Amendment to Third Amended and Restated Credit Agreement among Conn-Selmer, Inc., Steinway, Inc., Lenders, and GMAC Commercial Finance LLC
This amendment to the Credit Agreement involves Conn-Selmer, Inc. and Steinway, Inc. as borrowers, several lenders, and GMAC Commercial Finance LLC as administrative agent. The amendment increases the limit on stock repurchases and dividends by $10 million, allowing the borrowers to repurchase more stock than previously permitted, provided certain financial conditions are met. All other terms of the original agreement remain in effect, and the parties reaffirm their obligations under the amended agreement.
Exhibit 10.18
December 12, 2007
Mr. Dennis Hanson
Senior Executive Vice President
Steinway Musical Instruments, Inc.
800 South Street, Suite 305
Waltham, MA 02453-1439
Re: Loan and Security Documents (collectively, the “Loan Documents”) among Conn-Selmer, Inc. (“Conn-Selmer”), Steinway, Inc. (“Steinway” and together with Conn-Selmer, the “Borrowers”), the guarantors party thereto (“Guarantors”), the lenders party thereto (“Lenders”) and GMAC Commercial Finance LLC, as administrative agent (the “Administrative Agent”).
Dear Mr. Hanson:
This letter will constitute an amendment to the Third Amended and Restated Credit Agreement, dated as of September 29, 2006 (as the same may be amended, restated or modified from time to time, the “Credit Agreement”), among the Borrowers, the Guarantors, the Lenders and Administrative Agent. Unless defined in this letter, capitalized terms shall have the meanings set forth in the Credit Agreement and references to Sections are to Sections of the Credit Agreement.
Borrowers have advised Lenders that they desire to repurchase stock in excess of the amount currently allowed under the Credit Agreement and have requested that the Lenders amend the Credit Agreement to increase the dividend and stock repurchase basket by $10 million in order to allow such action. Accordingly, Section 9.9(c) of the Credit Agreement is amended and restated in its entirety to read as follows:
“(c) Redeem, repurchase, retire or otherwise acquire or distribute dividends in respect of the stock of any Loan Party in an aggregate amount not to exceed (A) $35,000,000 plus (B) fifty percent (50%) of the cumulative consolidated SMI net income earned after January 1, 2006 through the Termination Date (the “Allowed Investment Amount”); provided that, immediately after giving effect to any such transaction, Excess Availability shall not be less than $25,000,000.”
Each Borrower (a) reaffirms, ratifies and confirms its obligations under the Loan Documents as amended hereby and acknowledges that all of the terms and conditions in the Loan Documents remain in full force and effect, and (b) acknowledges that no further approvals or authorizations are needed to execute this letter amendment.
By execution of this letter amendment by the Required Lenders, Borrowers and Guarantors in the spaces provided below, the Credit Agreement is amended as provided above.
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This letter amendment, may be executed in any number of counterparts, (including by facsimile transmission of signature pages hereto) and all of said counterparts taken together shall be deemed to constitute one and the same letter.
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| Sincerely, | |||
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| GMAC COMMERCIAL FINANCE LLC, | |||
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| as Administrative Agent and Lender | |||
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| By | /s/ Joseph Skaferowsky | ||
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| Name: | Joseph Skaferowsky | |
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| Title: | Director | |
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| BANK OF AMERICA, N.A., | |||
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| as Lender | |||
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| By | /s/ Christopher M. O’Halloran | ||
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| Name: | Christopher M. O’Halloran | |
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| Title: | Vice President | |
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| JPMORGAN CHASE BANK, N.A., | |||
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| as Lender | |||
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| By | /s/ Kim Nguyen | ||
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| Name: | Kim Nguyen | |
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| Title: | Vice President | |
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| TD BANKNORTH, N.A., | |||
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| as Lender | |||
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| By | /s/ Matthew Leighton | ||
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| Name: | Matthew Leighton | |
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| Title: | Vice President | |
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| LASALLE BUSINESS CREDIT, LLC, | |||
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| as Lender | |||
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| By | /s/ Christopher M. O’Halloran | ||
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| Name: | Christopher M. O’Halloran | |
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| Title: | Authorized Officer | |
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| ISRAEL DISCOUNT BANK OF NEW YORK, | ||||
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| as Lender | ||||
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| By | /s/ James M. Morton | |||
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| Name: | James M. Morton | ||
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| Title: | First Vice President | ||
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| By | /s/ Ronald Bongiovanni | |||
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| Name: | Ronald Bongiovanni | ||
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| Title: | Senior Vice President I | ||
| Agreed to and accepted by: |
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| CONN-SELMER, INC., as Borrower |
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| By: | /s/ Dennis M. Hanson |
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| Name: | Dennis M. Hanson |
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| Title: | Executive Vice President |
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| STEINWAY, INC., as Borrower |
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| By: | /s/ Dennis M. Hanson |
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| Name: | Dennis M. Hanson |
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| Title: | Executive Vice President |
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| Consented to by: |
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| STEINWAY MUSICAL INSTRUMENTS, INC., |
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| as Guarantor |
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| By: | /s/ Dennis M. Hanson |
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| Name: | Dennis M. Hanson |
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| Title: | Senior Executive V.P. and CFO |
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| THE O.S. KELLY COMPANY, as Guarantor |
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| By: | /s/ Dennis M. Hanson |
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| Name: | Dennis M. Hanson |
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| Title: | Executive Vice President |
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