Exhibit 10.16


 


FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT


 


THIS FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”)
is made and entered into on October 26, 2009, by and among FREEDOM GROUP, INC., a Delaware corporation (“FGI”), REMINGTON ARMS COMPANY, INC., a Delaware corporation (“Remington”),
THE MARLIN FIREARMS COMPANY, a
Connecticut corporation (“Marlin”), H&R 1871, LLC,
a Connecticut limited liability company (“H&R”), BUSHMASTER
FIREARMS INTERNATIONAL, LLC, a Delaware limited liability company (“Bushmaster”),
DPMS FIREARMS, LLC, a Delaware limited
liability company (“DPMS”), E-RPC, LLC, a
Delaware limited liability company (“E-RPC”), and RA BRANDS,
L.L.C., a Delaware limited liability company  (“Brands,”
and together with FGI, Remington, Marlin, H&R, Bushmaster, DPMS, and E-RPC,
each individually a “Borrower” and collectively, “Borrowers”); WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking
association, in its capacity as agent (in such capacity, “Agent”) for various
financial institutions (“Lenders”), and the Lenders party hereto.


 


Recitals:


 


Agent, Lenders and Borrowers
are parties to a certain Loan and Security Agreement dated July 29, 2009
(as at any other time amended, restated, modified or supplemented, the “Loan
Agreement”), pursuant to which Agent and Lenders have made certain revolving
credit loans to Borrowers.


 


Borrowers have advised Agent
and Lenders of the proposed issuance by Borrowers of certain additional notes
under the existing Senior Notes Indenture (the “Additional Notes”) that are not
expressly permitted under Sections 9.8 and 9.9 of the Loan Agreement.  Borrowers have requested that Agent and
Lenders agree to amend the Loan Agreement in order to permit the proposed
issuance of such Additional Notes.


 


Subject to the terms and
conditions of this Amendment, Agent and Lenders are willing to amend the Loan
Agreement as hereinafter set forth.


 


NOW, THEREFORE, for good and
valuable consideration, the receipt and sufficiency of which are hereby
severally acknowledged, the parties hereto, intending to be legally bound
hereby, agree as follows:


 


1.                                      Definitions.  All capitalized terms used in this Amendment,
unless otherwise defined herein, shall have the meanings ascribed to such terms
in the Loan Agreement.


 


2.                                      Amendments to Loan Agreement.  Subject to the satisfaction
of each of the conditions precedent set forth in Section 6 of this
Amendment, the Loan Agreement is hereby amended as follows:


 


(a)                                  by deleting the definition
of “Senior Notes” contained in Section 1 of the Loan Agreement and
by substituting in lieu thereof the following:


 

















 


“Senior Notes” shall mean (i) FGI’s
101⁄4 % Senior Secured Notes due 2015 in the aggregate principal amount of
$200,000,000, and (ii) any Permitted Additional Pari Passu Obligations
which are permitted to be incurred under (and as defined in) the Senior Notes
Indenture as in effect on the date hereof or as amended with the consent of the
Required Lenders, and which are subject to the Intercreditor Agreement, in an
aggregate principal amount not to exceed $125,000,000; provided  that,
for the purposes of Sections 4.1 and 9.16, “Senior Notes” shall mean the notes
referred to in clause (i) only.  For
the avoidance of doubt, to the extent supplements to the Senior Notes Indenture
are required in connection with the issuance of the Permitted Additional Pari
Passu Obligations described above, the consent of the Required Lenders is not
required to such supplements so long as they do not otherwise modify the terms
of the Senior Notes Indenture.


 


(b)                                 by deleting clause (o) of
Section 10.1 of the Loan Agreement and by substituting in lieu
thereof the following:


 


(o)                                 any Borrower or Guarantor
shall be in default of any of its obligations under the Senior Notes or the
Senior Notes Indenture (including with respect to any Permitted Additional Pari
Passu Obligations permitted under (and as defined in) the Senior Notes
Indenture) and, as a consequence of which the payment or maturity of the Senior
Notes (including any such Permitted Additional Pari Passu Obligations) could be
accelerated or demand for payment thereof made or other rights or remedies
exercised by or on behalf of the holders of the Senior Notes (including any
such Permitted Additional Pari Passu Obligations).


 


3.                                      Ratification and Reaffirmation.  Each Borrower hereby ratifies and reaffirms
the Obligations, each of the Financing Agreements and all of such Borrower’s
covenants, duties, indebtedness and liabilities under the Financing Agreements.


 


4.                                      Acknowledgments and Stipulations.  Each Borrower acknowledges and stipulates
that the Loan Agreement and the other Financing Agreements executed by such
Borrower are legal, valid and binding obligations of such Borrower that are
enforceable against such Borrower in accordance with the terms thereof, except as
the enforceability thereof may be limited by laws relating to insolvency
proceedings or other similar laws of general application affecting the
enforcement of creditors’ rights generally or by general equitable principles;
all of the Obligations are owing and payable without defense, offset or
counterclaim (and to the extent there exists any such defense, offset or
counterclaim on the date hereof, the same is hereby waived by such Borrower);
the Liens granted by such Borrower in favor of Agent are first priority Liens,
subject only to those Permitted Liens which are expressly permitted by the
terms of the Financing Agreements to have priority over the Liens of Agent;
and, as of the close of business on October 26, 2009, the unpaid principal
amount of the Revolving Loans totaled $11,800,000, and the face amount of
outstanding Letters of Credit totaled $8,334,588.75.


 


2

















 


5.                                      Representations and Warranties.  Each Borrower represents and warrants to
Agent and Lenders, to induce Agent and Lenders to enter into this Amendment,
that no Default or Event of Default exists on the date hereof; the execution,
delivery and performance of this Amendment have been duly authorized by all
requisite corporate action on the part of such Borrower and this Amendment has
been duly executed and delivered by such Borrower; and all of the
representations and warranties made by such Borrower in the Loan Agreement are
true and correct in all material respects on and as of the date hereof after
giving effect to this Amendment (except where such representations and
warranties expressly relate to an earlier date in which case such
representations and warranties were true and correct in all material respects
as of such earlier date).


 


6.                                      Conditions
Precedent.  The effectiveness of the amendments contained
in Section 2 hereof is subject to the satisfaction of each of the
following conditions precedent:


 


(i)                                     No Default or Event of
Default.  No Default or Event of Default
occurs or exists on the date hereof.


 


(ii)                                  Amendment.  Agent shall have received a counterpart of
this Amendment duly executed and delivered by a duly authorized officer of the
each of the Borrowers and Required Lenders.


 


(iii)                               Other Agreements.  Agent shall have received a certificate from
FGI certifying that the Additional Notes constitute Permitted Additional Pari
Passu Obligations permitted to be incurred under (and as defined in) the Senior
Notes Indenture as in effect on the date hereof or as amended with the consent
of the Required Lenders, and are subject to the Intercreditor Agreement.


 


7.                                      Additional Covenant.  Within
five (5) Business Days after the issuance of the Additional Notes, FGI
shall deliver to Agent copies of documentation for the Additional Notes,
which documentation shall include any supplements to the Senior Notes Indenture
and all exhibits and schedules thereto, and evidence of all consents and
approvals (if any) required pursuant to the terms of the Senior Notes
Indenture.


 


8.                                      Reference to Loan Agreement.  Upon the effectiveness of this Amendment,
each reference in the Loan Agreement to “this Agreement,” “hereunder,” or words
of like import shall mean and be a reference to the Loan Agreement, as amended
by this Amendment.


 


9.                                      Breach of Amendment.  This Amendment shall be part of the Loan
Agreement and a breach of any representation, warranty or covenant herein shall
constitute an Event of Default.


 


10.                               Expenses of Agent and Lenders.  Borrowers jointly and severally agree to pay,
on demand, all reasonable costs
and expenses incurred by Agent and Lenders in connection with the preparation,
negotiation and execution of this Amendment and any other Financing Agreements
executed pursuant hereto, including, without limitation, the reasonable costs
and fees of Agent’s and Lenders’ legal counsel.


 


3

















 


11.                               Effectiveness; Governing Law.  This Amendment shall be effective upon execution and delivery by Borrowers and acceptance by
Agent and the Required Lenders (notice of which acceptance is hereby waived),
whereupon the same shall be governed by and construed in accordance with
the internal laws of the State of New York (without giving effect to the
conflict of laws principles thereof, other than Section 5-1401 of the New
York General Obligations Law).


 


12.                               Successors and Assigns.  This Amendment shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.


 


13.                               No Novation, etc.  Except as otherwise expressly provided in
this Amendment, nothing herein shall be deemed to amend or modify any provision
of the Loan Agreement or any of the other Financing Agreements, each of which
shall remain in full force and effect. 
This Amendment is not intended to be, nor shall it be construed to
create, a novation or accord and satisfaction, and the Loan Agreement as herein
modified shall continue in full force and effect.


 


14.                               Counterparts; Telecopied Signatures.  This Amendment may be executed in any number
of counterparts and by different parties to this Amendment on separate
counterparts, each  of which, when so
executed, shall be deemed an original, but all such counterparts shall
constitute one and the same agreement. 
Any signature delivered by a party by facsimile transmission shall be deemed
to be an original signature hereto.


 


15.                               Further Assurances.  Each Borrower agrees to take such further
actions as Agent shall reasonably request from time to time in connection
herewith to evidence or give effect to the amendments set forth herein or any
of the transactions contemplated hereby.


 


16.                               Section Titles.  Section titles and references used in
this Amendment shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreements among the parties hereto.


 


17.                               Release
of Claims.  To induce Agent and Lenders
to enter into this Amendment, each Borrower hereby releases, acquits and
forever discharges Agent and Lenders, and all officers, directors, agents,
employees, successors and assigns of Agent and Lenders, from any and all
liabilities, claims, demands, actions or causes of action of any kind or nature
(if there be any), whether absolute or contingent, disputed or undisputed, at
law or in equity, that are known to such Borrower as of the date of this Amendment,
or that such Borrower should have reasonably known, arising under or in
connection with any of the Financing Agreements.  Each Borrower represents and warrants to
Lender that such Borrower has not transferred or assigned to any Person any
claim that such Borrower ever had or claimed to have against Agent or any
Lender.


 


18.                               Waiver
of Jury Trial.  To the fullest extent
permitted by applicable law, the parties hereto each hereby waives the right to
trial by jury in any action, suit, counterclaim or proceeding arising out of or
related to this Amendment.


 


[Signatures begin on next page]


 


4

















 


IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed under seal and delivered by their respective duly authorized officers
on the date first written above.


 


	
   

  	
   

  	
  BORROWERS

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  FREEDOM
  GROUP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:
  

  	
  /s/
  Stephen P. Jackson, Jr.

  
	
   

  	
   

  	
  Title:
  

  	
  CFO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  REMINGTON
  ARMS COMPANY, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:
  

  	
  /s/
  Stephen P. Jackson, Jr.

  
	
   

  	
   

  	
  Title:
  

  	
  CFO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THE
  MARLIN FIREARMS COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:
  

  	
  /s/
  Stephen P. Jackson, Jr.

  
	
   

  	
   

  	
  Title:
  

  	
  Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  H&R
  1871, LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:
  

  	
  /s/
  Stephen P. Jackson, Jr.

  
	
   

  	
   

  	
  Title:
  

  	
  Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BUSHMASTER
  FIREARMS INTERNATIONAL, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:
  

  	
  /s/
  Stephen P. Jackson, Jr.

  
	
   

  	
   

  	
  Title:

  	
  Authorized
  signatory

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  DPMS
  FIREARMS, LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:
  

  	
  /s/
  Stephen P. Jackson, Jr.

  
	
   

  	
   

  	
  Title:
  

  	
  Authorized
  signatory

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  E-RPC,
  LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:
  

  	
  /s/
  Stephen P. Jackson, Jr.

  
	
   

  	
   

  	
  Title:
  

  	
  CFO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  RA BRANDS, L.L.C.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:
  

  	
  /s/
  Stephen P. Jackson, Jr.

  
	
   

  	
   

  	
  Title:
  

  	
  Vice
  President

  



 


First Amendment to Loan and Security
Agreement


 

















 


	
  AGENT

  	
   

  
	
   

  	
   

  
	
  WACHOVIA
  BANK, NATIONAL ASSOCIATION, as Agent and Issuing
  Bank

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:
  

  	
  Wachovia
  Bank, National Association

  	
   

  
	
  Title:

  	
  Director

  	
   

  
	
   

  	
   

  	
   

  
	
  REQUIRED LENDERS:

  	
   

  
	
   

  	
   

  
	
  WACHOVIA BANK, NATIONAL
  ASSOCIATION

  	
   

  
	
   

  	
   

  
	
  By:
  

  	
  Wachovia
  Bank, National Association

  	
   

  
	
  Title:

  	
  Director

  	
   

  
	
   

  	
   

  	
   

  
	
  BANK OF AMERICA, N.A.

  	
   

  
	
   

  	
   

  
	
  By:
  

  	
  Allan
  R. Juleus

  	
   

  
	
  Title:

  	
  SVP

  	
   

  



 


First Amendment to Loan and Security
Agreement