Exhibit 10.78(a)
EXECUTION VERSION
AMENDMENT NO. 1 TO AMENDED AND RESTATED CREDIT AGREEMENT
This Amendment No. 1 to Amended and Restated Credit Agreement dated as of
October 28, 2011 (this “Amendment”), is by and among SMITH & WESSON HOLDING
CORPORATION, a Nevada corporation, SMITH & WESSON CORP., a Delaware corporation,
THOMPSON/CENTER ARMS COMPANY, INC., a New Hampshire corporation, THOMPSON CENTER
HOLDING CORPORATION, a Delaware corporation, SMITH & WESSON SECURITY SOLUTIONS,
INC., a Delaware corporation, FOX RIDGE OUTFITTERS, INC., a New Hampshire
corporation, K.W. THOMPSON TOOL COMPANY, INC., a New Hampshire corporation, O.L.
DEVELOPMENT, INC., a New Hampshire corporation, BEAR LAKE HOLDINGS, INC., a
Delaware corporation, and SMITH & WESSON DISTRIBUTING, INC., a Delaware
corporation (collectively, the “Borrowers”, and each a “Borrower”), TD BANK
N.A., a national banking association, in its capacity as administrative agent
(in said capacity, the “Administrative Agent”) for the lenders from time to time
party to the Credit Agreement referenced below (collectively, the “Lenders”).
R E C I T A L S:
WHEREAS, the Borrowers, the Administrative Agent and the Lenders have entered
into that certain Amended and Restated Credit Agreement dated as of December 7,
2010 (as amended, restated, supplemented or modified from time to time, the
“Credit Agreement”); and
WHEREAS, the Borrowers have requested that the Administrative Agent and the
Lenders enter into this Amendment to, among other things, revise the definition
of the Capital Expenditures to exclude certain restructuring related expenses
therefrom and to provide the Borrowers with the ability to reduce the Revolving
Commitment from time to time, all as more particularly set forth herein, and the
Administrative Agent and the Required Lenders have agreed to do so, subject to
the terms and conditions set forth herein;
NOW THEREFORE, for good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereto hereby agree as follows:
1. Recitals. The foregoing recitals are hereby incorporated by reference herein.
2. Definitions. Terms defined in the Credit Agreement and not otherwise defined
herein shall have the meanings given to such terms in the Credit Agreement.
3. Amendments to Credit Agreement. The parties hereto hereby agree that,
effective on the Amendment Effective Date, the Credit Agreement is hereby
amended as follows:
3.1. Amendment to Definition of “Capital Expenditures”. The definition of
“Capital Expenditures” set forth in Section 1.01 of the Credit Agreement is
hereby deleted in its entirety and the following is substituted therefor:
““Capital Expenditures” of any Person means, without duplication, any
expenditure or commitment to expend money for any purchase or other acquisition
of any asset which would be classified as a fixed or capital asset on a balance
sheet of such Person prepared in accordance with GAAP; provided however, solely
for purposes of calculating the Consolidated Fixed Charge Coverage Ratio for the
Test Periods ending on October 31, 2011, January 31, 2012, April 30, 2012 and
July 31, 2012 respectively, Capital Expenditures shall not include any
expenditures resulting from the Borrowers’ consolidation of their Rochester, New
Hampshire operations into their Springfield, Massachusetts facility in an amount
not to exceed $4,254,000 in aggregate.”

 

 

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3.2. Amendment to Section 2.10. Section 2.10 of the Credit Agreement is hereby
amended by deleting clauses (c) and (d) thereof in their entirety and
substituting the following new clauses (c) and (d) therefor:
“SECTION 2.10. Termination and Reduction of Commitments.
(c) The Borrower Representative may from time to time reduce the Revolving
Commitment, provided that (x) each reduction of the Revolving Commitment shall
be in an amount of $10,000,000 or any whole multiple of $1,000,000 in excess
thereof, and (y) the Borrower Representative shall not reduce the Revolving
Commitment if, after giving effect to any concurrent prepayment of the Revolving
Loans hereunder, the Revolving Exposure would exceed the Revolving Commitment.
(d) The Borrower Representative shall notify the Administrative Agent of any
election to terminate or reduce the Revolving Commitment under paragraph (b) or
(c) of this Section at least five (5) Business Days prior to the effective date
of such termination or reduction, specifying such election and the effective
date thereof. Each notice delivered by the Borrower Representative pursuant to
this Section shall be irrevocable; provided that a notice of termination of the
Revolving Commitments delivered by the Borrower Representative may state that
such notice is conditioned upon the effectiveness of other credit facilities, in
which case such notice may be revoked by the Borrower Representative (by notice
to the Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Any termination or reduction of the Revolving
Commitment shall be permanent.”
4. Representations and Warranties. The Borrowers, by their execution hereof,
jointly and severally represent and warrant as follows:
4.1. Legal Existence; Organization. Each Borrower is duly organized and validly
existing and in good standing under the laws of the jurisdiction of its
organization and under the laws of each other jurisdiction in which it is
qualified to do business, with all power and authority (corporate or otherwise)
necessary (a) to enter into this Amendment and the documents executed in
connection herewith and to perform all of its obligations hereunder and
thereunder, and (b) to own its properties and carry on the business now
conducted or proposed to be conducted by it.
4.2. Enforceability. Each Borrower has taken all action (corporate or otherwise)
required to make the provisions of this Amendment and the documents executed in
connection herewith valid and enforceable obligations of such Borrower, as they
purport to be. Each Borrower has duly authorized, executed and delivered this
Amendment and the documents executed in connection herewith. This Amendment and
each document executed in connection herewith is the legal, valid and binding
obligations of such Borrower and each is enforceable against such Borrower in
accordance with its terms.
4.3. No Legal Obstacle to Agreements. Neither the execution, delivery or
performance by any Borrower of this Amendment or any document executed in
connection herewith nor the execution, delivery or performance by any Borrower,
nor the consummation of any other transaction referred to or contemplated by
this Amendment, any document executed in connection herewith, nor the
fulfillment of the terms hereof or thereof, has constituted or resulted in or
will constitute or result in:
4.3.1 any breach or termination of any agreement, instrument, deed or lease to
which such Borrower is a party or by which such Borrower is bound, or of the
charter, by-laws or other organizational documents, as applicable, of such
Borrower;

 

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4.3.2 the violation of any law, judgment, decree or governmental order, rule or
regulation applicable to such Borrower;
4.3.3 the creation under any agreement, instrument, deed or lease of any Lien
(other than Liens on the Collateral which secure the Obligations) upon any of
the assets of such Borrower; or
4.3.4 any redemption, retirement or other repurchase obligation of such Borrower
under any charter, by-law, organizational document, agreement, instrument, deed
or lease to which such Borrower is a party.
Except such as have been obtained and are in full force and effect, no approval,
authorization or other action by, or declaration to or filing with, any
governmental or administrative authority or any other Person is required to be
obtained or made by any Borrower in connection with the execution, delivery and
performance by such Borrower of this Amendment or any document executed in
connection herewith or the consummation of the transactions contemplated hereby
or thereby or the execution, delivery and performance by such Borrower.
4.4. Defaults. No Default exists or, immediately after giving effect to this
Amendment, will exist.
4.5. Incorporation of Representations and Warranties. The representations and
warranties set forth in Article V of the Credit Agreement and in the other Loan
Documents are each true and correct in all material respects on the date hereof
as if originally made on and as of the date hereof, except to the extent that
such representations and warranties expressly relate to an earlier date, in
which case, such representations and warranties shall be true and correct as of
such earlier date, provided that all representations and warranties set forth in
Article V with respect to the Schedules shall be true and correct as of the date
hereof with reference to the updated Schedules delivered herewith.
5. Conditions. This Amendment shall become effective upon the date when each of
the following conditions precedent have been satisfied (the “Amendment Effective
Date”):
5.1. Consummation of this Amendment. The Administrative Agent shall have
received this Amendment fully executed by the parties hereto.
5.2. Fees and Expenses. The Borrowers shall have paid or provided for payment of
all fees and expenses of the Administrative Agent (including the reasonable fees
and expenses of its legal counsel) in connection with this Amendment and the
documents executed in connection herewith and the transactions contemplated
herein.
6. Further Assurances. Each Borrower will, promptly upon the request of the
Administrative Agent from time to time, execute, acknowledge, deliver, file and
record all such instruments and notices, and take all such other action, as the
Administrative Agent deems necessary or advisable to carry out the intent and
purposes of this Amendment (and the attached acknowledgements and consents) and
the documents executed in connection therewith.

 

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7. No Defenses; Release. Each Borrower warrants and represents to the
Administrative Agent and the Lenders that, as of the Amendment Effective Date,
such Borrower has no claims, counterclaims, offsets or defenses to the Loan
Documents or the Obligations, or if any such Person does have any claims,
counterclaims, offsets or defenses to the Loan Documents or the Obligations as
of the Amendment Effective Date, the same are hereby waived, relinquished and
released in consideration of the execution and delivery of this Amendment by the
Administrative Agent and the Lenders party hereto.
8. General. Except as specifically amended hereby, all of the terms and
provisions of the Credit Agreement and each of the other Loan Documents
(including without limitation any Collateral Documents) and all related
documents, shall remain in full force and effect and are hereby ratified and
confirmed. This Amendment may be executed in any number of counterparts, which
together shall constitute one instrument, and shall bind and inure to the
benefit of the parties thereto and their respective successors and assigns,
including as such successors and assigns, all holders of any Obligation.
Delivery of an executed counterpart of a signature page of this Amendment by
telecopy or in PDF format by electronic mail shall be effective as delivery of a
manually executed counterpart of this Amendment. This Amendment shall be
governed by and construed in accordance with the laws of the State of New York,
including, but not limited to, Section 5-1401 of the New York General
Obligations Law.
9. Reduction of Revolving Commitment. The Borrower Representative hereby
notifies the Administrative Agent of its election to reduce the Revolving
Commitment from $115,000,000 to $55,000,000, effective on the Amendment
Effective Date, and requests that the Administrative Agent and the Lenders waive
the required notice period under Section 2.10(c) of the Credit Agreement, as
amended hereby. The Borrower Representative confirms and represents that, after
giving effect to such reduction in the Revolving Commitment and any concurrent
prepayment of the Revolving Loans under the Credit Agreement, the Revolving
Exposure will not exceed the Revolving Commitment. Subject to the terms and
conditions set forth herein, the Required Lenders and the Administrative Agent
hereby agree to waive the required notice period under Section 2.10(c) of the
Credit Agreement, as amended hereby, and agree that the reduction in the
Revolving Commitment as requested by the Borrower Representative herein shall
become effective on the Amendment Effective Date.
[Signature pages follow]

 

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Each of the undersigned has caused this Amendment to be executed and delivered
by its duly authorized officer as of the date first above written.

            Borrowers:

SMITH & WESSON HOLDING CORPORATION
      By:   /s/ Jeffrey D. Buchanan         Name:   Jeffrey D. Buchanan       
Title:   EVP, CFO, Secretary and Treasurer        SMITH & WESSON CORP.
      By:   /s/ Jeffrey D. Buchanan         Name:   Jeffrey D. Buchanan       
Title:   EVP, CFO, Secretary and Treasurer        THOMPSON/CENTER ARMS COMPANY,
INC.
      By:   /s/ Jeffrey D. Buchanan         Name:   Jeffrey D. Buchanan       
Title:   EVP, CFO, Secretary and Treasurer        SMITH & WESSON SECURITY
SOLUTIONS, INC.
      By:   /s/ Jeffrey D. Buchanan         Name:   Jeffrey D. Buchanan       
Title:   EVP, CFO, Secretary and Treasurer        FOX RIDGE OUTFITTERS, INC.
      By:   /s/ Jeffrey D. Buchanan         Name:   Jeffrey D. Buchanan       
Title:   EVP, CFO, Secretary and Treasurer     

 

 

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            BEAR LAKE HOLDINGS, INC.
      By:   /s/ Jeffrey D. Buchanan         Name:   Jeffrey D. Buchanan       
Title:   EVP, CFO, Secretary and Treasurer        K.W. THOMPSON TOOL COMPANY,
INC.
      By:   /s/ Jeffrey D. Buchanan         Name:   Jeffrey D. Buchanan       
Title:   EVP, CFO, Secretary and Treasurer        O.L. DEVELOPMENT, INC.
      By:   /s/ Jeffrey D. Buchanan         Name:   Jeffrey D. Buchanan       
Title:   EVP, CFO, Secretary and Treasurer        THOMPSON CENTER HOLDING
COMPANY
      By:   /s/ Jeffrey D. Buchanan         Name:   Jeffrey D. Buchanan       
Title:   EVP, CFO, Secretary and Treasurer        SMITH & WESSON DISTRIBUTING,
INC.
      By:   /s/ Jeffrey D. Buchanan         Name:   Jeffrey D. Buchanan       
Title:   EVP, CFO, Secretary and Treasurer     

 

 

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            Required Lenders:

TD BANK, N.A.
      By:   /s/ Maria P. Goncalves         Name:   Maria P. Goncalves       
Title:   Regional Vice President        SOVEREIGN BANK
      By:   /s/ John Faber         Name:   John Faber        Title:   Senior
Vice President        BERKSHIRE BANK
      By:   /s/ Michael T. Mancuso         Name:   Michael T. Mancuso       
Title:   Vice President        CHICOPEE SAVINGS BANK
      By:   /s/ Kathi L. Donahue         Name:   Kathi L. Donahue       
Title:   Senior Vice President        DEUTSCHE BANK TRUST COMPANY AMERICAS
      By:   /s/ Dusan Lazarov         Name:   Dusan Lazarov        Title:  
Director        By:   /s/ Michael Getz         Name:   Michael Getz       
Title:   Vice President     

 

 

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            Administrative Agent:

TD BANK, NA.,
as Administrative Agent
      By:   /s/ Maria P. Goncalves         Name:   Maria P. Goncalves       
Title:   Regional Vice President