EXHIBIT 10.1


 


Execution Copy


 


SECOND AMENDMENT AND WAIVER TO


THIRD AMENDED AND RESTATED CREDIT
AGREEMENT


 


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


 


RECITALS


 


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


 


B.          Borrowers have
informed 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 “Clickpoint
Acquisition”) and have requested that the Lenders waive compliance with Section 8.15
of the Existing Credit Agreement as the newly acquired entity will ultimately
be merged into one of the Borrowers.


 


C.          This Amendment
memorializes certain waivers and amendments agreed to by the Borrowers and the
Lenders.


 


In
consideration of the foregoing and of the mutual covenants and undertakings
herein contained, the parties hereto hereby agree that the Existing Credit
Agreement is amended as hereinafter provided.


 


 


ARTICLE I


Definitions


 


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


 


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


 

















 


“Existing
Credit Agreement”: the Third Amended and Restated Credit Agreement, dated
as of September 29, 2006, among (i) Conn-Selmer, (ii) Steinway, (iii) the
Guarantors, (iv) the Lenders and (v) the Administrative Agents, as
amended or otherwise modified from time to time prior to the Second Amendment
Effective Date.


 


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


 


ARTICLE II


Representations


 


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


 


(a)           It has full power, authority and
legal right to enter into this Amendment and perform all of its respective
obligations hereunder. The execution, delivery and performance hereof is within
its powers and has been duly authorized, is not in contravention of any
Requirement of Law which might have a material adverse effect upon it, the
Collateral, its operations, financial condition or prospects, or in
contravention of the terms of its by-laws, certificate of incorporation,
declaration of trust or other documents relating to its formation, as
applicable, or to the conduct of its business or of any material agreement or
undertaking to which it is a party or by which it is bound, and will not
conflict with or result in any breach of any of the provisions of, or
constitute a default under, or result in the creation of any Lien upon any of
its 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 or
its assets may be bound.


 


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


 


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


 


(d)           The
conditions contained in Article IV hereof have been satisfied.


 


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


 


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


 


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ARTICLE III


Amendments to Existing Credit Agreement


 


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


 


2.
            Amendments.


 


A.              Section 12.10


 


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


 


“(d)         Any Lender may assign to one or more
special purpose funding vehicles that is an Affiliate of such Lender (each, an “SPV”)
all or any portion of its funded Revolving Credit Loans (without the
corresponding obligation to make additional Revolving Credit Loans to the
Borrowers as provided under this Agreement), without the consent of any
Borrower or any other person or the payment of a fee, by execution of a written
assignment agreement in a form agreed to by a Lender and such SPV, and may
grant any such SPV the option, in such SPV’s sole discretion, to provide the
Borrowers all or any part of any Revolving Credit Loans that Lender would
otherwise be obligated to make pursuant to this Agreement.  Such SPVs shall have all the rights which a
Lender making or holding such Revolving Credit Loans would have under this
Agreement, but no obligations.  Lenders
shall remain liable for all of their respective original obligations under this
Agreement, provided, however, that the unused portion of such Lender’s
Revolving Credit Loans shall be reduced by the principal amount of any Loans
held by an SPV.  Notwithstanding such
assignment, Borrowers may deliver notices to Lender (as agent for the SPV) and
not 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 12.10
of the Existing Credit Agreement is hereby amended in its entirety to read as
follows:


 


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


 


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or
on behalf of the Borrowers pursuant to this Agreement or which has been
delivered to such Lender by or on behalf of the Borrowers in connection with
such Lender’s credit evaluation of the Borrowers and its Affiliates prior to
becoming a party to this Agreement.”


 


B.            Section 12.19.  Section 12.9 of the Existing
Credit Agreement is hereby amended and restated in its entirety to read as
follows:


 


“Section 12.19  Confidentiality.


 


Each
Lender agrees to keep confidential all non-public information provided to it by
the Borrowers pursuant to this Agreement that is designated by a Loan Party in
writing as confidential; provided that nothing herein shall prevent any Lender
from disclosing any such information
(i) to the Administrative Agent or any other Lender, (ii) to any
Transferee which agrees to comply with the provisions of this Section 12.19,
(iii) to its employees, directors, agents, attorneys, accountants and
other professional advisors, (iv) upon the request or demand of any
examiner or other Governmental Authority having jurisdiction over such Lender, (v) in
response to any order of any court or other Governmental Authority or as may
otherwise be required pursuant to any Requirement of Law, or (vii) in
connection with the exercise of any remedy hereunder.”


 


Notwithstanding
anything to the contrary herein, the confidentiality provisions contained in
this Section 12.19 shall not prohibit disclosures to any trustee,
administrator, collateral manager, servicer, backup servicer, lender, rating
agency or secured party of any SPV or its Affiliates in connection with the
evaluation, administration, servicing of, or the reporting on, the assets or
securitization activities of such SPV or its Affiliates.”


 


ARTICLE IV


Conditions to Effectiveness


 


This
Amendment, and the modifications to the Existing Credit Agreement provided for
herein, shall become effective on the date (the “Second Amendment Effective
Date”)  on which all of the following conditions have been (or are
concurrently being) satisfied:


 


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


 


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


 


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


 


3.             No Default or Event
of Default shall have occurred and be continuing.


 


 


ARTICLE V


Miscellaneous


 


 


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


 


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


 


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


 


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


 


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


 


[Signature page follows]


 


5

















 


[Signature page to Second Amendment
and Waiver to Steinway Inc. and Conn-Selmer Inc.’s Third Amended and Restated
Credit 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