exv10w44



 





Exhibit 10.44


REVOLVING LINE-OF-CREDIT

MAXIMUM $17,000,000               



REVOLVING LINE OF CREDIT NOTE




     AFTER DATE, FOR VALUE RECEIVED, Smith & Wesson Corp., a Delaware corporation, having a
principal place of business at 2100 Roosevelt Avenue, Springfield, Massachusetts (the “Borrower”),
promises to pay to the order, of Banknorth, N.A., a national banking association (“Lender”), having
a usual place of business at 1441 Main Street, Springfield, Massachusetts, or order, the maximum
principal sum of Seventeen Million and 00/100 Dollars ($17,000,000) or so much thereof as may be
Advanced (each Advance shall be referred to as an “Advance” and all such Advances shall
collectively be referred to as the “Advances”), pursuant to a Loan and Security Agreement of even
date herewith (the “Loan Agreement”) and incorporated by reference herein and between Borrower,
Guarantor and Lender. Capitalized terms not defined herein shall have the meanings given in the
Loan Agreement. The principal outstanding shall be repaid, together with interest thereon in
arrears, calculated daily and payable monthly, commencing thirty (30) days from the date hereof and
thereafter on the same day of each succeeding month, on the outstanding and unpaid principal amount
of the Revolving Line of Credit Loans during the preceding month at a rate per annum equal to:




A. Lender’s Prime Rate; or




B. LIBOR Interest Rate, plus two and one half percent (2.50%) based
on the Interest Period selected by the Borrower and confirmed in
writing to the Borrower following Borrower’s request for a LIBOR
Loan or a conversion to a LIBOR Loan as set forth in the Loan
Agreement. Notwithstanding the forgoing, the LIBOR Interest Rate
for a LIBOR Loan shall be reduced to LIBOR, plus two and one-quarter
percent (2.25%) when Maximum Leverage is less than or equal to
2.00:1.00 and shall be further reduced to LIBOR, plus two percent
(2.00%) at such time when Maximum Leverage is equal to or less than
1.25:1.00.



     Subject to the terms and conditions contained in the Loan Agreement, this Revolving Line of
Credit Note shall be repaid in accordance with the terms of the Loan Agreement. This Note is the
Note referred to in, and is subject to, and entitled to, the benefits of the Loan Agreement.



     However, nothing herein shall be construed to restrict the Lender, in its sole and exclusive
discretion, from making advances in excess of the stated maximum dollar amount, without requirement
of execution of additional promissory note(s), or otherwise modifying this Note, and its so doing
at any time, or times, shall not waive its rights to insist upon strict compliance with the terms
of this Note, or any other instruments executed in connection with this financial transaction, at
any other time, and to further rely upon all collateral secured to it for satisfaction of all
obligations of the Borrower to the Lender, without exception.



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     Borrower agrees that the Lender may, at its reasonable discretion, make Loan Advances to the
Borrower upon written, authority of any person authorized so to act on behalf of the Borrower; may
deliver loan proceeds by direct deposit to any demand deposit account of the Borrower with the
Lender, or otherwise, as so directed; and that all such loans and advances as evidenced solely by
the Lender’s books, ledgers and records shall presumptively represent binding obligations of the
Borrower hereunder.



     Borrower does hereby irrevocably grant to the Lender, full power and authority, at its
discretion, to debit any deposit account of the Borrower with the Lender for the amount of any
monthly interest owing on Borrower’s Loan Account; for the amount of any principal reduction, or
for any repayment of obligations due upon Borrower’s Loan Account which the Lender may require, all
without prior notice, or demand upon the Borrower.



     Any payments received by Lender with respect to this Note shall be applied first to any costs,
charges, or expenses (including attorney’s fees) due Lender from the Borrower, second to any unpaid
interest hereunder, and third to the unpaid principal sum owing under this Note.



     The Borrower acknowledges that this Note is an obligation which is payable immediately upon
the occurrence of an Event of Default as more fully described in the Loan Agreement.



     Lender shall have the unrestricted right at any time or from time to time, and without
Borrower consents, to sell, assign, endorse, or transfer all or any portion of its rights and
obligations hereunder to one or more Lenders or other entities (each an “Assignee”), and Borrower
agrees that it shall execute, or cause to be executed such documents necessary to effect the
foregoing. In addition, at the request of Lender and any such Assignee, Borrower shall issue one
or more new promissory notes, as applicable, to any such Assignee and, if Lender has retained any
of its rights and obligations hereunder following such assignment, to Lender, which new promissory
notes shall be issued in replacement of, but not in discharge of, the liability evidenced by the
note held by Lender prior to such assignment and shall reflect the amount of the respective
commitments and loans held by such Assignee and Lender after giving effect to such assignment.
Upon the execution and delivery of appropriate assignment documentation in connection with such
assignment, and the payment by Assignee of the purchase price agreed to by Lender and such
Assignee, such Assignee shall be a party to this Agreement and shall have all of the rights and
obligations of Lender hereunder (and under any and all other guaranties, documents, instruments and
agreements executed in connection herewith) to the extent that such rights and obligations have
been assigned by Lender pursuant to the assignment documentation between Lender and Assignee, and
Lender shall be released from its obligation hereunder and thereunder to a corresponding extent.



     Lender shall have the unrestricted right at any time and from time to time, and without the
consent of or notice to Borrower to grant to one or more institutions or other persons (each a
“Participant”) participating interests in Lender’s obligations to lend hereunder and/or any or all
of the loans held by Lender hereunder. In the event of any such grant by Lender of a participating
interest to a Participant, whether or not upon notice to Borrower, Lender shall remain responsible
for the



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performance of its obligations hereunder and Borrower shall continue to deal solely and
directly with Lender in connection with Lender’s rights and obligations hereunder. Lender shall
furnish any information concerning Borrower in their possession from time to time to any
prospective assignees and Participants, provided that Lender shall require any such prospective
assignee or Participant to maintain the confidentiality of such information.




     Upon receipt of an affidavit of an officer of Lender as to the loss, theft, destruction or
mutilation of the Note or any other security document(s) which is not of public record and, in the
case of any such loss, theft, destruction or mutilation, upon surrender and cancellation of such
Note or other document(s), the Borrower will issue, in lieu thereof, a replacement Note or other
document(s) in the same principal amount thereof and otherwise of like tenor.



     Lender may at any time pledge, endorse, assign, or transfer all or any portion of its rights
under the Loan Documents including any portion of the Note to any of the twelve (12) Federal
Reserve Banks organized under Section 4 of the Federal Reserve Act. 12 U.S.C. Section 341. No such
pledge or enforcement thereof shall release Lender from its obligations under any of the Loan
Documents.



     If any payment required hereunder is more than ten (10) days overdue, (in addition to the
interest accruing hereunder) a late charge of six percent (6%) of the overdue payment shall be
charged to the Borrower and be immediately due and payable to Lender. Any payment having a due
date falling upon a Saturday, Sunday, or legal holiday shall be due and payable on the next
business day for which Lender is open for business, and interest shall continue to accrue during
any such period.



     If any payment received by Lender with respect to this Note shall be deemed by a court of
competent jurisdiction to have been a voidable preference or fraudulent conveyance under federal or
state law, or otherwise due any party other than Lender, then the obligation for which the payment
was made shall not be discharged by the payment and shall survive as an obligation due hereunder,
notwithstanding the Lender’s return to the Borrower or any other party of the original of this Note
or other instrument evidencing the obligation for which payment was made.



     Interest hereunder shall be computed on the basis of actual days elapsed and a 360-day year.
Upon and during the continuance of an Event of Default, interest upon the total unpaid principal
hereunder shall thereafter, at Lender’s option, without notice to Borrower and until payment in
full of all obligations hereunder, accrue at the Default Rate.



     It is not intended under this Note to charge interest at a rate exceeding the maximum rate of
interest permitted to be charged under applicable law, but if interest exceeding said maximum rate
should be paid hereunder, the excess shall, at Lender’s option, be (a) deemed a voluntary
prepayment of principal not subject to the prepayment premium (if any) set forth herein or (b)
refunded to the Borrower.



     The following described property, in addition to all other collateral now or hereafter
provided



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by the Borrower to Lender, shall secure this Note and all other present or future obligations
of the Borrower to Lender: First security interest in all personal property and chose-in-action
(except as described in Section 11.00 of the Loan Agreement), as well as real estate mortgages on
property located at 2100 Roosevelt Avenue, Springfield, Massachusetts; 299 Page Boulevard,
Springfield, Massachusetts; and 19 Aviation Drive, Houlton, Maine.




     As additional collateral for the payment and performance of this Note and all other
obligations, whether now existing or hereafter arising, of the Borrower to Lender, Lender shall at
all times have and is hereby granted a security interest in and right of offset against all cash,
deposit balances and/or accounts, instruments, securities, or other property of the Borrower, and
of any endorser or guarantor hereof, now or hereafter in the possession of Lender, whether for
safekeeping or otherwise. This right of offset shall permit Lender at any time, after the
occurrence of an Event of Default as defined in the Loan Agreement and while such Event of Default
is continuing, and without notice to the Borrower or any endorser or guarantor hereof, to transfer
such funds or property as may be deemed by Lender to be appropriate so as to reduce or satisfy any
obligation of the Borrower to the Lender.



     The Borrower (a) waives presentment, demand, notice, protest, and delay in connection with the
delivery, acceptance, performance, collection, and enforcement of this Note, and (b) assents to any
extension, renewal, modification, or other indulgence permitted by Lender with respect to this
Note, including, without limitation, any release, substitution, or addition of co-makers,
endorsers, or guarantors of this Note and any release, substitution, or addition of collateral
securing this Note or any other obligations of the Borrower, or any such endorsers or guarantors,
to Lender, and (c) authorize Lender, in its sole and exclusive discretion and without notice to the
Borrower, or any endorser or guarantor hereof, to complete this Note if delivered incomplete in any
respect.



     No indulgence, delay, or omission by Lender in exercising or enforcing any of its rights or
remedies hereunder shall operate as a waiver of any such rights or remedies or of the right to
exercise them at any later time. No waiver of any default hereunder shall operate as a waiver of
any other default hereunder or as a continuing waiver. The Lender’s acceptance of any payment
hereunder, following any default, shall not constitute a waiver of such default or of any of the
Lender’s rights or remedies hereunder (including charging interest at the Default Rate), unless
waived in writing by Lender.



     All of the Lender’s rights and remedies hereunder and under any other Loan Documents, or
instruments, shall be cumulative and may be exercised singularly or concurrently, at the Lender’s
sole and exclusive discretion.



     The Borrower agrees to pay on demand all costs and expenses, including, but not limited
to, reasonable attorney’s fees, incurred by Lender in connection with the protection and/or
enforcement of any of Lender’s rights or remedies hereunder, whether or not any suit has been
instituted by Lender.



     The word “Lender” where used herein shall mean the named payee, its successors, assigns,



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affiliates, and endorsees (and/or the holder of this Note if, at any time, it is made payable
to bearer), all of whom this Note shall inure to their benefit as holders in due course.




     From time-to-time, said Prime Rate may change, whereupon the interest rate charged hereunder
may change, effective the date of such change without requirement of prior notice thereof to the
Borrower.



     The word “Borrower” where used herein includes any and all makers and co-makers hereof, and
their respective successors, assigns, and representatives, all of whom, along with each endorser
and guarantor of this Note, and their respective heirs, successors, assigns, and representatives,
shall be jointly and severally liable hereunder.



     The use of masculine or neuter genders hereunder shall be deemed to include the feminine, and
the use of the singular or the plural herein shall be deemed to include the other, as the context
may require.



     The Borrower represents that the proceeds of this Note will not be used for personal, family,
or household purposes and that this loan is strictly a commercial transaction.



     This Note shall be governed by the laws of the Commonwealth of Massachusetts, and the
Borrower, and each endorser and guarantor hereof, submit to the jurisdiction of its courts with
respect to all claims concerning this Note or any collateral securing it.



     ALL PARTIES TO THIS NOTE, INCLUDING LENDER, AND AS A NEGOTIATED PART OF THIS TRANSACTION,
HEREBY EXPRESSLY WAIVE ALL RIGHTS TO TRIAL BY JURY, AS TO ALL ISSUES, INCLUDING ANY COUNTERCLAIMS,
WITHOUT EXCEPTION, IN ANY ACTION OR PROCEEDING RELATING, DIRECTLY OR INDIRECTLY, TO THIS NOTE
AND/OR OTHER INSTRUMENTS OR LOAN DOCUMENTS (IF ANY) EXECUTED IN CONNECTION HEREWITH.



     This Note constitutes a final written expression of all of its terms and is a complete and
exclusive statement of those terms. Any modification or waiver of any of these terms must be in
writing signed by the party against whom the modification or waiver is to be enforced.



     Signed as a sealed instrument this 11th day of January, 2005.



	 	 	 	 	 
	 
	 	 	SMITH & WESSON CORP.	 
	 
	 	 	 	 
	 
	 	 	 	 
	/s/ Peter Marcil
	 	BY:	/s/ John A. Kelly	
	 
	 	 	 	 
	Witness
	 	 	 	 
	 
	 	 	Its duly authorized (seal)	 





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