Guarantor (which election may be conditional or for a limited period of time). 


SECTION 9.5  LIMITATION OF GUARANTOR'S LIABILITY; CERTAIN BANKRUPTCY EVENTS 


    (a) Each
Guarantor, and by its acceptance hereof each Holder, hereby confirms that it is the intention of all such parties that the Guarantee Obligation of such
Guarantor pursuant to its Guarantee not constitute a fraudulent transfer or conveyance for purposes of any Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or
any similar federal or state law. To effectuate the foregoing intention, the Holders and such Guarantor hereby irrevocably agree that the Guarantee Obligations of such Guarantor under this
Article X shall be limited to the maximum amount as will, after giving effect to all other contingent and fixed liabilities of such Guarantor and after giving effect to any collections from or
payments made by or on behalf of any other Guarantor in respect of the Guarantee Obligations of such other Guarantor under this Article X, result in the Guarantee Obligations of such Guarantor
under the Guarantee of such Guarantor not constituting a fraudulent transfer or conveyance. 


    (b) Each
Guarantor hereby covenants and agrees, to the fullest extent that it may do so under applicable law, that in the event of the insolvency, bankruptcy,
dissolution, liquidation or reorganization of the Company, such Guarantor shall not file (or join in any filing of), or otherwise seek to participate in the filing of, any motion or request seeking to
stay or to prohibit (even temporarily) execution on the Guarantee and hereby waives and agrees not to take the benefit of any such stay of execution, whether under Section 362 or 105 of the
Bankruptcy Law or otherwise. 


SECTION 9.6  APPLICATION OF CERTAIN TERMS AND PROVISIONS TO THE GUARANTORS 


    (a) For
purposes of any provision of this Indenture which provides for the delivery by any Guarantor of an Officers' Certificate and/or an Opinion of Counsel, the
definitions of such terms in Section 1.1 shall apply to such Guarantor as if references therein to the Company were references to such Guarantor. 


    (b) Any
request, direction, order or demand which by any provision of this Indenture is to be made by any Guarantor, shall be sufficient if evidenced as described in
Section 11.2 as if references therein to the Company were references to such Guarantor. 



    (c) Any
notice or demand which by any provision of this Indenture is required or permitted to be given or served by the Trustee or by the holders of Notes to or on any
Guarantor may be given or 


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served as described in Section 11.2 as if references therein to the Company were references to such Guarantor. 


    (d) Upon
any demand, request or application by any Guarantor to the Trustee to take any action under this Indenture, such Guarantor shall furnish to the Trustee such
certificates and opinions as are required in Section 11.4 hereof as if all references therein to the Company were references to such Guarantor. 


 
 

ARTICLE X
  MISCELLANEOUS    
  


SECTION 10.1  TRUST INDENTURE ACT CONTROLS 


    If
any provision of this Indenture limits, qualifies or conflicts with the duties imposed by the TIA, the imposed duties shall control. 



SECTION 10.2  NOTICES 


    Any
notice or communication by the Company or the Trustee to the other is duly given if in writing and delivered in Person or mailed by first class mail (registered or certified,
return receipt requested), telecopier or overnight air courier guaranteeing next day delivery, to the others' address:



	If to the Company

or the Guarantors:	 	 
	 	 	Steinway Musical Instruments, Inc.

800 South Street, Suite 305

Waltham, MA 02453

Attention: Chief Financial Officer
	with copies (which

shall not constitute

notice) to:	 	 
	 	 	Milbank, Tweed, Hadley & McCloy LLP

601 South Figueroa Street

Los Angeles, CA 90017

Attention of: Neil J Wertlieb

telecopier no.: (213) 629-5063
	If to the Trustee:	 	 
	 	 	Firstar Bank, N.A.

101 East 5th Street

St. Paul, Minnesota 55101

Attention: Corporate Trust Department

telecopier no.: (651) 229-6415





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


    All
notices and communications (other than those sent to Holders) shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; when answered back,
if telexed; when receipt acknowledged, if telecopied; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery. 


68





 


    Any notice or communication to a Holder shall be mailed by first class mail, certified or registered, return receipt requested, or by overnight air courier guaranteeing next day
delivery to its address shown on the register kept by the Registrar. Any notice or communication shall also be so mailed to any Person described in TIA § 313(c), to the extent required by
the TIA. Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. 



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


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


SECTION 10.3  COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES 


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


SECTION 10.4  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: 


    (a) an
Officers' Certificate in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 11.5 hereof)
stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been satisfied; and 



    (b) an
Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 11.5 hereof)
stating that, in the opinion of such counsel, all such conditions precedent and covenants have been satisfied. 


SECTION 10.5  STATEMENTS REQUIRED IN CERTIFICATE OR OPINION 


    Each
certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to TIA §
314(a)(4)) shall comply with the provisions of TIA § 314(e) and shall include: 


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


    (b) 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; 


    (c) a
statement that, in the opinion of such Person, he or she has made such examination or investigation as is necessary to enable him to express an informed opinion
as to whether or not such covenant or condition has been satisfied; and 


    (d) a
statement as to whether or not, in the opinion of such Person, such condition or covenant has been satisfied; provided,
however, that with respect to matters of fact, an Opinion of Counsel may rely on an Officers' Certificate or certificate of public officials. 


69





 


SECTION 10.6  RULES BY TRUSTEE AND AGENTS 


    The
Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its
functions. 


SECTION 10.7  NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS 


    No
past, present or future director, officer, employee, incorporator or stockholder (direct or indirect) of the Company or the Guarantors (or any such successor entity), as such,
shall have any liability for any Obligations of the Company or the Guarantors under the Notes, the Guarantees or this Indenture or for any claim based on, in respect of, or by reason of, such
Obligations or their creation, except in their capacity as an obligor or Guarantor of the Notes in accordance with this Indenture. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for issuance of the Notes. 


SECTION 10.8  GOVERNING LAW 


    THE
INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE, THE NOTES AND THE GUARANTEES, INCLUDING, WITHOUT LIMITATION, SECTION 5-1401
OF THE NEW YORK GENERAL OBLIGATIONS LAW. 



SECTION 10.9  NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS 


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


SECTION 10.10  SUCCESSORS 


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


SECTION 10.11  SEVERABILITY 


    In
case any one or more of the provisions of this Indenture or in the Notes or in the Guarantees shall be held invalid, illegal or unenforceable, in any respect for any reason, the
validity, legality and enforceability of any such provision in every other respect and of the remaining provisions shall not in any way be affected or impaired thereby, it being intended that all of
the provisions hereof shall be enforceable to the full extent permitted by law. 


SECTION 10.12  COUNTERPART 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. 


SECTION 10.13  TABLE OF CONTENTS, HEADINGS, ETC. 


    The
Table of Contents 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 of this
Indenture and shall in no way modify or restrict any of the terms or provisions hereof. 


[Signatures on following page] 


70







 
 

SIGNATURES    
  


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



	 	 	THE COMPANY:

STEINWAY MUSICAL INSTRUMENTS, INC.
	

 	
 	

By:	
 	

/s/ DANA D. MESSINA   

	 	 	 	 	Name:	 	Dana D. Messina
	 	 	 	 	Title:	 	President and Chief Executive Officer
	

 	
 	
THE GUARANTORS:

THE SELMER COMPANY, INC
	

 	
 	

By:	
 	

/s/ DANA D. MESSINA   

	 	 	 	 	Name:	 	Dana D. Messina
	 	 	 	 	Title:	 	Executive Vice President
	

 	
 	

EMERSON MUSICAL INSTRUMENTS, INC.
	

 	
 	

By:	
 	

/s/ DANA D. MESSINA   

	 	 	 	 	Name:	 	Dana D. Messina
	 	 	 	 	Title:	 	Executive Vice President
	

 	
 	

THE STEINWAY PIANO COMPANY, INC.
	

 	
 	

By:	
 	

/s/ DANA D. MESSINA   

	 	 	 	 	Name:	 	Dana D. Messina
	 	 	 	 	Title:	 	Executive Vice President
	

 	
 	

STEINWAY, INC.
	

 	
 	

By:	
 	

/s/ DANA D. MESSINA   

	 	 	 	 	Name:	 	Dana D. Messina
	 	 	 	 	Title:	 	Executive Vice President
	

 	
 	

THE SMI TRUST
	

 	
 	

By:	
 	

/s/ DANA D. MESSINA   

	 	 	 	 	Name:	 	Dana D. Messina
	 	 	 	 	Title:	 	Executive Vice President
	

 	
 	

S&B RETAIL, INC.
	

 	
 	

By:	
 	

/s/ DANA D. MESSINA   

	 	 	 	 	Name:	 	Dana D. Messina
	 	 	 	 	Title:	 	Executive Vice President






 

	

 	
 	

BOSTON PIANO COMPANY, INC.
	

 	
 	

By:	
 	

/s/ DANA D. MESSINA   

	 	 	 	 	Name:	 	Dana D. Messina
	 	 	 	 	Title:	 	Executive Vice President
	

 	
 	

THE O.S. KELLY CORPORATION
	

 	
 	

By:	
 	

/s/ DANA D. MESSINA   

	 	 	 	 	Name:	 	Dana D. Messina
	 	 	 	 	Title:	 	Executive Vice President
	

 	
 	

THE O.S. KELLY COMPANY
	

 	
 	

By:	
 	

/s/ DANA D. MESSINA   

	 	 	 	 	Name:	 	Dana D. Messina
	 	 	 	 	Title:	 	Executive Vice President
	

 	
 	

UNITED MUSICAL INSTRUMENTS HOLDINGS, INC.
	

 	
 	

By:	
 	

/s/ DANA D. MESSINA   

	 	 	 	 	Name:	 	Dana D. Messina
	 	 	 	 	Title:	 	Executive Vice President
	

 	
 	

UNITED MUSICAL INSTRUMENTS USA, INC.
	

 	
 	

By:	
 	

/s/ DANA D. MESSINA   

	 	 	 	 	Name:	 	Dana D. Messina
	 	 	 	 	Title:	 	Executive Vice President
	

 	
 	
THE TRUSTEE:

FIRSTAR BANK, N.A.
	

 	
 	

By:	
 	

/s/ FRANK P. LESLIE III   

	 	 	 	 	Name:	 	Frank P. Leslie III
	 	 	 	 	Title:	 	Vice President, Corporate Trust Department




2






  



 
 
 
EXHIBIT A

[FORM OF NOTE]

STEINWAY MUSICAL INSTRUMENTS, INC.

83/4% [SERIES A] [SERIES B](1) SENIOR NOTE

DUE 2011  



	 	 	CUSIP:             
	No.	 	$                  





    Steinway
Musical Instruments, Inc., a Delaware corporation (hereinafter called the "Company" which term includes any successors under this Indenture hereinafter referred to),
for value received, hereby promises to pay to             , or registered assigns, the principal sum of             
Dollars, on
April 15, 2011. 


    Interest
Payment Dates: April 15 and October 15; commencing October 15, 2001. 



    Record
Dates: April 1 and October 1. 


    Reference
is made to the further provisions of this Note on the reverse side, which will, for all purposes, have the same effect as if set forth at this place. 




	(1)
	Series A
should be replaced with Series B in the Exchange Notes. 


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    IN
WITNESS WHEREOF, the Company has caused this instrument to be duly executed. 



	 	 	STEINWAY MUSICAL INSTRUMENTS, INC.

a Delaware corporation
	

 	
 	

By:	


	 	 	 	Name:
	 	 	 	Title:
	

 	
 	

By:	


	 	 	 	Name:
	 	 	 	Title:




TRUSTEE'S
CERTIFICATE OF AUTHENTICATION 


    This
is one of the Notes described in the within-mentioned Indenture. 



	 	 	Firstar Bank, N.A.
	

 	
 	

By:	


	 	 	 	Authorized Signatory
	Dated:             	 	 	 




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(Back of Note)

83/4% [Series A] [Series B](2) Senior Notes due 2011 


    [THIS
GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF,
AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.6 OF THE INDENTURE,
(II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.6(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION
PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.](3) 


    [UNLESS
AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT 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 OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("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 SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE 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.](4) 


    [THE
RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR DEFINITIVE NOTES, ARE AS SPECIFIED IN THE
INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE CASH PAYMENTS OF INTEREST DURING THE PERIOD WHICH
SUCH HOLDER HOLDS THIS NOTE. NOTHING IN THIS LEGEND SHALL BE DEEMED TO PREVENT INTEREST FROM ACCRUING ON THIS NOTE.](5) 


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    [THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE NEXT SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE
HOLDER:  




	(2)
	Series A
should be replaced with series B int he Exchange Notes.



	(3)
	To
be included only on Global Notes deposited with DTC as Depositary.



	(4)
	To
be included only on Global Notes deposited with DTC as Depositary.



	(5)
	To
be included only on Reg S Temporary Global Notes. 





    (1) REPRESENTS
THAT, IN CONNECTION WITH EXEMPT RESALES BY UBS WARBURG LLC (THE "INITIAL PURCHASER"), (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN
RULE 144A UNDER THE ACT)(A "QIB"), OR (B) IT HAS ACQUIRED THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE ACT, 


    (2) AGREES
THAT, IN CONNECTION WITH RESALES AND TRANSFERS OF THE NOTES OTHER THAN IN CONNECTION WITH EXEMPT RESALES BY THE INITIAL PURCHASER, IT WILL NOT RESELL OR
OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF THE ACT, (D) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144 UNDER THE ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE
ACT) THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF THIS NOTE (THE FORM OF WHICH CAN BE OBTAINED FROM
THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH
THE ACT, (F) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY) OR (G) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND 


    (3) AGREES
THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. 




    AS
USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE 


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ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING.](6) 


    Capitalized
terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.   




	(6)
	To
be included only on Transfer Restricted Notes. 



    1.  Interest.  Steinway Musical Instruments, Inc., a Delaware corporation (the "Company"),
promises to pay interest on the principal amount of this Note at 83/4% per annum from April 19, 2001 until maturity and shall pay the Liquidated Damages, if any, payable pursuant
to Section 5 of the Registration Rights Agreement referred to below. The Company will pay interest and Liquidated Damages, if any, semi-annually on April 15 and
October 15 of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each an "Interest Payment Date"). Interest on the Notes will accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from the Issue Date; provided that if there is no existing Default in the payment
of interest, and if this Note is authenticated between a Record Date (defined below) referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next
succeeding Interest Payment Date; provided, further, that the first Interest Payment Date shall be October 15, 2001. The Company shall pay
interest (including Accrued Bankruptcy Interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, from time to time on demand at the rate then in effect; it shall
pay interest (including Accrued Bankruptcy Interest in any proceeding under any Bankruptcy Law) on overdue installments of interest and Liquidated Damages, if any, (without regard to any applicable
grace periods) from time to time on demand at the same rate to the extent lawful. Interest will be computed on the basis of a 360-day year of twelve 30-day months. 


    2.  Method of Payment.  The Company will pay interest on the Notes (except defaulted interest) and
Liquidated Damages, if any, to the Persons who are registered Holders of Notes at the close of business on the April 1 or October 1 next preceding the Interest Payment Date (each a
"Record Date"), even if such Notes are cancelled after such Record Date and on or before such Interest Payment Date, except as provided in Section 2.12 of the Indenture (as defined below) with
respect to defaulted interest. The Notes will be payable as to principal, premium, interest and Liquidated Damages, if any, at the office or agency of the Company maintained within the City and State
of New York for such purpose, or, at the option of the Company, payment of interest and Liquidated Damages, if any, may be made by check mailed to the Holders at their addresses set forth in the
register of Holders, and provided that payment by wire transfer of immediately available funds to an account within the United States will be required
with respect to principal of and interest, premium and Liquidated Damages, if any, on all Global Notes. Such payment shall be in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts. 


    3.  Paying Agent and Registrar.  Initially, Firstar Bank, N.A., the Trustee under the Indenture, will act
as Paying Agent and Registrar. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company or any of its Subsidiaries may act in any such capacity. 


    4.  Indenture.  The Company issued the Notes under an Indenture dated as of April 19, 2001,
("Indenture") among the Company, the Guarantors party thereto and the Trustee. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the 


A–5





 


Trust Indenture Act of 1939, as amended (15 U.S. Code §§ 77aaa-77bbbb). The Notes are subject to all such terms, and Holders are referred to the Indenture and such
Act for a statement of such terms. 


    5.  Optional Redemption.  



    (a) Except
as set forth in clause (b) of this Section, the Company shall not have the option to redeem the Notes pursuant to this Section 5 prior to
April 15, 2006. The Notes will be redeemable for cash at the option of the Company, in whole or in part, at any time on or after April 15, 2006, upon not less than 30 days nor
more than 60 days prior notice mailed by first class mail to each Holder at its last registered address, at the following redemption prices (expressed as percentages of the principal amount) if
redeemed during the 12-month period commencing April 15 of the years indicated below, in each case (subject to the right of Holders of record on a Record Date to receive the
corresponding interest due (and the corresponding Liquidated Damages, if any) on the corresponding Interest Payment Date that is on or prior to such redemption date) together with accrued and unpaid
interest and Liquidated Damages, if any, thereon to the redemption date: 



	Year
 
	 	Percentage
	 
	2006	 	104.375	%
	2007	 	102.917	%
	2008	 	101.458	%
	2009 and thereafter	 	100.000	%






    (b) Notwithstanding
the provisions of clause (a) of this Section, at any time or from time to time until April 15, 2004, up to 35% of the aggregate
principal amount of the Notes originally issued under the Indenture may be redeemed at the option of the Company within 60 days of a Public Equity Offering, on not less than 30 days, but
not more than 60 days, prior notice to each Holder of the Notes to be redeemed, with cash from the Net Cash Proceeds of such Public Equity Offering, at a redemption price equal to 108.750% of
the principal amount thereof (subject to the right of Holders of record on a
Record Date to receive the corresponding interest (and the corresponding Liquidated Damages, if any) due on the Interest Payment Date that is on or prior to such redemption date) together with accrued
and unpaid interest and Liquidated Damages, if any, thereon to the redemption date; provided that immediately following such redemption not less than
65% of the aggregate principal amount of the Notes originally issued pursuant to the Indenture remain outstanding. 


    (c) Notice
of redemption will be mailed by first class mail at least 30 days but not more than 60 days before the redemption date to each Holder whose
Notes are to be redeemed at its registered address. Notes in denominations larger than $1,000 may be redeemed in part but only in integral multiples of $1,000, unless all of the Notes held by a Holder
are to be redeemed. On and after the redemption date interest ceases to accrue on Notes or portions thereof called for redemption unless the Company defaults in such payments due on the redemption
date. 




    6.  Mandatory Redemption.  The Company shall not be required to make mandatory redemption payments with
respect to the Notes. The Notes shall not have the benefit of any sinking fund. 


    7.  Offers to Purchase.  



    (a) Failure to Redeem the Selmer Notes. In the event that the Selmer Notes Redemption has not occurred on or prior to
June 30, 2001 each Holder of Notes will have the right, at such Holder's option, pursuant to an offer (subject only to conditions required by applicable law, if any) by the Company (the "Selmer
Notes Redemption Offer"), to require the Company to repurchase all or any part of such Holder's Notes (provided, that the principal amount of such Notes must be $1,000 or an integral multiple thereof)
on a date (the "Selmer Notes Redemption Purchase Date") that is no later than 25 Business Days after June 30, 2001, at a cash price equal to 100% of the 



A–6






 


principal amount thereof (the "Selmer Notes Redemption Purchase Price"), together with accrued and unpaid interest to the Selmer Notes Redemption Purchase Date. 


    The
Selmer Notes Redemption Offer shall be made within 5 Business Days following June 30, 2001 and shall remain open for 20 Business Days following its commencement (the
"Selmer Notes Redemption Offer Period"). Upon expiration of the Selmer Notes Redemption Offer Period, the Company shall promptly purchase all Notes properly tendered in response to the Selmer Notes
Redemption Offer. 


    On
or before the Selmer Notes Redemption Purchase Date, the Company will: (1) accept for payment Notes or portions thereof properly tendered pursuant to the Selmer Notes
Redemption Offer, (2) deposit with the paying agent for the Company (the "Paying Agent") cash sufficient to pay the
Selmer Notes Redemption Purchase Price (together with accrued and unpaid interest of all Notes so tendered), and (3) deliver to the Trustee the Notes so accepted together with an Officers'
Certificate listing the Notes or portions thereof being purchased by the Company. 


    (b) Change of Control. In the event that a Change of Control has occurred, each Holder of Notes will have the right, at
such Holder's option, pursuant to an offer (subject only to conditions required by applicable law, if any) by the Company (the "Change of Control Offer"), to require the Company to repurchase all or
any part of such Holder's Notes (provided that the principal amount of such Notes must be $1,000 or an integral multiple thereof) on a date (the "Change of Control Purchase Date") that is no later
than 90 Business Days after the occurrence of such Change of Control, at a cash price equal to 101% of the principal amount thereof (the "Change of Control Purchase Price"), together with accrued and
unpaid interest and Liquidated Damages, if any, to the Change of Control Purchase Date. The Change of Control Offer shall be made within 30 Business Days following a Change of Control and shall remain
open for 20 Business Days following its commencement (the "Change of Control Offer Period"). Upon expiration of the Change of Control Offer Period, the Company promptly shall purchase all Notes
properly tendered in response to the Change of Control Offer. 


    On
or before the Change of Control Purchase Date, the Company shall, to the extent lawful, (i) accept for payment Notes or portions thereof properly tendered and not validly
withdrawn pursuant to the Change of Control Offer, (ii) deposit with the Paying Agent an amount in cash sufficient to pay the Change of Control Purchase Price (together with accrued and unpaid
interest and Liquidated Damages, if any), of all Notes so tendered and (iii) deliver or cause to be delivered to the Trustee the Notes so accepted together with an Officers' Certificate listing
the Notes or portions thereof being purchased by the Company. The Paying Agent promptly will pay the Holders of Notes so accepted an amount equal to the Change of Control Purchase Price (together with
accrued and unpaid interest and Liquidated Damages, if any), and the Trustee promptly will authenticate and deliver to such Holders a new Note equal in principal amount to any unpurchased portion of
the Note surrendered. Any Notes not so accepted will be delivered promptly by the Company to the Holder thereof. The Company publicly will announce the results of the Change of Control Offer on or as
soon as practicable after the Change of Control Purchase Date. 


    (c) Asset Sale. The Company and the Guarantors shall not, and shall not permit any of their Subsidiaries to, in one or a
series of related transactions, convey, sell, transfer, assign or otherwise dispose of, directly or indirectly, any of its property, business or assets, including by merger or consolidation (in the
case of a Guarantor or a Subsidiary of the Company), and including any sale or other transfer or issuance of any Equity Interests of any Subsidiary of the Company, whether by the Company or a
Subsidiary or through the issuance, sale or transfer of Equity Interests by a Subsidiary of the Company, and including any sale and leaseback transaction (any of the foregoing, an "Asset Sale"),
unless (1) the Company (or its Subsidiary, as the case may be) receive 



A–7





 


consideration at the time of such Asset Sale at least equal to the fair market value (evidenced by a resolution of the Board of Directors set forth in an Officers' Certificate delivered to the
Trustee) of the assets or Equity Interests issued or sold or otherwise disposed of; and (2) at least 75% (100% in the
case of lease payments) of the consideration received by the Company or the applicable Subsidiary for the Asset Sale is in the form of cash or Cash Equivalents; provided that the amount of:
(a) any liabilities (as shown on the Company's or such Subsidiary's most recent balance sheet or in the notes thereto) of the Company's or any of its Subsidiaries that rank equal in right of
payment to the Notes and that are assumed by the transferee of any such assets, and (b) any securities, notes or other obligations received by the Company or any such Subsidiary from such
transferee that are immediately (but in no event more than 30 days after receipt, subject to customary settlement periods) converted by the Company or such Subsidiary into cash or Cash
Equivalents (to the extent of the cash or Cash Equivalents, as the case may be, received) shall be deemed to be cash or Cash Equivalents, as the case may be, for purposes of this provision. Within
360 days after the receipt of any Net Cash Proceeds from an Asset Sale, the Company or the applicable Subsidiary, as the case may be, may apply such Net Cash Proceeds, at its option, to:
(3) permanently reduce Indebtedness outstanding under the Credit Agreement (including that in the case of a revolving credit facility or similar arrangement that makes credit available under
the Credit Agreement, such commitment is also permanently reduced by such amount), or (4) (a) purchase one or more businesses or to purchase more than 50% of the Equity Interests of a Person
operating one or more businesses so long as such Person becomes a Subsidiary, (b) make capital expenditures, and/or (c) acquire other long-term assets, in each case, so long
as such business or businesses, capital expenditures or long-term assets are in a Related Business. Pending the final application of any such Net Cash Proceeds, the Company may temporarily
reduce revolving borrowings outstanding under the Credit Agreement or otherwise invest such Net Cash Proceeds in any manner that is not prohibited by the Indenture. 


    Any
Net Cash Proceeds from Asset Sales that are not so applied or invested will be considered "Excess Proceeds." When the aggregate amount of Excess Proceeds exceeds $10,000,000, the
Company will be required to make an offer, within such 360-day period, to all holders of Notes and all holders of the Company's other Indebtedness ranking equal in right of payment to the
Notes with similar provisions requiring the Company to make an offer to purchase such Indebtedness with the proceeds of such Asset Sale pursuant to a cash offer (subject only to conditions required by
applicable law, if any) pro rata in proportion to the respective principal amounts (or accreted values in the case of Indebtedness issued with original
issue discount) of the Notes and such other Indebtedness then outstanding (an "Asset Sale Offer") to purchase the maximum principal amount of Notes and such other Indebtedness that may be purchased
out of the Excess Proceeds. The offer price for an Asset Sale Offer will be 100% of the principal amount of the Notes plus accrued and unpaid interest and Liquidated Damages, if any, on the Notes to
the date of purchase. The offer price will be paid in cash in accordance with the procedures set forth in the Indenture. To the extent that the aggregate amount of Notes and such other Indebtedness
tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company may use any remaining Excess Proceeds not so utilized for general corporate purposes. If the aggregate principal
amount of Notes and such other Indebtedness surrendered by holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select the Notes to be purchased on a pro rata basis. Upon
completion of any purchase of Notes pursuant to an Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero. 




    8.  Denominations, Transfer, Exchange.  The Notes are in registered form without coupons in denominations
of $1,000 and integral multiples of $1,000. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the 


A–8





 


Indenture. The Company need not exchange or register the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. Also,
it need not exchange or register the transfer of any Notes for a period of 15 days before a selection of Notes to be redeemed or during the period between a Record Date and the corresponding
Interest Payment Date. 


    9.  Persons Deemed Owners.  The registered Holder of a Note may be treated as its owner for all purposes. 


    10.  Amendment, Supplement and Waiver.  Subject to certain exceptions, the Indenture, the Notes or the
Guarantees may be amended or supplemented with the consent of the Holders of at least a majority in principal amount of the then outstanding Notes, and any existing Default or compliance with any
provision of the Indenture, the Notes or the Guarantees may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Notes. Without the consent of any Holder
of a Note, the Indenture, the Notes or the Guarantees may be amended or supplemented to cure any ambiguity, defect or inconsistency, to provide for uncertificated Notes in addition to or in place of
certificated Notes, to provide for the assumption of the Company's obligations to Holders of the Notes in case of a merger or consolidation, to provide for additional Guarantees as set forth in the
Indenture or for the release or assumption of Guarantees in compliance with the Indenture, to make any change that would provide any additional rights or benefits to the Holders of the Notes
(including the addition of any Guarantor) or that does not adversely affect the rights under the Indenture of any such Holder, to comply with the provisions of the Depositary, Euroclear or Clearstream
or the Trustee with respect to the provisions of the Indenture or the Notes relating to transfers and exchanges of Notes or beneficial interests therein, or to comply with the requirements of the SEC
in order to effect or maintain the qualification of the Indenture under the TIA. 


    11.  Defaults and Remedies.  The Indenture provides that each of the following constitutes an Event of
Default: (a) the failure of the Company to pay any installment of interest (or Liquidated Damages, if any) on the Notes as and when the same becomes due and payable and the continuance of any
such failure for 30 days, (b) the failure of the Company to pay all or any part of the principal, or premium, if any, on the Notes when and as the same becomes due and payable at
maturity, redemption, by acceleration or otherwise, including, without limitation, payment of the Change of Control Purchase Price, the Asset Sale Offer Price or the Selmer Notes Redemption Purchase
Price, on Notes validly tendered and not properly withdrawn pursuant to a Change of Control Offer or Asset Sale Offer, as applicable, (c)the failure of the Company or the failure by any of the
Guarantors to observe or perform any covenant, condition or agreement described under Section 4.7, 4.9, 4.13, 4.14, 4.15 and Article V of the Indenture, which failure continues for a
period of 30 days after notice is given to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in aggregate principal amount of the Notes outstanding,
(d) the failure of the Company or the failure by any of the Guarantors to comply with any of its other agreements in this Indenture or the Notes (including the Guarantees) which failure
continues for a period of 45 days after written notice is given to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in aggregate principal amount of
the Notes outstanding, (e) a default under the Indebtedness of the Company or the Indebtedness of any the Company's Subsidiaries with an aggregate amount outstanding in excess of $5,000,000
(i) which is not an Excluded Default and is caused by a failure to pay principal of or premium, if any, on such Indebtedness when due (after giving effect to any applicable grace period,
excluding any extension thereof) or (ii) as a result of which the maturity of such Indebtedness has been accelerated prior to its stated maturity, (f) final unsatisfied judgments not
covered by insurance aggregating in excess of $5,000,000, at any one time rendered against the Company or any of its Subsidiaries and not stayed, bonded or discharged within 60 days,
(g) any Guarantee of a Guarantor shall be held in any judicial proceeding to be unenforceable or invalid, any Guarantor shall default on its Guarantee (other than in accordance with the terms
of the Indenture 


A–9





 


and the Guarantee) or any Guarantor denies or disaffirms its Obligations under its Guarantee, (h) a court having jurisdiction in the premises enters a decree or order for (A) relief in
respect of the Company or any Subsidiary in an involuntary case under any applicable Bankruptcy Law now or hereafter in effect, (B) appointment of a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official of the Company or any Subsidiary or for all or substantially all of the property and assets of the Company or any Subsidiary or (C) the winding up or
liquidation of the affairs of the Company or any Subsidiary and, in each case, such decree or order shall remain unstayed and in effect for a period of 60 consecutive days, or (i) the Company
or any Subsidiary (A) commences a voluntary case under any applicable Bankruptcy Law now or hereafter in effect, or consents to the entry of an order for relief in an involuntary case under any
such law, (B) consents to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Company or any Subsidiary or
for all or substantially all of the property and assets of the Company or any Subsidiary or (C) effects any general assignment for the benefit of creditors. 



    If
a Default occurs and is continuing, the Trustee must, within 90 days after the occurrence of such Default, give to the Holders notice of such Default. 


    12.  Trustee Dealings with Company.  The Trustee, 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 the Trustee. 


    13.  No Recourse Against Others.  No past, present or future director, officer, employee, incorporator or
stockholder (direct or indirect) of the Company or the Guarantors (or any such successor entity), as such, shall have any liability for any Obligations of the Company or the Guarantors under the
Notes, the Guarantees or this Indenture or for any claim based on, in respect of, or by reason of, such Obligations or their creation, except in their capacity as an obligor or Guarantor of the Notes
in accordance with this Indenture. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. 


    14.  Authentication.  This Note shall not be valid until authenticated by the manual signature of the
Trustee or an authenticating agent. 


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


    16.  Additional Rights of Holders of Transfer Restricted Notes.(7)  In addition to the rights provided to
Holders of Notes under the Indenture, Holders of Transfer Restricted Notes shall have all the rights set forth in the Registration Rights Agreement dated as of the date of the Indenture, among the
Company, the Guarantors and the Initial Purchaser (the "Registration Rights Agreement"). 


    17.  CUSIP Numbers.  Pursuant to a recommendation promulgated by the Committee on Uniform Security
Identification Procedures, the Company has caused CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers in notices of redemption as a convenience to Holders. No representation
is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed
thereon, and any such redemption shall not be affected by any defect in or omission of such numbers. 




	(7)
	To
be included only on Transfer Restricted Notes. 


A–10





 

    18.  Notation of Guarantee.  As more fully set forth in the Indenture, to the extent permitted by law,
each of the Guarantors from time to time, in accordance with Article X of the Indenture, unconditionally and jointly and severally guarantees, to each Holder of a Note authenticated and
delivered by the Trustee and to the Trustee and its successors and assigns, that: (a) the principal of, and premium, if any, Liquidated Damages, if any, and interest on the Notes will be duly
and punctually paid in full when due, whether at maturity, by acceleration, call for redemption, upon a Change of Control Offer, upon an Asset Sale Offer, upon a Selmer Notes Redemption Offer or
otherwise, and interest on overdue principal of, and premium, if any, Liquidated Damages, if any and (to the extent permitted by law and the Indenture) interest on any interest, if any, on the Notes
and all other obligations of the Company to the Holders or the Trustee hereunder or under the Notes (including fees, expenses or other) will be promptly paid in full or performed, all in accordance
with the terms hereof; and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, the same will be promptly paid in full when due or performed
in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration, call for redemption, upon a Change of Control Offer, upon an Asset Sale Offer, upon a Selmer
Notes Redemption Offer or otherwise, provided, however, that The Selmer Company, Inc., Emerson Musical Instruments, Inc., The Steinway
Piano Company, Inc., Steinway, Inc., The SMI Trust, S&B Retail, Inc., Boston Piano Company, Inc., The O.S.
Kelly Corporation, The O.S. Kelly Company, United Musical Instruments Holdings, Inc. and United Musical Instruments USA, Inc. have irrevocably and unconditionally guaranteed on a senior
basis the Guarantee Obligations (as defined in Section 10.1 of the Indenture) only to the extent: (1) the indebtedness represented by the Guarantee may be incurred pursuant to
Section 4.09 of the Selmer Indenture; (2) the investment represented by the Guarantee may be made pursuant to Section 4.07 of the Selmer Indenture; (3) the Guarantee is a
transaction permitted under Section 4.11 of the Selmer Indenture; and (4) the Guarantee is otherwise permitted by the Selmer Indenture; in each case, so long as the Selmer Indenture is
applicable, if at all; and, if the Selmer Notes are deemed to be no longer outstanding pursuant to the terms of the Selmer Indenture, including as a result of the redemption of all of the outstanding
Selmer Notes, then there shall be no such limit on such Guarantee. 


    When
a successor assumes all the obligations of its predecessor under the Notes and the Indenture, the predecessor will be released from those obligations. 



    19.  Governing Law.  THE INDENTURE AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW. 


    The
Company will furnish to any Holder upon written request and without charge a copy of the Indenture [and/or the Registration Rights Agreement](8). Requests
may be made to: 



	 	 	Steinway Musical Instruments, Inc.

800 South Street, Suite 305

Waltham, MA 02453	 	 
	 	 	Assignment Form	 	 






	(8)
	To
be included only on Transfer Restricted Notes. 


A–11





 

To
assign this Note, fill in the form below: (I) or (we) assign and transfer this Note to 





	
 (Insert assignee's soc. sec. or tax I.D. no.)	 
	

  
	

 
	  
	 
	  
	 
	  
 (Print or type assignee's name, address and zip code)	 





and
irrevocably appoint
                                     to transfer this Note
on the books of the Company. The agent may substitute another to act for him. 






	Date:	  
	 	Your Signature:	  

	 	 	 	(Sign exactly as your name appears on the face of this Note)





Signature
Guarantee* 





*NOTICE:
The Signature must be guaranteed by an Institution which is a member of one of the following recognized signature Guarantee Programs: (i) The Securities Transfer Agent Medallion
Program (STAMP); (ii) The New York Stock Exchange Medallion Program (MNSP); (iii) The Stock Exchange Medallion Program (SEMP); or (iv) in such other guarantee program acceptable
to the Trustee. 


A–12





 
Option of Holder to Elect Purchase  


    If you want to elect to have this Note purchased by the Company pursuant to Section 4.13, 4.14 or 4.15 of the Indenture, check the box
below:



	/ / Section 4.13	 	/ / Section 4.14	 	/ / Section 4.15






    If
you want to elect to have only part of the Note purchased by the Company pursuant to Section 4.13, Section 4.14 or Section 4.15 of the Indenture, state the
amount you elect to have purchased (in denominations of $1,000 only, except if you have elected to have all of your Notes purchased): $          



	Date:	  
	 	Your Signature:	  

	 	 	 	(Sign exactly as your name appears on the face of this Note)




Tax
Identification No.:                             


Signature
Guarantee* 





*NOTICE:
The Signature must be guaranteed by an Institution which is a member of one of the following recognized signature Guarantee Programs: (i) The Securities Transfer Agent Medallion
Program (STAMP); (ii) The New York Stock Exchange Medallion Program (MNSP); (iii) The Stock Exchange Medallion Program (SEMP); or (iv) in such other guarantee program acceptable
to the Trustee. 


A–13





 
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE(9)



    The
following exchanges of a part of this Global Note for an interest in another Global Notes or for a Definitive Note, or exchanges of a part of another Global Note or Definitive
Note for an interest in this Global Note, have been made: 



	Date of Exchange
 
	 	Amount of

decrease in

Principal Amount of

this Global Note
	 	Amount of increase

in Principal Amount of

this Global Note
	 	Principal Amount of

this Global Note

following such decrease

(or increase)
	 	Signature of

authorized officer of

Trustee or Note

Custodian

	

 	
 	

 	
 	

 	
 	

 	
 	

 






	(9)
	This
should be included only if the Note isssued in global form. 


A–14





 
GUARANTEE  


    The Guarantors listed below (hereinafter referred to as the "Guarantors," which term includes any successors or assigns under the Indenture, dated the date
hereof, among the Guarantors, the Company
(defined below) and Firstar Bank, N.A., as trustee (the "Indenture") and any additional Guarantors), have irrevocably and unconditionally guaranteed on a senior basis the Guarantee Obligations (as
defined in Section 10.1 of the Indenture), which include (i) the due and punctual payment of the principal of, premium, if any, and interest and Liquidated Damages, if any, on the
83/4% Senior Notes due 2011 (the "Notes") of Steinway Musical Instruments, Inc., a Delaware corporation (the "Company"), whether at maturity, by acceleration, call for
redemption, upon a Change of Control Offer, upon an Asset Sale Offer, upon a Selmer Notes Redemption Offer or otherwise, the due and punctual payment of interest on the overdue principal and premium,
if any, and (to the extent permitted by law) interest on any interest on the Notes, and the due and punctual performance of all other obligations of the Company, to the Holders or the Trustee all in
accordance with the terms set forth in Article X of the Indenture, and (ii) in case of any extension of time of payment or renewal of any Notes or any such other obligations, that the
same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration, call for redemption, upon a Change of
Control Offer, upon an Asset Sale Offer, upon a Selmer Notes Redemption Offer or otherwise; provided, however, that The Selmer Company, Inc.,
Emerson Musical Instruments, Inc., The Steinway Piano Company, Inc., Steinway, Inc., The SMI Trust, S&B Retail, Inc., Boston Piano Company, Inc., The O.S. Kelly
Corporation, The O.S. Kelly Company, United Musical Instruments Holdings, Inc. and United Musical Instruments USA, Inc., guarantees the Guarantee Obligations only to the extent:
(1) the indebtedness represented by the Guarantee may be incurred pursuant to Section 4.09 of the Selmer Indenture; (2) the investment represented by the Guarantee may be made
pursuant to Section 4.07 of the Selmer Indenture; (3) the Guarantee is a transaction permitted under Section 4.11 of the Selmer Indenture; and (4) the Guarantee is
otherwise permitted by the Selmer Indenture; in each case, so long as the Selmer Indenture is applicable, if at all; and, if the Selmer Notes are deemed to be no longer outstanding pursuant to the
terms of the Selmer Indenture, including as a result of the redemption of all of the outstanding Selmer Notes, then there shall be no such limit on the obligations of such Guarantor. 


    The
obligations of each Guarantor to the Holders and to the Trustee pursuant to this Guarantee and the Indenture are expressly set forth in Article X of the Indenture and
reference is hereby made to such Indenture for the precise terms of this Guarantee. 


    No
past, present or future director, officer, employee, incorporator or stockholder (direct or indirect) of the Guarantors (or any such successor entity), as such, shall have any
liability for any obligations of the Guarantors under this Guarantee or the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation, except in their
capacity as an obligor or Guarantor of the Notes in accordance with the Indenture. 


    This
is a continuing Guarantee and shall remain in full force and effect and shall be binding upon each Guarantor and its successors and assigns until full and final payment of all of
the Company's obligations under the Notes and Indenture or until released or legally defeased in accordance with the Indenture and shall inure to the benefit of the successors and assigns of the
Trustee and the Holders, and, in the event of any transfer or assignment of rights by any Holder or the Trustee, the rights and privileges herein conferred upon that party shall automatically extend
to and be vested in such transferee or assignee, all subject to the terms and conditions hereof. This is a Guarantee of payment and not of collectibility. 


    This
Guarantee shall not be valid or obligatory for any purpose until the certificate of authentication on the Note upon which this Guarantee is noted shall have been executed by the
Trustee under the Indenture by the manual signature of one of its authorized officers. 


A–15





 


    The obligations of each Guarantor under this Guarantee shall be limited to the extent necessary to insure that it does not constitute a fraudulent conveyance under applicable law. 


    THE
TERMS OF ARTICLE X THE INDENTURE IS INCORPORATED HEREIN BY REFERENCE. 


    Capitalized
terms used herein have the same meanings given in the Indenture unless otherwise indicated. 


A–16





 


    IN WITNESS WHEREOF, each of the Guarantors has caused this instrument to be duly executed. 



	Dated:             	 	 	 	 	 	 
	

 	
 	

THE SELMER COMPANY, INC
	

 	
 	

By:	
 	

  

	 	 	 	 	Name:	 	 
	 	 	 	 	Title:	 	 
	

 	
 	

EMERSON MUSICAL INSTRUMENTS, INC.
	

 	
 	

By:	
 	

  

	 	 	 	 	Name:	 	 
	 	 	 	 	Title:	 	 
	

 	
 	

THE STEINWAY PIANO COMPANY, INC.
	

 	
 	

By:	
 	

  

	 	 	 	 	Name:	 	 
	 	 	 	 	Title:	 	 
	

 	
 	

STEINWAY, INC.
	

 	
 	

By:	
 	

  

	 	 	 	 	Name:	 	 
	 	 	 	 	Title:	 	 
	

 	
 	

THE SMI TRUST
	

 	
 	

By:	
 	

  

	 	 	 	 	Name:	 	 
	 	 	 	 	Title:	 	 
	

 	
 	

S&B RETAIL, INC.
	

 	
 	

By:	
 	

  

	 	 	 	 	Name:	 	 
	 	 	 	 	Title:	 	 
	

 	
 	

BOSTON PIANO COMPANY, INC.
	

 	
 	

By:	
 	

  

	 	 	 	 	Name:	 	 
	 	 	 	 	Title:	 	 
	

 	
 	

THE O.S. KELLY CORPORATION
	

 	
 	

By:	
 	

  

	 	 	 	 	Name:	 	 
	 	 	 	 	Title:	 	 



A–17





 

	

 	
 	

THE O.S. KELLY COMPANY
	

 	
 	

By:	
 	

  

	 	 	 	 	Name:	 	 
	 	 	 	 	Title:	 	 
	

 	
 	

UNITED MUSICAL INSTRUMENTS HOLDINGS, INC.
	

 	
 	

By:	
 	

  

	 	 	 	 	Name:	 	 
	 	 	 	 	Title:	 	 
	

 	
 	

UNITED MUSICAL INSTRUMENTS USA, INC.
	

 	
 	

By:	
 	

  

	 	 	 	 	Name:	 	 
	 	 	 	 	Title:	 	 




A–18






  



 
 

EXHIBIT B
  FORM OF CERTIFICATE OF TRANSFER    
  


Steinway
Musical Instruments, Inc.

800 South Street, Suite 305

Waltham, MA 02453 


Firstar
Bank, N.A.

101 East 5th Street

St. Paul, Minnesota 55101 



	Re:
	83/4%
Senior Notes due 2011 




Dear
Sirs: 


    Reference
is hereby made to the Indenture, dated as of April 19, 2001 (the "Indenture"), among Steinway Musical Instruments, Inc., as issuer (the "Company"), the
Guarantors party thereto and Firstar Bank, N.A., as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.            , (the
"Transferor") owns and proposes to transfer the Note[s] or interest in such Note[s] specified in Annex A hereto, in the principal amount of
$            in such Note[s] or interests (the "Transfer"), to            (the "Transferee"), as further specified in Annex A
hereto. In connection with the
Transfer, the Transferor hereby certifies that: 


[CHECK
ALL THAT APPLY] 



1.  / /  Check if Transferee will take delivery of a beneficial interest in the 144A Global Note or a Definitive Note Pursuant to
Rule 144A. The Transfer is being effected pursuant to and in accordance with Rule 144A
under the United States Securities Act of 1933, as amended (the "Securities Act"), and, accordingly, the Transferor hereby further certifies that the beneficial interest or Definitive Note is being
transferred to a Person that the Transferor reasonably believed and believes is purchasing the beneficial interest or Definitive Note for its own account, or for one or more accounts with respect to
which such Person exercises sole investment discretion, and such Person and each such account is a "qualified institutional buyer" within the meaning of Rule 144A in a transaction meeting the
requirements of Rule 144A and such Transfer is in compliance with any applicable blue sky securities laws of any State of the United States. Upon consummation of the proposed Transfer in
accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on
the 144A Global Note and/or the Definitive Note and in the Indenture and the Securities Act. 


2.  / /  Check if Transferee will take delivery of a beneficial interest in the Regulation S Global Note or a Definitive Note
pursuant to Regulation S. The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and, accordingly,
the Transferor hereby further certifies that (i) the Transfer is not being made to a person in the United States and (x) at the time the buy order was originated, the Transferee was
outside the United States or such Transferor and any Person acting on its behalf reasonably believed and believes that the Transferee was outside the United States or (y) the transaction was
executed in, on or through the facilities of a designated offshore securities market and neither such Transferor nor any Person acting on its behalf knows that the transaction was prearranged with a
buyer in the United States, (ii) no directed selling efforts have been made in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S under the
Securities Act, (iii) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act and (iv) if the proposed transfer is being made prior
to the expiration of the Distribution Compliance Period, the transfer is not being made to a U.S. Person or for the account or benefit of a U.S. Person (other than an Initial Purchaser) and the
interest 


B–1





 


transferred will be held immediately thereafter through Euroclear or Clearstream. Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will be subject to the restrictions on Transfer enumerated in the Private Placement Legend printed on the Regulation S Global Note and/or the Definitive Note and in
the Indenture and the Securities Act. 


3.  / /  Check and complete if Transferee will take delivery of a beneficial interest in a Definitive Note pursuant to any provision of
the Securities Act other than Rule 144A or Regulation S. The Transfer is being effected in compliance with the transfer restrictions applicable to beneficial
interests in Restricted Global Notes and Restricted Definitive Notes and pursuant to and in accordance with the Securities Act and any applicable blue sky securities laws of any State of the United
States, and accordingly the Transferor hereby further certifies that (check one): 



    (a) / / Such
Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act; or 


    (b) / / Such
Transfer is being effected to the Company or a subsidiary thereof; or 


    (c) / / Such
Transfer is being effected pursuant to an effective registration statement under the Securities Act and in compliance with the
prospectus delivery requirements of the Securities Act; or 


    (d) / / such
Transfer is being effected to an Institutional Accredited Investor and pursuant to an exemption from the registration requirements
of the Securities Act other than Rule 144A, Rule 144 or Rule 904, and the Transferor hereby further certifies that it has not engaged in any general solicitation within the
meaning of Regulation D under the Securities Act and the Transfer complies with the transfer restrictions applicable to beneficial interests in a Restricted Global Note or Restricted Definitive
Notes and the requirements of the exemption claimed, which certification is supported by (1) a certificate executed by the Transferee in a form of Exhibit D to the Indenture and
(2) if such Transfer is in respect of a principal amount of Notes at the time of transfer of less than $250,000, an Opinion of Counsel provided by the Transferor or the Transferee (a copy of
which the Transferor has attached to this certification and provided to the Company, which has confirmed its acceptability), to the effect that such Transfer is in compliance with the Securities Act.
Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the Definitive Note will be subject to the restrictions on transfer enumerated in the Private Placement Legend
printed on the Definitive Notes and in the Indenture and the Securities Act. 




4.  / /  Check if Transferee will take delivery of a beneficial interest in an Unrestricted Global Note or of an Unrestricted Definitive
Note.



    (a)   / /  Check if Transfer is Pursuant to Rule 144. (i) The
Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable
blue sky securities laws of any State of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no
longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture and the
Securities Act. 


    (b)   / /  Check if Transfer is Pursuant to Regulation S. (i) The
Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture
and any applicable blue sky securities laws of any State of the United States and (ii) the restrictions on transfer contained in 



B–2





 


the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global
Notes, on Restricted Definitive Notes and in the Indenture and the Securities Act. 


	(c)
	/ /  Check if Transfer is Pursuant to Other Exemption. (i) The Transfer is being
effected pursuant to and in compliance with an exemption from the registration requirements of the Securities Act other than Rule 144, Rule 903 or Rule 904 and in compliance with
the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any State of the United States and (ii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will not be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes
or Restricted Definitive Notes and in the Indenture. 




    This
certificate and the statements contained herein are made for your benefit and the benefit of the Company. 



	 	 	 	Dated:	 
	
	 	 	

	[Insert Name of Transferor]	 	 	 
	

By:	

 	
 	

 	

 
	 	
	 	 	 
	 	Name:	 	 	 
	 	Title:	 	 	 




B–3





 

ANNEX A TO CERTIFICATE OF TRANSFER 


	1.
	The
Transferor owns and proposes to transfer the following: 



[CHECK
ONE OF (a) OR (b)] 



	(a)
	/ / a
beneficial interest in the:



	(i)
	/ / 144A
Global Note (CUSIP      ), or



	(ii)
	/ / Regulation S
Global Note (CUSIP      ), or 









	(b)
	/ / a
Restricted Definitive Note. 





	2.
	After
the Transfer the Transferee will hold: 



[CHECK
ONE] 



	(a)
	/ / a
beneficial interest in the:



	(i)
	/ / 144A
Global Note (CUSIP      ), or



	(ii)
	/ / Regulation S
Global Note (CUSIP      ), or



	(iii)
	/ / Unrestricted
Global Note (CUSIP      ); or 









	(b)
	/ / a
Restricted Definitive Note; or



	(c)
	/ / an
Unrestricted Definitive Note, 




in
accordance with the terms of the Indenture. 


B–4






  



 
 

EXHIBIT C
  FORM OF CERTIFICATE OF EXCHANGE    
  


Steinway
Musical Instruments, Inc.

800 South Street, Suite 305

Waltham, MA 02453 


Firstar
Bank, N.A.

101 East 5th Street

St. Paul, Minnesota 55101 



	Re:
	83/4%
Senior Notes due 2011 




Dear
Sirs: 


    Reference
is hereby made to the Indenture, dated as of April 19, 2001 (the "Indenture"), between Steinway Musical Instruments, Inc., as issuer (the "Company"), the
Guarantors party thereto and Firstar Bank, N.A., as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture. 



                ,
(the "Owner") owns and proposes to exchange the Note[s] or interest in such Note[s] specified herein, in the
principal amount of $            in such Note[s] or interests (the "Exchange"). In connection with the Exchange, the Owner hereby certifies that: 


    1.  Exchange of Restricted Definitive Notes or Beneficial Interests in a Restricted Global Note for Unrestricted Definitive Notes or Beneficial
Interests in an Unrestricted Global Note.



    (a)   / /  Check if Exchange is from beneficial interest in a Restricted Global Note to beneficial
interest in an Unrestricted Global Note. In connection with the Exchange of the Owner's beneficial interest in a Restricted Global Note for a beneficial interest in an
Unrestricted Global Note in an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions applicable to the Global Notes and pursuant to and in accordance with the United States Securities Act of 1933, as amended (the
"Securities Act"), (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and
(iv) the beneficial interest in an Unrestricted Global Note is being acquired in compliance with any applicable blue sky securities laws of any State of the United States. 


    (b)   / /  Check if Exchange is from beneficial interest in a Restricted Global Note to Unrestricted
Definitive Note. In connection with the Exchange of the Owner's beneficial interest in a Restricted Global Note for an Unrestricted Definitive Note, the Owner hereby certifies
(i) the Definitive Note is being acquired for the Owner's own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to
the Restricted Global Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any State of the
United States. 


    (c)   / /  Check if Exchange is from Restricted Definitive Note to beneficial interest in an
Unrestricted Global Note. In connection with the Owner's Exchange of a Restricted Definitive Note for a beneficial interest in an Unrestricted Global Note, the Owner hereby
certifies (i) the beneficial interest is being acquired for the Owner's own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on 



C–1





 


transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest is being acquired
in compliance with any applicable blue sky securities laws of any State of the United States. 


    (d)   / /  Check if Exchange is from Restricted Definitive Note to Unrestricted Definitive
Note. In connection with the Owner's Exchange of a Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Unrestricted
Definitive Note is being acquired for the Owner's own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted
Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and (iv) the Unrestricted Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any State of the
United States. 




    2.  Exchange of Restricted Definitive Notes or Beneficial Interests in Restricted Global Notes for Restricted Definitive Notes or Beneficial
Interests in Restricted Global Notes



    (a)   / /  Check if Exchange is from beneficial interest in a Restricted Global Note to Restricted
Definitive Note. In connection with the Exchange of the Owner's beneficial interest in a Restricted Global Note for a Restricted Definitive Note with an
equal principal amount, the Owner hereby certifies that the Restricted Definitive Note is being acquired for the Owner's own account without transfer. Upon consummation of the proposed Exchange in
accordance with the terms of the Indenture, the Restricted Definitive Note issued will continue to be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the
Restricted Definitive Note and in the Indenture and the Securities Act. 


    (b)   / /  Check if Exchange is from Restricted Definitive Note to beneficial interest in a Restricted
Global Note. In connection with the Exchange of the Owner's Restricted Definitive Note for a beneficial interest in the: [CHECK
ONE]

/ / 144A Global Note or / / Regulation S Global Note with an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired
for the Owner's own account without transfer and (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and
in accordance with the Securities Act, and in compliance with any applicable blue sky securities laws of any State of the United States. Upon consummation of the proposed Exchange in accordance with
the terms of the Indenture, the beneficial interest issued will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the relevant Restricted Global Note and
in the Indenture and the Securities Act. 




    This
certificate and the statements contained herein are made for your benefit and the benefit of the Company. 



	
 [Insert Name of Owner]	 	 
	

By:	

	
 	

 
	 	Name:	 	 
	 	Title:	 	 
	

Dated:	

	
 	

 




C–2






  



 
 

EXHIBIT D
  FORM OF CERTIFICATE FROM ACQUIRING
  INSTITUTIONAL ACCREDITED INVESTOR    
  


Steinway
Musical Instruments, Inc.

800 South Street, Suite 305

Waltham, MA 02453 


Firstar
Bank, N.A.

101 East 5th Street

St. Paul, Minnesota 55101 



	Re:
	83/4%
Senior Notes due 2011 




Dear
Sirs: 


    Reference
is hereby made to the Indenture, dated as of April 19, 2001 (the "Indenture"), between Steinway Musical Instruments, Inc., as issuer (the "Company"), the
Guarantors party thereto and Firstar Bank, N.A., as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture. 


    In
connection with our proposed purchase of $            aggregate principal amount of: (a) a beneficial interest in a Global Note, or (b) a Definitive Note, we
confirm that: 


    1.  We
understand that any subsequent transfer of the Notes or any interest therein is subject to certain restrictions and conditions set forth in the Indenture and the
undersigned agrees to be bound by, and not to resell, pledge or otherwise transfer the Notes or any interest therein except in compliance with,
such restrictions and conditions and the United States Securities Act of 1933, as amended (the "Securities Act"). 



    2.  We
understand that the offer and sale of the Notes have not been registered under the Securities Act, and that the Notes and any interest therein may not be offered
or sold except as permitted in the following sentence. We agree, on our own behalf and on behalf of any accounts for which we are acting as hereinafter stated, that if we should sell the Notes or any
interest therein, we will do so only (A) to the Company or any Guarantor or any of their respective subsidiaries, (B) in accordance with Rule 144A under the Securities Act to a
"qualified institutional buyer" (as defined therein), (C) to an institutional "accredited investor" (as defined below) that, prior to such transfer, furnishes (or has furnished on its behalf by
a U.S. broker-dealer) to you and to the Company a signed letter substantially in the form of this letter and, if the proposed transfer is in respect of an aggregate principal amount of Notes of less
than $250,000, an Opinion of Counsel in form reasonably acceptable to the Company to the effect that such transfer is in compliance with the Securities Act, (D) outside the United States in
accordance with Rule 904 of Regulation S under the Securities Act, (E) pursuant to the provisions of Rule 144 under the Securities Act, (F) in accordance with
another exemption from the registration requirements of the Securities Act (and based upon an opinion of counsel acceptable to the Company) or (G) pursuant to an effective registration
statement under the Securities Act, and we further agree to provide to any person purchasing the Definitive Note from us in a transaction meeting the requirements of clauses (A) through
(F) of this paragraph a notice advising such purchaser that resales thereof are restricted as stated herein. 



    3.  We
understand that, on any proposed resale of the Notes or beneficial interest therein, we will be required to furnish to you and the Company such certifications,
legal opinions and other information as you and the Company may reasonably require to confirm that the proposed sale complies with the foregoing restrictions. We further understand that the Notes
purchased by us will bear a legend to the foregoing effect. We further understand that any subsequent transfer by us of the 


D–1





 


Notes or beneficial interest therein acquired by us must be effected through one of the Initial Purchasers. 


    4.  We
are an institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act)
and have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Notes, and we and any accounts for which we are
acting are each able to bear the economic risk of our or its investment. 



    5.  We
are acquiring the Notes or beneficial interest therein purchased by us for our own account or for one or more accounts (each of which is an institutional
"accredited investor") as to each of which we exercise sole investment discretion. 


    You
and 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. 



	 	 	 	Dated:	                        ,
	
 [Insert Name of Accredited Investor]	 	 	 
	

By:	

	
 	

 	

 
	Name:	 	 	 	 
	Title:	 	 	 	 




D–2






  



 
 

EXHIBIT E
  FORM OF SUPPLEMENTAL INDENTURE
  TO BE DELIVERED BY SUBSEQUENT GUARANTORS    
  



    Supplemental Indenture (this "Supplemental Indenture"), dated as of      , among            (the "Guaranteeing
Subsidiary"), a subsidiary
of Steinway Musical Instruments, Inc. (or its permitted successor), a Delaware corporation (the "Company"), the Company and Firstar Bank, N.A., as trustee under the Indenture referred to below
(the "Trustee"). 


W
I T N E S S E T H 


    WHEREAS,
the Company has heretofore executed and delivered to the Trustee an indenture (the "Indenture"), dated as of April 19, 2001, providing for the issuance of
83/4% Senior Notes due 2011 (the "Notes"); 


    WHEREAS,
the Indenture provides that under certain circumstances the Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental indenture pursuant to which any
newly-acquired or created Guarantor shall unconditionally guarantee all of the Company's obligations under the Notes and the Indenture on the terms and conditions set forth herein (the "Subsidiary
Guarantee"); and 


    WHEREAS,
pursuant to Section 9.1 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture. 



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


    1.  Capitalized Terms. Capitalized terms used herein without definition shall have the meanings assigned to them in the
Indenture. 


    2.  Agreement to Guarantee. The Guaranteeing Subsidiary irrevocably and unconditionally guarantees the Guarantee
Obligations, which include (i) the due and punctual payment of the principal of, premium, if any, and interest and Liquidated Damages, if any, on the Notes, whether at maturity, by
acceleration, call for redemption, upon a Change of Control Offer, upon an Asset Sale Offer, upon a Selmer Notes Redemption Offer or otherwise, the due and punctual payment of interest on the overdue
principal and premium, if any, and (to the extent permitted by law) interest on any interest on the Notes, and payment of expenses, and the due and punctual performance of all other obligations of the
Company, to the Holders or the Trustee all in accordance with the terms set forth in Article X of the Indenture, and (ii) in case of any extension of time of payment or renewal of any
Notes or any such other obligations, that the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by
acceleration, call for redemption, upon a Change of Control Offer, upon an Asset Sale Offer, upon a Selmer Notes Redemption Offer or otherwise[; provided,
however, that the Guaranteeing Subsidiary shall guarantee the Guarantee Obligations only to the extent: (1) the indebtedness represented by the Guarantee may be incurred
pursuant to Section 4.09 of the Selmer Indenture; (2) the investment represented by the Guarantee may be made pursuant to Section 4.07 of the Selmer Indenture; (3) the
Guarantee is a transaction permitted under Section 4.11 of the Selmer Indenture; and (4) the Guarantee is otherwise permitted by the Selmer Indenture; in each case so long as the Selmer
Indenture is applicable, if at all; and, if the Selmer Notes are deemed to be no longer outstanding, pursuant to the terms of the Selmer Indenture, including as a result of the redemption of all of
the outstanding Selmer Notes, then there shall be no such limit on the obligations of such Guarantor](10). 




	(10)
	This
proviso shall not be included in any Supplemental Indenture executed after the date Selmer Notes Redemption occurs. 


E–1





 

    The
obligations of Guaranteeing Subsidiary to the Holders and to the Trustee pursuant to this Subsidiary Guarantee and the Indenture are expressly set forth in Article X of the
Indenture and reference is hereby made to such Indenture for the precise terms of this Subsidiary Guarantee. 


    No
past, present or future director, officer, employee, incorporator or stockholder (direct or indirect) of the Guaranteeing Subsidiary (or any such successor entity), as such, shall
have any liability for any obligations of the Guaranteeing Subsidiary under this Subsidiary Guarantee or the Indenture or for any claim based on, in respect of, or by reason of, such obligations or
their creation, except in their capacity as an obligor or Guarantor of the Notes in accordance with the Indenture. 



    This
is a continuing Guarantee and shall remain in full force and effect and shall be binding upon the Guaranteeing Subsidiary and its successors and assigns until full and final
payment of all of the Company's obligations under the Notes and Indenture or until released in accordance with the
Indenture and shall inure to the benefit of the successors and assigns of the Trustee and the Holders, and, in the event of any transfer or assignment of rights by any Holder or the Trustee, the
rights and privileges herein conferred upon that party shall automatically extend to and be vested in such transferee or assignee, all subject to the terms and conditions hereof. This is a Guarantee
of payment and not of collectibility. 


    The
obligations of the Guaranteeing Subsidiary under its Subsidiary Guarantee shall be limited to the extent necessary to insure that it does not constitute a fraudulent conveyance
under applicable law. 


    THE
TERMS OF ARTICLE X OF THE INDENTURE ARE INCORPORATED HEREIN BY REFERENCE. 


    3.  NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS
SUPPLEMENTAL INDENTURE, INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW. 



    4.  Counterparts. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an
original, but all of them together represent the same agreement. 


    5.  Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction
hereof. 


E–2





 


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



	 	 	THE COMPANY:

STEINWAY MUSICAL INSTRUMENTS, INC.
	

 	
 	

By:	
 	

 	

 
	 	 	 	 	
 Name:
	 	 	 	 	Title:	 
	

 	
 	
GUARANTEEING SUBSIDIARY:

NAME:
	

 	
 	

By:	
 	

 	

 
	 	 	 	 	
 Name:
	 	 	 	 	Title:	 
	

 	
 	
THE TRUSTEE:

FIRSTAR BANK, N.A.
	

 	
 	

By:	
 	

 	

 
	 	 	 	 	
 Name:
	 	 	 	 	Title:	 




E–3









QuickLinks



EXHIBIT 4.1


TABLE OF CONTENTS


CROSS-REFERENCE TABLE

ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE


ARTICLE I THE NOTES

ARTICLE II REDEMPTION


ARTICLE III COVENANTS

ARTICLE IV SUCCESSORS

ARTICLE V DEFAULTS AND REMEDIES


ARTICLE VI TRUSTEE

ARTICLE VII LEGAL DEFEASANCE AND COVENANT DEFEASANCE

ARTICLE VIII AMENDMENT, SUPPLEMENT AND WAIVER

ARTICLE IX GUARANTEES

ARTICLE X MISCELLANEOUS



SIGNATURES


EXHIBIT A - FORM OF NOTE


EXHIBIT B FORM OF CERTIFICATE OF TRANSFER


EXHIBIT C FORM OF CERTIFICATE OF EXCHANGE


EXHIBIT D FORM OF CERTIFICATE FROM ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR


EXHIBIT E FORM OF SUPPLEMENTAL INDENTURE TO BE DELIVERED BY SUBSEQUENT GUARANTORS