# **Exhibit 4.6**

 

**EXECUTION COPY**

 

**FIFTHAMENDMENT TO SECOND AMENDED AND RESTATED CREDIT****AGREEMENT**

 

FIFTH AMENDMENT TO SECOND AMENDED ANDRESTATED 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, andthe surviving corporation of the merger of United Musical Instruments USA, Inc.with and into Conn-Selmer, Inc. (“Conn-Selmer”), (ii) STEINWAY, INC., aDelaware corporation (“Steinway” and together with Conn-Selmer, the “Borrowers”),(iii) those signatories hereto and identified on Schedule I (as may be amendedfrom 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 “AdministrativeAgent”), as administrative agent for the Lenders hereunder.

 

RECITALS

 

The Borrowers, Guarantors, the AdministrativeAgent and the Lenders have entered into the Existing Credit Agreement, pursuantto which the Lenders are providing to the Borrowers an $85,000,000 revolvingcredit facility, a $22,500,000 term loan facility and a $45,000,000 term loanfacility, each of which are secured by certain accounts receivable, realestate, and other collateral of Conn-Selmer, Steinway and UMI and guaranteed bythe Guarantors.  The parties desire toamend certain provisions of the Existing Credit Agreement as hereinafter providedto, among other things, reflect that The Selmer Company, Inc. has changed itsname to Conn-Selmer, Inc., and that United Musical Instruments USA, Inc. hasbeen merged with and into Conn-Selmer, Inc. with Conn-Selmer as the survivingcorporation.

 

In consideration of the foregoing and of themutual covenants and undertakings herein contained, the parties hereto herebyagree 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 tothis Amendment, the following definitions shall apply hereto:

 

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

 

“Existing Credit Agreement”: theSecond Amended and Restated Credit Agreement, dated as of September 14, 2000,among (i) Selmer, (ii) Steinway, (iii) UMI, (iv) the Guarantors, (v) theLenders and (vi) the Administrative Agents as amended or otherwise modifiedfrom time to time prior to the Fifth Amendment Effective Date.

 

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

 

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ARTICLE II

Representations

 

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

 

(a)           It has full power, authority and legal right to enter intothis Amendment and perform all of its respective obligations hereunder. Theexecution, delivery and performance hereof is within its powers and has beenduly authorized, is not in contravention of any Requirement of Law which mighthave a material adverse effect upon it, the Collateral, its operations,financial condition or prospects, or in contravention of the terms of itsby-laws, certificate of incorporation, declaration of trust or other documentsrelating to its formation, as applicable, or to the conduct of its business orof any material agreement or undertaking to which it is a party or by which itis bound, and will not conflict with or result in any breach of any of theprovisions of, or constitute a default under, or result in the creation of anyLien 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 aparty or by which it or its assets may be bound.

 

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

 

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

 

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

 

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

 

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

 

 

ARTICLE III

Amendments to Existing CreditAgreement

 

1.             The preamble of the Existing Credit Agreement is herebydeleted 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 SELMERCOMPANY, INC., a Delaware corporation, and the surviving corporation of themerger 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 signatorieshereto 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 tothis Agreement (the “Lenders”), and (v) GMAC

 

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COMMERCIAL CREDIT, LLC, a New York limitedliability company (“GMACCC”), as administrative agent for the Lendershereunder.

 

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

 

3.             Amendments to Section 1.

 

(a)           Section 1.1 of the Existing Credit Agreement is herebyamended 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 bydeletion of all language after the end of subsection (o) and replacing suchdeleted language with the following:

 

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

 

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

 

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

 

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

 

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

 

(c)                                  up to the sum of (A) in the case of Steinwaygrand pianos, the sum of (1) eighty-five percent (85%) of the Current WholesaleValue 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) seventypercent (70%) of the Current Wholesale Value of all Factory Returns; (B) in thecase of Steinway upright pianos, the sum of (1) sixty-five percent (65%) of theCurrent Wholesale Value of all finished and near-finished pianos, and (2) fiftypercent (50%) of the Current Wholesale Value of all Factory Returns; (C) in thecase 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 CostValue of all Factory Returns; and (D) in the case of Boston and Essex uprightpianos, the sum of (1) fifty percent (50%) of Standard Cost Value of allfinished pianos, and (2) forty percent (40%) of the Standard Cost Value of allFactory Returns;

 

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

 

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

 

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

 

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

 

4.             Release of Certain Guarantors.  Schedule 1 to the Existing Credit Agreementis hereby amended by deletion of Emerson Musical Instruments, Inc., UnitedMusical Instruments Holdings, Inc., and The O.S. Kelly Corporation asguarantors.

 

 

ARTICLE IV

Conditions to Effectiveness

 

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

 

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

 

2.             Each of the representations and warranties made by theBorrowers and Guarantors in or pursuant to the Loan Documents shall be true andcorrect in all material respects on and as of the Fifth Amendment EffectiveDate as if made on and as of such date (except to the extent the same relate toanother, earlier date, in which case they shall be true and correct in allmaterial respects as of such earlier date).

 

3.             No Default or Event of Default shall have occurred andbe continuing.

 

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

 

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ARTICLE V

Miscellaneous

 

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

 

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

 

3.             Payment of Expenses.Without limiting itsobligations under Section 12.8 of the Agreement, the Borrowers jointly andseverally agree to pay or reimburse the Administrative Agent for all of itsreasonable costs and expenses incurred in onnection with this Amendment,including, without limitation, the reasonable costs and expenses of counsel tothe Administrative Agent and expressly acknowledge that their obligationshereunder constitute “Obligations” within the meaning of the Existing CreditAgreement.

 

3.             No Other Amendments; Confirmation.  Except as expressly amended, modified andsupplemented hereby and by the documents related hereto, the provisions of theExisting Credit Agreement and the other Loan Documents shall remain in fullforce and effect.

 

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

 

6.             Governing Law; Counterparts. (a) This Amendmentand the rights and obligations of the parties hereto shall be governed by, andconstrued and interpreted in accordance with, the laws of the State of NewYork.

 

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

 

IN WITNESS WHEREOF, the parties hereto havecaused this Amendment to be duly executed and delivered as of the day and yearfirst 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 FourthAmendment to Second Amended and Restated Credit Agreement dated as of July 17,2002 among the Borrowers, the Guarantor specified on Schedule I thereto (whichshould have included the undersigned), the Lenders and the AdministrativeAgent.

 
|   | **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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