Exhibit 4.6


 


EXECUTION COPY


 


FIFTH
AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT
AGREEMENT


 


FIFTH AMENDMENT TO SECOND AMENDED AND
RESTATED CREDIT AGREEMENT, dated as of January 14, 2003 (this “Amendment”),
to the Existing Credit Agreement (as hereinafter defined), by and among (i)
CONN-SELMER, INC., f/k/a THE SELMER COMPANY, INC., a Delaware corporation, and
the surviving corporation of the merger of United Musical Instruments USA, Inc.
with and into Conn-Selmer, Inc. (“Conn-Selmer”), (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 CREDIT LLC, a New York limited liability company (the “Administrative
Agent”), as administrative agent for the Lenders hereunder.


 


RECITALS


 


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 $85,000,000 revolving
credit facility, a $22,500,000 term loan facility and a $45,000,000 term loan
facility, each of which are secured by certain accounts receivable, real
estate, and other collateral of Conn-Selmer, Steinway and UMI and guaranteed by
the Guarantors.  The parties desire to
amend certain provisions of the Existing Credit Agreement as hereinafter provided
to, among other things, reflect that The Selmer Company, Inc. has changed its
name to Conn-Selmer, Inc., and that United Musical Instruments USA, Inc. has
been merged with and into Conn-Selmer, Inc. with Conn-Selmer as the surviving
corporation.


 


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
Second Amended and Restated Credit Agreement, dated as of September 14, 2000,
among (i) Selmer, (ii) Steinway, (iii) UMI, (iv) the Guarantors, (v) the
Lenders and (vi) the Administrative Agents as amended or otherwise modified
from time to time prior to the Fifth 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.


 


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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.


 


 


ARTICLE III


Amendments to Existing Credit
Agreement


 


1.             The preamble of the Existing Credit Agreement is hereby
deleted in its entirety and replaced with the following:


 


SECOND AMENDED AND RESTATED CREDIT AGREEMENT,
dated as of September 14, 2000, among (i) CONN-SELMER, INC., f/k/a THE SELMER
COMPANY, INC., a Delaware corporation, and the surviving corporation of the
merger of United Musical Instruments USA, Inc. with and into Conn-Selmer, Inc.
(“Conn-Selmer”), (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 from time to time parties to
this Agreement (the “Lenders”), and (v) GMAC


 


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COMMERCIAL CREDIT, LLC, a New York limited
liability company (“GMACCC”), as administrative agent for the Lenders
hereunder.


 


2.             All references to “The Selmer Company, Inc.,” “Selmer,”
“United Musical Instruments USA, Inc.,” or “UMI” in the Existing Credit
Agreement and in any and all documents executed in connection therewith,
including, without limitation, all of the Notes, shall be deemed to be
references to “Conn-Selmer, Inc.”


 


3.             Amendments to Section 1.


 


(a)           Section 1.1 of the Existing Credit Agreement is hereby
amended by addition of the following definitions in alphabetical order.


 


(i)            “Dealer Notes”: 
notes made by Conn-Selmer dealers in favor of Conn-Selmer.


 


(b)           The definition of “Eligible Accounts” is hereby amended by
deletion of all language after the end of subsection (o) and replacing such
deleted language with the following:


 


“notwithstanding the foregoing, Eligible
Accounts may include in addition to any account of any Borrower constituting an
Eligible Account hereunder, Dealer Notes otherwise qualifying as Eligible
Accounts hereunder having an aggregate outstanding principal amount at any time
of up to $20,000,000 that mature up to two years from the execution thereof.”


 


(c)           The definition of “Revolver Borrowing Base” is hereby
deleted in its entirety and replaced with the following:


 


“Revolver Borrowing Base”:  at any time, an amount equal to the lesser
of (I) Aggregate Maximum Revolving Credit Commitment Amount and (II) the sum
of:


 


(a)                                  up to eighty percent (80%) of the then Eligible
Accounts of Selmer, Boston Piano Co. and Steinway, other than Accounts
constituting Dealer Notes;


 


(b)                                 up to 50% of the then Eligible Accounts of
Conn-Selmer, constituting Dealer Notes;


 


(c)                                  up to the sum of (A) in the case of Steinway
grand pianos, the sum of (1) eighty-five percent (85%) of the Current Wholesale
Value of all finished and near-finished pianos, (2) seventy-five percent (75%)
of the Current Wholesale Value of Concert and Artist Bank Pianos, and (3) seventy
percent (70%) of the Current Wholesale Value of all Factory Returns; (B) in the
case of Steinway upright pianos, the sum of (1) sixty-five percent (65%) of the
Current Wholesale Value of all finished and near-finished pianos, and (2) fifty
percent (50%) of the Current Wholesale Value of all Factory Returns; (C) in the
case of Boston and Essex grand pianos, the sum of (1) sixty-five percent (65%)
of the Standard Cost Value of all finished pianos, and (2) fifty percent


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(50%) of the Standard Cost
Value of all Factory Returns; and (D) in the case of Boston and Essex upright
pianos, the sum of (1) fifty percent (50%) of Standard Cost Value of all
finished pianos, and (2) forty percent (40%) of the Standard Cost Value of all
Factory Returns;


 


(d)                                 up to fifty percent (50%) of the cost of the
Eligible Inventory of Steinway constituting raw materials;


 


(e)                                  up to sixty-five percent (65%) of the cost of
Eligible Inventory of Conn-Selmer constituting finished goods;


 


(f)                                    up to twenty-five percent (25%) of the cost of
Eligible Inventory of Conn-Selmer constituting raw materials; and


 


(g)                                 up to the lesser of $7,500,000 and twenty-five
percent (25%) of the cost of Eligible Inventory of Conn-Selmer constituting
work-in-process.


 


4.             Release of Certain Guarantors.  Schedule 1 to the Existing Credit Agreement
is hereby amended by deletion of Emerson Musical Instruments, Inc., United
Musical Instruments Holdings, Inc., and The O.S. Kelly Corporation as
guarantors.


 


 


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 “Fifth 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 Fifth Amendment Effective
Date as if made on and as of such date (except to 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.


 


4.             All corporate and other proceedings, and all documents,
instruments and other legal matters in connection with the transactions
contemplated by the Existing Credit Agreement and this Amendment shall be
reasonably satisfactory in form and substance to the Administrative Agent, and
the Administrative Agent shall have received such other documents in respect of
any aspect or consequence of the transactions contemplated hereby or thereby as
it shall reasonably request.


 


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ARTICLE V


Miscellaneous


 


1.             Amendment Fee. 
In consideration of the Lenders’ agreement to the amendments to the
Existing Credit Agreement set forth in this Fifth Amendment, Borrowers shall
pay to the Lenders a fee of $50,000, which fee will be split pro rata among the
Lenders in accordance with their percent participation in this credit.


 


2.             Consent to Dissolution of Certain Entities.  Based on the representations of the
Borrowers that Emerson Musical Instruments, Inc. UMI Musical Instruments
Holdings, Inc., and O.S. Kelly Corporation are inactive and have no assets, the
Lenders hereby consent to the dissolution of such corporations and to their
removal as Guarantors.


 


3.             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 onnection 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.


 


3.             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.


 


5.             Affirmation by Loan Parties.  Each Loan
Party hereby reaffirms its obligations under the Loan Documents executed by
such Loan Party.


 


6.             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.


 


IN WITNESS WHEREOF, the parties hereto have
caused this Amendment to be duly executed and delivered as of the day and year
first above written.


 


	
   

  	
  CONN-SELMER, INC.,

  
	
   

  	
  Borrower

  
	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ Dennis M. Hanson

  	
   

  
	
   

  	
  Title:  Executive Vice President

  
	
   

  	
   

  
	
   

  	
  STEINWAY, INC.,

  
	
   

  	
  Borrower

  
	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ Dennis M. Hanson

  	
   

  
	
   

  	
  Title:  Executive Vice President

  
						



 


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  GMAC COMMERCIAL CREDIT LLC,

  	
   

  
	
   

  	
  as Administrative Agent

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ Daniel Manella

  	
   

  
	
   

  	
  Title:  Senior Vice President

  
	
   

  	
   

  
	
   

  	
  GMAC COMMERCIAL CREDIT LLC,

  	
   

  
	
   

  	
  as Lender

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ Daniel Manella

  	
   

  
	
   

  	
  Title:  Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  FLEET CAPITAL CORPORATION,

  	
   

  
	
   

  	
  as Lender

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ Daniel P. Corcoran

  	
   

  
	
   

  	
  Title:  Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  GUARANTEE BUSINESS CREDIT

  	
   

  
	
   

  	
  CORPORATION

  	
   

  
	
   

  	
  as Lender

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   /s/
  James E. Casper

  	
   

  
	
   

  	
  Title:  Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  BANK OF NEW YORK,

  	
   

  
	
   

  	
  as Lender

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ John M. Foley, Jr.

  	
   

  
	
   

  	
  Title: Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
  BANKNORTH, N.A.,

  	
   

  
	
   

  	
  as Lender

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ Mark Evitts

  	
   

  
	
   

  	
  Title: Vice
  President

  
								



 


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SCHEDULE I


 


GUARANTORS


 


	
  Steinway Musical Instruments, Inc.,

  
	
  Guarantor

  
	
   

  
	
  By:

  	
  /s/ Dennis M. Hanson

  	
   

  
	
  Title: Senior Executive Vice President

  
	
   

  
	
  800 South Street

  
	
  Suite 425

  
	
  Waltham, MA 02453

  
	
   

  
	
  The Steinway Piano Company, Inc.,

  
	
  Guarantor

  
	
   

  
	
  By:

  	
  /s/ Dennis M. Hanson

  	
   

  
	
  Title: Executive Vice President

  
	
   

  
	
  600 Industrial Parkway

  
	
  Elkhart, IN 46516

  
	
   

  
	
  The SMI Trust,

  
	
  Guarantor

  
	
   

  
	
  By:

  	
  /s/ Dennis M. Hanson

  	
   

  
	
  Title: Trustee

  
	
   

  
	
  800 South Street

  
	
  Suite 425

  
	
  Waltham, MA 02453

  
	
   

  
	
  S&B Retail, Inc.,

  
	
  Guarantor

  
	
   

  
	
  By:

  	
  /s/ Dennis M. Hanson

  	
   

  
	
  Title: Executive Vice President

  
	
   

  
	
  455 Route 17 South

  
	
  Paramus, New Jersey 07652

  



 


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  Boston Piano Company, Inc.,

  
	
  Guarantor

  
	
   

  
	
  By:

  	
  /s/ Dennis M. Hanson

  	
   

  
	
  Title: Executive Vice President

  
	
   

  
	
  37-11 19th Avenue

  
	
  Long Island City, NY 11105

  
	
   

  
	
  The O.S. Kelly Company,

  
	
  Guarantor

  
	
   

  
	
  By:

  	
  /s/ Dennis M. Hanson

  	
   

  
	
  Title: Executive Vice President

  
	
   

  
	
  P.O. Box 1267

  
	
  318 E. North Spring Street

  
	
  Springfield, OH 45503

  
				



 


The undersigned hereby further consents to that certain Fourth
Amendment to Second Amended and Restated Credit Agreement dated as of July 17,
2002 among the Borrowers, the Guarantor specified on Schedule I thereto (which
should have included the undersigned), the Lenders and the Administrative
Agent.


 


	
   

  	
  The O.S. Kelly
  Company,

  
	
   

  	
  Guarantor

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Dennis M. Hanson

  	
   

  
	
   

  	
  Title: Executive Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  P.O. Box 1267

  318 E. North Spring Street 

  Springfield, OH 45503

  
					



 


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