Document:

EXHIBIT 4.1

    Exhibit
      4.1

    
       

       

      CORONADO
        INDUSTRIES, INC.

      16857
        E. Saguaro Boulevard

      Fountain
        Hills, AZ 85268

      

      February
        15, 2006

      

      Coronado
        Employees and Consultants, 

      

      The
        Company’s Board of Directors has decided to make available to all employees and
        consultants, shares of the Company’s common stock
        at
        a negotiated price of not less than 90% of the lowest closing bid price during
        the week prior to the compensation being due.

      

      To
        participate in this program, all you have to do is execute this letter in
        the
        space below, and indicate the amount of wages you wish to
        have
        allocated to this Plan and the pay period from which your salary will be
        credited. Your free-trading shares will be delivered to
        you
        within a few days.

       

      
         

        
          	 	 	 
	 	CORONADO
                  INDUSTRIES, INC.
	 
 	 
 	 
 
	 	By:  	/s/ 
                  Gary R. Smith
	 	
                  

                
	 	Gary
                  R. Smith, President

        

      

       

      
        

      

      
        	
                

              	 	
                

              
	Amount of Compensation	 	Employee/Consultant
                Signature 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	
                

              	 	
                

              
	Period From 	 	
                Name
                  of Employee/Consultant 

              
	Which To Be Paid 	 	
                (Please
                  Print)Exhibit
4.1

 

STEINWAY MUSICAL
INSTRUMENTS, INC.

 

(as Issuer)

 

 

CONN-SELMER, INC.

THE STEINWAY PIANO COMPANY, INC.

STEINWAY, INC.

S&B RETAIL, INC.

BOSTON PIANO COMPANY, INC.

THE O.S. KELLY COMPANY

 

(each a Guarantor)

 

7.0%
Senior Notes due 2014

 

 

INDENTURE

 

Dated
as of February 23, 2006

 

 

THE
BANK OF NEW YORK TRUST COMPANY, 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

  	
  22

  
	
   

  	
  Section 1.3

  	
  Incorporation by Reference
  of Trust Indenture Act

  	
  22

  
	
   

  	
  Section 1.4

  	
  Rules of Construction

  	
  22

  
	
   

  	
   

  
	
  ARTICLE II THE NOTES

  	
  23

  
	
   

  	
  Section 2.1

  	
  Form and Dating

  	
  23

  
	
   

  	
  Section 2.2

  	
  Execution and
  Authentication

  	
  24

  
	
   

  	
  Section 2.3

  	
  Registrar, Paying Agent
  and Depositary

  	
  24

  
	
   

  	
  Section 2.4

  	
  Paying Agent to Hold Money
  in Trust

  	
  25

  
	
   

  	
  Section 2.5

  	
  Holder Lists

  	
  25

  
	
   

  	
  Section 2.6

  	
  Transfer and Exchange

  	
  25

  
	
   

  	
  Section 2.7

  	
  Replacement Notes

  	
  36

  
	
   

  	
  Section 2.8

  	
  Outstanding Notes

  	
  36

  
	
   

  	
  Section 2.9

  	
  Treasury Notes

  	
  36

  
	
   

  	
  Section 2.10

  	
  Temporary Notes

  	
  37

  
	
   

  	
  Section 2.11

  	
  Cancellation

  	
  37

  
	
   

  	
  Section 2.12

  	
  Defaulted Interest

  	
  37

  
	
   

  	
  Section 2.13

  	
  CUSIP Numbers

  	
  38

  
	
   

  	
  Section 2.14

  	
  Issuance of Additional
  Notes

  	
  38

  
	
   

  	
  Section 2.15

  	
  Global Notes

  	
  38

  
	
   

  	
   

  
	
  ARTICLE III REDEMPTION

  	
  39

  
	
   

  	
  Section 3.1

  	
  Notices to Trustee

  	
  39

  
	
   

  	
  Section 3.2

  	
  Selection of Notes to Be
  Redeemed

  	
  39

  
	
   

  	
  Section 3.3

  	
  Notice of Redemption

  	
  40

  
	
   

  	
  Section 3.4

  	
  Effect of Notice of
  Redemption

  	
  40

  
	
   

  	
  Section 3.5

  	
  Deposit of Redemption
  Price

  	
  41

  
	
   

  	
  Section 3.6

  	
  Notes Redeemed in Part

  	
  41

  
	
   

  	
  Section 3.7

  	
  Optional Redemption

  	
  41

  
	
   

  	
  Section 3.8

  	
  No Mandatory Redemption

  	
  42

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV COVENANTS

  	
  42

  
	
   

  	
  Section 4.1

  	
  Payment of Notes

  	
  42

  
	
   

  	
  Section 4.2

  	
  Maintenance of Office or
  Agency

  	
  42

  
	
   

  	
  Section 4.3

  	
  SEC Reports and Reports to
  Holders

  	
  43

  
	
   

  	
  Section 4.4

  	
  Compliance Certificate

  	
  44

  
	
   

  	
  Section 4.5

  	
  Taxes

  	
  44

  
	
   

  	
  Section 4.6

  	
  Stay, Extension and Usury
  Laws

  	
  44

  
	
   

  	
  Section 4.7

  	
  Limitation on Incurrence
  of Additional Indebtedness and Disqualified Capital Stock

  	
  44

  
	
   

  	
  Section 4.8

  	
  Limitation on Liens

  	
  46

  

 

i

 

	
   

  	
  Section 4.9

  	
  Limitations on Restricted
  Payments

  	
  46

  
	
   

  	
  Section 4.10

  	
  Limitation on Dividends
  and Other Payment Restrictions Affecting Subsidiaries

  	
  47

  
	
   

  	
  Section 4.11

  	
  Limitation on Lines of
  Business

  	
  48

  
	
   

  	
  Section 4.12

  	
  Limitation on Transactions
  with Affiliates

  	
  48

  
	
   

  	
  Section 4.13

  	
  Limitation on Sale of
  Assets and Subsidiary Stock

  	
  49

  
	
   

  	
  Section 4.14

  	
  Repurchase of Notes at the
  Option of the Holder Upon a Change of Control

  	
  51

  
	
   

  	
  Section 4.15

  	
  Repurchase of Notes at the
  Option of the Holder Upon the Failure of the Company to Redeem the Existing
  Notes

  	
  52

  
	
   

  	
  Section 4.16

  	
  Subsidiary Guarantors

  	
  53

  
	
   

  	
  Section 4.17

  	
  Limitation on Status as
  Investment Company

  	
  53

  
	
   

  	
  Section 4.18

  	
  Maintenance of Properties
  and Insurance

  	
  54

  
	
   

  	
  Section 4.19

  	
  Corporate Existence

  	
  54

  
	
   

  	
   

  
	
  ARTICLE V SUCCESSORS

  	
  54

  
	
   

  	
  Section 5.1

  	
  Merger, Consolidation or
  Sale of Assets

  	
  54

  
	
   

  	
  Section 5.2

  	
  Successor Corporation
  Substituted

  	
  55

  
	
   

  	
   

  
	
  ARTICLE VI DEFAULTS AND
  REMEDIES

  	
  55

  
	
   

  	
  Section 6.1

  	
  Events of Default

  	
  55

  
	
   

  	
  Section 6.2

  	
  Acceleration

  	
  56

  
	
   

  	
  Section 6.3

  	
  Other Remedies

  	
  58

  
	
   

  	
  Section 6.4

  	
  Waiver of Past Defaults

  	
  58

  
	
   

  	
  Section 6.5

  	
  Control by Majority

  	
  58

  
	
   

  	
  Section 6.6

  	
  Limitation on Suits

  	
  59

  
	
   

  	
  Section 6.7

  	
  Rights of Holders of Notes
  to Receive Payment

  	
  59

  
	
   

  	
  Section 6.8

  	
  Collection Suit by Trustee

  	
  59

  
	
   

  	
  Section 6.9

  	
  Trustee May File Proofs of
  Claim

  	
  59

  
	
   

  	
  Section 6.10

  	
  Priorities

  	
  60

  
	
   

  	
  Section 6.11

  	
  Undertaking for Costs

  	
  60

  
	
   

  	
   

  
	
  ARTICLE VII TRUSTEE

  	
  61

  
	
   

  	
  Section 7.1

  	
  Duties of Trustee

  	
  61

  
	
   

  	
  Section 7.2

  	
  Rights of Trustee

  	
  62

  
	
   

  	
  Section 7.3

  	
  Individual Rights of
  Trustee

  	
  63

  
	
   

  	
  Section 7.4

  	
  Trustee’s Disclaimer

  	
  63

  
	
   

  	
  Section 7.5

  	
  Notice of Defaults

  	
  64

  
	
   

  	
  Section 7.6

  	
  Reports by Trustee to
  Holders of the Notes

  	
  64

  
	
   

  	
  Section 7.7

  	
  Compensation and Indemnity

  	
  64

  
	
   

  	
  Section 7.8

  	
  Replacement of Trustee

  	
  65

  
	
   

  	
  Section 7.9

  	
  Successor Trustee by
  Merger, etc.

  	
  66

  
	
   

  	
  Section 7.10

  	
  Eligibility; Disqualification

  	
  66

  
	
   

  	
  Section 7.11

  	
  Preferential Collection of
  Claims Against Company

  	
  66

  
	
   

  	
   

  
	
  ARTICLE VIII LEGAL
  DEFEASANCE AND COVENANT DEFEASANCE

  	
  66

  
	
   

  	
  Section 8.1

  	
  Option to Effect Legal
  Defeasance or Covenant Defeasance

  	
  66

  

 

ii

 

	
   

  	
  Section 8.2

  	
  Legal Defeasance and
  Discharge

  	
  67

  
	
   

  	
  Section 8.3

  	
  Covenant Defeasance

  	
  67

  
	
   

  	
  Section 8.4

  	
  Conditions to Legal or
  Covenant Defeasance

  	
  68

  
	
   

  	
  Section 8.5

  	
  Deposited Money and
  Government Securities to be Held in Trust; Other Miscellaneous Provisions

  	
  69

  
	
   

  	
  Section 8.6

  	
  Repayment to Company

  	
  69

  
	
   

  	
  Section 8.7

  	
  Reinstatement

  	
  70

  
	
   

  	
   

  
	
  ARTICLE IX AMENDMENT,
  SUPPLEMENT AND WAIVER

  	
  70

  
	
   

  	
  Section 9.1

  	
  Without Consent of Holders
  of Notes

  	
  70

  
	
   

  	
  Section 9.2

  	
  With Consent of Holders of
  Notes

  	
  71

  
	
   

  	
  Section 9.3

  	
  Compliance with Trust
  Indenture Act

  	
  73

  
	
   

  	
  Section 9.4

  	
  Revocation and Effect of
  Consents

  	
  73

  
	
   

  	
  Section 9.5

  	
  Notation on or Exchange of
  Notes

  	
  73

  
	
   

  	
  Section 9.6

  	
  Trustee to Sign
  Amendments, etc.

  	
  73

  
	
   

  	
   

  	
   

  
	
  ARTICLE X GUARANTEES

  	
  74

  
	
   

  	
  Section 10.1

  	
  Guarantees

  	
  74

  
	
   

  	
  Section 10.2

  	
  Execution and Delivery of
  Guarantees

  	
  75

  
	
   

  	
  Section 10.3

  	
  Guarantors May
  Consolidate, etc., on Certain Terms

  	
  76

  
	
   

  	
  Section 10.4

  	
  Release of Guarantors

  	
  76

  
	
   

  	
  Section 10.5

  	
  Limitation of Guarantor’s
  Liability; Certain Bankruptcy Events

  	
  77

  
	
   

  	
  Section 10.6

  	
  Application of Certain
  Terms and Provisions to the Guarantors

  	
  78

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI MISCELLANEOUS

  	
  78

  
	
   

  	
  Section 11.1

  	
  Trust Indenture Act
  Controls

  	
  78

  
	
   

  	
  Section 11.2

  	
  Notices

  	
  78

  
	
   

  	
  Section 11.3

  	
  Communication by Holders
  of Notes with Other Holders of Notes

  	
  79

  
	
   

  	
  Section 11.4

  	
  Certificate and Opinion as
  to Conditions Precedent

  	
  80

  
	
   

  	
  Section 11.5

  	
  Statements Required in
  Certificate or Opinion

  	
  80

  
	
   

  	
  Section 11.6

  	
  Rules by Trustee and
  Agents

  	
  80

  
	
   

  	
  Section 11.7

  	
  No Personal Liability of
  Directors, Officers, Employees and Stockholders

  	
  80

  
	
   

  	
  Section 11.8

  	
  Governing Law; Waiver of
  Trial by Jury

  	
  81

  
	
   

  	
  Section 11.9

  	
  No Adverse Interpretation
  of Other Agreements

  	
  81

  
	
   

  	
  Section 11.10

  	
  Successors

  	
  81

  
	
   

  	
  Section 11.11

  	
  Severability

  	
  81

  
	
   

  	
  Section 11.12

  	
  Counterpart Originals

  	
  81

  
	
   

  	
  Section 11.13

  	
  Table of Contents, Headings,
  Etc.

  	
  81

  

 

	
  EXHIBIT A

  	
   

  
	
   

  	
  FORM OF NOTE

  	
  A-1

  
	
   

  	
   

  
	
  EXHIBIT B

  	
   

  
	
   

  	
  FORM OF
  CERTIFICATE OF TRANSFER

  	
  B-1

  

 

iii

 

	
  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

  

 

iv

 

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 February 23, 2006, among Steinway Musical Instruments, Inc., a
Delaware corporation (the “Company”), the Guarantors (as defined), and The Bank
of New York Trust Company, 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 7.0% Senior Notes due 2014 (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 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 

 

2

 

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.

 

“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.

 

“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:

 

3

 

(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,

 

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 Affiliates or 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 Affiliates 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 

 

4

 

(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 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 

 

5

 

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, (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 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” means the office of the Trustee, the
Paying Agent or the Registrar, as the case may be, at which at any particular
time its corporate trust business shall be principally administered, which
office as of the date of this instrument is located at The Bank of New York
Trust Company, N.A., Corporate Trust Administration, 222 Berkeley Street, 2nd
Floor, 

 

6

 

Boston, MA  02116, except that
with respect to presentation of Notes for payment or for registration of
transfer or exchange or for service of notices and demands to or upon the
Company in respect of Notes and this Indenture, such term shall mean the office
or agency of the Trustee at which at any particular time its corporate agency
business shall be conducted, which office at the date of this instrument is
located at 101 Barclay Street, New York, New York 10286; Attention: Corporate
Trust Division - Corporate Finance Unit, or, in the case of any of such
offices, such other address as the Trustee may designate from time to time by
notice to the Holders and 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 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.

 

“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.

 

7

 

“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.

 

“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 Existing Notes Indenture,
prior to April 17, 2006.

 

“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.

 

“Existing
Notes” means the $166.2 million aggregate principal
amount of the Company’s 83⁄4% Senior Notes due 2011.

 

“Existing
Notes Indenture” means the indenture, dated as of
April 19, 2001, by and among the Company, the Selmer Company, Inc. and the
other guarantors party thereto, and First Bank, N.A., as trustee, pursuant to
which the 83⁄4% Senior Notes due 2011 were issued.

 

“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 

 

8

 

(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 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(f)(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;

 

9

 

(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 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 Purchaser” means the initial purchaser of the Notes
under the Purchase Agreement, dated February 23, 2006, with respect to the
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 

 

10

 

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.

 

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 

 

11

 

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.

 

“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.

 

“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 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.

 

“Offering” means the offering of the Notes by the Company.

 

12

 

“Offering Memorandum” means the final Offering Memorandum,
dated February 23, 2006, relating to the offer and sale of the 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 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.

 

“Opinion of Counsel” means an opinion from legal counsel who
is reasonably acceptable to the Trustee. 
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 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;

 

13

 

(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 Guarantor or such Person is
immediately merged with or into the Company or 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

 

14

 

(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;

 

(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;

 

15

 

(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;

 

(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.

 

16

 

“Private Placement Legend” means the legend set forth in
Section 2.6(f)(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.

 

“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
Equity Offering” means an underwritten public offering
or a private placement of Qualified Capital Stock of the Company for cash
pursuant that provides the Company with Net Cash Proceeds of at least $35
million.

 

“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 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.

 

17

 

“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.

 

“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.

 

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

 

18

 

“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
Business Asset” means assets (other than notes, bonds,
obligations and securities, except in connection with the acquisition of a
Subsidiary in a Related Business that becomes a Guarantor) and capital
expenditures, in each case that, in the good faith reasonable judgment of the
Board of Directors of the Company, will immediately constitute, be a part of,
or be used in, a Related Business of the Company or a Subsidiary.

 

“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.

 

“Responsible Officer” means, with respect to the Trustee, any
officer within the Corporate Trust Administration department (or any successor
department) of the Trustee located at the Corporate Trust Office of the
Trustee, who shall have direct responsibility for the administration of this
Indenture.

 

“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.

 

“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 

 

19

 

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 Existing 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.

 

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

 

“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
March 1, 2014.

 

“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.

 

20

 

“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.

 

“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.

 

“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.

 

21

 

“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.

 

Section 1.2                                      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 1.3                                      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 1.4                                      Rules of Construction

 

Unless the
context otherwise requires:

 

22

 

(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

 

(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 II

THE NOTES

 

Section 2.1                                      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
minimum 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 

 

23

 

Trustee, in
accordance with written 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 2.2                                      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
$175,000,000 in aggregate principal amount. 
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. An authenticating agent may 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 2.3                                      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.

 

24

 

Section 2.4             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 or premium, 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 2.5             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 2.6             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 (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) 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

 

25

 

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 (e) 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 certificates identified by the Company or its counsel to be
required pursuant to Rule 903 and Rule 904 under the Securities
Act.  Upon satisfaction of all of the
requirements for transfer or exchange of beneficial interests in Global Notes
contained in this Indenture and the

 

26

 

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(g) 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 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 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.

 

27

 

(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(g) 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 authorized denomination or
denominations as the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the

 

28

 

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 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(g) 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 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

 

29

 

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 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

 

30

 

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 subparagraph (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

 

(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

 

31

 

Unrestricted
Definitive Note if 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)            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 (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

 

32

 

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 $100,000, 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),
(e)(ii), or (e)(iii) 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

 

33

 

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 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.”

 

(g)           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

 

34

 

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.

 

(h)           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).

 

(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.

 

35

 

(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 2.7             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 2.8             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 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 2.9             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

 

36

 

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 2.10           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 2.11           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 dispose of cancelled
Notes (subject to the record retention requirement of the Exchange Act).  Certification of the disposal of all
cancelled Notes shall be delivered to the Company upon request of 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 2.12           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 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

 

37

 

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 2.13           CUSIP Numbers

 

The Company in issuing the Notes may use “CUSIP,” “ISIN” or other
similar numbers (if then generally in use), and, if so, the Trustee shall use “CUSIP”
“ISIN” or other similar 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” “ISIN” or other
similar numbers.

 

Section 2.14           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.

 

Section 2.15           Global Notes

 

Participants shall have no rights under this Indenture with respect to
any Global Notes held on their behalf by the Depositary, and the Depositary
(including, for this purpose, its nominee) may be treated by the Company, the
Trustee and any agent of the Company or the Trustee as the absolute owner and
Holder of such Global Notes for all purposes whatsoever.   Notwithstanding the foregoing, nothing
herein shall (A) prevent the Company, the Trustee or any

 

38

 

agent of the Company or the Trustee from
giving effect to any written certification, proxy or other authorization
furnished by the Depositary, or such nominee, as the case may be, or (B) impair,
as between the Depositary and the Participants, the Applicable Procedures or
the operation of customary practices governing the exercise of the rights of a
Holder of any Global Notes.

 

None of the Company, the Trustee, the Registrar, any Paying Agent or
any agent of any of them shall have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests in the Notes, for maintaining, supervising or reviewing any
records relating to such beneficial owner interests, or for any acts or
omissions of a Depositary or for any transactions between a Depository and any
beneficial owner or between or among beneficial owners.   No owner of a beneficial interest in the
Notes shall have any rights under this Indenture, and the Depository or its
nominee, if any, shall be deemed and treated by the Company, the Trustee, the
Registrar, any Paying Agent or any agent of any of them as the absolute owner
and holder of such Notes for all purposes whatsoever.   Notwithstanding the foregoing, nothing
herein shall prevent the Company, the Trustee, the Registrar, any Paying Agent
or any agent of any of them from giving effect to any written certification, proxy
or other authorization furnished by a Depository, or any of its members and any
other Person on whose behalf such member may act, the operation of customary
practices of such Persons governing he exercise of the rights of a beneficial
owner of any Notes.

 

ARTICLE III

REDEMPTION

 

Section 3.1             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 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 3.2             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 $2,000

 

39

 

selected shall be in amounts of $2,000 or
integral multiples of $1,000 in excess of $2,000; 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 in excess of
$2,000, 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 3.3             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, ISIN or other similar 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 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.

 

40

 

Section 3.4             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 3.5             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 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 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 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 3.6             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; provided
that the unredeemed portion of any Holder’s Notes must be equal to $2,000 or an
integral multiple of $1,000 in excess of $2,000.

 

Section 3.7             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 March 1, 2010.  The Notes
will be redeemable for cash at the option of the Company, in whole or in part,
at any time on or after March 1, 2010 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 March 1 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 on the corresponding Interest Payment Date that is on or prior to
such redemption date) together with accrued and unpaid interest thereon to the
redemption date:

 

41

 

	
  Year

  	
   

  	
  Percentage

  	
   

  
	
  2010

  	
   

  	
  103.500

  	
  %

  
	
  2011

  	
   

  	
  101.750

  	
  %

  
	
  2012 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 March 1,
2009, 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 Qualified 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 Qualified Equity Offering, at a
redemption price equal to 107.000% of the principal amount thereof (subject to
the right of Holders of record on a Record Date to receive the corresponding
interest due on the Interest Payment Date that is on or prior to such
redemption date) together with accrued and unpaid interest 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 3.8             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 IV

COVENANTS

 

Section 4.1             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 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 (without regard to any
applicable grace period) at the same rate to the extent lawful.

 

42

 

Section 4.2             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 4.3             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, each Holder of Notes, and potential investors in the Notes and
Securities analysts, in each case, identified by a Holder of the Notes, within
10 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.  Delivery of such reports, information and
documents to the Trustee is for informational purposes only and the Trustee’s
receipt of such shall not constitute notice or constructive notice of any
information contained therein or determinable from information contained
therein, including the Company’s compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely exclusively on Officers’
Certificates).  The Company shall cause
its management to participate in quarterly conference calls to discuss the
results of operations with the Holders of the Notes.  In addition, the Company and the Guarantors
agree that 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.

 

43

 

Section 4.4             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 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 4.5             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 4.6             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 4.7             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),

 

44

 

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 accordance with GAAP in good faith by 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

 

45

 

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 (and later redesignate) 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 (and later redesignate) 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 4.8             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 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 4.9             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) $25,000,000, 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

 

46

 

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.

 

Section 4.10           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

 

47

 

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 4.11           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 4.12           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 $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

 

48

 

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 4.13           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 of the assets or Equity Interests issued or sold
or otherwise disposed of; and (2) at least 75% of the consideration
received by the Company or the applicable Subsidiary for the Asset Sale is in
the form of cash or Cash Equivalents, Related Business Assets or a combination
thereof; 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

 

49

 

$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 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 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

 

50

 

(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 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 will not be payable to Holders who tender Notes
pursuant to such Asset Sale Offer.

 

Section 4.14           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 unpurchased portion of such
Notes must be equal to $2,000 or an integral multiple of $1,000 in excess of
$2,000) 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 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, to the extent lawful, 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), 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 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; provided that the unpurchased
portion of any Holder’s Notes must be equal to $2,000 or an integral multiple
of $1,000 in excess of $2,000. 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.

 

51

 

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 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 will not be payable to Holders who
tender the Notes pursuant to the Change of Control Offer.

 

Section 4.15           Repurchase of Notes at the Option of the Holder Upon
the Failure of the Company to Redeem the Existing Notes

 

In the event that the Existing Notes Redemption has not occurred on or
prior to April 17, 2006 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 “Existing Notes Redemption Offer”),
to require the Company to repurchase all or any part of such Holder’s Notes (provided, that the unpurchased portion of such Notes must be
equal to $2,000 or an integral multiple of $1,000 in excess of $2,000) on a
date (the “Existing Notes Redemption Purchase Date”) that is no later than 25
Business Days after April 17, 2006, at a cash price equal to 100% of the
principal amount thereof (the “Existing Notes Redemption Purchase Price”), together
with accrued and unpaid interest to the Existing Notes Redemption Purchase
Date.

 

The Existing Notes Redemption Offer shall be made within 5 Business
Days following April 17, 2006 and shall remain open for 20 Business Days
following its commencement (the “Existing Notes Redemption Offer Period”).  Upon expiration of the Existing Notes
Redemption Offer Period, the Company shall promptly purchase all Notes properly
tendered in response to the Existing Notes Redemption Offer.

 

On or before the Existing Notes Redemption Purchase Date, the Company
will: (1) accept for payment Notes or portions thereof properly tendered
pursuant to the Existing Notes Redemption Offer, (2) deposit with the
Paying Agent for the Company cash sufficient to pay the Existing 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 Existing 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; provided that the unpurchased
portion of any Holder’s Notes must be equal to $2,000 or an integral multiple
of $1,000 in excess of $2,000.  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

 

52

 

Existing Notes Redemption Offer on or as soon
as practicable after the Existing Notes Redemption Purchase Date.

 

Any Existing 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 4.16           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 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 4.17           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.

 

53

 

Section 4.18           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 4.19           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 V

SUCCESSORS

 

Section 5.1             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 or (b) the resulting, surviving or
transferee entity is a

 

54

 

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; and (iii) 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.

 

The Company shall deliver to the Trustee prior to the proposed
transaction an Officers’ Certificate and an Opinion of Counsel, each of which
shall state that such consolidation, merger or transfer and such supplemental
indenture comply with this Article 5 and that all conditions precedent
herein provided for relating to such transaction have been complied with.

 

Section 5.2             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 VI

DEFAULTS AND REMEDIES

 

Section 6.1             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 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;

 

55

 

(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 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.

 

56

 

Section 6.2             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 on the Notes to
be immediately due and payable.  Upon a
declaration of acceleration, such principal of, premium, if any, and accrued
interest 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 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
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)           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 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 on the Notes which have become
due solely by such declaration of acceleration, have been cured or waived as provided
in Section 6.4.

 

(c)           Notwithstanding clause (b)(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

 

57

 

other
event.  No such waiver shall cure or
waive any subsequent default or impair any right consequent thereon.

 

Section 6.3             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.

 

Section 6.4             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 6.5             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.

 

58

 

Section 6.6             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 6.7             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 interest on the Note, on or after the
respective due dates expressed in the Note (including in 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 6.8             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 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 6.9             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

 

59

 

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 6.10           Priorities

 

If the Trustee collects any money pursuant to this Article, and after
an Event of Default any money or other property distributable in respect of the
Company’s obligations under this Indenture, such money or property shall be
paid out in the following order:

 

First: 
to the Trustee (including any predecessor 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 interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Notes for principal, premium
and interest, respectively; and

 

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

 

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

 

Section 6.11           Undertaking for Costs

 

In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as 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

 

60

 

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 VII

TRUSTEE

 

Section 7.1             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 a Responsible Officer of 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) or (e) 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

 

61

 

its rights and
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 7.2             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)           The Trustee shall not be deemed to have knowledge or
be charged with knowledge of any Default or Event of Default except (i) if
the Trustee is the Paying Agent, 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 a Responsible Officer of the Trustee shall have received
written notification at the Corporate Trust Office of the Trustee in the manner
set forth in this Indenture, and such notification references the Notes and
this Indenture.

 

(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,

 

62

 

direction,
consent, order, bond, debenture, note, other evidence of indebtedness or other
paper or document, but the Trustee may, in its discretion and at the cost of
the Company, make such further inquiry or investigation into such facts or
matters as it may see fit.

 

(i)            The Trustee shall not be responsible or liable for any
failure or delay in the performance of its obligations under this Indenture
arising out of or caused, directly or indirectly, by circumstances beyond its
reasonable control, including, without limitation, acts of God; earthquakes;
fire; flood; terrorism; wars and other military disturbances; sabotage;
epidemics; riots; interruptions; loss or malfunctions of utilities, computer
(hardware or software) or communication services; accidents; labor disputes;
acts of civil or military authority and governmental action.

 

(j)            Anything in this Indenture notwithstanding, in no
event shall the Trustee be liable for special, indirect, punitive or
consequential loss or damage of any kind whatsoever (including but not limited
to loss of profit), even if the Company has been advised as to the likelihood
of such loss or damage and regardless of the form of action.

 

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

 

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

 

(m)          The permissive right of the Trustee to take or refrain
from taking any actions enumerated in this Indenture shall not be construed as
a duty.

 

Section 7.3             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 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 7.4             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

 

63

 

document in connection with the sale of the
Notes or pursuant to this Indenture other than its certificate of
authentication.

 

Section 7.5             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 7.6             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 7.7             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 claims,
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 gross negligence or
willful misconduct.  The Trustee shall
notify the Company promptly of any claim for which it may seek indemnity.  Failure by the 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 

 

64

 

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 and the resignation or
removal of the Trustee. 

 

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 and the resignation or
removal of the Trustee.

 

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 7.8             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 50% 

 

65

 

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 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 7.9             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 Person, the
successor Person without any further act shall be the successor Trustee.

 

Section 7.10           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).  Nothing herein shall prevent the Trustee from
making the application referred to the penultimate sentence of TIA § 310(b).

 

Section 7.11           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 VIII

LEGAL DEFEASANCE AND COVENANT DEFEASANCE

 

Section 8.1             Option to Effect Legal Defeasance or Covenant
Defeasance

 

66

 

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 8.2             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 fully set forth in such
Section, payments in respect of the principal of, premium, if any, and interest
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 8.3             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

 

67

 

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 8.4             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 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 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);

 

68

 

(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; and

 

(g)           the Company must deliver to the Trustee an Officers’
Certificate confirming the satisfaction of the conditions in clauses (a) through
(f) 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 earlier of (i) the 91st day after the deposit, and (ii) the
date all of the applicable conditions set forth in this Section 8.4 are
satisfied.

 

Section 8.5             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, 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 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.

 

69

 

Section 8.6             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,
or interest on any Note and remaining unclaimed for two years after such
principal, and premium, 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 8.7             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.

 

ARTICLE IX

AMENDMENT, SUPPLEMENT AND WAIVER

 

Section 9.1             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;

 

70

 

(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 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.

 

Section 9.2             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.

 

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):

 

71

 

(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
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 change the date on which any Notes may be subject to redemption;

 

(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.

 

72

 

Section 9.3             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 9.4             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 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 9.5             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 9.6             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,

 

73

 

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.

 

ARTICLE X

GUARANTEES

 

Section 10.1           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 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 an Existing 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 Existing 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”).  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

 

74

 

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 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 10.2           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.

 

75

 

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 10.3           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.

 

(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; and (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; provided,
however, the provisions of this clause
10.3(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.

 

76

 

Section 10.4           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).

 

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 10.5           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

 

77

 

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 10.6           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 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 XI

MISCELLANEOUS

 

Section 11.1           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 11.2           Notices

 

Any notice or communication to the Company 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:

 

78

 

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:

 

The Bank of
New York Trust Company, N.A.

222 Berkeley Street, 2nd Floor

Boston, MA 02116

Attention:  Corporate Trust
Administration

Telecopier no.  - (617) 351-2401

 

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 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.

 

Notwithstanding anything herein to the contrary, any notices or
communications to the Trustee shall be effective only when received at the
Corporate Trust Office.

 

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.

 

79

 

Section 11.3           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 11.4           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 (which shall include the
statements set forth in Section 11.5 hereof) stating that, in the opinion
of the signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and

 

(b)           an Opinion of Counsel in form (which shall include the
statements set forth in Section 11.5 hereof) stating that, in the opinion
of such counsel, all such conditions precedent have been complied with.

 

Section 11.5           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.

 

Section 11.6           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 11.7           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,

 

80

 

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 11.8           Governing Law; WAIVER OF TRIAL BY JURY

 

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.

 

EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS INDENTURE.

 

Section 11.9           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 11.10         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 11.11         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 11.12         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 11.13         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.

 

81

 

[Signatures on following page]

 

82

 

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/   Dennis M.Hanson

  	
   

  
	
   

  	
   

  	
  Name:  Dennis M.Hanson

  
	
   

  	
   

  	
  Title:  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE GUARANTORS:

  
	
   

  	
  CONN-SELMER,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/   Dennis M. Hanson

  	
   

  
	
   

  	
   

  	
  Name:  Dennis M.Hanson

  
	
   

  	
   

  	
  Title:  Senior Executive Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE STEINWAY PIANO COMPANY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/   Dennis M. Hanson

  	
   

  
	
   

  	
   

  	
  Name:  Dennis M.Hanson

  
	
   

  	
   

  	
  Title:  Senior Executive Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  STEINWAY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/   Dennis M. Hanson

  	
   

  
	
   

  	
   

  	
  Name:  Dennis M.Hanson

  
	
   

  	
   

  	
  Title:  Senior Executive Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  S&B
  RETAIL, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/   Dennis M. Hanson

  	
   

  
	
   

  	
   

  	
  Name:  Dennis M.Hanson

  
	
   

  	
   

  	
  Title:  Senior Executive Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

 

	
   

  	
  BOSTON PIANO
  COMPANY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/   Dennis M. Hanson

  	
   

  
	
   

  	
   

  	
  Name:  Dennis M.Hanson

  
	
   

  	
   

  	
  Title:  Senior Executive Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE O.S.
  KELLY COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/   Dennis M. Hanson

  	
   

  
	
   

  	
   

  	
  Name:  Dennis M.Hanson

  
	
   

  	
   

  	
  Title:  Senior Executive Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE
  TRUSTEE:

  
	
   

  	
  THE BANK OF
  NEW YORK TRUST COMPANY,

  N.A., as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Patrick T. Giordano

  	
   

  
	
   

  	
   

  	
  Name:  Patrick T. Giordano

  
	
   

  	
   

  	
  Title:  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

2

 

EXHIBIT A

 

[FORM OF NOTE]

 

STEINWAY MUSICAL INSTRUMENTS, INC.

 

7.0% SENIOR NOTE

DUE 2014

 

 

	
   

  	
   

  	
  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 March 1, 2014.

 

Interest
Payment Dates:  March 1 and September 1;
commencing September 1, 2006.

 

Record
Dates:  February 15 and August 15.

 

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.

 

A-1

 

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.

  
	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  The Bank of
  New York Trust Company, N.A., as Trustee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  	
   

  	
   

  
						

 

A-2

 

(Back of Note)

 

7.0% Senior Notes due 2014

 

[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.](1)

 

[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.](2)

 

[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.

 

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

 

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

 

A-3

 

NOTHING IN THIS LEGEND SHALL BE DEEMED TO PREVENT INTEREST FROM
ACCRUING ON THIS NOTE.](3)

 

[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”), 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 $100,000, 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.

 

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

 

A-4

 

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.](4)

 

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

 

1.                                       Interest.  Steinway
Musical Instruments, Inc., a Delaware corporation (the “Company”),
promises to pay interest on the principal amount of this Note at 7.000% per
annum from February 23, 2006 until maturity.  The Company will pay interest semi-annually
on March 1 and September 1 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 September 1, 2006. 
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 (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),
to the Persons who are registered Holders of Notes at the close of business on
the February 15 or August 15 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 and interest 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 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, interest
and premium, 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, The Bank of New York Trust Company, 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)                  To be included only on Transfer
Restricted Notes.

 

A-5

 

4.                                       Indenture.  The
Company issued the Notes under an Indenture dated as of February 23, 2006,
(“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 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 March 1, 2010.  The Notes will be redeemable for cash at the
option of the Company, in whole or in part, at any time on or after March 1,
2010, 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 March 1 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 on the corresponding
Interest Payment Date that is on or prior to such redemption date) together
with accrued and unpaid interest, thereon to the redemption date:

 

	
  Year

  	
   

  	
  Percentage

  	
   

  
	
  2010

  	
   

  	
  103.500

  	
  %

  
	
  2011

  	
   

  	
  101.750

  	
  %

  
	
  2012 and
  thereafter

  	
   

  	
  100.000

  	
  %

  

 

(b)                                 Notwithstanding the provisions of clause
(a) of this Section, at any time or from time to time until March 1,
2009, 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 Qualified 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 Qualified Equity Offering, at a
redemption price equal to 107.000% of the principal amount thereof (subject to
the right of Holders of record on a Record Date to receive the corresponding
interest due on the Interest Payment Date that is on or prior to such
redemption date) together with accrued and unpaid interest 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 $2,000 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.

 

A-6

 

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 Existing
Notes.  In the event that the Existing Notes
Redemption has not occurred on or prior to April 17, 2006 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 “Existing Notes Redemption Offer”), to require the Company to repurchase
all or any part of such Holder’s Notes (provided, that the unpurchased portion
of such Notes must be equal to $2,000 or an integral multiple of $1,000 in
excess of $2,000) on a date (the “Existing Notes Redemption Purchase Date”)
that is no later than 25 Business Days after April 17, 2006, at a cash
price equal to 100% of the principal amount thereof (the “Existing Notes
Redemption Purchase Price”), together with accrued and unpaid interest to the Existing
Notes Redemption Purchase Date.

 

The Existing Notes Redemption Offer shall be made within 5 Business
Days following April 17, 2006 and shall remain open for 20 Business Days
following its commencement (the “Existing Notes Redemption Offer Period”).  Upon expiration of the Existing Notes
Redemption Offer Period, the Company shall promptly purchase all Notes properly
tendered in response to the Existing Notes Redemption Offer.

 

On or before the Existing Notes Redemption Purchase Date, the Company
will: (1) accept for payment Notes or portions thereof properly tendered
pursuant to the Existing Notes Redemption Offer, (2) deposit with the
paying agent for the Company (the “Paying Agent”) cash sufficient to pay the Existing
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 unpurchased portion of such Notes must
be equal to $2,000 or an integral multiple of $1,000 in excess of $2,000) 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 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, to the extent lawful, 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

 

A-7

 

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), 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 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; provided that the unpurchased portion of any Holder’s Notes
must be equal to $2,000 or an integral multiple of $1,000 in excess of $2,000.
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
consideration at the time of such Asset Sale at least equal to the fair market
value of the assets or Equity Interests issued or sold or otherwise disposed
of; and (2) at least 75% of the consideration received by the Company or
the applicable Subsidiary for the Asset Sale is in the form of cash or Cash
Equivalents, Related Business Assets or a combination thereof; 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.

 

A-8

 

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 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 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)

 

A-9

 

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 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 Existing 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 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.

 

A-10

 

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.                                 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.

 

17.                                 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, 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 Existing Notes Redemption
Offer or otherwise, and interest on overdue principal of, and premium, 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

 

A-11

 

acceleration, call for redemption, upon a
Change of Control Offer, upon an Asset Sale Offer, upon a Existing Notes
Redemption Offer or otherwise.

 

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

 

18.                                 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.  Requests
may be made to:

 

Steinway
Musical Instruments, Inc.

800 South
Street, Suite 305

Waltham, MA
02453

 

A-12

 

Assignment Form

 

	
  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-13

 

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:

 

	
  o Section 4.13

  	
   

  	
  o Section 4.14

  	
   

  	
  o 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
  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-14

 

SCHEDULE OF EXCHANGES OF INTERESTS IN
THE GLOBAL NOTE(5)

 

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

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

(5)                  This should be included only if the
Note is issued in global form

 

A-15

 

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 The Bank of
New York Trust Company, N.A. Trust Company, 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, on the 7.0% Senior Notes due 2014
(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 Existing
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 Existing Notes
Redemption Offer or otherwise.

 

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-16

 

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-17

 

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

 

	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CONN-SELMER
  COMPANY, INC

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE STEINWAY
  PIANO COMPANY, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  STEINWAY,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  S&B
  RETAIL, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BOSTON PIANO
  COMPANY, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

A-18

 

	
   

  	
  THE O.S. KELLY COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

A-19

 

EXHIBIT B

FORM OF CERTIFICATE OF TRANSFER

 

Steinway Musical Instruments, Inc.

800 South Street, Suite 305

Waltham, MA 02453

 

The Bank of New York Trust Company, N.A.

222 Berkeley Street, 2nd Floor

Boston, MA 02116

Attention:  Corporate Trust
Administration

 

Re: 7.0% Senior Notes due 2014

 

Dear Sirs:

 

Reference is hereby made to the Indenture, dated as of February 23,
2006 (the “Indenture”), among Steinway Musical Instruments, Inc., as
issuer (the “Company”), the Guarantors party thereto and The Bank of New York
Trust Company, 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.                                       G                                        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.                                       G                                        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

 

B-1

 

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

 

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

 

(c)                                  G                                        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)                                 G                                        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

 

B-2

 

restrictions on transfer enumerated in the
Private Placement Legend printed on the Definitive Notes and in the Indenture
and the Securities Act.

 

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

 

(a)                                  G                                        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)                                 G                                        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 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)                                  G                                        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

 

	
  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.

 

B-4

 

ANNEX A TO CERTIFICATE OF TRANSFER

 

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

 

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

 

(a)                                  G                                        a
beneficial interest in the:

 

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

 

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

 

(b)                                 G                                        a
Restricted Definitive Note.

 

2.                                       After
the Transfer the Transferee will hold:

 

[CHECK ONE]

 

(a)                                  G                                        a
beneficial interest in the:

 

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

 

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

 

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

 

(b)                                                                                 a
Restricted Definitive Note; or

 

(c)                                  G                                        an
Unrestricted Definitive Note,

 

in accordance with the terms of the Indenture.

 

B-5

 

EXHIBIT C

FORM OF CERTIFICATE OF EXCHANGE

 

Steinway Musical Instruments, Inc.

800 South Street, Suite 305

Waltham, MA 02453

 

The Bank of New York Trust Company, N.A.

222 Berkeley Street, 2nd Floor

Boston, MA 02116

Attention:  Corporate Trust
Administration

 

Re:  7.0% Senior Notes due 2014

 

Dear Sirs:

 

Reference is hereby made to the Indenture, dated as of February 23,
2006 (the “Indenture”), between Steinway Musical Instruments, Inc., as
issuer (the “Company”), the Guarantors party thereto and The Bank of New York
Trust Company, 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)                                  G                                        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)                                 G                                        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

 

C-1

 

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)                                  G                                        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 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)                                 G                                        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)                                  G                                        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)                                 G                                        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] G 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

 

C-2

 

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:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  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.

 

C-3

 

EXHIBIT D

FORM OF CERTIFICATE FROM ACQUIRING

INSTITUTIONAL ACCREDITED INVESTOR

 

Steinway Musical Instruments, Inc.

800 South Street, Suite 305

Waltham, MA 02453

 

The Bank of New York Trust Company, N.A.

222 Berkeley Street, 2nd Floor

Boston, MA 02116

Attention:  Corporate Trust
Administration

 

Re:                               7.0%
Senior Notes due 2014

 

Dear Sirs:

 

Reference is hereby made to the Indenture, dated as of February 23,
2006 (the “Indenture”), between Steinway Musical Instruments, Inc., as
issuer (the “Company”), the Guarantors party thereto and The Bank of New York
Trust Company, 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

 

D-1

 

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

 

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.

 

D-2

 

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:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  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.

 

D-3

 

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 The Bank of New York Trust Company, 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 February 23, 2006,
providing for the issuance of 7.0% Senior Notes due 2014 (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, on the Notes, whether at
maturity, by acceleration, call for redemption, upon a Change of Control Offer,
upon an Asset Sale Offer, upon a Existing 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 Existing Notes Redemption Offer or
otherwise.

 

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:

  
	
   

  	
  THE BANK OF
  NEW YORK TRUST COMPANY,

  N.A., as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name: 

  
	
   

  	
   

  	
  Title:

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