Exhibit 10.57(d)
SMITH & WESSON HOLDING CORPORATION
AND
CERTAIN AFFILIATED ENTITIES
AMENDMENT NO. 4 TO CREDIT AGREEMENT
     This Amendment No. 4 to Credit Agreement (this “Amendment No. 4”) dated as
of December 3, 2009 (the “Amendment Date”), is among Smith & Wesson Holding
Corporation, a Nevada corporation (“Holdings”), Smith & Wesson Corp., a Delaware
corporation (“S&W Corp.”), Thompson/Center Arms Company, Inc., a New Hampshire
corporation (“TCAC”), and Universal Safety Response, Inc., a Delaware
corporation (“USR” together with Holdings, S&W Corp. and TCAC, the “Borrowers”
and each individually, a “Borrower”), Thompson Center Holding Corporation, a
Delaware corporation (“TCHC”), Fox Ridge Outfitters, Inc., a New Hampshire
corporation (“Fox Ridge”), Bear Lake Holdings, Inc., a Delaware corporation
(“Bear Lake”), K.W. Thompson Tool Company, Inc., a New Hampshire corporation
(“K.W. Thompson”), O.L. Development, Inc., a New Hampshire corporation (“O.L.
Development”, together with the Borrowers, TCHC, Fox Ridge, Bear Lake, and K.W.
Thompson, the “Loan Parties” and each individually a “Loan Party”), the Lenders
(as defined below), and TD Bank, N.A., a national banking association (“TD
Bank”), in its capacity as administrative agent (in such capacity, the
“Administrative Agent”) for itself and the other lenders party to the Credit
Agreement (as defined below) from time to time (the “Lenders”).
RECITALS:
     WHEREAS, the Borrowers have entered into that certain Credit Agreement
dated as of November 30, 2007 with the Lenders and the Administrative Agent, as
amended by that certain Amendment No. 1 to Credit Agreement and Assignment and
Acceptance of Collateral Documents dated as of October 31, 2008, that certain
Amendment No. 2 to Credit Agreement dated as of March 12, 2009, and that certain
Amendment No. 3 and Joinder to Credit Agreement dated as of July 20, 2009 (as so
amended and as it may be further amended from time to time, the “Credit
Agreement”); and
     WHEREAS, the Loan Parties, the Administrative Agent and the Lenders wish to
enter into this Amendment No. 4 to increase the Revolving Commitment, to extent
the Revolving Maturity Date and to amend certain provisions of the Credit
Agreement to reflect the results of a recent collateral field audit performed by
or on behalf of the Administrative Agent, all as more particularly 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.

 

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     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 Date, the Credit Agreement is hereby amended as
follows:
          3.1 Section 1.01 of the Credit Agreement is hereby amended by deleting
the definitions of ““Borrowing Base,” “Permitted Encumbrances,” “Reserves,”
“Revolving Commitment,” and “Revolving Maturity Date” in their entirety and
substituting the following therefor:
          ““Borrowing Base” means, at any time, the sum of (a) 80% of Eligible
Accounts at such time, plus (b) 50% of Eligible “Do Not Mail” Accounts, plus
(c) the lesser of (i) Fifteen Million Dollars ($15,000,000), or (ii) the
aggregate of (x) 60% of Eligible Inventory, valued at the lower of cost or
market value, determined on a first-in-first-out basis, at such time, and
(y) 45% of Eligible Demo Inventory, valued at the lower of cost or market value,
determined on a first-in-first-out basis, at such time. The Administrative Agent
may, in its Permitted Discretion, reduce the advance rates set forth above or
reduce one or more of the other elements used in computing the Borrowing Base.”
          ““Permitted Encumbrances” means:
          (a) Liens imposed by law for taxes that are not yet due or are being
contested in compliance with Section 5.10;
          (b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s
and other like Liens imposed by law, arising in the ordinary course of business
and securing obligations that are not overdue by more than thirty (30) days or
are being contested in compliance with Section 5.06;
          (c) pledges and deposits made in the ordinary course of business in
compliance with workers’ compensation, unemployment insurance and other social
security laws or regulations;
          (d) deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature, in each case in the ordinary course of
business;
          (e) judgment liens in respect of judgments that do not constitute an
Event of Default under Section 8.01(k);
          (f) Liens granted by USR to Zurich America Insurance Company, it
subsidiaries and affiliates (“Zurich”) pursuant to an Agreement of Indemnity
dated July 20, 2009, in certain Equipment, Accounts and Inventory used in
government contracts bonded by

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Zurich, to the extent consented to by the Administrative Agent by that certain
Consent, Waiver and Release Agreement dated or to be dated as of November 4,
2009, among the Loan Parties, the Administrative Agent and the Lenders; and
          (g) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary course
of business that do not secure any monetary obligations and do not materially
detract from the value of the affected property or interfere with the ordinary
conduct of business of the Borrower or any Subsidiary;
provided that the term “Permitted Encumbrances” shall not include any Lien
securing Indebtedness other than provided in (f) above.”
          ““Reserves” means any and all reserves which the Administrative Agent
deems necessary, in its Permitted Discretion, to maintain (including, without
limitation, reserves for accrued and unpaid interest on the Obligations,
reserves for rent at locations leased by any Loan Party and for consignee’s,
warehousemen’s and bailee’s charges, reserves for dilution of Accounts, reserves
for Inventory shrinkage, the Excise Tax Reserve, the Progress Billing Reserve,
reserves for customs charges and shipping charges related to any Inventory in
transit, reserves for contingent liabilities of any Loan Party, reserves for
uninsured losses of any Loan Party, reserves for uninsured, underinsured,
unindemnified or under indemnified liabilities or potential liabilities with
respect to any litigation and reserves for taxes, fees, assessments, and other
governmental charges) with respect to the Collateral or any Loan Party.”
           ““Revolving Commitment” means the commitment of the Lenders to make
Revolving Loans and the LC Issuer to issue Letters of Credit hereunder, as such
commitment may be reduced from time to time pursuant to Section 2.16. The
initial amount of the Lenders’ Revolving Commitment is $60,000,000. Each
Lender’s Revolving Commitment is set forth on Schedule 2.01 or in the Assignment
Assumption to which such Lender becomes a party hereto, as applicable as such
amount may be adjusted from time to time in accordance with this Agreement.”
           ““Revolving Maturity Date” means November 30, 2013 or any earlier
date on which the Revolving Commitment is reduced to zero or otherwise
terminated pursuant to the terms hereof.”
           3.2 Section 1.01 is hereby further amended by inserting the following
new definitions therein in appropriate alphabetical order:
           ““Bonded Accounts” means any Account arising from a transaction in
which a Loan Party’s performance is or has been supported or secured by a
performance bond, and such Account secures, or is subject to, the claim of a
bonding company, insurer or indemnitor.”
           ““Bonded Inventory” means any and all Inventory used or to be used by
a Loan Party in a transaction in which such Loan Party’s performance is or has
been supported or

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secured by a performance bond or similar undertaking, and such Inventory
secures, or is subject to, the claim of a bonding company, insurer or
indemnitor.”
           ““Eligible Demo Inventory” means any and all finished goods inventory
of S&W Corp. or TCAC which consists of (i) firearms located at any field school
or training facility, and (ii) firearms in the possession of sales employees or
agents of either S&W Corp. or TCAC, provided that such agency is created
pursuant to a written agency agreement between the agent and either S&W Corp. or
TCAC.”
           ““Eligible “Do Not Mail” Accounts” means any Account arising from
transaction with a law enforcement agency where a portion of the purchase
consideration is the delivery of used weapons to a Loan Party.”
           ““Excise Tax Reserve” means a reserve established in an amount equal
to the accrued and unpaid excise taxes not paid when due, from time to time,
from any Loan Party to any Governmental Authority, including without limitation,
any amounts due with respect to any United States firearm and ammunition excise
taxes. The amount of the reserve shall be determined on and as of each date a
Borrowing Base Certificate is submitted to the Administrative Agent based upon
then accrued and unpaid excise taxes owing by the Loan Parties on such date,
whether or not then due and payable.”
           ““Progress Billings Reserve” means a reserve equal to 5% of any
Accounts of USR that constitute invoices on account of progress billings under a
contract with an Account Debtor.
          3.3 In Section 1.01(a) of the Credit Agreement the definition of
“Eligible Accounts” is hereby amended by (i) deleting clauses (a), (h) and (n),
and (ii) inserting the following the following provisions in their place as
indicated:
          “(a) which is not subject to a first priority perfected security
interest in favor of the Administrative Agent or is otherwise subject to a
Permitted Encumbrance;”
          “(h) for which the goods giving rise to such Account have not been
shipped to the Account Debtor or for which the services giving rise to such
Account have not been performed by any Operating Company or if such Account was
invoiced more than once, including, without limitation, so-called “Do not mail”
Accounts due from any law enforcement agency;”
          “(n) which is owed by any Governmental Authority unless, with respect
to (i) the government (or any department, agency, public corporation, or
instrumentality thereof) of any country other than the U.S., such Account is
backed by a letter of credit acceptable to the Lender which is in the possession
of the Lender, or (ii) the government of the U.S. any department, agency, public
corporation, or instrumentality thereof, or any state or local government
authority, such Account is subject to the Federal Assignment of Claims Act of
1940, as amended (31 U.S.C. § 3727 et seq. and 41 U.S.C. § 15 et seq.) or its
state or local equivalent,

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and any all steps necessary to perfect the Lien of the Administrative Agent in
such Account have been complied with to the Administrative Agent’s
satisfaction;”
          3.4 In Section 1.01(a) of the Credit Agreement the definition of
“Eligible Accounts” is hereby further amended by (i) deleting, at the end of
clause (w), the word “or”, (ii) deleting the “.” at the end of clause (x), and
inserting “; “ in its stead, and (iii) inserting the following clauses (y) and
(z):
          “(y) which is subject to an invoiced discount, or accrued distributor
incentives, accrued advertising incentives, accrued sales incentive or other
credits or discounts unless and until such discounts, incentives and credits
have been identified to the Administrative Agent and expressly deducted from the
Account to reflect the net Account balance due, in which case the net Account
will be included as an Eligible Account; and
          (z) which is a Bonded Account or an Eligible “Do Not Mail” Account.”
          3.5 In Section 1.01(a) of the Credit Agreement the definition of
“Eligible Inventory” is hereby amended by inserting at the end of the definition
the following new sentence:
          “Notwithstanding anything in this definition to the contrary, the term
“Eligible Inventory” shall also exclude the following Inventory: Eligible Demo
Inventory, inventory used as samples, for sale demonstrations and is otherwise
in possession of any third party (other than an agent of a Loan Party pursuant
to a written agency agreement); inventory in transit unless it is between Loan
Party locations and is in the sole control of any Borrower; inventory consigned
to any Person, including any field school or other training facility of such
third party; inventory leased by any Loan Party to any Person; and any Bonded
Inventory.”
          3.6 Section 5.06(b) of the Credit Agreement is hereby deleted in its
entirety and the following is hereby substituted in its stead:
          “(b) Each Loan Party and each Subsidiary owns, or is licensed to use,
all trademarks, tradenames, copyrights, patents and other intellectual property
necessary to its business as currently conducted and the use thereof by the Loan
Parties and the Subsidiaries does not infringe in any material respect upon the
rights of any other Person, and the Loan Parties’ rights thereto are not subject
to any licensing agreement or similar arrangement.”
          3.7 The Schedules to the Credit Agreement are hereby amended by
deleting such Schedules in their entirety and replacing them with the updated
Schedules attached hereto; provided, however, Schedule 5.06(b) is hereby deleted
in its entirety.
          3.8 The Exhibits to the Credit Agreement are hereby amended by
deleting Exhibit D (Form of Borrowing Base Certificate) to the Credit Agreement
in its entirety and replacing it with Exhibit D attached hereto.

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     4. Representations and Warranties. Each of the Loan Parties, by its
execution hereof, jointly and severally represents and warrants as follows:
          4.1. Legal Existence; Organization. Each Loan Party 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 No. 4 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 Loan Party has taken all action (corporate
or otherwise) required to make the provisions of this Amendment No. 4 and the
documents executed in connection herewith valid and enforceable obligations of
such Loan Party, as they purport to be. Each Loan Party has duly authorized,
executed and delivered this Amendment No. 3 and the documents executed in
connection herewith. This Amendment No. 4 and each document executed in
connection herewith is the legal, valid and binding obligations of such Loan
Party and each is enforceable against such Loan Party in accordance with its
terms.
          4.3. No Legal Obstacle to Agreements. Neither the execution, delivery
or performance by any Loan Party of this Amendment No. 4 or any document
executed in connection herewith nor the execution, delivery or performance by
any Loan Party, nor the consummation of any other transaction referred to or
contemplated by this Amendment No. 4, 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 Loan Party is a party or by which such Loan Party is bound,
or of the charter, by-laws or other organizational documents, as applicable, of
such Loan Party;
          4.3.2 the violation of any law, judgment, decree or governmental
order, rule or regulation applicable to such Loan Party;
          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 Loan Party; or
          4.3.4 any redemption, retirement or other repurchase obligation of
such Loan Party under any charter, by-law, organizational document, agreement,
instrument, deed or lease to which such Loan Party 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 Loan Party in connection with the execution, delivery
and performance by such Loan

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Party of this Amendment No. 4 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 Loan Party.
          4.4. Defaults. No Default exists or, immediately after giving effect
to this Amendment No. 4, will exist.
          4.5. Incorporation of Representations and Warranties. The
representations and warranties set forth in Article V of the Credit Agreement
and in Section 10 of the Holdings/TCAC Guaranty, Section 10 of the Holdings/S&W
Corp. Guaranty, Section 10 of the Operating Companies Guaranty and Section 10 of
the Subsidiary Guaranty 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 No. 4 shall become effective upon the date
when each of the following conditions precedent have been satisfied (the
“Amendment No. 4 Effective Date”):
          5.1 Corporate Matters. (a) The Administrative Agent shall have
received such documents and certificates as the Administrative Agent may
reasonably request relating to the due organization, valid existence and good
standing the Loan Parties and any other legal matters relating to the Loan
Parties, this Amendment No. 4, and the other Loan Documents.
          (b) The Administrative Agent shall have received evidence, in form and
substance reasonably satisfactory to the Administrative Agent and its counsel,
as to the authorization by each Loan Party, including, without limitation,
approval by the Board of Directors of Holdings, of this Amendment No. 4 and any
and all other documents, instruments and agreements contemplated hereby or
thereby or executed and delivered in connection herewith or therewith.
          5.2 Consummation of this Amendment No. 4. The Administrative Agent
shall have received this Amendment No. 4 fully executed by the parties hereto.
          5.3 Other Amendments. The Administrative Agent shall have received a
Third Amended and Restated Revolving Line of Credit Note in the form of
Exhibit A-1 annexed hereto.
          5.4 Schedules. The Administrative Agent shall have received revised
Schedules to the Credit Agreement which Schedules shall be attached hereto. Such
Schedules shall be deemed to be incorporated into the Credit Agreement as of the
date hereof and each

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reference in the Credit Agreement to any such Schedule shall be deemed to refer
to such Schedule attached hereto on and after the date hereof.
          5.5 Existing USR Debt; Liens. The Administrative Agent shall have
received evidence that, as of the date hereof, the assets and properties of USR
are not subject to any Liens (other than Liens permitted to remain outstanding
in accordance with Section 7.02 of the Credit Agreement, as amended hereby).
          5.6 Legal Opinions. The Administrative Agent shall have received a
favorable opinion (addressed to the Administrative Agent and the Lenders and
dated as of the Amendment No. 4 Effective Date) of Greenberg Traurig LLP,
counsel to the Loan Parties, with respect to the Loan Parties, this Amendment
No. 4, and the documents to be delivered in connection herewith and therewith
and covering such other matters as the Administrative Agent may request, which
shall be in form and substance reasonably satisfactory to the Administrative
Agent and its counsel.
          5.7 Officer Certificate Regarding Representations and Absence of
Defaults. The Administrative Agent shall have received a certificate, dated the
Amendment No. 4 Effective Date and signed by a officer of the Borrower
Representative, confirming that both before and after giving effect to this
Amendment No. 4, each of the representations in the Loan Documents is true and
correct and no Default or Event of Default exists or would result therefrom.
          5.8 Copies of Material Contracts, etc. To the extent requested by the
Administrative Agent, the Administrative Agent shall have received copies of all
material contracts, licenses, permits and governmental approvals entered into or
obtained since the Third Amendment Date.
          5.9 Other Documents. The Administrative Agent shall have received duly
executed copies of such other certificates, documents, instruments and
agreements as the Administrative Agent shall reasonably request in connection
with the transactions contemplated by this Amendment No. 4, each in form and
substance acceptable to the Administrative Agent.
          5.10 Legal Matters. All legal matters incident to the transactions
contemplated hereby shall be satisfactory to counsel for the Administrative
Agent.
          5.11 Fees and Expenses. The Loan Parties 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 No. 4 and the documents executed in connection herewith and the
transactions contemplated herein.
     6. Further Assurances. Each of the Loan Parties 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

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necessary or advisable to carry out the intent and purposes of this Amendment
No. 4 (and the attached acknowledgements and consents) and the documents
executed in connection therewith.
     7. No Defenses/Release. Each Loan Party warrants and represents to the
Administrative Agent and Lenders that such Loan Party 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, the same are hereby waived, relinquished
and released in consideration of the execution and delivery of this Amendment
No. 4 by the Administrative Agent and the Lenders.
     8. General. Except as specifically amended hereby or by any of the
amendments referred to in Section 5.3 and Section 5.4 above, all of the terms
and provisions of the Credit Agreement, the Guaranty and each of the other Loan
Documents and all related documents, shall remain in full force and effect and
are hereby ratified and confirmed. This Amendment No. 4 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 No. 4 by telecopy or in PDF format by electronic mail shall be
effective as delivery of a manually executed counterpart of this Amendment
No. 4. This Amendment No. 4 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. Waiver. The Administrative Agent and the Lenders hereby confirm that the
Administrative Agent and the Lenders have not yet declared any Potential Event
of Default to be an Event of Default. The Administrative Agent and the Lenders
hereby waive any Event of Default that would have resulted from the failure to
timely satisfy any requirement of the Post-Closing Letter. The parties
acknowledge and agree that the foregoing waiver is limited solely to the
Post-Closing Letter and does not constitute a waiver of any other presently
existing or future Default or Event of Default or a waiver of compliance with
any other provision of the Loan Documents for any other purpose or on any other
occasion.
[Signature pages follow]

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     Each of the undersigned has caused this Amendment No. 4 to be executed and
delivered by its duly authorized officer as of the date first above written.

            Loan Parties:

SMITH & WESSON HOLDING CORPORATION
      By:   /s/ William F. Spengler         William F. Spengler        Executive
Vice President, Chief Financial
Officer and Treasurer        SMITH & WESSON CORP.
      By:   /s/ William F. Spengler         William F. Spengler        Vice
President, Chief Financial Officer and Treasurer        THOMPSON/CENTER ARMS
COMPANY, INC.
      By:   /s/ William F. Spengler         William F. Spengler        Vice
President, Chief Financial Officer and Treasurer        THOMPSON CENTER HOLDING
CORPORATION
      By:   /s/ William F. Spengler         William F. Spengler        Vice
President, Chief Financial Officer and Treasurer     

[Signatures appear on following pages]

 

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            FOX RIDGE OUTFITTERS, INC.
      By:   /s/ William F. Spengler         William F. Spengler        Vice
President, Chief Financial Officer and Treasurer        BEAR LAKE HOLDINGS, INC.
      By:   /s/ William F. Spengler         William F. Spengler        Vice
President, Chief Financial Officer and Treasurer        K.W. THOMPSON TOOL
COMPANY, INC.
      By:   /s/ William F. Spengler         William F. Spengler        Vice
President, Chief Financial Officer and Treasurer        O.L. DEVELOPMENT, INC.
      By:   /s/ William F. Spengler         William F. Spengler        Vice
President, Chief Financial Officer and Treasurer        UNIVERSAL SAFETY
RESPONSE, INC.
      By:   /s/ Matthew A. Gelfand         Matthew A. Gelfand        President 
   

[Signatures appear on following page]

 

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            Administrative Agent:

TD BANK, N.A.,
as Administrative Agent
      By:   /s/ Maria P. Goncalves         Maria P. Goncalves, Senior Vice
President                Lender:

TD BANK, N.A., as sole Lender
      By:   /s/ Maria P. Goncalves         Maria P. Goncalves, Senior Vice
President             

 

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Exhibit A-1
THIRD AMENDED AND RESTATED
REVOLVING LINE OF CREDIT NOTE

$60,000,000.00   December 3, 2009

     FOR VALUE RECEIVED, the undersigned, SMITH & WESSON HOLDING CORPORATION, a
Nevada corporation (“Holdings”), SMITH & WESSON CORP., a Delaware corporation
(“S&W Corp.”), THOMPSON/CENTER ARMS COMPANY, INC., a New Hampshire corporation
(“TCAC”), and UNIVERSAL SAFETY RESPONSE, INC., a Delaware corporation (“USR”),
as borrowers (Holdings, S&W Corp., TCAC and USR are, jointly and severally, the
“Borrowers”), promise to pay to the order of TD BANK, N.A., a national banking
association (the “Lender”), at the place and times provided in the Credit
Agreement referred to below the principal sum of
SIXTY MILLION DOLLARS AND 00 CENTS ($60,000,000.00)
or, if less, the principal amount of, and interest accrued on, all Revolving
Loans made by the Lender from time to time pursuant to that certain Credit
Agreement dated November 30, 2007 (as amended, restated or modified from time to
time, the “Credit Agreement”) by and among the Borrowers, TD Bank, N.A., in its
capacity as administrative agent (in said capacity, together with its successors
and assigns, the “Administrative Agent”), for itself and the other Secured
Parties (as defined therein), and the lenders party thereto from time to time
(including, without limitation, the Lender). This Third Amended and Restated
Revolving Line of Credit Note is being executed and delivered by the Borrowers
pursuant to Section 2.16(i) of the Credit Agreement. Capitalized terms used
herein and not defined herein shall have the meanings ascribed to them in the
Credit Agreement.
     The unpaid principal amount of this Third Amended and Restated Revolving
Line of Credit Note from time to time outstanding is subject to mandatory
prepayment from time to time as provided in the Credit Agreement and shall bear
interest as provided in the Credit Agreement. All payments of principal and
interest on this Third Amended and Restated Revolving Line of Credit Note shall
be payable in lawful currency of the United States of America in immediately
available funds to the Administrative Agent.
     This Third Amended and Restated Revolving Line of Credit Note is entitled
to the benefits of, and evidences obligations incurred under, the Credit
Agreement, to which reference is made for a description of the Collateral for
this Third Amended and Restated Revolving Line of Credit Note and for a
statement of the terms and conditions on which the Borrowers are permitted and
required to make prepayments and repayments of principal of the obligations
evidenced hereby and on which such obligations may be declared to be immediately
due and payable.
     THIS THIRD AMENDED AND RESTATED REVOLVING LINE OF CREDIT NOTE SHALL BE
GOVERNED 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.
     Each and every party liable hereunder or for the indebtedness evidenced
hereby whether as maker, endorser, guarantor, surety or otherwise hereby:
(a) except as may be expressly provided in the Credit Agreement or the other
Loan Documents, waives notice (including, without limitation, notice of

 

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intention to accelerate maturity, notice of acceleration of maturity, and notice
of non-payment), presentment, demand, protest, suretyship defenses and defenses
in the nature thereof such as bringing of suit, and diligence in taking any
action to collect amounts owing hereunder or in any proceeding against any of
the rights and properties securing payment hereof; (b) waives any defenses based
upon and specifically assents to any and all extensions and postponements of the
time for payment, changes in terms and conditions and all other indulgences and
forbearances which may be granted by the holder to any party now or hereafter
liable hereunder or for the indebtedness evidenced hereby; (c) agrees to any
substitution, exchange, release, surrender or other delivery of any Collateral
now or hereafter held hereunder or in connection with the Credit Agreement or
any of the other Loan Documents, and to the addition or release of any other
party or person primarily or secondarily liable; (d) agrees that if any
Collateral given to secure this Third Amended and Restated Revolving Line of
Credit Note or the indebtedness evidenced hereby or to secure any of the
obligations set forth or referred to in the Credit Agreement or any of the other
Loan Documents shall be found to be unenforceable in full or to any extent, or
if the Administrative Agent, the Lender, any other Secured Party or any other
party shall fail to duly perfect or protect such Collateral, the same shall not
relieve or release any party liable hereon or thereon nor vitiate any other
security or collateral given for any obligations evidenced hereby or thereby;
(e) agrees to pay all reasonable costs and expenses incurred by the
Administrative Agent, the Lender or any other Secured Party in connection with
the indebtedness evidenced hereby, including, without limitation, all reasonable
attorneys’ fees and costs, for the making and collection of the indebtedness
evidenced hereby and the enforcement of rights and remedies hereunder and under
the Credit Agreement and the other Loan Documents, whether or not suit is
instituted; and (f) consents to all of the terms and conditions contained in
this Third Amended and Restated Revolving Line of Credit Note, the Credit
Agreement and the other Loan Documents.
     The liability of the Borrowers under this Third Amended and Restated
Revolving Line of Credit Note shall be joint and several.
     The provisions contained herein shall, effective the date hereof, amend,
restate and supersede in their entirety, the terms of (i) that certain Second
Amended and Restated Revolving Line of Credit Note dated July 20, 2009, in the
original principal amount of $40,000,000 made by Holdings, S&W Corp., TCAC and
USR to the order of the Lender (the “Second Amended and Restated Note”). All
amounts outstanding under the Second Amended and Restated Note shall be deemed
to be outstanding hereunder for all purposes. This Third Amended and Restated
Revolving Credit Note replaces the Second Amended and Restated Note to the
Borrowers, and the return of the Second Amended and Restated Note to the
Borrowers (which shall each be marked “Cancelled by Substitution”) does not
constitute a discharge, release or satisfaction of the indebtedness evidenced by
the Second Amended and Restated Note. This Third Amended and Restated Revolving
Line of Credit Note shall be deemed the Revolving Line of Credit Note under the
Credit Agreement.
* The Next Page is the Signature Page *

 

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     IN WITNESS WHEREOF, the Borrowers have executed this Third Amended and
Restated Revolving Line of Credit Note as of the day and year first above
written.

          Witnesses:  Borrowers:
SMITH & WESSON HOLDING CORPORATION
      By:           William F. Spengler        Executive Vice President, Chief
Financial
Officer and Treasurer     

            SMITH & WESSON CORP.
      By:           William F. Spengler        Vice President, Chief Financial
Officer and
Treasurer     

            THOMPSON/CENTER ARMS COMPANY, INC.
      By:           William F. Spengler        Vice President, Chief Financial
Officer and
Treasurer     

            UNIVERSAL SAFETY RESPONSE, INC.
      By:           Matthew A. Gelfand        President   

 

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Exhibit D
Form of Borrowing Base Certificate
TD Bank, N.A., as Administrative Agent
Borrowing Base Certificate

                                      Smith & Wesson     Thompson/Center        
          Corp.     Arms     Universal Safety     Total  
Accounts Receivable Balance
  $       $       $       $ 0.00  
 
                       
 
  Less Ineligible:   Less Ineligible:   Less Ineligible:   Less Ineligible:
Over 90 days from invoice
  $       $       $       $ 0.00  
 
                       
Over 30 days from invoice *
                          $ 0.00  
 
                       
30% Margin Rule
                          $ 0.00  
 
                       
Credit Add Backs
                          $ 0.00  
 
                       
Contras/Discounts/Sales
                          $ 0.00  
 
                       
Incentives/Advertising Credits
                               
Foreign/Government **
                          $ 0.00  
 
                       
Employees
                          $ 0.00  
 
                       
Intercompany
                          $ 0.00  
 
                       
15% Concentration Rule
                          $ 0.00  
 
                       
Retainage
                          $ 0.00  
 
                       
37.5% of Eligible Do Not Mail
                          $ 0.00  
 
                       
Other Ineligible A/R as
                               
defined in Credit Agreement dated 11/30/07  
                          $ 0.00  
 
                       
Total Ineligible A/R
  $       $       $       $ 0.00  
 
                       
Total Eligible Accounts Receivable
    0.00       0.00       0.00       0.00  
 
                       
Advance Rate
    X 80 %     X 80 %     X 80 %     X 80 %
 
                       
Net Eligible Accounts Receivable
  $ 0.00     $ 0.00     $ 0.00     $ 0.00  
 
                       

 

*   If such invoice is subject to dating terms   **   Except Canada and A/R
backed by Letters of Credit

                                      Smith & Wesson     Thompson/Center        
          Corp.     Arms     Universal Safety     Total  
Total Inventory per the Attached
  $       $       $       $ 0.00  
 
                       
 
  Less Ineligible:   Less Ineligible:   Less Ineligible:     Less Ineligible:  
WIP
  $       $       $       $ 0.00  
 
                       
Obsolete
                          $ 0.00  
 
                       
Scrap/Waste
                          $ 0.00  
 
                       
Defective
                          $ 0.00  
 
                       
Shrinkage
                          $ 0.00  
 
                       
Inventory Held on
                          $ 0.00  
 
                       
Consignment and demo inventory with third parties In transit with third parties
                          $ 0.00  
 
                       
25% of Eligible Demo Inventory
                               
In the possession of a bailee, warehouseman, processor or lessee *  
                          $ 0.00  
 
                       
Other ineligible inventory as defined in Credit Agreement
                          $ 0.00  
 
                       
Total Ineligible Inventory
  $ 0.00     $ 0.00     $ 0.00     $ 0.00  
 
                       
Total Eligible Inventory
                          $ 0.00  
 
                       
Advance Rate
    X 60 %     X 60 %     X 60 %     X 60 %
 
                       
Net Eligible Inventory
                          $ 0.00  
 
                       
Total Inventory not to exceed
  $ 15,000,000.00                     $    
 
                       

 

*   Without prior written consent

 

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Total Borrowing Base per Advance Formula:
  $    
 
     
Less Accounts Payable to Processor
  $    
 
     
Less Reserves
  $    
 
     
Less US$ Equivalent Letters of Credit
  $    
 
     
Total Eligible Collateral
  $    
 
     
Revolving Credit Line Amount: (lesser of $60,000,000 or Total Eligible
Collateral)
  $    
 
     
Less Sub Debt Lenders Reserve on Credit Line Limit:
  $    
 
     
Less Loan Balance as of __________________
  $    
 
     
Amount Available for Future Borrowing:
  $    
 
     

Pursuant to, and in accordance with, the terms and provisions of that certain
Credit Agreement, dated November 30, 2007 (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”, the terms defined
therein being used herein as therein defined), by and among Smith & Wesson
Holding Corporation (“Holdings”), Smith & Wesson Corp., a Delaware corporation
(“S&W Corp.”), Thompson/Center Arms Company, Inc., a New Hampshire corporation
(“TCAC”), Universal Safety Response, Inc. (“USR”) (Holdings, S&W Corp., TCAC and
USR are, individually, “Borrower”, and collectively, “Borrowers”), the lenders
party from time to time party thereto (the “Lenders”), and TD Bank, N.A., as
administrative agent (in such capacity, the “Administrative Agent”), the
Borrower Representative is executing and delivering to the Administrative Agent
this Borrowing Base Certificate accompanied by supporting data (collectively
referred to as the “Report”). The Borrower Representative represents and
warrants to the Administrative Agent that this Report is true and correct, and
is based on information contained in the Borrower Representative’s own financial
accounting records. The Borrower Representative, by the execution of this
Report, hereby ratifies, confirms and affirms all of the terms, conditions and
provisions of the Credit Agreement, and further certifies on this ___ day of
_____, 20___ that the Loan Parties are in compliance with the Credit Agreement.
Smith & Wesson Holding Corporation

                     
Authorized by:
 
      Date:
 
   

 

--------------------------------------------------------------------------------

 

Schedule 1.01
CONSOLIDATED EBITDA
Impairment of goodwill and intangible assets associated with the acquisition of
Thompson Center Holding Corporation: $98,243,188
Costs associated with the recall of Walther PPK/S products (net of profit
sharing): $1,930,374
Schedule - 1.01

 

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Schedule 2.01
Applicable Percentage
Revolving Loan

                    Lender   Commitment   Applicable Percentage  
TD Bank, N.A.
  $ 60,000,000       100%
Total
  $ 60,000,000       100%

Schedule - 2.01

 

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Schedule 5.06(a)
REAL PROPERTY
Owned Real Property

      Owner   Location
Smith & Wesson Corp.
  2100 Roosevelt Avenue
Springfield, MA 01104
 
   
Smith & Wesson Corp.
  19 Aviation Drive
Houlton, Southern Aroostook County, Maine
 
   
Smith & Wesson Corp.
  299 Page Boulevard
Springfield, Hampden County, Massachusetts
 
   
O.L. Development, Inc.
  400 North Main Street
Rochester, Strafford County, New Hampshire

Leased Real Property

      Tenant   Location of Property
Smith & Wesson Holding Corporation
  7377 E. Doubletree Ranch Rd., Ste. 200
Scottsdale, AZ 85258
 
   
Universal Safety Response, Inc.
  Suite 112 and 113 of Aspen Grove Business Center I
277 Mallory Station Road
Franklin, TN
 
   
Universal Safety Response, Inc.
  Suite 509 of Aspen Grove Business Center
416 Mary Lindsay Polk Drive
Franklin, TN

Subleased Real Property

      Tenant   Location of Property
Universal Safety Response, Inc.
  Suite 503 of Aspen Grove Business Center
416 Mary Lindsay Polk Drive
Franklin, TN

Schedule - 5.06(a)

 

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Schedule 5.07
DISCLOSED MATTERS
None.
Schedule - 5.07

 

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Schedule 5.14
MATERIAL AGREEMENTS

1.   Trademark Agency Agreement, dated March 11, 2000, by and between UMAREX
Sportwaffen, GmbH, and S&W Corp.   2.   Agreement, dated December 18, 2000, by
and among S&W Corp., Advanced Research & Technology, and Western Massachusetts
Electric Company.   3.   Master Supply Agreement, dated August 1, 2001, by and
between Remington Arms Company, Inc. and S&W Corp.   4.   Agreement, dated
June 7, 2002, by and between S&W Corp. and Carl Walther GmbH, as amended by the
Amendment, dated January 12, 2006, as further amended by the Amendment, dated
January 13, 2007.   5.   License and OEM Purchase Agreement, dated November 15,
2001, by and between S&W Corp. and Carl Walther GmbH, as amended by Addendum,
dated January 15, 2002, as further amended by Amendment No. 1, dated
December 22, 2004, and as further amended by the Amendment, dated January 12,
2006, as further amended by the Amendment, dated January 13, 2007.   6.  
Framework Contract, dated February 13, 2004, by and between S&W Corp. and Carl
Walther GmbH, as amended by the Amendment, dated January 12, 2006, as further
amended by the Amendment, dated January 13, 2007.   7.   2001 Stock Option Plan.
  8.   2004 Incentive Stock Plan.   9.   2004 Incentive Compensation Plan
Restricted Stock Unit Award Agreement.   10.   Employment Agreement, dated
November 12, 2007, by and between Holdings and Michael F. Golden.   11.   USR
401(k) Plan.   12.   Agreement and Plan of Merger, dated June 18, 2009, by and
among Holdings, SWAC-USR I, Inc., USR (f/k/a SWAC-USR II, Inc.), Universal
Safety Response, Inc., a New York corporation and William C. Cohen, Jr., as
stockholders’ representative.   13.   Agreement of Indemnity, dated July 20,
2009, by and among the Borrower and the Guarantors, as contractor and
indemnitors, and Zurich American Insurance Company and its subsidiaries and
affiliates.

Schedule - 5.14

 

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Schedule 5.16
INSURANCE
[Schedule Provided To Lender]
Schedule - 5.16

 

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Schedule 5.17
EQUITY INTERESTS AND SUBSIDIARIES
Smith & Wesson Holding Corporation, a Nevada corporation
(parent corporation to Smith & Wesson Corp.)
Authorized Capital Stock: 1,000,000 shares Common Stock, par value $0.01

                  Record Owner   Certificate No.   No. Shares
Public Company
    N/A       N/A  

Smith & Wesson Corp., a Delaware corporation
(a wholly-owned subsidiary of Smith & Wesson Holding Corporation)
Authorized Capital Stock: 1,000 shares Common Stock, par value $0.01

                  Record Owner   Certificate No.   No. Shares
Smith & Wesson Holding Corporation
    5       800  

Thompson Center Holding Corporation, a Delaware corporation
(a wholly-owned subsidiary of Smith & Wesson Holding Corporation)
Authorized Capital Stock: 100 shares of common stock, par value $0.001

                  Record Owner   Certificate No.   No. Shares
Smith & Wesson Holding Corporation
    2       100  

Universal Safety Response, Inc., a Delaware corporation
(a wholly-owned subsidiary of Smith & Wesson Holding Corporation)
Authorized Capital Stock: 1,000 shares of common stock, par value $0.001

                  Record Owner   Certificate No.   No. Shares
Smith & Wesson Holding Corporation
    2       100  

Fox Ridge Outfitters, Inc., a New Hampshire corporation
(a wholly-owned subsidiary of Thompson Center Holding Corporation)
Authorized Capital Stock: 300 shares of common stock, no par value
Schedule - 5.17

 

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                  Record Owner   Certificate No.   No. Shares
Thompson Center Holding Corporation
    2       25  

Bear Lake Holdings, Inc., a Delaware corporation
(a wholly-owned subsidiary of Thompson Center Holding Corporation)
Authorized Capital Stock: 300 shares of common stock, no par value

                  Record Owner   Certificate No.   No. Shares
Thompson Center Holding Corporation
    10       105.7963  

K.W. Thompson Tool Company, Inc., a New Hampshire corporation
(a wholly-owned subsidiary of Bear Lake Holdings)
Authorized Capital Stock: 300 shares of common stock, no par value

                  Record Owner   Certificate No.   No. Shares
Bear Lake Holdings
    3       25  

O.L. Development, Inc., a New Hampshire corporation
(a wholly-owned subsidiary of Bear Lake Holdings)
Authorized Capital Stock: 300 shares of common stock, no par value

                  Record Owner   Certificate No.   No. Shares
Bear Lake Holdings
    1       25  

Thompson/Center Arms Company, Inc., a New Hampshire corporation
(a wholly-owned subsidiary of Bear Lake Holdings)
Authorized Capital Stock: 300 shares of common stock, no par value

                  Record Owner   Certificate No.   No. Shares
Bear Lake Holdings
    3       25  

Schedule - 5.17

 

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Schedule 5.20
AFFILIATED TRANSACTIONS AND INDEBTEDNESS
S&W Corp. has entered into a Licensing Agreement, effective as of November 1,
2009, executed by S&W Corp., as licensor, and Identity Protection Corporation,
as licensee, with respect to the licensing of certain marks owned by S&W Corp.
Identity Protection Corporation is affiliated with a board member of Holdings.
Schedule - 5.20

 

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Schedule 6.12
DEPOSITORY BANKS
[Schedule Provided To Lender]

 

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Schedule 7.01(b)
INDEBTEDNESS

1.   Indebtedness incurred in connection with the Indenture, dated as of
December 15, 2006, made by Holdings, as issuer, in favor of The Bank of New York
Trust Company, N.A, as trustee.

2.   Indebtedness incurred in connection with the Commercial Premium Finance
Agreement, dated as of May 15, 2009, by and between S&W Corp. and AFCO Credit
Corporation.

Schedule - 7.01(b)

 

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Schedule 7.01(c)
UNSECURED AND SUBORDINATED INDEBTEDNESS
Indebtedness incurred in connection with the Indenture, dated as of December 15,
2006, made by Holdings, as issuer, in favor of The Bank of New York Trust
Company, N.A, as trustee.
Schedule - 7.01(b)

 

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Schedule 7.02(c)
EXISTING LIENS
Liens securing Indebtedness incurred in connection with the Commercial Premium
Finance Agreement, dated as of May 15, 2009, by and between S&W Corp. and AFCO
Credit Corporation.
Schedule - 7.02(c)

 

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Schedule 7.04(b)
EXISTING INVESTMENTS
None.
Schedule - 7.04(b)

 

--------------------------------------------------------------------------------

 

Schedule 7.04(m)
POTENTIAL INVESTMENTS
None.
Schedule - 7.04(m)

 

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Schedule 7.06
SALE AND LEASEBACK
None.
Schedule - 7.06

 

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Schedule 7.10
RESTRICTIVE AGREEMENTS
Section 10.12 of the Indenture, dated as of December 15, 2006, made by Holdings,
as issuer, in favor of The Bank of New York Trust Company, N.A, as trustee,
restricts Holdings’ ability to incur, create, issue, assume, guarantee otherwise
become liable for Indebtedness (as defined therein) in excess of a designated
amount. Section 10.12 of the Indenture also contains a restriction on Holdings’
ability to encumber its property; provided, however, that such restriction does
not apply to encumbrances related to certain Indebtedness permitted therein.
Schedule - 7.10