Document:

exv10w46

 

Exhibit 10.46

COMMERCIAL REAL ESTATE TERM PROMISSORY NOTE

			
	$  5,896,000.00          
	 	January 11, 2005               

     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 at such other place as Lender may
designate in writing, the principal sum of Five Million Eight Hundred Ninety Six Thousand and
00/100 Dollars ($5,896,000.00) plus interest from the date hereof, all as hereinafter set forth.

INTEREST

     Interest from the date hereof upon the unpaid principal balance from time to time outstanding
shall accrue at a fixed rate of six and eighty-five one hundredths percent (6.85%) per annum.
Interest shall be calculated on the basis of actual days elapsed and a 360-day year.

REPAYMENT

     Principal and interest due Lender hereunder shall be repaid as follows:

A. Commencing one (1) month from the date hereof and thereafter on the same day of
each succeeding month for a period of one hundred twenty (120) months (and based
upon an amortization period of twenty (20) years), equal monthly payments of
principal and interest in the amount of Forty Five Thousand Five Hundred Twenty Five
and 13/100 Dollars ($45,525.13); and

B. Any remaining unpaid principal, and all accrued interest thereon, shall be due
and payable IN FULL ten (10) years from the date hereof;

     This Note is entered into pursuant to a Loan and Security Agreement of even date herewith (the
“Loan Agreement”). Capitalized terms not defined herein shall have the meanings given in the Loan
Agreement. Subject to the terms and conditions contained in the Loan Agreement, this Note shall be
repaid in accordance with the terms and conditions of the Loan Agreement. Any payments received by
Lender with respect to this Note prior to demand, acceleration or maturity shall be applied first
to any costs, expenses or charges due Lender from Borrower, second to any unpaid accrued interest
hereunder, and third to the unpaid principal hereunder. Any payments received after demand,
acceleration or maturity shall be applied in such a manner as Lender shall determine.

     If any payment required hereunder is more than ten (10) days past due, (in addition to
interest accruing hereunder) a late charge of six (6%) percent of the overdue payment shall be
charged to

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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 the extended
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 Lender’s return to Borrower or any other party of the original of this
Note or other instrument evidencing the obligation for which payment was made.

     The following described property from Borrower, in addition to all other collateral now or
hereafter provided by Borrower, or by any guarantor or endorser hereof, to Lender, shall secure
this Note and all other present and future obligations of 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.

     Any and all deposits or other sums at any time credited by, or due to Borrower or any endorser
or guarantor hereof from, Lender or any of its banking or lending affiliates or any loan
participant under any loan arrangement between Lender and Borrower, and any cash, instruments,
securities or other property of Borrower, and of any endorser or guarantor hereof, now or hereafter
in the possession of Lender, or any of its banking or lending affiliates or any loan participant
under any loan arrangement between Lender and Borrower, whether for safekeeping or otherwise, shall
at all times constitute security (and hereby remain subject to a pledge and grant of a security
interest by Borrower and/or any guarantor or endorser hereof) for the payment of this Note and all
other obligations, whether now existing or hereafter arising, of Borrower to Lender and may be
applied or set off against such Note or other obligations at any time, whether or not then due.

     This Note shall be in Default, and all unpaid principal, interest, and other
amounts due hereunder, shall, at Lender’s option, be immediately due and payable, without prior
notice, protest, or demand, upon the occurrence of any one or more of the Events of Default as
specified in the Loan Agreement. Default upon this Note shall also operate as a default upon all
other Obligations of Borrower to Lender.

     Upon and during the continuance of an Event of Default hereunder, interest upon the principal
balance hereof, and to the extent permitted by law, on any accrued but unpaid interest hereon,
shall, at Lender’s option, accrue at the Default Rate.

     Borrower, and each endorser and guarantor hereof, hereby waives presentment, demand, notice
and protest and also waives any delay on the part of the holder hereof. Each also assents to (i)
any extension, or other indulgence (including, without limitation, any release or substitution of
collateral or of any direct or indirect obligor) permitted by Lender with respect to this Note
and/or

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any collateral given to secure this Note and (ii) any extension or other indulgence, as
described above, with respect to any other obligation or any collateral given to secure such other
obligation of Borrower or any endorser or guarantor to Lender. A discharge or release of any
party directly or indirectly liable hereon shall not discharge or otherwise affect the liability of
any other party directly or indirectly liable hereon.

     No indulgence, delay, or omission by Lender in exercising or enforcing any of its
rights or remedies hereunder shall operate as a waiver thereof on that occasion nor on any other
occasion. No waiver of any default hereunder shall operate as a waiver of any other default
hereunder, nor as a continuing waiver. No waiver of a default or of any other right or remedy
hereunder, nor any modification of any provision of this Note, shall be enforceable unless it is in
writing signed by the party against whom the waiver or modification is to be enforced. All of
Lender’s rights and remedies hereunder and under any other related loan documents shall be
cumulative and may be exercised singularly or concurrently, at Lender’s sole and exclusive
discretion.

     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 Borrower.

     Borrower, and each endorser and guarantor hereof, jointly and severally agree to pay on demand
all costs and expenses, including, but not limited to, reasonable attorneys’ fees, incurred by
Lender in connection with the protection and/or enforcement of any of Lender’s rights or remedies
against Borrower or any such endorser or guarantor (whether or not any suit has been instituted by
or against Lender).

     This Note shall be binding upon Borrower and each endorser and guarantor hereof and upon their
respective heirs, successors, and representatives, and shall inure to the benefit of Lender and its
successors, endorsees and assigns.

     The liabilities of the Borrower (and each co-maker, if any), and any endorser or
guarantor hereof, are joint and several. Each reference in this Note to the Borrower, any endorser
and any guarantor, is to such maker, co-maker (if any), endorser and guarantor, individually, as
well as collectively. No party obligated on account of this Note may seek contribution from any
other party also obligated unless and until all obligations to Lender of the party to whom
contribution is sought have been satisfied in full. Each reference to Lender herein is to the
named payee hereto or any subsequent holder hereof, and their respective successors, endorsees and
assigns.

     Borrower represents to Lender 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.

     BORROWER, AND EACH ENDORSER AND GUARANTOR HEREOF, HEREBY

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EXPRESSLY WAIVE ALL RIGHTS TO A TRIAL BY JURY WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT
OF ANY DISPUTE RELATING, DIRECTLY OR INDIRECTLY, TO THIS NOTE AND/OR OTHER LOAN DOCUMENTS (IF ANY)
EXECUTED IN CONNECTION HEREWITH AND ALSO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE
COMMONWEALTH OF MASSACHUSETTS (AND THE FEDERAL COURTS SITUATED THEREIN) WITH RESPECT TO ALL CLAIMS
CONCERNING THIS NOTE AND/OR ANY COLLATERAL SECURING THEIR RESPECTIVE LIABILITIES TO LENDER.

     This Note shall be governed by the laws of the Commonwealth of Massachusetts, without regard
to its principles of conflicts of laws, and shall take effect as a sealed instrument.

     Signed under seal as of the day and year first above written.

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

4exv10w47

 

Exhibit 10.47

EQUIPMENT LINE OF CREDIT NOTE

	 	 
	$5,000,000.00  
	January 11, 2005
	 
	Springfield, Massachusetts

     FOR VALUE RECEIVED, the undersigned, 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, , the principal sum of
Five Million and 00/100 Dollars ($5,000,000.00) or the (then) current balance of Borrower’s Loan
Account upon Equipment Loans made on or after the date hereof, as reflected on the books, records
and ledgers of the Lender, as well as all other obligations of the Borrower which may at any time
be due the Lender (if such balances or obligations are other than Five Million and 00/100 Dollars
($5,000,000.00), together with interest thereon prior to the Conversion Date at the rate
hereinafter provided which shall be due and payable upon the outstanding principal balance, in
accordance with a certain Loan and Security Agreement dated January 11, 2005 (the “Loan
Agreement”). Prior to the Conversion Date, interest shall be payable in arrears. It shall be
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 Equipment Loans during the preceding month at a rate per annum equal to:

A. For a Prime Loan equal to Prime Rate; or

B. For LIBOR Loan at a rate equal to the adjusted LIBOR Interest
Rate, plus two and one-half percent (2.50%) based upon 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. 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.

     Prior to the Conversion Date, principal sums Advanced under this Note may be repaid and
re-borrowed in accordance with the terms of the Loan Agreement. No Advance under this Note shall
be made after the Conversion Date.

     Subject to the terms and conditions contained in the Loan Agreement, this Equipment Line of
Credit Note shall be repaid in accordance with the terms of the Loan Agreement. This Note is the
Equipment Note referred to in, and is subject to, and entitled to, the benefits of the Loan
Agreement between Borrower and Lender. The terms used herein which are defined in the Loan
Agreement shall have their defined meanings when used herein.

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     Principal amounts Advanced under this Note (the “Equipment Loan”) shall convert to a principal
amortizing loan on April 30, 2006 or such earlier date as Lender and Borrower mutually agree on
(the earlier being referred to as the “Conversion Date”). Upon the Conversion Date, at the
Borrower’s written election, the (then) outstanding principal balance shall accrue interest in
accordance with the following schedule:

A. A variable rate of interest equal to the Lender’s one (1) month
LIBOR rate, plus two hundred fifty (250) basis points.
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.

B. A fixed rate of interest equal the Federal Home Loan Bank
of Boston Rate in effect on the Conversion Date for the
corresponding term of this Loan, plus two percent (2.00%) per annum.

     Following the Conversion Date the (then) outstanding principal balance of the Loan, together
with interest thereon shall be repaid as follows:

     If interest is accruing pursuant to Choice A with respect to LIBOR:

Commencing one (1) month from the Conversion Date and thereafter on
the same day of each succeeding month for a period of up to
eighty-four (84) months and based on an amortization period of up to
seven (7) years, equal monthly payments of principal, plus accrued
interest in such amount as are necessary to fully amortize the
(then) unpaid principal hereunder at the (then) applicable rate of
interest herein over the remaining amortization period of this Note.

     If interest is accruing pursuant to Choice B with Fixed Rate:

Commencing one (1) month from the date of the Conversion Date and
thereafter on the same day of each succeeding month for a period of
up to eighty-four (84) months and based on a amortization period of
up to seven (7) years, equal monthly payments of principal and
interest in such amounts as are necessary to fully amortize the
(then) unpaid principal hereunder at the (then) applicable rate of
interest herein over the remaining amortization period of this Note.

     All Equipment Loans shall be secured by a first purchase money security in specific items of
personal property being purchased by Borrower from time-to-time, as well as Lender’s security
interest

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granted in the Loan Agreement.

     Any payment received more than ten (10) days after its due date shall be subject to an
additional charge of six percent (6%) of the amount due.

     This Note and all Equipment Loans made hereunder shall be in default, and all unpaid
principal, interest, and other amounts due, shall, at Lender’s option, be immediately due and
payable, without prior notice, protest, or demand, upon the occurrence of any one or more of the
Events of Default as specified in the Loan Agreement. Default upon this Note shall also operate as
a default upon all other Obligations of Borrower to Lender.

     Upon and during the continuance of an Event of Default (whether or not Lender has accelerated
payment of the Equipment Line of Credit or any other Obligation hereunder), or after maturity or
after judgment has been rendered on the Equipment Line of Credit or any other Obligations
hereunder, Borrower’s right to select pricing options shall cease and the unpaid principal of all
Advances shall, at the option of Lender, bear interest at the Default Rate.

     Nothing herein shall be construed to restrict the Lender, in its sole discretion, from making
Advances in excess of the face amount of this Note, without requirement of execution of additional
notes, or otherwise modifying this instrument, and its so doing at any time or times, shall not
result in a waiver of its rights to insist upon strict compliance with the terms of this Note, or
any document or instrument granting security to the Lender or other instruments executed in
connection with this financial transaction, at any other time.

     Borrower agrees that the Lender shall make Loan Advances to the Borrower upon written or
verbal authority of Borrower and 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 represent binding
obligations of the Borrower hereunder.

     Borrower with respect to this Note and/or the obligation represented by this Note, waives
presentment, demand, notice, protest and all other demands or notices in connection with the
delivery, acceptance, or endorsement of this Note. With respect to liabilities, the Borrower
assents to any extension or postponement of the time of payment or any other indulgence to the
addition or release of any party or person primarily or secondarily liable, to the acceptance of
partial payments thereon and the settlement thereof, all in such manner and at such time or times
as the Lender may elect in its sole and exclusive discretion, and generally waives all suretyship
defenses and defenses in the nature thereof. No delay or omission on the part of the Lender in
exercising any right shall operate as a waiver of such right or any other right. A waiver on any
one occasion shall not be construed as a bar to or waiver of any right on any future occasion. All
rights and remedies of the Lender, whether evidenced hereby or by any other instrument or papers,
shall be cumulative and may be exercised singularly or concurrently.

     The undersigned will pay all reasonable costs and expenses of collection, after an Event of
Default, including reasonable attorneys’ fees, incurred or paid by the holder in enforcing this
Note or the obligations

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hereby evidenced, to the extent permitted by law.

     No delay or omission of the holder in exercising any right or remedy hereunder shall
constitute a waiver of any such right or remedy. Acceptance by the holder of any payment after
acceleration shall not be deemed a waiver of such acceleration. A waiver on one occasion shall not
operate as a bar to or waiver of any such right or remedy on any future occasion.

     The holder need not enter payments of principal or interest upon this Note but may maintain a
record thereof on a separate ledger maintained by the holder.

     The word “holder” as used in this Note shall mean the payee or endorsee of this Note who is in
possession of it or the bearer if this Note is at the time payable to bearer. The word “Borrower”
as used in this Note shall mean the Borrower and all successors or assigns.

     In the event any payment of principal or interest received upon this obligation and paid by
the Borrower, or any guarantor, surety, co-maker or endorser, shall be deemed by final order of a
court of competent jurisdiction to have been a voidable preference or fraudulent conveyance under
the bankruptcy or insolvency laws of the United States, or any state, or otherwise due to any party
other than the Lender, then in any such event, the obligation of said Borrower, or any guarantor,
surety, co-maker or endorser shall, jointly and severally, survive as an obligation due hereunder
and shall not be discharged or satisfied by said payment or payments, notwithstanding return by the
Lender to said parties of the original hereof, or any guaranty, endorsement, or the like.

     The Borrower expressly warrants that the proceeds of the loan shall be used solely for
business purposes and that this transaction is not a consumer transaction subject to M.G.L. c.
140D, Regulation Z of the Board of Governors of the Federal Reserve System, or other “consumer
protection” statutes, regulations, or restrictions, without exception. Borrower is not engaged in
the business of purchasing or selling margin stock (as defined in Regulation U of the Board of
Governors of the Federal Reserve System) or extending credit to others for the purpose of
purchasing or carrying margin stock, and no part of the proceeds of any borrowing hereunder will be
used to purchase or carry any margin stock or for any other purpose which would violate any of the
margin regulations of said Board of Governors.

     Borrower hereby grants to Lender, a continuing lien, security interest and right of setoff as
security for all liabilities and obligations to Lender, whether now existing or hereafter arising,
upon and against all deposits, credits, collateral and property, now or hereafter in the
possession, custody, safekeeping or control of Lender or any entity under the control of
FleetBoston Financial Corporation and its successors and assigns or in transit to any of them. At
any time, without demand or notice (any such notice being expressly waived by Borrower), Lender may
setoff the same or any part thereof and apply the same to any liability or obligation of Borrower
even though unmatured and regardless of the adequacy of any other collateral securing the Loan. ANY
AND ALL RIGHTS TO REQUIRE LENDER TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER
COLLATERAL WHICH SECURES THE LOAN, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH
DEPOSITS, CREDITS OR OTHER PROPERTY OF BORROWER, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY
WAIVED.

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     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 banks or other financial institutions
(each, a “Participant”) participating interests in Lender’s obligation 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 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.
Bank may furnish any information concerning Borrower in its possession from time to time to
prospective Participants, provided that Lender shall require any such prospective Participant to
agree in writing to maintain the confidentiality of such information.

     This Note and the rights and obligations of the parties hereunder shall be construed and
interpreted in accordance with the laws of the Commonwealth of Massachusetts (the “Governing
State”) (excluding the laws applicable to conflicts or choice of law).

     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 which is not of public record, and, in the
case of any such loss, theft, destruction or mutilation, upon cancellation of such Note or other
security document, Borrower will issue, in lieu thereof, a replacement note or other security
document in the same principal amount thereof and otherwise of like tenor.

     This Note shall be governed by laws of The Commonwealth of Massachusetts provided that, as to
the maximum rate of interest which may be charged or collected, if the laws applicable to the
Lender permit it to charge or collect a higher rate than the laws of The Commonwealth of
Massachusetts, then such laws applicable to the Lender shall apply to the Lender under this Note.

     THE BORROWER AND THE LENDER HEREBY WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM OR
COUNTERCLAIM, WHETHER IN CONTRACT OR TORT, AT LAW OR IN EQUITY, ARISING OUT OF OR IN ANY WAY
RELATES TO THIS NOTE OR ANY OTHER LOAN DOCUMENT. NO OFFICER OF THE LENDER HAS AUTHORITY TO WAIVE,
CONDITION, OR MODIFY THIS PROVISION.

     This Note shall take effect as an instrument under seal.

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

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