Exhibit 10.65
SUBSIDIARY GUARANTY
THIS SUBSIDIARY GUARANTY (as
amended, restated, supplemented or otherwise modified from time to
time, this “ Agreement ”), dated as of
November 30, 2007, is made by and among each of the guarantors
listed on the signature pages hereof and those additional entities
that hereafter become guarantors hereunder by executing a joinder
agreement substantially in the form of Exhibit A hereto
(each a “ Subsidiary Guarantor ” and
collectively the “ Subsidiary Guarantors ”), and
Toronto Dominion (Texas) LLC, as administrative agent (in such
capacity, the “ Administrative Agent” ) for the
Secured Parties (as defined in the Credit Agreement referred to
below).
Reference is made to that certain
Credit Agreement, dated as of the date hereof (as amended,
restated, supplemented or otherwise modified from time to time, the
“ Credit Agreement ”) , among Smith
&Wesson Holdings Corporation, a Nevada corporation (“
Holdings ”), Smith & Wesson Corp., a Delaware
corporation (“ S&W Corp .”), Thompson/Center
Arms Company, Inc., a New Hampshire corporation (“
TCAC ”) (Holdings, S&W Corp. and TCAC are,
individually, “ Borrower ”, and collectively,
“ Borrowers ”), the lenders party from time to
time party thereto (the “ Lenders ”), and the
Administrative Agent. Capitalized terms used and not defined herein
are used with the meanings assigned to such terms in the Credit
Agreement.
The Lenders have agreed to make Loans
and grant financial accommodations to one or more of the Borrowers,
pursuant to, and upon the terms and subject to the conditions
specified in, the Credit Agreement. Each Subsidiary Guarantor is a
Subsidiary of one the Borrowers and acknowledges that it has
derived and will derive substantial benefit from the making of the
Loans by the Lenders to the Borrowers. As consideration therefor
and in order to induce the Lenders to make the Loans, each
Subsidiary Guarantor is willing to execute this Agreement.
Accordingly, the parties hereto agree
as follows:
SECTION 1. Guarantee . Each
Subsidiary Guarantor unconditionally guarantees, jointly with any
other Guarantors of the Obligations under the Credit Agreement and
other Loan Documents and severally, as a primary obligor and not
merely as a surety, the due and punctual payment of the
Obligations. Each Subsidiary Guarantor waives notice of, and hereby
consents to any agreements or arrangements whatsoever by the
Secured Parties with any other Person pertaining to the
Obligations, including agreements and arrangements for payment,
extension, renewal, subordination, composition, arrangement,
discharge or release of the whole or any part of the Obligations,
or for the discharge or surrender of any or all security, or for
the compromise, whether by way of acceptance of part payment or
otherwise, and, the same shall in no way impair each Subsidiary
Guarantor’s liability hereunder.
SECTION 2. Obligations Not
Waived . To the fullest extent permitted by applicable law,
each Subsidiary Guarantor waives presentment to, demand of payment
from and protest to the Borrowers or any other Person of any of the
Obligations, and also waives notice of acceptance of its guarantee,
notice of protest for nonpayment and all other formalities. To the
fullest extent permitted by applicable law, the Guarantee of each
Subsidiary Guarantor hereunder
shall
not be affected by (a) the failure of any Loan Party to assert
any claim or demand or to enforce or exercise any right or remedy
against the Borrowers or any Guarantor under the provisions of the
Credit Agreement, any other Loan Document or otherwise;
(b) any extension, renewal or increase of or in any of the
Obligations; (c) any rescission, waiver, amendment or
modification of, or any release from, any of the terms or
provisions of this Agreement, the Credit Agreement, any other Loan
Document, any guarantee or any other agreement or instrument,
including with respect to any Guarantor under the Loan Documents;
(d) the release of (or the failure to perfect a security
interest in) any of the security held by or on behalf of the
Administrative Agent or any other Secured Party; or (e) the
failure or delay of any Secured Party to exercise any right or
remedy against the Borrowers or any Guarantor of the
Obligations.
SECTION 3. Security. Each
Subsidiary Guarantor authorizes the Administrative Agent to (a)
take and hold security for the payment of this Subsidiary Guaranty
and the Obligations and exchange, enforce, waive and release any
such security pursuant to the terms of any other Loan Documents;
(b) apply such security and direct the order or manner of sale
thereof as it in its sole discretion may determine subject to the
terms of any other Loan Documents; and (c) release or
substitute any one or more endorsees, other Guarantors or other
obligors pursuant to the terms of any other Loan Documents. In no
event shall this Section 3 require any Subsidiary Guarantor to
grant security, except as required by the terms of the Loan
Documents.
SECTION 4. Guarantee of
Payment. Each Subsidiary Guarantor further agrees that its
guarantee constitutes a guarantee of payment when due and not of
collection and waives any right to require that any resort be had
by the Administrative Agent or any other Secured Party to any of
the security held for payment of the Obligations or to any balance
of any deposit account or credit on the books of the Administrative
Agent or any other Secured Party in favor of the Borrowers or any
other Person.
SECTION 5. No Discharge or
Diminishment of Guaranty. The obligations of each Subsidiary
Guarantor hereunder shall not be subject to any reduction,
limitation, impairment or termination for any reason (other than
the indefeasible payment in full in cash of the Obligations),
including any claim of waiver, release, surrender, alteration or
compromise of any of the Obligations, and shall not be subject to
any defense (other than a defense of payment) or setoff,
counterclaim, recoupment or termination whatsoever by reason of the
invalidity, illegality or unenforceability of the Obligations or
otherwise. Without limiting the generality of the foregoing, the
obligations of each Subsidiary Guarantor hereunder shall not be
discharged or impaired or otherwise affected by the failure of the
Administrative Agent or any other Secured Party to assert any claim
or demand or to enforce any remedy under the Credit Agreement, any
other Loan Document, any guarantee or any other agreement or
instrument, by any amendment, waiver or modification of any
provision of the Credit Agreement or any other Loan Document or
other agreement or instrument, by any default, failure or delay,
willful or otherwise, in the performance of the Obligations, or by
any other act, omission or delay to do any other act that may or
might in any manner or to any extent vary the risk of any
Subsidiary Guarantor or that would otherwise operate as a discharge
of any Guarantor as a matter of law or equity (other than the
indefeasible payment in full in cash of all the Obligations) or
which would impair or eliminate any right of any Guarantor to
subrogation.
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SECTION 6. Defenses Waived.
To the fullest extent permitted by applicable law, each Subsidiary
Guarantor waives any defense based on or arising out of the
unenforceability of the Obligations or any part thereof from any
cause or the cessation from any cause of the liability (other than
the final and indefeasible payment in full in cash of the
Obligations) of the Borrowers or any other Person. Subject to the
terms of the other Loan Documents, the Administrative Agent and the
other Secured Parties may, at their election, foreclose on any
security held by one or more of them by one or more judicial or
nonjudicial sales, accept an assignment of any such security in
lieu of foreclosure, compromise or adjust any part of the
Obligations, make any other accommodation with the Borrowers or any
other Guarantor or exercise any other right or remedy available to
them against the Borrowers or any other Guarantor, without
affecting or impairing in any way the liability of each Subsidiary
Guarantor hereunder except to the extent the Obligations have been
fully, finally and indefeasibly paid in cash. Each Subsidiary
Guarantor waives any defense arising out of any such election even
though such election operates, pursuant to applicable law, to
impair or to extinguish any right of reimbursement or subrogation
or other right or remedy of each Subsidiary Guarantor against the
Borrowers or any other Guarantor or any security.
SECTION 7. Agreement to Pay;
Subordination. In furtherance of the foregoing and not in
limitation of any other right that the Administrative Agent or any
other Secured Party has at law or in equity against each Subsidiary
Guarantor by virtue hereof, upon the failure of the Borrowers or
any other Loan Party to pay any Secured Obligation when and as the
same shall become due, whether at maturity, by acceleration, after
notice of prepayment or otherwise, each Subsidiary Guarantor hereby
promises to and will forthwith pay, or cause to be paid, to the
Administrative Agent or such other Secured Party as designated
thereby in cash an amount equal to the unpaid principal amount of
such Obligations then due, together with accrued and unpaid
interest and fees on such Obligations. Upon payment by each
Subsidiary Guarantor of any sums to the Administrative Agent or any
Secured Party as provided above, all rights of each Subsidiary
Guarantor against the Borrowers arising as a result thereof by way
of right of subrogation, contribution, reimbursement, indemnity or
otherwise shall in all respects be subordinate and junior in right
of payment to the prior indefeasible payment in full in cash of all
the Obligations. In addition, any indebtedness of the Borrowers or
any Subsidiary now or hereafter held by each Subsidiary Guarantor
that is required by the Credit Agreement to be subordinated to the
Obligations is hereby subordinated in right of payment to the prior
payment in full of the Obligations. If any amount shall be paid to
any Subsidiary Guarantor on account of (i) such subrogation,
contribution, reimbursement, indemnity or similar right or
(ii) any such indebtedness at any time when any Secured
Obligation then due and owing has not been paid, such amount shall
be held in trust for the benefit of the Secured Parties and shall
forthwith be paid to the Administrative Agent to be credited
against the payment of the Obligations, whether matured or
unmatured, in accordance with the terms of the Loan
Documents.
SECTION 8. General Limitation on
Guarantee Obligations . In any action or proceeding involving
any state corporate law, or any state, Federal or foreign
bankruptcy, insolvency, reorganization or other law affecting the
rights of creditors generally, if the obligations of any Subsidiary
Guarantor under this Agreement would otherwise be held or
determined to be void, voidable, invalid or unenforceable, or
subordinated to the claims of any other creditors, on account of
the amount of its liabilit
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