**Exhibit 4.9**

 

 

**GMAC COMMERCIAL FINANCE LLC - STEINWAY MUSICALINSTRUMENTS, INC.**

 

 

**EIGHTH AMENDMENT TO THE SECOND AMENDED ANDRESTATED CREDIT AGREEMENT**

 

 

**AUGUST 11, 2004**

 

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**EIGHTH AMENDMENT TO**

**SECOND AMENDED AND RESTATED CREDIT**

**AGREEMENT**

 

ThisEIGHTH AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated as of August 11,2004 (this “Amendment”), to the Existing Credit Agreement (ashereinafter defined), by and among (i) CONN-SELMER, INC., f/k/a THE SELMERCOMPANY, INC., a Delaware corporation, and the surviving corporation of themerger of United Musical Instruments USA, Inc. and United Musical InstrumentsHoldings, Inc. with and into Conn-Selmer, Inc. (“Conn-Selmer”), (ii)STEINWAY, INC., a Delaware corporation (“Steinway” and together withConn-Selmer, the “Borrowers”), (iii) those signatories hereto andidentified on Schedule I (as may be amended from time to time) asGuarantors (the “Guarantors”), (iv) the lenders (the “Lenders”)from time to time party to the Agreement (defined below) and (v) GMACCOMMERCIAL FINANCE LLC (successor by merger to GMAC Commercial Credit, LLC), aDelaware limited liability company, as administrative agent for the Lendershereunder (in such capacity, the “Administrative Agent”).

 

RECITALS

 

A.                                   TheBorrowers, the Guarantors, the Administrative Agent and the Lenders haveentered into the Existing Credit Agreement, pursuant to which the Lenders areproviding 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 ofwhich are secured by certain accounts receivable, real estate, and othercollateral of Conn-Selmer and Steinway and guaranteed by the Guarantors.

 

B.                                     SteinwayMusical Instruments, Inc., one of the Guarantors listed on Schedule Ireferred to above (“SMI”), has entered into an Asset Purchase Agreement,dated July 22, 2004 (the “Purchase Agreement”), with G. LeblancCorporation (“Leblanc”), pursuant to which SMI is purchasingsubstantially all of the assets (the “Purchased Assets”) of Leblanc (the“Transaction”).

 

C.                                     Inaccordance with the terms of the Existing Credit Agreement, the Borrowers andthe Guarantors have requested the consent of the Lenders to the Transaction(the “Consent”), and the Lenders are willing to provide such Consent, subjectto the terms and conditions of this Amendment.

 

D.                                    Inconnection with the Consent, the parties desire to amend certain provisions ofthe Existing Credit Agreement as hereinafter provided.

 

E.                                      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.

 

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ARTICLE I

Definitions

 

1.                                       Definitions.  (a)  Inaddition to the definitions set forth in the heading and the recitals to thisAmendment, 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 thisAmendment.

 

“ExistingCredit Agreement”: the Second Amended and Restated Credit Agreement, datedas of September 14, 2000, among (i) Selmer, (ii) Steinway, (iii) theGuarantors, (iv) the Lenders and (v) the Administrative Agents as amended orotherwise modified from time to time prior to the Eighth Amendment EffectiveDate.

 

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

 

ARTICLE II

Representations

 

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

 

(a)                                  Ithas full power, authority and legal right to enter into this Amendment andperform all of its respective obligations hereunder.  The execution, delivery and performancehereof is within its powers and has been duly authorized, is not incontravention of any Requirement of Law which might have a material adverseeffect upon it, the Collateral, its operations, financial condition orprospects, or in contravention of the terms of its by-laws, certificate ofincorporation, declaration of trust or other documents relating to itsformation, as applicable, or to the conduct of its business or of any materialagreement or undertaking to which it is a party or by which it is bound, andwill not conflict 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 itor its assets may be bound.

 

(b)                                 Itis duly organized and in good standing under the laws of its respective stateof organization and it is qualified to do business and is in good standing ineach jurisdiction where qualification and good standing are necessary for it toconduct its businesses and own its properties and where the failure to soqualify would have a Material Adverse Effect.

 

(c)                                  ThisAmendment has been duly executed and delivered on its behalf and this Amendmentconstitutes its legal, valid and binding obligation, enforceable against it inaccordance with its terms, except as enforceability may be limited byapplicable bankruptcy, insolvency, reorganization, moratorium or similar lawsaffecting the enforcement of creditors’ rights generally and by generalequitable principles (whether enforcement is sought by proceedings in equity orat law).

 

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

 

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

 

(f)                                    NoDefault or Event of Default has occurred and is continuing.

 

ARTICLE III

Consent and Acknowledgement

 

1.                                       TheLenders hereby consent to the Transaction as described in the PurchaseAgreement, provided, however, that this Consent is conditioned upon theconsummation of the Transaction substantially on the terms and conditions setforth in the Purchase Agreement, and any material change in such terms and conditionsshall require another consent by the Lenders, which the Lenders may give orwithhold in their sole discretion.

 

2.                                       TheBorrowers acknowledge and agree that the Purchased Assets shall be deemedIneligible Collateral until such time as a field examination of such PurchasedAssets is performed, and, thereafter, all or any portion of the PurchasedAssets may be deemed Eligible Collateral in accordance with the applicableprovisions of the Existing Credit Agreement.

 

ARTICLE IVAmendments to Existing Credit Agreement

 

1.                                       AdditionalNegative Covenants.  In addition tothe negative covenants set forth in the Existing Credit Agreement, theBorrowers and the Guarantors covenant and agree that, so long as the ExistingCredit Agreement remains in effect, no mortgages, liens or encumbrances of anynature whatsoever will be placed on any of the Purchased Assets consisting ofReal Property (as defined in the Purchase Agreement) without the consent of theLenders, which consent may be given or withheld in the Lenders’ solediscretion.

 

2.                                       AdditionalAffirmative Covenants and Acknowledgements. SMI has informed the Lenders that, simultaneously with or, immediatelyafter, the consummation of the Transaction, SMI will assign all of thePurchased Assets to a new company which will be incorporated under the name “Leblanc”or some variation thereof (“New Leblanc”).  In connection therewith, and in addition tothe Affirmative Covenants already set forth in the Existing Credit Agreement,the Borrowers and the Guarantors covenant and agree as follows:

 

A.                                   Immediatelyafter the formation of New Leblanc, the Borrowers and the Guarantors will causeNew Leblanc to execute and deliver to the Administrative Agent a Guarantysubstantially similar to the guaranties executed by the Guarantors, and willtake or cause to be taken any other actions necessary to cause New Leblanc tobecome a Guarantor under, and a party to, the Existing Credit Agreement.

 

B.                                     Immediatelyafter the formation of New Leblanc, the Borrowers and the Guarantors will causeNew Leblanc to execute and deliver to the Administrative Agent a SecurityAgreement, UCC Financing Statement, and any other documents or instrumentsrequested by the Administrative Agent in form and substance acceptable to theAdministrative Agent, to grant to the Administrative Agent, on behalf of theLenders, a

 

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firstpriority lien and security interest in all of New Leblanc’s assets, includingthe Purchased Assets.

 

C.                                     Immediatelyafter the formation of New Leblanc, the Borrowers and the Guarantors will causeNew Leblanc to execute and deliver to the Administrative Agent a CollateralAssignment of Proprietary Rights and Security Agreement, in form and substanceacceptable to the Administrative Agent, with respect to those ProprietaryRights listed on Schedule 4.11 of the Purchase Agreement as specified bythe Administrative Agent and will cause New Leblanc to execute and deliver suchother documents or instruments requested by the Administrative Agent to grantto the Administrative Agent, on behalf of the Lenders, a collateral assignmentof, and a first priority lien and security interest in, such ProprietaryRights.

 

D.                                    Atany time after the closing of the Transaction, upon the request of the AdministrativeAgent, the Borrowers and the Guarantors will cause New Leblanc to execute anddeliver to the Administrative Agent mortgages with respect to the RealProperty, as defined in the Purchase Agreement, in a form acceptable to theAdministrative Agent, and will execute and deliver to the Administrative Agentsuch other documents or instruments requested by the Administrative Agent togrant to the Administrative Agent, on behalf of the Lenders, a first prioritymortgage, lien and security interest in each parcel of such Real Property.

 

E.                                      Inthe event that the Purchased Assets are not assigned to New Leblanc ascontemplated above, immediately upon consummation of the Transaction, theBorrowers and the Guarantors will cause all of the above actions to be taken bythe record title holder of such Purchased Assets (whether such record titleholder is SMI or some other entity), so as to provide to the AdministrativeAgent, on behalf of the Lenders, first priority liens, mortgages and/orsecurity interests in all of such Purchased Assets.

 

3.                                       AdditionalEvents of Default.  In addition tothe Events of Default in the Existing Credit Agreement, failure of any Borroweror any Guarantor to comply with one or more of the negative or affirmativecovenants set forth in subsections 1 and 2 above shall be an Event of Defaultand shall entitle the Lenders and/or the Administrative Agent, on behalf of theLenders, to all rights and remedies provided under the Agreement and applicablelaw.

 

ARTICLE V

Conditions to Effectiveness

 

ThisEighth Amendment, and the modifications to the Existing Credit Agreementprovided for herein, shall become effective on the date (the “EighthAmendment Effective Date”) on which all of the following conditions havebeen (or are concurrently being) satisfied:

 

1.                                       ThisEighth Amendment shall have been duly executed and delivered by each partythereto.

 

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2.                                       Eachof the representations and warranties made by the Borrowers and Guarantors inor pursuant to the Loan Documents shall be true and correct in all materialrespects on and as of the Eighth Amendment Effective Date as if made on and asof such date (except to the extent the same relate to another, earlier date, inwhich case they shall be true and correct in all material respects as of suchearlier date).

 

3.                                       NoDefault or Event of Default shall have occurred and be continuing.

 

4.                                       Allcorporate and other proceedings, and all documents, instruments and other legalmatters in connection with the transactions contemplated by the Existing CreditAgreement and this Amendment shall be reasonably satisfactory in form andsubstance to the Administrative Agent, and the Administrative Agent shall havereceived such other documents in respect of any aspect or consequence of thetransactions contemplated hereby or thereby as it shall reasonably request.

 

ARTICLE VI

Miscellaneous

 

1.                                       AmendmentFee.  In consideration of the Lenders’consent to the Transaction and the Lenders’ agreement to the amendments to theExisting Credit Agreement set forth in this Eighth Amendment, the Borrowerswill pay to the Lenders a fee of $50,000, which fee will be split pro rataamong the Lenders in accordance with their percent participation in the creditfacilities provided pursuant to the Agreement.

 

2.                                       NoOther Amendments; Confirmation. Except as expressly amended, modified and supplemented hereby and by thedocuments related hereto, the provisions of the Existing Credit Agreement andthe other Loan Documents shall remain in full force and effect.

 

3.                                       Affirmationby Loan Parties.  Each Loan Partyhereby reaffirms its obligations under the Loan Documents executed by such LoanParty.

 

4.                                       GoverningLaw; Counterparts. (a) This Amendment and the rights and obligations of theparties hereto shall be governed by, and construed and interpreted inaccordance with, the laws of the State of New York.

 

(b)                                 ThisAmendment may be executed by one or more of the parties hereto on any number ofseparate counterparts, and all of said counterparts taken together shall bedeemed to constitute one and the same instrument.  A set of the copies of this Amendment signedby all the parties shall be lodged with each of the Borrowers and theAdministrative Agent, as the Administrative Agent for the Lenders.  This Amendment may be delivered by facsimiletransmission of the relevant signature pages hereof.

 

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INWITNESS WHEREOF, the parties hereto have caused this Amendment to be dulyexecuted 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** |
| ** ** | ** **                                                                                                       |
| ** ** | ** **                                                                                                       |
| ** ** | **GMAC  COMMERCIAL FINANCE LLC,  (successor by merger to GMAC Commercial  Credit LLC), as Administrative Agent** |
| ** ** | ** **                                                                                                       |
| ** ** | ** **                                                                                                       |
| ** ** | **By**                                                                                                           | **/s/ Harvey Winter** |
| ** ** | ** **                                                                                                       | **Title: Vice President** |
| ** ** | ** **                                                                                                       | ** ** |
| ** ** | ** **                                                                                                       | ** ** |
| ** ** | **GMAC  COMMERCIAL FINANCE LLC  (successor by merger to GMAC Commercial  Credit, LLC), as Lender**               |
| ** ** | ** **                                                                                                       |
| ** ** | ** **                                                                                                       |
| ** ** | **By**                                                                                                           | **/s/ Harvey Winter** |
| ** ** | ** **                                                                                                       | **Title: Vice President** |
| ** ** | ** **                                                                                                       | ** ** |
| ** ** | ** **                                                                                                       | ** ** |
| ** ** | **FLEET  CAPITAL CORPORATION,  as Lender**                                                                       |
| ** ** | ** **                                                                                                       |
| ** ** | **By**                                                                                                           | **/s/ Daniel P. Corcoran** |
| ** ** | ** **                                                                                                       | **Title: Senior Vice President** |
|            |                                                                                                                  |  |  |

 

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| ** ** | **THE  BANK OF NEW YORK,  as Lender**             |
|------------|---------------------------------------------------|
| ** ** | ** **                                        |
| ** ** | **By**                                            | **/s/  John M. Foley, Jr.** |
| ** ** | ** **                                        | Title: Vice  President |
| ** ** | ** **                                        |
| ** ** | ** **                                        |
| ** ** | **BANKNORTH,  N.A.,  as Lender**                  |
| ** ** | ** **                                        |
| ** ** | **By**                                            | **/s/ Mark M. Evitts** |
| ** ** | ** **                                        | Title: Senior  Vice President |
| ** ** | ** **                                        |
| ** ** | ** **                                        |
| ** ** | **LASALLE  BUSINESS CREDIT, LLC  as Lender**      |
| ** ** | ** **                                        |
| ** ** | **By**                                            | **/s/ Daniel K. Clancy** |
| ** ** | ** **                                        | Title: First  Vice President |
| ** ** | ** **                                        |
| ** ** | ** **                                        |
| ** ** | **ISRAEL  DISCOUNT BANK OF NEW YORK,  as Lender** |
| ** ** | ** **                                        |
| ** ** | **By**                                            | **/s/ Andy Ballta** |
| ** ** | ** **                                        | Title: Vice  President |
| ** ** | ** **                                        |
| ** ** | **ISRAEL  DISCOUNT BANK OF NEW YORK,  as Lender** |
| ** ** | ** **                                        |
| ** ** | **By**                                            | **/s/ Ronald Bongiovanni** |
| ** ** | ** **                                        | Title: Senior  Vice President |

 

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**SCHEDULE I**

 

 

GUARANTORS

 

 
| **Steinway  Musical Instruments, Inc.**, |                 |
|------------------------------------------|----------------------|
| Guarantor                                |                 |
|                                     |                 |
| By:                                      | /s/ Dennis M. Hanson |   |   |
| Title: Sr.  Executive V.P. and C.F.O.    |                 |
|                                     |                 |
| 800 South Street                         |                 |
| Suite 505                                |                 |
| Waltham, MA  02453                       |                 |
|                                     |                 |
|                                     |                 |
| **The  Steinway Piano Company, Inc.**,   |                 |
| Guarantor                                |                 |
|                                     |                 |
| By:                                      | /s/ Dennis M. Hanson |   |   |
| Title: Executive  V.P.                   |                 |
|                                     |                 |
| 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  V.P.                   |                 |
|                                     |                 |
| 455 Route 17  South                      |                 |
| Paramus, New  Jersey 07652               |                 |

 

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| **Boston  Piano Company, Inc.**, |                 |
|----------------------------------|----------------------|
| Guarantor                        |                 |
|                             |                 |
| By:                              | /s/ Dennis M. Hanson |   |   |
| Title: Executive  V.P.           |                 |
|                             |                 |
| 37-11 19th  Avenue               |                 |
| Long Island  City, NY 11105      |                 |
|                             |                 |
| **The  O.S. Kelly Company**,     |                 |
| Guarantor                        |                 |
|                             |                 |
| By:                              | /s/ Dennis M. Hanson |   |   |
| Title: Executive  V.P.           |                 |
|                             |                 |
| P.O. Box 1267                    |                 |
| 318 E. North  Spring Street      |                 |
| Springfield, OH  45503           |                 |

 

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