**EXHIBIT 10.1**

 

**Execution Copy**

 

**SECOND AMENDMENT AND WAIVER TO**

**THIRD AMENDED AND RESTATED CREDITAGREEMENT**

 

SECONDAMENDMENT AND WAIVER TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT, dated asof May 9, 2008 (this “Amendment”), to the Existing Credit Agreement(as hereinafter defined), by and among (i) CONN-SELMER, INC., a Delawarecorporation, and (ii) STEINWAY, INC., a Delaware corporation (“Steinway”and together with Conn-Selmer, the “Borrowers”), (iii) thosesignatories hereto and identified on Schedule I (as may be amended from time totime) as Guarantors (the “Guarantors”), (iv) the lenders (the “Lenders”)from time to time party to the Agreement (defined below) and (v) GMACCOMMERCIAL FINANCE LLC, a Delaware limited liability company (the “AdministrativeAgent”), as administrative agent for the Lenders hereunder.

 

RECITALS

 

A.          The Borrowers,Guarantors, the Administrative Agent and the Lenders have entered into theExisting Credit Agreement, pursuant to which the Lenders are providing to theBorrowers an $110,000,000 revolving credit facility, which is secured bycertain accounts receivable, and other collateral of the Borrowers andguaranteed by the Guarantors.

 

B.          Borrowers haveinformed the Lenders that it intends to acquire the stock of 4 Real Investments, Inc.d/b/a Clickpoint Software,Inc., a Nevada corporation for $215,000 (the “ClickpointAcquisition”) and have requested that the Lenders waive compliance with Section 8.15of the Existing Credit Agreement as the newly acquired entity will ultimatelybe merged into one of the Borrowers.

 

C.          This Amendmentmemorializes certain waivers and amendments agreed to by the Borrowers and theLenders.

 

Inconsideration of the foregoing and of the mutual covenants and undertakingsherein contained, the parties hereto hereby agree that the Existing CreditAgreement is amended as hereinafter provided.

 

 

ARTICLE I

Definitions

 

1.             Definitions.           (a)  In addition to thedefinitions set forth in the heading and the recitals to this Amendment, thefollowing definitions shall apply hereto:

 

“Agreement”:  the Existing Credit Agreement as amended,supplemented or otherwise modified from time to time up to and including thisAmendment.

 

----

 

“ExistingCredit Agreement”: the Third Amended and Restated Credit Agreement, datedas of September 29, 2006, among (i) Conn-Selmer, (ii) Steinway, (iii) theGuarantors, (iv) the Lenders and (v) the Administrative Agents, asamended or otherwise modified from time to time prior to the Second AmendmentEffective Date.

 

(b)           Unless otherwise indicated,capitalized terms that are used but not defined herein shall have the meaningsascribed to them in the Existing Credit Agreement.

 

ARTICLE II

Representations

 

1.             Representations.  Each of the Borrowers and Guarantors herebyrepresents and warrants as follows:

 

(a)           It has full power, authority andlegal right to enter into this Amendment and perform all of its respectiveobligations hereunder. The execution, delivery and performance hereof is withinits powers and has been duly authorized, is not in contravention of anyRequirement of Law which might have a material adverse effect upon it, theCollateral, its operations, financial condition or prospects, or incontravention of the terms of its by-laws, certificate of incorporation,declaration of trust or other documents relating to its formation, asapplicable, or to the conduct of its business or of any material agreement orundertaking to which it is a party or by which it is bound, and will notconflict with or result in any breach of any of the provisions of, orconstitute a default under, or result in the creation of any Lien upon any ofits assets under, the provisions of any agreement, charter, instrument, by-law,declaration of trust or other instrument to which it is a party or by which it orits assets may be bound.

 

(b)           It is duly organized and in goodstanding under the laws of its respective state of organization and it isqualified to do business and is in good standing in each jurisdiction wherequalification and good standing are necessary for it to conduct its businessesand own its properties and where the failure to so qualify would have aMaterial Adverse Effect.

 

(c)           This Amendment has been duly executedand delivered on its behalf and this Amendment constitutes its legal, valid andbinding obligation, enforceable against it in accordance with its terms, exceptas enforceability may be limited by applicable bankruptcy, insolvency,reorganization, moratorium or similar laws affecting the enforcement ofcreditors’ rights generally and by general equitable principles (whetherenforcement is sought by proceedings in equity or at law).

 

(d)**          **Theconditions contained in Article IV hereof have been satisfied.

 

(e)           Each of the LoanDocuments is on the date hereof in full force and effect.

 

(f)            No Default or Event of Default hasoccurred and is continuing.

 

2

----

 

ARTICLE III

Amendments to Existing Credit Agreement

 

1.             **Waiver**.Lenders hereby waive Borrowers’ compliance with Section 8.15 of theExisting Credit Agreement with respect to the Clickpoint Acquisition only.

 

2.            **Amendments.**

 

A.              Section 12.10

 

(i)            Sub-clause (d) of Section 12.10of the Existing Credit Agreement is hereby re-lettered to read “(e)” and all ofthe sub-clauses following thereafter are appropriately re-lettered.  A new sub-clause (d) is hereby added to Section 12.10of the Credit Agreement to read as follows:

 

“(d)         Any Lender may assign to one or morespecial purpose funding vehicles that is an Affiliate of such Lender (each, an “SPV”)all or any portion of its funded Revolving Credit Loans (without thecorresponding obligation to make additional Revolving Credit Loans to theBorrowers as provided under this Agreement), without the consent of anyBorrower or any other person or the payment of a fee, by execution of a writtenassignment agreement in a form agreed to by a Lender and such SPV, and maygrant any such SPV the option, in such SPV’s sole discretion, to provide theBorrowers all or any part of any Revolving Credit Loans that Lender wouldotherwise be obligated to make pursuant to this Agreement.  Such SPVs shall have all the rights which aLender making or holding such Revolving Credit Loans would have under thisAgreement, but no obligations.  Lendersshall remain liable for all of their respective original obligations under thisAgreement, provided, however, that the unused portion of such Lender’sRevolving Credit Loans shall be reduced by the principal amount of any Loansheld by an SPV.  Notwithstanding suchassignment, Borrowers may deliver notices to Lender (as agent for the SPV) andnot separately to the SPV unless Borrowers are requested in writing by the SPV(or its agent) to deliver such notices separately to it.”

 

(ii)           The new sub-clause (g) of Section 12.10of the Existing Credit Agreement is hereby amended in its entirety to read asfollows:

 

“(f)          The Borrowers authorize each Lender todisclose to any Participant, Assignee or SPV (each, a “Transferee”) andany prospective Transferee, subject to the provisions of Section 12.19,any and all financial information in such Lender’s possession concerning theLoan Parties and their Affiliates which has been delivered to such Lender by 

 

3

----

 

oron behalf of the Borrowers pursuant to this Agreement or which has beendelivered to such Lender by or on behalf of the Borrowers in connection withsuch Lender’s credit evaluation of the Borrowers and its Affiliates prior tobecoming a party to this Agreement.”

 

B.            Section 12.19.  Section 12.9 of the ExistingCredit Agreement is hereby amended and restated in its entirety to read asfollows:

 

“Section 12.19  Confidentiality.

 

EachLender agrees to keep confidential all non-public information provided to it bythe Borrowers pursuant to this Agreement that is designated by a Loan Party inwriting as confidential; provided that nothing herein shall prevent any Lenderfrom disclosing any such information(i) to the Administrative Agent or any other Lender, (ii) to anyTransferee which agrees to comply with the provisions of this Section 12.19,(iii) to its employees, directors, agents, attorneys, accountants andother professional advisors, (iv) upon the request or demand of anyexaminer or other Governmental Authority having jurisdiction over such Lender, (v) inresponse to any order of any court or other Governmental Authority or as mayotherwise be required pursuant to any Requirement of Law, or (vii) inconnection with the exercise of any remedy hereunder.”

 

Notwithstandinganything to the contrary herein, the confidentiality provisions contained inthis Section 12.19 shall not prohibit disclosures to any trustee,administrator, collateral manager, servicer, backup servicer, lender, ratingagency or secured party of any SPV or its Affiliates in connection with theevaluation, administration, servicing of, or the reporting on, the assets orsecuritization activities of such SPV or its Affiliates.”

 

ARTICLE IV

Conditions to Effectiveness

 

ThisAmendment, and the modifications to the Existing Credit Agreement provided forherein, shall become effective on the date (the “Second Amendment EffectiveDate”)on which all of the following conditions have been (or areconcurrently being) satisfied:

 

1.             This Amendment shall have been dulyexecuted and delivered by each party thereto.

 

2.             Each of the representations andwarranties made by the Borrowers and Guarantors in or pursuant to the LoanDocuments shall be true and correct in all material respects on and as of theSecond Amendment Effective Date as if made on and as of such date (except to 

 

4

----

 

theextent the same relate to another, earlier date, in which case they shall betrue and correct in all material respects as of such earlier date).

 

3.             No Default or Eventof Default shall have occurred and be continuing.

 

 

ARTICLE V

Miscellaneous

 

 

1.             Paymentof Expenses. Without limiting its obligations under Section 12.8of the Agreement, the Borrowers jointly and severally agree to pay or reimbursethe Administrative Agent for all of its reasonable costs and expenses incurredin connection with this Amendment, including, without limitation, thereasonable costs and expenses of counsel to the Administrative Agent andexpressly acknowledge that their obligations hereunder constitute “Obligations”within the meaning of the Existing Credit Agreement.

 

2.             No Other Amendments;Confirmation.  Except as expresslyamended, modified and supplemented hereby and by the documents related hereto,the provisions of the Existing Credit Agreement and the other Loan Documentsshall remain in full force and effect.

 

3.             Reaffirmation by Loan Parties.Each Loan Party hereby reaffirms its obligations under the Loan Documentsexecuted by such Loan Party.

 

4.             Governing Law; Counterparts.(a) This Amendment and the rights and obligations of the parties heretoshall be governed by, and construed and interpreted in accordance with, thelaws of the State of New York.

 

(b)           This Amendment may be executed by oneor more of the parties hereto on any number of separate counterparts, and allof said counterparts taken together shall be deemed to constitute one and thesame instrument. A set of the copies of this Amendment signed by all theparties shall be lodged with each of the Borrowers and the AdministrativeAgent, as the Administrative Agent. This Amendment may be delivered byfacsimile transmission of the relevant signature pages hereof.

 

***[Signature page follows]***

 

5

----

 

**[Signature page to Second Amendmentand Waiver to Steinway Inc. and Conn-Selmer Inc.’s Third Amended and RestatedCredit Agreement]**

 
|   | **CONN-SELMER,  INC.**,****Borrower          |
|--------|----------------------------------------------|
|   |                                         |   |   |
|   | By                                           | /s/  Dennis M. Hanson |
|   |                                         | Name: | Dennis  M. Hanson |
|   |                                         | Title: | E.V.P. |
|   |                                         |   |   |
|   |                                         |   |   |
|   | **STEINWAY,  INC.,** Borrower                |
|   |                                         |   |   |
|   | By                                           | /s/  Dennis M. Hanson |
|   |                                         | Name: | Dennis  M. Hanson |
|   |                                         | Title: | E.V.P. |
|   |                                         |   |   |
|   |                                         |   |   |
|   | **GMAC  COMMERCIAL CREDIT LLC,**             |
|   | as  Administrative Agent and Lender          |
|   |                                         |   |   |
|   | By                                           | /s/  Joseph Skaferowsky |
|   |                                         | Name: | Joseph  Skaferowsky |
|   |                                         | Title: | Director |
|   |                                         |   |   |   |
|   | **BANK OF AMERICA****, N.A.**,               |
|   | as  Lender                                   |
|   |                                         |   |   |   |
|   | By                                           | /s/  Christopher M. O’Halloran |
|   |                                         | Name: | Christopher  M. O’Halloran |
|   |                                         | Title: | Vice  President |
|   |                                         |   |   |   |
|   | **JPMORGAN CHASE BANK, N.A.,**               |
|   | as  Lender                                   |
|   |                                         |   |   |   |
|   | By                                           | /s/  Kim Nguyen |
|   |                                         | Name: | Kim  Nguyen |
|   |                                         | Title: | V.P. |
|   |                                         |   |   |   |
|   | **[Signatures  continue on following page]** |

 

6

----

 
|   | **[Signatures  continued from prior page]**       |
|--------|---------------------------------------------------|
|   |                                              |   |   |   |
|   | **TD  BANKNORTH, N.A.**,                          |
|   | as  Lender                                        |
|   |                                              |   |   |
|   | By                                                |   |
|   |                                              | Name: |   |
|   |                                              | Title: |   |
|   |                                              |   |   |
|   |                                              |   |   |
|   | **LASALLE  BUSINESS CREDIT, LLC**,  as Lender     |
|   |                                              |   |   |
|   | By                                                | /s/  Christopher M. O’Halloran |
|   |                                              | Name: | Christopher  M. O’Halloran |
|   |                                              | Title: | Authorized  Officer |
|   |                                              |   |   |
|   |                                              |   |   |
|   | **ISRAEL  DISCOUNT BANK OF NEW YORK**,  as Lender |
|   |                                              |   |   |
|   | By                                                |   |
|   |                                              | Name: |   |
|   |                                              | Title: |   |
|   |                                              |   |   |
|   | By                                                |   |
|   |                                              | Name: |   |
|   |                                              | Title: |   |

 

7

----

 

**SCHEDULE I**

 

**GUARANTORS**

 

 
| **STEINWAY MUSICAL INSTRUMENTS, INC.,** |                  |                          |   |
|-----------------------------------------|-----------------------|-------------------------------|--------|
| Guarantor                               |                  |                          |   |
|                                    |                  |                          |   |
| By:                                     | /s/  Dennis M. Hanson |                          |   |   |
|                                    | Name:                 | Dennis  M. Hanson             |   |   |   |
|                                    | Title:                | Sr.  E.V.P. & C.F.O. |   |   |   |
|                                    |                  |                          |   |   |   |
|                                    |                  |                          |   |   |   |
| **THE O.S. KELLY COMPANY,**             |                  |                          |   |
| Guarantor                               |                  |                          |   |
|                                    |                  |                          |   |   |   |
|                                    |                  |                          |   |   |   |
| By:                                     | /s/  Dennis M. Hanson |                          |   |   |
|                                    | Name:                 | Dennis  M. Hanson             |   |   |   |
|                                    | Title:                | E.V.P.                        |   |   |   |

 

8

----