Document:

EX-10.121

 Exhibit 10.121 

TRANSITION SERVICES AGREEMENT 

by and between 

SMITH & WESSON BRANDS, INC. 

and 
 AMERICAN OUTDOOR
BRANDS, INC. 
 Dated as of August 21, 2020 
  

 

 TABLE OF CONTENTS 

 

							
		 		  	 	Page	 
	 ARTICLE 1 DEFINITIONS
	  	 	1	 
			
	 Section 1.1
	 	Definitions	  	 	1	 
		
	 ARTICLE 2 SERVICES
	  	 	3	 
			
	 Section 2.1
	 	 Provision of Services
	  	 	3	 
	 Section 2.2
	 	 Standard of Service
	  	 	4	 
	 Section 2.3
	 	 Third-Party Service Providers
	  	 	4	 
	 Section 2.4
	 	 Access to Premises
	  	 	4	 
		
	 ARTICLE 3 COMPENSATION
	  	 	5	 
			
	 Section 3.1
	 	 Responsibility for Wages and Fees
	  	 	5	 
	 Section 3.2
	 	 Terms of Payment and Related Matters
	  	 	5	 
	 Section 3.3
	 	 Extension of Services
	  	 	6	 
	 Section 3.4
	 	 Terminated Services
	  	 	6	 
	 Section 3.5
	 	 No Right of Setoff
	  	 	6	 
		
	 ARTICLE 4 TERMINATION
	  	 	6	 
			
	 Section 4.1
	 	 Termination of Agreement
	  	 	6	 
	 Section 4.2
	 	 Termination of Agreement in the Event of Breach
	  	 	6	 
	 Section 4.3
	 	 Insolvency
	  	 	6	 
	 Section 4.4
	 	 Effect of Termination
	  	 	7	 
	 Section 4.5
	 	 Force Majeure
	  	 	7	 
		
	 ARTICLE 5 CONFIDENTIALITY
	  	 	7	 
			
	 Section 5.1
	 	 Confidentiality
	  	 	7	 
		
	 ARTICLE 6 LIMITATION ON LIABILITY; INDEMNIFICATION
	  	 	8	 
			
	 Section 6.1
	 	 Limitation on Liability
	  	 	8	 
	 Section 6.2
	 	 SWBI Indemnification
	  	 	8	 
	 Section 6.3
	 	 AOUT Indemnification
	  	 	8	 
		
	 ARTICLE 7 MISCELLANEOUS
	  	 	8	 
			
	 Section 7.1
	 	 Notices
	  	 	8	 
	 Section 7.2
	 	 Headings
	  	 	9	 
	 Section 7.3
	 	 Severability
	  	 	9	 
	 Section 7.4
	 	 Entire Agreement
	  	 	10	 
	 Section 7.5
	 	 Successors and Assigns
	  	 	10	 
	 Section 7.6
	 	 No Third-Party Beneficiaries
	  	 	10	 
	 Section 7.7
	 	 Amendment and Modification; Waiver
	  	 	10	 
	 Section 7.8
	 	 Governing Law; Submission to Jurisdiction
	  	 	10	 
	 Section 7.9
	 	 Waiver of Jury Trial
	  	 	10	 
	 Section 7.10
	 	 Counterparts
	  	 	11	 

  
 -i- 

 SCHEDULES 
  

			
	 Schedule A
	  	 Information Technology Services

	 Schedule A-1
	  	 IT Systems

	 Schedule A-2
	  	 Shared Drives

	 Schedule B
	  	 Finance Services

	 Schedule C
	  	 Human Resources Services

	 Schedule D
	  	 Compliance Services

	 Schedule E
	  	 Legal Services

	 Schedule F
	  	 Security Services

	 Schedule G
	  	 Investor Relations Support Services

  
 -ii- 

 TRANSITION SERVICES AGREEMENT 

THIS TRANSITION SERVICES AGREEMENT (this “Agreement”), is entered into as of August 21, 2020, by and between
Smith & Wesson Brands, Inc., a Nevada corporation (“SWBI”), and American Outdoor Brands, Inc., a Delaware corporation (“AOUT”). 

RECITALS 
 WHEREAS,
SWBI through its direct and indirect subsidiaries, owns the Firearm Business and the Outdoor Products and Accessories Business; 

WHEREAS, SWBI and AOUT have entered into a Separation and Distribution Agreement, dated as of the date hereof (the “Separation
and Distribution Agreement”), pursuant to which SWBI will be separated into two independent publicly traded companies: (a) SWBI, which, following the consummation of the transactions contemplated by the Separation and Distribution
Agreement, will own and conduct the Firearm Business, and (b) AOUT, which, following the consummation of the transactions contemplated by the Separation and Distribution Agreement, will own and conduct the Outdoor Products and Accessories
Business, which separation will be effected via the distribution by SWBI of all of the issued and outstanding shares of common stock of AOUT to the holders of SWBI common stock (the “Distribution”); 

WHEREAS, pursuant to the Separation and Distribution Agreement and in connection with the transactions contemplated thereby, SWBI and
AOUT have agreed to enter into this Agreement, pursuant to which each party will provide, or cause its Affiliates to provide (in such capacity, as “Provider”), the other party (in such capacity, as “Recipient”) with
certain services, in each case on a transitional basis and subject to the terms and conditions set forth herein; and 
 NOW,
THEREFORE, in consideration of the mutual agreements and covenants hereinafter set forth, AOUT and SWBI hereby agree as follows: 

ARTICLE 1 
 DEFINITIONS

 Section 1.1 Definitions. As used in this Agreement, the following terms have the following meanings: 

“Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under
common control with, such other Person. For the purposes of this definition, “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through
the ownership of voting securities, by contract or otherwise, and the terms “controlling” and “controlled” have meanings correlative to the foregoing. Notwithstanding any provision of this Agreement to the contrary (except where
the relevant provision states explicitly to the contrary), no member of the SWBI Group, on the one hand, and no member of the AOUT Group, on the other hand, shall be deemed to be an Affiliate of the other. 

“Agreement” has the meaning set forth in the preamble to this Agreement. 

“AOUT” has the meaning set forth in the preamble to this Agreement. 

“AOUT Group” means AOUT and its subsidiaries as set forth in the Separation and Distribution Agreement, including all
predecessors and successors to such Persons. 

 “AOUT Indemnified Parties” has the meaning set forth in
Section 6.2. 
 “Applicable Law” means, with respect to any Person, any federal, state, local, or
foreign law (statutory, common, or otherwise), constitution, treaty, convention, ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling, directive, guidance, instruction, direction, permission, waiver, notice, condition,
limitation, restriction or prohibition, or other similar requirement enacted, adopted, promulgated, imposed, issued, or applied by a Governmental Authority that is binding upon or applicable to such Person, its properties or assets, or its business
or operations.     
 “Breaching Party” has the meaning set forth in
Section 4.2. 
 “Business Day” means any day, other than Saturday, Sunday, or other day on which
commercial banks in New York, New York are authorized or required by Applicable Law to close. 
 “Confidential Information”
has the meaning set forth in Section 5.1(a). 
 “Disclosing Party” has the meaning set forth in
Section 5.1(a). 
 “Distribution” has the meaning set forth in the recitals to this Agreement.

 “Employee Expenses” has the meaning set forth in Section 3.1. 

“End Date” has the meaning set forth in Section 2.1(e). 

“Firearm Business” means the business, operations, products, services, and activities of SWBI’s firearm business. 

“Force Majeure Events” has the meaning set forth in Section 4.5. 

“Governmental Authority” means any multinational, foreign, federal, state, local, or other governmental, statutory, or
administrative authority, regulatory body, or commission or any court, tribunal, or judicial or arbitral authority which has any jurisdiction or control over either party (or any of their Affiliates). 

“Liabilities” means any and all claims, debts, liabilities, damages, and/or obligations of any kind, character, or
description, whether absolute or contingent, matured or not matured, liquidated or unliquidated, accrued or unaccrued, known or unknown, whenever arising, including all costs and expenses (including attorneys’ fees and expenses and associated
investigation costs) relating thereto, and including those claims, debts, liabilities, damages, and/or obligations arising under this Agreement, any Applicable Law, any action or threatened action, any order or consent decree of any Governmental
Authority, or any award of any arbitrator of any kind, and those arising under any agreement, commitment, or undertaking, including in connection with the enforcement of rights hereunder or thereunder 

“Non-Breaching Party” has the meaning set forth in
Section 4.2. 

“Out-of-Pocket Costs” has the meaning set
forth in Section 3.2(a). 

  
 2 

 “Outdoor Products and Accessories Business” means the business, operations,
products, services, and activities of SWBI’s outdoor products and accessories business, which will be transferred from SWBI to AOUT in connection with the Distribution. 

“Permitted Purpose” has the meaning set forth in Section 5.1(a). 

“Person” means an individual, corporation, partnership, limited liability company, association, trust, or other entity or
organization, including a Governmental Authority. 
 “Provider” has the meaning set forth in the recitals to this
Agreement. 
 “Receiving Party” has the meaning set forth in Section 5.1(a). 

“Recipient” has the meaning set forth in the recitals to this Agreement. 

“Representatives” has the meaning set forth in Section 5.1(a). 

“Separation and Distribution Agreement” has the meaning set forth in the recitals to this Agreement. 

“Service Schedules” has the meaning set forth in Section 2.1(a). 

“Services” has the meaning set forth in Section 2.1(a). 

“SWBI” has the meaning set forth in the preamble to this Agreement. 

“SWBI Group” means SWBI and its subsidiaries as set forth in the Separation and Distribution Agreement, including all
predecessors and successors to such Persons. 
 “SWBI Indemnified Parties” has the meaning set forth in
Section 6.3. 
 ARTICLE 2 

SERVICES 
 Section 2.1
Provision of Services. 
 (a) Commencing on the Distribution, Provider agrees to provide the services (the
“Services”) set forth in the schedules attached hereto (such schedules may be amended or supplemented pursuant to the terms of this Agreement, collectively the “Service Schedules”) to Recipient, for the respective
periods and on the other terms and conditions set forth in this Agreement and the Service Schedules. 
 (b) Notwithstanding the contents of
the Service Schedules, Provider agrees to respond in good faith to any reasonable request by Recipient for access to any additional services that are necessary for the operation of the Firearm Business and/or the Outdoor Products and Accessories
Business, as applicable, following the Distribution that are not currently contemplated in the Service Schedules, at a price to be agreed upon after good faith negotiations between the parties. Any such additional services so provided by Provider
shall constitute Services under this Agreement and be subject in all respects to the provisions of this Agreement as if fully set forth on the Service Schedules as of the date hereof. 

  
 3 

 (c) The parties hereto acknowledge the transitional nature of the Services. Accordingly, as
promptly as practicable following the execution of this Agreement, Recipient agrees to use commercially reasonable efforts to make a transition of each Service to its own internal organization or to obtain alternate third-party sources to provide
the Services. 
 (d) In providing the Services, Provider shall not be obligated to (i) purchase, lease, or license any additional
equipment or software unless any additional costs to Provider are reimbursed by Recipient, (ii) create or supply any documentation or information not currently existing or available through minimal efforts of Provider, (iii) pay any costs
related to the transfer or conversion of data to Recipient or any alternate supplier of the Services, or (iv) enter into additional contracts with third parties or change the scope of current agreements with third parties unless any additional
costs to Provider are reimbursed by Recipient. 
 (e) Subject to Section 3.3,
Section 3.4, and Section 4.5, the obligations of Provider under this Agreement to provide Services shall terminate with respect to each Service upon the earlier of (i) August 24, 2022, or
(ii) the termination of the applicable service period specified in the Service Schedule (each, an “End Date”). Notwithstanding the foregoing, the parties acknowledge and agree that Recipient may determine from time to time that
it does not require all the Services set forth on the Service Schedules or that it does not require such Services for the entire period up to the applicable End Date. Accordingly, Recipient may terminate any Service, in whole or in part, upon thirty
(30) days’ advance written notice to Provider. In no event shall Provider be obligated to provide Services to Recipient after the End Date unless Provider otherwise agrees in writing to such an extension pursuant to
Section 3.3. 
 Section 2.2 Standard of Service. 

(a) Provider represents, warrants, and agrees that the Services shall be provided in good faith, in accordance with Applicable Law, and in a
manner generally consistent with the historical provision of the Services and with the same standard of care as historically provided. Subject to Section 2.3, Provider agrees to assign sufficient resources and qualified
personnel as are reasonably required to perform the Services in accordance with the standards set forth in the preceding sentence. 
 (b)
Except as expressly set forth in Section 2.2(a) or in any contract entered into hereunder, Provider makes no representations and warranties of any kind, implied or expressed, with respect to the Services, including, without
limitation, no warranties of merchantability or fitness for a particular purpose, which are specifically disclaimed. Recipient acknowledges and agrees that this Agreement does not create a fiduciary relationship, partnership, joint venture, or
relationships of trust or agency between the parties and that all Services are provided by Provider as an independent contractor. 

Section 2.3 Third-Party Service Providers. Provider shall have the right to hire third-party subcontractors to provide all or part
of any Service hereunder; provided, however, that in the event such subcontracting is inconsistent with past practices or such subcontractor is not already engaged with respect to such Service as of the date hereof, Provider shall
obtain the prior written consent of Recipient to hire such subcontractor, which consent shall not be unreasonably withheld. Provider shall in all cases retain responsibility for the provision to Recipient of Services to be performed by any
third-party service provider or subcontractor or by any of Provider’s Affiliates. 
 Section 2.4 Access to Premises. 

(a) In order to enable the provision of the Services by Provider, Recipient agrees that it shall provide to Provider’s Affiliates,
employees, and any third-party service providers or subcontractors who provide Services, at no cost to Provider, access to the facilities, assets, and books and records of Recipient and its Affiliates, in all cases to the extent reasonably necessary
for Provider to fulfill its obligations under this Agreement. 

  
 4 

 (b) Provider agrees that all of its and its Affiliates’ employees and any third-party
service providers and subcontractors, when on the property of Recipient or when given access to any equipment, computer, software, network, or files owned or controlled by Recipient, shall conform to the policies and procedures of Recipient
concerning health, safety, and security which are made known to Provider in advance in writing. 
 ARTICLE 3 

COMPENSATION 

Section 3.1 Responsibility for Wages and Fees. For such time as any employees of Provider or any of its Affiliates are providing
the Services to Recipient under this Agreement, (a) such employees will remain employees of Provider or such Affiliate, as applicable, and shall not be deemed to be employees of Recipient for any purpose, and (b) subject to
Section 3.2, Provider or such Affiliate, as applicable, shall be solely responsible for the payment and provision of all wages, bonuses, and commissions, employee benefits, including severance and worker’s
compensation, and the withholding and payment of applicable taxes relating to such employment (“Employee Expenses”). 

Section 3.2 Terms of Payment and Related Matters. 

(a) As consideration for provision of the Services, Recipient shall pay Provider the amount specified for each Service in accordance with the
terms set forth in the Service Schedules. In addition to such amounts, unless covered in the amount specified for the Services in accordance with the terms set forth in the Service Schedules, Recipient shall reimburse Provider for reasonable
documented expenses incurred by Provider in the provision of any Service, including, without limitation, Employee Expenses, license fees, and payments to third-party service providers or subcontractors (collectively, “Out-of-Pocket Costs”), in accordance with the procedure set forth in Section 3.2(c). 

(b) During the term of this Agreement, SWBI shall apply a credit against any amounts payable by AOUT, as a Recipient of Services, to SWBI, as
a Provider of Services, pursuant to Section 3.2(a), as follows: 
 (i) $900,000, which will be applied during the
period beginning on the date of this Agreement and ending on the first anniversary of the date of this Agreement; and 
 (ii) $450,000,
which will be applied during the period beginning on the first anniversary of the date of this Agreement and ending on the second anniversary of the date of this Agreement. 

(c) Provider shall provide Recipient with such supporting documentation as Recipient may reasonably request with respect to Out-of-Pocket Costs. Subject to Section 3.2(d), Recipient shall pay to Provider the amount payable pursuant to this Agreement as promptly as
reasonably practicable after the date of receipt of such supporting documentation by Recipient from Provider, but in any event no later than 15 days after receipt of such supporting documentation. Notwithstanding any other provision of this
Agreement (except Section 3.3), compensation for Services will be determined using an internal cost allocation methodology based on fully burdened cost such that the party providing the Services will have neither a profit
nor loss from the provision of such Services as calculated under GAAP. 

  
 5 

 (d) In the event of a dispute by Recipient of the amount due according to the supporting
documentation, no later than ten (10) days following receipt by Recipient of such disputed supporting documentation, Recipient shall deliver a written statement to Provider listing all disputed items and providing a reasonably detailed
description of each disputed item. Amounts not so disputed shall be deemed accepted and shall be paid, notwithstanding disputes on other items, within the period set forth in Section 3.2(c). The parties shall seek to
resolve all such disputes expeditiously and in good faith but if such dispute cannot be resolved within thirty (30) days, Provider may initiate legal action to seek resolution of such dispute. 

Section 3.3 Extension of Services. The parties agree that Provider shall not be obligated to perform any Service after the
applicable End Date; provided, however, that if Recipient desires and Provider agrees to continue to perform any of the Services after the applicable End Date, the parties shall negotiate in good faith to determine a market price that
compensates Provider for its performance of such Services, including reimbursement of all Out-of-Pocket Costs and an ongoing procedure for such reimbursement. Except as
amended through the mutually agreed upon extension, the Services so performed by Provider after the applicable End Date shall continue to constitute Services under this Agreement and be subject in all respects to the provisions of this Agreement for
the duration of the agreed-upon extension period. 
 Section 3.4 Terminated Services. Upon termination or expiration of any or
all Services pursuant to this Agreement, or upon the termination of this Agreement in its entirety, Provider shall have no further obligation to provide the applicable terminated Services and Recipient will only have the obligation to pay Provider
pursuant to Section 3.2 for or in respect of (a) Services already provided in accordance with the terms of this Agreement and received by Recipient prior to such termination, and (b) which Provider became legally
bound on or before such termination or expiration to pay as a result of the provision of Services to Recipient. 
 Section 3.5 No
Right of Setoff. Each of the parties hereby acknowledges that it shall have no right under this Agreement to offset any amounts owed (or to become due and owing) to the other party, whether under this Agreement, the Separation and Distribution
Agreement, or otherwise, against any other amount owed (or to become due and owing) to it by the other party. 
 ARTICLE 4 

TERMINATION 

Section 4.1 Termination of Agreement. Subject to Section 4.4, this Agreement shall terminate in its
entirety upon the earlier of (a) the End Date, (b) the date upon which the parties shall have no continuing obligation to perform any Services as a result of each of their expiration or termination in accordance with
Section 2.1(e) or Section 4.2, or (c) in accordance with Section 4.3. 

Section 4.2 Termination of Agreement in the Event of Breach. Any party (the
“Non-Breaching Party”) may terminate this Agreement with respect to any Service, in whole or in part, at any time upon prior written notice to the other party (the “Breaching
Party”) if the Breaching Party has failed (other than pursuant to Section 4.5) to perform any of its obligations under this Agreement relating to such Service, and such failure shall have continued without cure for
a period of fifteen (15) days after receipt by the Breaching Party of a written notice of such failure from the Non-Breaching Party seeking to terminate such Service. 

Section 4.3 Insolvency. In the event that either party hereto shall (a) file a petition in bankruptcy, (b) become or be
declared insolvent, or become the subject of any proceedings (not dismissed within sixty (60) days) related to its liquidation, insolvency, or the appointment of a receiver, (c) make an assignment on behalf of all or substantially all of
its creditors, or (d) take any corporate action for its winding up or dissolution, then the other party shall have the right to terminate this Agreement by providing written notice in accordance with Section 7.1. 

  
 6 

 Section 4.4 Effect of Termination. Upon termination of this Agreement in its
entirety pursuant to Section 4.1, all obligations of the parties hereto shall terminate, except for the provisions of Section 3.2, Section 3.4,
Section 3.5, Article 4, Article 5 and Article 6, which shall survive any termination or expiration of this Agreement. 

Section 4.5 Force Majeure. The obligations of Provider under this Agreement with respect to any Service shall be suspended during
the period and to the extent that Provider is prevented or hindered from providing such Service, or Recipient is prevented or hindered from receiving such Service, due to any of the following causes beyond such party’s reasonable control (such
causes, “Force Majeure Events”): (a) acts of God; (b) flood, fire, or explosion, (c) war, invasion, riot, or other civil unrest; (d) Applicable Law or judicial or administrative order; (e) actions,
embargoes, or blockades in effect on or after the date of this Agreement; (f) action by any Governmental Authority; (g) national or regional emergency; (h) strikes, labor stoppages, or slowdowns or other industrial disturbances;
(i) shortage of adequate power or transportation facilities; (j) pandemics; or (k) any other event which is beyond the reasonable control of such party. The party suffering a Force Majeure Event shall give notice of suspension as soon
as reasonably practicable to the other party stating the date and extent of such suspension and the cause thereof, and Provider shall resume the performance of its obligations as soon as reasonably practicable after the removal of the cause. Neither
Provider nor Recipient shall be liable for the nonperformance or delay in performance of its respective obligations under this Agreement when such failure is due to a Force Majeure Event. The applicable End Date for any Service so suspended shall be
automatically extended for a period of time equal to the time lost by reason of the suspension. 
 ARTICLE 5 

CONFIDENTIALITY 

Section 5.1 Confidentiality. 

(a) During the term of this Agreement and thereafter, the parties hereto shall, and shall instruct their respective employees, agents,
accountants, legal counsel, and other representatives (“Representatives”) to, maintain in confidence and not disclose the other party’s financial, technical, sales, marketing, development, personnel, and other information,
records, or data, including, without limitation, customer lists, supplier lists, trade secrets, designs, product formulations, product specifications, or any other proprietary or confidential information, however recorded or preserved, whether
written or oral (any such information, “Confidential Information”). Each party hereto shall use the same degree of care, but no less than reasonable care, to protect the other party’s Confidential Information as it uses to
protect its own Confidential Information of like nature. Unless otherwise authorized in any other agreement between the parties, any party receiving any Confidential Information of the other party (the “Receiving Party”) may use
Confidential Information only for the purposes of fulfilling its obligations under this Agreement (the “Permitted Purpose”). Any Receiving Party may disclose such Confidential Information only to its Representatives who have a need
to know such information for the Permitted Purpose and who have been advised of the terms of this Section 5.1 and the Receiving Party shall be liable for any breach of these confidentiality provisions by such Persons;
provided, however, that any Receiving Party may disclose such Confidential Information to the extent such Confidential Information is required to be disclosed by Applicable Law or judicial or administrative order, in which case the
Receiving Party shall promptly notify, to the extent possible, the disclosing party (the “Disclosing Party”), and take reasonable steps to assist in contesting such disclosure or in protecting the Disclosing Party’s rights
prior to disclosure, and in which case the Receiving Party shall only disclose such Confidential Information that it is advised by its counsel in writing that it is legally bound to disclose under such Applicable Law or judicial or administrative
order. 

  
 7 

 (b) Notwithstanding the foregoing, “Confidential Information” shall not
include any information that the Receiving Party can demonstrate (i) was publicly known at the time of disclosure to it, or has become publicly known through no act of the Receiving Party or its Representatives in breach of this
Section 5.1, (ii) was rightfully received from a third party without a duty of confidentiality, or (iii) was developed by it independently without any reliance on the Confidential Information. 

(c) Upon demand by the Disclosing Party at any time, or upon expiration or termination of this Agreement with respect to any Service, the
Receiving Party agrees promptly to return or destroy, at the Disclosing Party’s option, all Confidential Information. If such Confidential Information is destroyed, an authorized officer of the Receiving Party shall certify to such destruction
in writing. 
 ARTICLE 6 

LIMITATION ON LIABILITY; INDEMNIFICATION 

Section 6.1 Limitation on Liability. In no event shall either party hereto have any liability under any provision of this
Agreement for any punitive, special, or indirect damages relating to the breach or alleged breach of this Agreement, or diminution of value or any damages based on any type of multiple, whether based on statute, contract, tort, or otherwise, and
whether or not arising from the other party’s sole, joint, or concurrent negligence, strict liability, criminal liability, or other fault. Recipient acknowledges that the Services to be provided to it hereunder are subject to, and that its
remedies under this Agreement are limited by, the applicable provisions of Section 2.2, including the limitations on representations and warranties with respect to the Services. 

Section 6.2 SWBI Indemnification. Subject to the limitations set forth in Section 6.1, SWBI shall
indemnify, defend, and hold harmless AOUT and its Affiliates and each of their respective Representatives (collectively, the “AOUT Indemnified Parties”) from and against any and all Liabilities of the AOUT Indemnified Parties
relating to, arising out of, or resulting from the gross negligence or willful misconduct of SWBI or its Affiliates or any third party that provides a Service to AOUT pursuant to Section 2.3 in connection with the provision
of, or failure to provide, any Services to AOUT. 
 Section 6.3 AOUT Indemnification. Subject to the limitations set forth in
Section 6.1, AOUT shall indemnify, defend, and hold harmless SWBI and its Affiliates and each of their respective Representatives (collectively, the “SWBI Indemnified Parties”) from and against any and all
Liabilities of the SWBI Indemnified Parties relating to, arising out of, or resulting from the gross negligence or willful misconduct of AOUT or its Affiliates or any third party that provides a Service to SWBI pursuant to
Section 2.3 in connection with the provision of, or failure to provide, any Services to SWBI. 
 ARTICLE 7

 MISCELLANEOUS 

Section 7.1 Notices. All supporting documentation, invoices, notices, requests, consents, claims, demands, waivers, and other
communications hereunder shall be in writing and shall be deemed to have been given (a) when delivered by hand (with written confirmation of receipt), (b) when received by the addressee if sent by a nationally recognized overnight courier
(receipt requested), (c) on the date sent by facsimile or e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day
if sent after normal business hours of the recipient, or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the
following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 7.1): 

  
 8 

			
	(a)	  	if to SWBI:
		
		  	 Smith & Wesson Brands, Inc.

		  	 2100 Roosevelt Avenue

		  	 Springfield, Massachusetts 01104

		  	 Email: rcicero@smith-wesson.com

		  	 Attn: General Counsel

		
		  	with a copy (which shall not constitute notice) to:
		
		  	 Greenberg Traurig, LLP

		  	 2375 East Camelback Road, Suite 700

		  	 Phoenix, Arizona 85016

		  	 Attn:     Robert S. Kant

		  	              Katherine A. Beck

		  	 Email:  kantr@gtlaw.com

		  	              beckk@gtlaw.com

		
	(b)	  	if to AOUT:
		
		  	 American Outdoor Brands, Inc.

		  	 1800 North Route Z

		  	 Columbia, Missouri 65202

		  	 Attn: Chief Counsel

		  	 Email: dbrown@aob.com

		
		  	with a copy (which shall not constitute notice) to:
		
		  	 Greenberg Traurig, LLP

		  	 2375 East Camelback Road, Suite 700

		  	 Phoenix, Arizona 85016

		  	 Attn:     Robert S. Kant

		  	              Katherine A. Beck

		  	 Email:  kantr@gtlaw.com

		  	              beckk@gtlaw.com

 Section 7.2 Headings. The headings in this Agreement are for reference only and shall not affect
the interpretation of this Agreement. 
 Section 7.3 Severability. If any term or provision of this Agreement is invalid,
illegal, or unenforceable in any jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction.
Upon such determination that any term or other provision is invalid, illegal, or unenforceable, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a
mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible. 

  
 9 

 Section 7.4 Entire Agreement. This Agreement, including the Service Schedules,
constitutes the sole and entire agreement of the parties to this Agreement with respect to the subject matter contained herein and supersedes all prior and contemporaneous understandings and agreements, both written and oral, with respect to such
subject matter. In the event and to the extent that there is a conflict between the provisions of this Agreement and the provisions of the Separation and Distribution Agreement as it relates to the Services hereunder, the provisions of this
Agreement shall control. 
 Section 7.5 Successors and Assigns. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and permitted assigns. Subject to the following sentence, neither party may assign its rights or obligations hereunder without the prior written consent of the other party, which consent
shall not be unreasonably withheld or delayed. Notwithstanding the foregoing sentence, Recipient may, without the prior written consent of Provider, assign all or any portion of its right to receive Services to any of its Affiliates;
provided, that such Affiliate shall receive such Services from Provider in the same place and manner as described in the Service Schedule as Recipient would have received such Service. No assignment shall relieve the assigning party of any of
its obligations hereunder. 
 Section 7.6 No Third-Party Beneficiaries. This Agreement is for the sole benefit of the parties
hereto and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit, or remedy of any nature whatsoever, under or by reason
of this Agreement. 
 Section 7.7 Amendment and Modification; Waiver. This Agreement, including the Service Schedules, may only
be amended, modified, or supplemented by an agreement in writing signed by each party hereto. No waiver by any party of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving. No
failure to exercise, or delay in exercising, any right, remedy, power, or privilege arising from this Agreement shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power, or privilege
hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power, or privilege. 

Section 7.8 Governing Law; Submission to Jurisdiction. This Agreement shall be governed by and construed in accordance with the
internal laws of the state of Delaware without giving effect to any choice or conflict of law provision or rule. Any legal suit, action, or proceeding arising out of or based upon this Agreement or the transactions contemplated hereby may be
instituted in the federal courts of the United States of America or the courts of the state of Delaware, and each party irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action, or proceeding. Service of process,
summons, notice, or other document by mail to such party’s address set forth herein shall be effective service of process for any suit, action, or other proceeding brought in any such court. The parties irrevocably and unconditionally waive any
objection to the laying of venue of any suit, action, or any proceeding in such courts and irrevocably waive and agree not to plead or claim in any such court that any such suit, action, or proceeding brought in any such court has been brought in an
inconvenient forum. 
 Section 7.9 Waiver of Jury Trial. Each party irrevocably and unconditionally waives any right it may have
to a trial by jury in respect of any legal action arising out of or relating to this Agreement or the transactions contemplated hereby. Each party to this Agreement certifies and acknowledges that (a) no representative of any other party has
represented, expressly or otherwise, that such other party would not seek to enforce the foregoing waiver in the event of a legal action, (b) such party has considered the implications of this waiver, (c) such party makes this waiver
voluntarily, and (d) such party has been induced to enter into this Agreement by, among other things, the mutual waivers and certifications in this Section 7.9. 

  
 10 

 Section 7.10 Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, e-mail, or other means of electronic
transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement. 
 [Signature Page
Follows] 

  
 11 

 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as
of the date first written above by their respective officers thereunto duly authorized. 
  

			
	SMITH & WESSON BRANDS, INC.
		
	 By:
	 	 /s/ Mark P. Smith

	 Name: Mark P. Smith

	 Title: President and Chief Executive Officer

	
	AMERICAN OUTDOOR BRANDS, INC.
		
	 By:
	 	 /s/ Brian D. Murphy

	 Name: Brian D. Murphy

	 Title: President and Chief Executive Officer

  
 Signature Page to
Transition Services Agreement 

 SCHEDULE A 

Information Technology Services 
  

									
	 	 	 	 	 
	ID	 	Service	  	Description	  	Service Period	  	Cost1
	 	 	 	 	 
	1	 	IT Systems	  	 SWBI will provide AOUT (and third parties designated by AOUT) with
network access to the SWBI IT systems specified below in the attached Schedule A-1.
  

SWBI will provide AOUT with reasonable notice in advance of any planned system maintenance outages so that AOUT can properly plan for such outages.
	  	Up to 24 months commencing on the Distribution; provided, however, that this term may be extended by mutual agreement of AOUT and SWBI pursuant to
Section 3.3.	  	 
	 	 	 	 	 
	2	 	Share Point and Shared Drives	  	SWBI to provide AOUT with access to the SWBI shared drives set forth in the attached Schedule A-2 until such time as
they have been carved out or copied and provided to AOUT:	  	Up to 24 months commencing on the Distribution.	  	 
	 	 	 	 	 
	3	 	E-mail	  	 SWBI to provide AOUT with access to historical emails, to the extent
not transferred prior to or following the Distribution.
  
 Email will be migrated from
SWBI to AOUT prior to the termination of this transition service.
	  	Up to 24 months commencing on the Distribution.	  	 
	 	 	 	 	 
	4	 	End User Support	  	 SWBI to provide AOUT with Service Desk services until such time as
substitute Service Desk services are established by AOUT.
  
 Service desk services of
AOUT will be split into:
  
 Traditional IT service desk – PC maintenance,
software licensing, password reset, network/infrastructure, Citrix, printer / copier maintenance etc.
  

SAP support – Break/Fix and interface support, mass data loads, batch jobs, go anywhere file movement, authorization support, EDI, data carve out/copy for
transition to new ERP system by AOUT.
  
 In the event that AOUT acquires a new company
or business or performs other integrations while this transition service is in effect, SWBI will assist in the loading of the data for that newly acquired company in SAP. The assumption is that any new acquisitions will follow current business
processes.
	  	Up to 24 months commencing on the Distribution.	  	 

 

	1 	 Costs for services in this Schedule A will be calculated as set forth in the “Cost and
Billing” section below. 

									
	 	 	 	 	 
	ID	 	Service	  	Description	  	Service Period	  	Cost1
	 	 	 	  	 New custom development in SAP solely
for AOUT will not be provided to AOUT, nor will support of ERP selection or implementation by AOUT, or loading of legacy data into the newly selected ERP system. However, SWBI will provide data extraction and transfer to assist AOUT’s
third-party consultants in implementation of new AOUT ERP system.
  
 AOUT will manage
and provide its own cyber security for the websites directly related to AOUT. SWBI will not provide administration and cyber security to web sites that are not operated and maintained by SWBI.

 
 SWBI will not provide support for AOUT’s Salesforce.com functionality.

 
 SWBI will work with AOUT to establish and adhere to quarterly system maintenance
windows in which systems may be down and unavailable for use.
	  	 	  	 

 Cost and Billing 

AOUT will be billed by SWBI monthly for services rendered associated with this Agreement according to the following guidelines: 

 

	 	•	 	 Hardware purchased by SWBI for AOUT will be billed at cost. 

 

	 	•	 	 Software licensing will be billed by SWBI at the license cost per application per person. 

 

	 	•	 	 Day-to-day IT support supplied to
AOUT will be billed by SWBI as 15% of the fully burdened salary plus fringe of the infrastructure, service desk, CoE, BASIS, and authorization teams monthly. This percentage will be revisited quarterly in order to ensure that the charges and
percentage of time spent on AOUT IT support are appropriate and justified. These assessments may increase or decrease the rate billed by SWBI to AOUT. 

  

	 	•	 	 Development project(s) for the sole use of AOUT will be estimated by SWBI by functional area/resource and billed
above and beyond day-to-day IT services. 

 SCHEDULE A-1 

IT Systems 
  

									
	 	 	 	 	 
	ID	 	System/Software	  	Description	  	Additional notes	  	Cost2
	 	 	 	 	 
	1	 	SAP	  	CoE—Supported as described in Schedule A, IT Services	  	No Infrastructure	  	 
	 	 	 	 	 
	2	 	Esker	  	 Infrastructure – Support connectivity with SAP &
SAGE
  
 CoE—Interface support as needed
	  	 	  	 
	 	 	 	 	 
	3	 	Sterling Integrator	  	 Infrastructure – Support Servers, vendor connectivity

 
 CoE—Day to day business support for all EDI transactions between SAP and trading
partners.
	  	 	  	 
	 	 	 	 	 
	4	 	Solidworks	  	Infrastructure – Support Server, Licensing	  	 	  	 
	 	 	 	 	 
	5	 	Creo	  	Infrastructure – Support Server, Licensing	  	 	  	 
	 	 	 	 	 
	6	 	Office 365/suite	  	Infrastructure – Email Domains, SharePoint	  	 	  	 
	 	 	 	 	 
	7	 	Blackline	  	CoE—Interface support as needed	  	No Infrastructure	  	 
	 	 	 	 	 
	8	 	Qlikview	  	 Infrastructure – Support Servers

 
 CoE—Break/fix support of existing reports. SWBI may choose to use existing or
create Qlikview reports if deemed necessary to support data carve out.
	  	 	  	 
	 	 	 	 	 
	9	 	ADP	  	 Access will be provided and administered.

 
 CoE – Interface support as needed
	  	No Infrastructure	  	 
	 	 	 	 	 
	10	 	Trend Micro	  	 End point and server anti-virus software. Software and updates will
be supported.
  
 Infrastructure – Support Servers
	  	 	  	 
	 	 	 	 	 
	11	 	Blue Prism	  	Infrastructure – Support Servers	  	 	  	 

 

	2 	 During the last year of the transition services to be provided under this Schedule A-1, licensing for the applicable software will be transitioned to AOUT from SWBI on the respective anniversary of each license renewal. Until that date, SWBI will cross charge AOUT for the cost of each such
license. 

									
	 	 	 	 	 
	ID	 	System/Software	  	Description	  	Additional notes	  	Cost2
	 	 	 	 	 
	12	 	SPS Commerce	  	Complete transition of trading partners from SPS commerce to Sterling Integrator	  	No Infrastructure	  	 
	 	 	 	 	 
	13	 	Adobe	  	Reader, Pro, and Creative Cloud. Licensing and installation supported	  	No Infrastructure	  	 
	 	 	 	 	 
	14	 	PDM Standard	  	PDM vault for solids. Database and application support	  	 	  	 
	 	 	 	 	 
	17	 	Paymetric	  	Infrastructure – Support Servers	  	 	  	 
	 	 	 	 	 
	18	 	QAS (address verification)	  	 Infrastructure – Support Servers

 
 Installation and testing of updates
	  	 	  	 
	 	 	 	 	 
	19	 	Active Directory	  	Infrastructure – Support Servers; user accounts; security groups	  	 	  	 
	 	 	 	 	 
	20	 	Network services	  	Infrastructure – Support network switches, routers, firewalls, wireless, LAN, WAN, VPN	  	 	  	 
	 	 	 	 	 
	21	 	SAP Console	  	Infrastructure – Support Servers	  	 	  	 
	 	 	 	 	 
	22	 	Winshuttle Foundation	  	Infrastructure – Support Servers. Break / fix for purchase requisition release process.	  	 	  	 
	 	 	 	 	 
	23	 	Winshuttle data services	  	 Infrastructure – Support Servers

 
 CoE—Break/fix support as well as mass updates as needed.
	  	 	  	 
	 	 	 	 	 
	24	 	Wells Fargo	  	 Interface and file administration support.

 
 Infrastructure – Support Servers and FTP/SFTP connections/accounts

 
 CoE—Interface support as needed.
	  	 	  	 
	 	 	 	 	 
	25	 	TD Bank	  	 Interface and file administration support.

 
 Infrastructure – Support Servers and FTP/SFTP connections/accounts

 
 CoE—Interface support as needed.
	  	 	  	 
	 	 	 	 	 
	26	 	Printing services	  	 Print servers

 
 Maintain printers

 
 Infrastructure – Support Servers
	  	 	  	 

									
	 	 	 	 	 
	ID	 	System/Software	  	Description	  	Additional notes	  	Cost1
	 	 	 	 	 
	27	 	SMTP Email relay	  	Infrastructure – Support Servers	  	 	  	 
	 	 	 	 	 
	28	 	SQL database servers	  	Infrastructure – Support Servers	  	 	  	 
	 	 	 	 	 
	29	 	SAP GRC services	  	Support audit compliance / segregation of duties for AOUT	  	 	  	 
	 	 	 	 	 
	30	 	Citrix	  	Need to determine remote access needs of AOUT moving forward	  	 	  	 
	 	 	 	 	 
	31	 	KBOX	  	KBOX will be used to track ticket progress and resolution for AOUT	  	 	  	 
	 	 	 	 	 
	32	 	Sage – Taylor Brands	  	Infrastructure – Support Servers and access controls	  	 	  	 
	 	 	 	 	 
	33	 	Sage – Crimson Trace	  	Infrastructure – Support Servers and access controls	  	 	  	 
	 	 	 	 	 
	34	 	Sage – UST	  	Infrastructure – Support Servers and access controls	  	 	  	 
	 	 	 	 	 
	35	 	Great Plains – BTI	  	Infrastructure – Support Servers	  	 	  	 
	 	 	 	 	 
	36	 	SAP Concur	  	Access and travel administration will be supported until AOUT establishes their own travel and expense solution	  	No Infrastructure	  	 
	 	 	 	 	 
	37	 	Readsoft	  	Legacy invoicing data. Infrastructure – Support Servers	  	 	  	 
	 	 	 	 	 
	38	 	Mitel/Telephone	  	Phone systems in Chicopee, Columbia and Crimson Trace. Infrastructure – Support	  	 	  	 
	 	 	 	 	 
	39	 	Bartender	  	 CoE – maintain necessary customer labels as well as the
associated interfaces and printing functionality.
  
 Infrastructure – Support
Servers
	  	 	  	 
	 	 	 	 	 
	40	 	Currency Exchange Interface	  	 Thompson Reuter’s currency exchange interface

 
 CoE—Interface support as needed
	  	 	  	 

									
	 	 	 	 	 
	ID	 	System/Software	  	Description	  	Additional notes	  	Cost1
	 	 	 	 	 
	41	 	Process Weaver	  	 CoE—Interface support as needed

 
 Infrastructure – Support Servers
	  	 	  	 
	 	 	 	 	 
	42	 	SFCC Interface	  	CoE – support SAP interface with SFCC	  	 	  	 
	 	 	 	 	 
	43	 	Windchill	  	Windchill engineering software – Software installation when required	  	 	  	 

 SCHEDULE A-2 

Shared Drives 
  

							
	 	 	 	 
	ID	 	Network Drive	  	Description	  	Additional notes
	 	 	 	 
	1	 	\\san-cifs01.smith-wesson.com\usr-share (H)	  	Shared drive space by endpoint	  	Allows people to store files on a network drive that is not accessible by other people
	 	 	 	 
	2	 	\\SAN-CIFS01.smith-wesson.com (I)	  	Shared drive. Access can be limited by folder.	  	 
	 	 	 	 
	3	 	\\SAN-CIFS01.smith-wesson.com (T)	  	Shared drive. Access can be limited by folder.	  	 

 SCHEDULE B 

Finance Services 
  

									
	 	 	 	 	 
	ID	 	Service	  	Description	  	Service Period	  	Cost3
	 	 	 	 	 
	1	 	Financial Business Transactions	  	As reasonably requested by either party, the other party to provide support and training for the requesting party to perform financial business transactions,
including accounting, consolidation, reporting, and forecasting.	  	Up to 24 months commencing on the Distribution.	  	 
	 	 	 	 	 
	2	 	Treasury	  	As reasonably requested by either party, the other corresponding party will support the requesting party with banking activities (including banking and cash
management processes and procedures).	  	Up to 24 months commencing on the Distribution.	  	 
	 	 	 	 	 
	3	 	Tax	  	As reasonably requested by either party, the other party will provide support and assistance in the resolution of audit matters related to any tax filing that
occurred prior to the spin-off of AOUT.	  	Up to 24 months commencing on the Distribution.	  	 
	 	 	 	 	 
	4	 	Audit	  	SWBI to provide AOUT with SOC1 testing and certificate; reasonable cost to be paid by AOUT. Failing the ability to provide a SOC1, SWBI will accommodate
AOUT’s auditors in testing internal controls over information technology systems. SWBI to provide AOUT with support, knowledge transfer, and training related to internal controls.	  	Up to 24 months commencing on the Distribution.	  	 

  

	3 	 Cost for all Finance Services will be calculated in accordance with Section 3.2 of
this Agreement. 

 SCHEDULE C 

Human Resources Services 
  

									
	 	 	 	 	 
	ID	 	Service	  	Description	  	Service Period	  	Cost
	 	 	 	 	 
	1	 	401(k)	  	As reasonably requested by AOUT, SWBI to (i) provide information and consulting services regarding prior participation by any AOUT employee in the SWBI
401(k) plan, and (ii) assist in transitioning AOUT employees to the AOUT 401(k) plan, including with respect to questions/issues that arise regarding the transfer of participant accounts, loans, etc. from the SWBI 401(k) plan into the AOUT
401(k) plan. For these services, the primary service providers will be Benefits Manager, Jim Pashko, or Benefits Specialist, (currently Liz Carroll), provided that neither shall dedicate more than 5% of their time during the service period.	  	Up to 24 months commencing on the Distribution.	  	$48/hour
	 	 	 	 	 
	2	 	E-Trade	  	As reasonably requested by AOUT, SWBI to provide consulting services regarding administration of AOUT’s E-Trade
platform and equity/ESPP program. For these services, the primary service providers will be Lisa Gebhardt and/or Laura Olmeda-Smith, provided that neither shall dedicate more than 5% of their time during the service period. E-Trade to be the primary consultant for things such as processing, admin. SWBI would be the resource on plans, historical eligibility, ESPP historical records, etc.	  	Up to 24 months commencing on the Distribution.	  	$76/hour

 SCHEDULE D 

Compliance Services 
  

									
	 	 	 	 	 
	ID	 	Service	  	Description	  	Service Period	  	Cost4
	 	 	 	 	 
	1	 	Compliance Training	  	 As reasonably requested by AOUT, SWBI will provide assistance in
managing quarterly, online compliance training for AOUT employees.
  
 For these
services, the primary service provider shall be SWBI’s Corporate Compliance Analyst, provided that the service provider shall not dedicate more than 5% of his or her time to the provision of these services to AOUT during the service
period.
	  	Up to 6 months commencing on the Distribution.	  	 
	 	 	 	 	 
	2	 	Policy Management	  	 As reasonably requested by AOUT, SWBI will provide assistance in
managing compliance policies.
  
 For these services, the primary service provider
shall be SWBI’s Corporate Compliance Analyst, provided that the service provider shall not dedicate more than 5% of his or her time to the provision of these services to AOUT during the service period.
	  	Up to 6 months commencing on the Distribution.	  	 
	 	 	 	 	 
	3	 	Anti-Corruption and Third Party Management	  	 As reasonably requested by AOUT, SWBI will provide assistance
managing AOUT’s Anti-Corruption processes, policies, and procedures, including due diligence and training.
  

For these services, the primary service provider shall be SWBI’s Director of Corporate Compliance, Hope Sholes, provided that Ms. Sholes shall not
dedicate more than 15% of her time to the provision of these services to AOUT during the service period.
	  	Up to 6 months commencing on the Distribution.	  	 
	 	 	 	 	 
	4	 	Export Compliance	  	 As reasonably requested by AOUT, SWBI will provide assistance in
managing AOUT’s Export Controls processes, policies, and procedures, including training.
  

For these services, the primary service provider shall be SWBI’s Trade Compliance Manager, Sharon Breault, provided that Ms. Breault shall not
dedicate more than 15% of her time to the provision of these services to AOUT during the service period.
	  	Up to 6 months commencing on the Distribution.	  	 

  
  

	4 	 Cost for all Compliance Services will be calculated in accordance with Section 3.2 of
this Agreement. 

 SCHEDULE E 

Legal Services 
  

									
	 	 	 	 	 
	ID	 	Service	  	Description	  	Service Period	  	Cost5
	 	 	 	 	 
	1	 	Knowledge Transfer	  	 As reasonably requested by AOUT, SWBI Legal Department personnel
shall provide knowledge transfer and general assistance to AOUT, related to legal matters that occurred prior to the Distribution.
  

No information or assistance may be provided to the extent it would create a conflict of interest, violate any confidentiality obligations, risk the loss of
attorney-client privilege, expose SWBI to potential liability, or otherwise interfere with the operation of SWBI’s business. AOUT shall use all reasonable efforts to minimize the extent of requested knowledge transfer and general assistance
from SWBI.
  
 The areas of knowledge transfer will include the following:

 
 •  Access to information from
SWBI’s e-billing and matter management system, on an as-needed basis
  

•  Access to SWBI’s information regarding contract management, on
an as-needed basis
  

•  Access to information and supporting documentation for materials filed with the SEC prior to the
Distribution
	  	Up to 12 months commencing on the Distribution.	  	 
	 	 	 	 	 
	2	 	Legal Services—IP	  	 As reasonably requested by AOUT, SWBI Legal Department personnel
shall provide assistance with regard to the legal aspects of managing AOUT’s intellectual property portfolio.
  

For these services, the primary service providers shall be Associate General Counsel, Chris Scott, and Intellectual Property Paralegal, Paul Szulak, provided
that neither Mr. Scott nor Mr. Szulak shall dedicate more than 15% of his time to the provision of these services to AOUT during the service period.
	  	Up to 6 months commencing on the Distribution.	  	 
	 	 	 	 	 
	3	 	Legal Services _ Data Privacy and	  	As reasonably requested by AOUT, SWBI Legal Department personnel shall provide assistance with issues relating to privacy law and cybersecurity law.	  	Up to 6 months commencing on the Distribution.	  	 

 

	5 	 Cost for all Legal Services will be calculated in accordance with Section 3.2 of this
Agreement. 

									
	 	 	 	 	 
	ID	 	Service	  	Description	  	Service Period	  	Cost5
	 	 	 	 	 
	 	 	Cyber Security	  	For these services, the primary service provider shall be Assistant General Counsel, Ahsan Khan, provided that Mr. Khan shall not dedicate more than 5% of
his time to the provision of these services to AOUT during the service period.	  	 	  	 
	 	 	 	 	 
	4	 	Legal Services – Commercial Contracts	  	 As reasonably requested by AOUT, SWBI Legal Department personnel
shall provide assistance with issues relating to commercial contracts.
  
 For these
services, the primary service provider shall be Assistant General Counsel, Ahsan Khan, provided that Mr. Kahn shall not dedicate more than 10% of his time to the provision of these services to AOUT during the service period.
	  	Up to 6 months commencing on the Distribution.	  	 
	 	 	 	 	 
	5	 	Legal Services—Corporate	  	 As reasonably requested by AOUT, SWBI Legal Department personnel
shall provide assistance with legal entity formation and corporate organization and maintenance matters.
  

For these services, the primary service provider shall be General Counsel, Robert Cicero, provided that Mr. Cicero shall not dedicate more than 5% of his
time to the provision of these services to AOUT during the service period.
	  	Up to 6 months commencing on the Distribution.	  	 

 SCHEDULE F 

Security Services 
  

									
	 	 	 	 	 
	ID	 	Service	  	Description	  	Service Period	  	Cost6
	 	 	 	 	 
	1	 	Security Services	  	SWBI Security will continue to provide the security services and continue to administer the security systems in place at the Columbia, Missouri facility as of
the Distribution	  	Up to 6 months commencing on the Distribution.	  	 

  
  

	6 	 Cost for all Security Services will be calculated in accordance with Section 3.2 of
this Agreement. 

 SCHEDULE G 

Investor Relations Support Services 
  

									
	 	 	 	 	 
	ID	 	Service	  	Description	  	Service Period	  	Cost7
	 	 	 	 	 
	1	 	Investor Relations	  	SWBI pays AOUT for investor relations consulting services as needed, up to an agreed maximum percentage of available time of AOUT’s Investor Relations
employee(s)	  	Up to 24 months commencing on the Distribution.	  	 

  
  

	7 	 Cost for all Investor Relations Services will be calculated in accordance with
Section 3.2 of this Agreement.EX-10.122

 Exhibit 10.122 

 
 TAX MATTERS AGREEMENT 

by and between 

SMITH & WESSON BRANDS, INC. 

and 
 AMERICAN OUTDOOR
BRANDS, INC. 
 Dated as of August 21, 2020 

 TAX MATTERS AGREEMENT 

THIS TAX MATTERS AGREEMENT (this “Agreement”) is entered into as of August 21, 2020, by and between
Smith & Wesson Brands, Inc., a Nevada corporation (“SWBI”), and American Outdoor Brands, Inc., a Delaware corporation (“AOUT”). Each of SWBI and AOUT is sometimes referred to herein as a
“Party” and, collectively, as the “Parties.” 
 WHEREAS, pursuant to the Separation and Distribution
Agreement, dated as of August 21, 2020, by and between SWBI and AOUT (the “Separation Agreement”), SWBI agreed, among other things, to contribute certain assets to AOUT (the “Contribution”) and to distribute
all of the outstanding stock of AOUT to SWBI’s stockholders (the “Distribution”); 
 WHEREAS, prior to consummation of
the Distribution, SWBI was in “control” of AOUT (within the meaning of Section 368(c) of the Code); 
 WHEREAS, the Parties intend that, for
federal income Tax purposes, the Contribution and the Distribution qualify as a reorganization within the meaning of Section 368(a)(1)(D) of the Code and a distribution to which Section 355 of the Code applies and this Agreement and any
related agreement constitute a “plan of reorganization” within the meaning of Section 368 of the Code; 
 WHEREAS, the
obligation of SWBI to consummate the Contribution and Distribution is conditioned, among other things, upon the receipt of a tax opinion from the Tax Advisor that the Contribution and the Distribution will qualify as a reorganization within the
meaning of Section 368(a)(1)(D) of the Code and a distribution to which Section 355 of the Code applies (the “Tax Opinion”); and 

WHEREAS, the Parties wish to (a) provide for the payment of Tax liabilities and entitlement to refunds thereof, allocate responsibility
for, and cooperation in the filing of Tax Returns, and provide for certain other matters relating to Taxes, and (b) set forth certain covenants and indemnities relating to the preservation of the intended Tax treatment of the Contribution and
the Distribution. 
 NOW, THEREFORE, in consideration of the foregoing and the terms, conditions, covenants and provisions of this
Agreement, each of the Parties mutually covenants and agrees as follows: 
 ARTICLE I 

DEFINITIONS 

Section 1.01. General. As used in this Agreement, the following terms have the following meanings: 

“Affiliated Group” means an affiliated group of corporations within the meaning of Section 1504(a) of the Code, or any
other group filing consolidated, combined or unitary Tax Returns under state, local or foreign law. 
 “Agreement” has the
meaning set forth in the preamble to this Agreement. 
 “AOUT” has the meaning set forth in the preamble to this Agreement.

 “AOUT Equity Awards” has the meaning set forth in the Employee Matters Agreement. 

“AOUT Group” has the meaning set forth in the Separation Agreement. 

 “AOUT Separate Tax Return” means any Tax Return that is required to be
filed by, or with respect to, a member of the AOUT Group that is not a Combined Tax Return. 
 “AOUT Tax Representation
Letter” means the tax representation letter from AOUT addressed to the Tax Advisor dated July 1, 2020, supporting the Tax Opinion. 

“Closing of the Books Method” means the apportionment of items between portions of a taxable period based on a closing of the
books and records on the close of the Distribution Date (in the event that the Distribution Date is not the last day of the taxable period, as if the Distribution Date were the last day of the taxable period), subject to adjustment for items accrued
on the Distribution Date that are properly allocable to the taxable period following the Distribution, as determined by SWBI in accordance with applicable law; provided, however, that Taxes not based upon or measured by net or gross
income or specific events shall be apportioned between portions of a taxable period on a pro rata basis in accordance with the number of days in each portion. 

“Code” means the Internal Revenue Code of 1986, as amended. 

“Combined Tax Return” means a Tax Return filed in respect of federal, state, local or foreign income Taxes for an Affiliated
Group, or any other affiliated, consolidated, combined, unitary, fiscal unity or other group basis (including as permitted by Section 1501 of the Code). 

“Contribution” has the meaning set forth in the recitals to this Agreement. 

“Disqualifying Action” means (i) any breach by AOUT of any representation, warranty or covenant made by it in this
Agreement or (ii) any event (or series of events) involving the capital stock of AOUT that, in either case, would negate the Tax-Free Status of the Transactions; provided, however, the term
“Disqualifying Action” shall not include any action required or expressly permitted under any Transaction Document or that is undertaken pursuant to the Contribution or the Distribution. 

“Distribution” has the meaning set forth in the recitals to this Agreement. 

“Distribution Date” means the date on which the Distribution occurs. 

“Effective Time” means the time at which the Distribution becomes effective. 

“Employee Matters Agreement” means the Employee Matters Agreement by and between the Parties dated August 21, 2020. 

“Final Determination” means the final resolution of liability for any Tax for any taxable period, by or as a result of:
(i) a final decision, judgment, decree or other order by any court of competent jurisdiction that can no longer be appealed; (ii) a final settlement with the IRS, a closing agreement or accepted offer in compromise under Section 7121
or 7122 of the Code, or a comparable agreement under the laws of other jurisdictions, that resolves the entire Tax liability for any taxable period; or (iii) any other final resolution, including by reason of the expiration of the applicable
statute of limitations or the execution of a pre-filing agreement with the IRS or other Tax Authority. 

“Indemnified Party” means the Party that is entitled to seek indemnification from the other Party pursuant to the provisions
of Section 2.01. 
 “Indemnifying Party” means the Party from which the other Party is entitled
to seek indemnification pursuant to the provisions of Section 2.01. 

  
 2 

 “IRS” means the Internal Revenue Service or any successor thereto,
including its agents, representatives, and attorneys. 
 “Outdoor Products and Accessories Business” has the meaning set
forth in the Separation Agreement. 
 “Party” has the meaning set forth in the preamble to this Agreement. 

“Person” has the meaning set forth in Section 7701(a)(1) of the Code. 

“Post-Distribution Period” means any taxable period (or portion thereof) beginning after the Distribution Date. 

“Pre-Distribution Period” means any taxable period (or portion thereof) ending on or
before the Distribution Date. 
 “Separation Agreement” has the meaning set forth in the recitals to this Agreement. 

“Separation Taxes” means any income Taxes (other than Transaction Taxes) that arise in connection with the Contribution or
the Distribution. For the avoidance of doubt, Separation Taxes shall include, without limitation, any federal, state, or local income Taxes arising out of deferred intercompany gains recognized pursuant to Treasury Regulations Section 1.1502-13. 
 “SWBI” has the meaning set forth in the preamble to this
Agreement. 
 “SWBI Equity Awards” has the meaning set forth in the Employee Matters Agreement. 

“SWBI Group” has the meaning set forth in the Separation Agreement. 

“SWBI Separate Tax Return” means any Tax Return that is required to be filed by, or with respect to, a member of the SWBI
Group that is not a Combined Tax Return. 
 “SWBI Tax Representation Letter” means the tax representation letter from SWBI
addressed to the Tax Advisor dated July 1, 2020, supporting the Tax Opinion. 
 “Tax” means (i) all taxes,
charges, fees, duties, levies, imposts, or other similar assessments, imposed by any federal, state or local or foreign governmental authority, including income, gross receipts, excise, property, sales, use, license, capital stock, transfer,
franchise, payroll, withholding, social security, value added, real property transfer, intangible, recordation, registration, documentary, stamp and other taxes of any kind whatsoever, and (ii) any interest, penalties or additions attributable
thereto. 
 “Tax Advisor” means Greenberg Traurig, LLP. 

“Tax Arbiter” has the meaning set forth in Section 5.08. 

“Tax Attributes” means net operating losses, capital losses, investment tax credit carryovers, earnings and profits, foreign
tax credit carryovers, overall foreign losses, previously taxed income, separate limitation losses, deductions, credits or other comparable items, and assets basis, that could affect a Tax liability for a past or future taxable period. 

  
 3 

 “Tax Authority” means any governmental authority or any subdivision,
agency, commission or entity thereof or any quasi-governmental or private body having jurisdiction over the assessment, determination, collection or imposition of any Tax (including the IRS). 

“Tax Detriment” means an increase in the Tax liability (or reduction in refund or credit or item of deduction or expense,
including any carryforward) of a taxpayer for any taxable period. 
 “Tax Matter” has the meaning set forth in
Section 4.01. 
 “Tax Notice” has the meaning set forth in
Section 2.07. 
 “Tax Opinion” has the meaning set forth in the recitals to this Agreement. 

“Tax Opinion Documents” means the Tax Opinion and the information and representations provided by, or on behalf of, SWBI or
AOUT to the Tax Advisor in connection therewith. 
 “Tax Return” means any return, report, certificate, form or similar
statement or document (including any related or supporting information or schedule attached thereto and any information return, or declaration of estimated Tax) supplied or required to be supplied to, or filed with, a Tax Authority in connection
with the payment, determination, assessment or collection of any Tax or the administration of any laws relating to any Tax and any amended Tax return or claim for refund. 

“Tax-Free Status of the Transactions” means the qualification of the Contribution and
the Distribution as a reorganization within the meaning of Section 368(a)(1)(D) of the Code and a distribution with respect to which gain or loss is not recognized by SWBI, AOUT, or their respective shareholders pursuant to Section 355 of
the Code and in which the AOUT Common Stock distributed is “qualified property” under Section 361(c) of the Code. 

“Transaction Documents” means this Agreement, the Separation Agreement, the Transition Services Agreement, and the Employee
Matters Agreement. 
 “Transaction Taxes” means any Tax Detriment incurred by SWBI or AOUT as a result of the Contribution
or the Distribution failing to qualify as a reorganization within the meaning of Section 368(a)(1)(D) of the Code and a distribution to which Section 355 of the Code applies or corresponding provisions of other applicable laws with respect
to Taxes. 
 “Transition Services Agreement” means the Transition Services Agreement by and between the Parties dated
August 21, 2020. 
 “Transfer Taxes” means all sales, use, transfer, real property transfer, intangible, recordation,
registration, documentary, stamp or similar Taxes imposed on the Contribution or the Distribution. 
 “Treasury
Regulations” means the final and temporary (but not proposed) income Tax regulations promulgated under the Code, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations). 

Section 1.02. Additional Definitions. Capitalized terms used but not defined in this Agreement have the meaning ascribed to them
in the Separation Agreement. 

  
 4 

 ARTICLE II 

ALLOCATION, PAYMENT AND INDEMNIFICATION 

Section 2.01. Responsibility for Taxes; Indemnification. 

(a) SWBI shall be responsible for and shall pay, and shall indemnify and hold harmless AOUT for, all Tax liabilities (and any loss, cost,
damage or expense, including reasonable attorneys’ fees and costs, incurred in connection therewith) attributable to: (i) any Taxes reported or required to be reported on (A) an SWBI Separate Tax Return, or (B) a Combined Tax
Return that any member of the SWBI Group files or is required to file; (ii) any Transaction Taxes; and (iii) fifty percent (50%) of all Transfer Taxes; in each case, other than Taxes for which AOUT is responsible for under
Section 2.01(b). 
 (b) AOUT shall be responsible for and shall pay, and shall indemnify and hold harmless SWBI
for, all Tax liabilities (and any loss, cost, damage or expense, including reasonable attorneys’ fees and costs, incurred in connection therewith) attributable to: (i) any Taxes reported or required to be reported on (A) an AOUT
Separate Tax Return, or (B) a Combined Tax Return that any member of the AOUT Group files or is required to file; (ii) any Taxes reported or required to be reported on any Combined Tax Return that any member of the SWBI Group files or is
required to file to the extent such Taxes are attributable to the Outdoor Products and Accessories Business, as determined pursuant to Section 2.02; (iii) any Taxes that arise from or are attributable to a
Disqualifying Action; (iv) fifty percent (50%) of all Transfer Taxes; and (v) any Separation Taxes. 
 (c) If the Indemnifying
Party is required to indemnify the Indemnified Party pursuant to this Section 2.01, the Indemnified Party shall submit its calculations of the amount required to be paid pursuant to this
Section 2.01, showing such calculations in sufficient detail so as to permit the Indemnifying Party to understand the calculations. Subject to the following sentence, the Indemnifying Party shall pay to the Indemnified
Party, no later than twenty (20) days after the Indemnifying Party receives the Indemnified Party’s calculations, the amount that the Indemnifying Party is required to pay the Indemnified Party under this
Section 2.01. If the Indemnifying Party disagrees with such calculations, it must notify the Indemnified Party of its disagreement in writing within fifteen (15) days of receiving such calculations. 

(d) For all Tax purposes, SWBI and AOUT agree to treat (i) any payment required by this Agreement (other than payments with respect to
interest accruing after the Effective Time) as either a contribution by SWBI to AOUT or a distribution by AOUT to SWBI as the case may be, occurring immediately prior to the Effective Time, and (ii) any payment of interest or non-federal Taxes by or to a Tax Authority as taxable or deductible, as the case may be, to the party entitled under this Agreement to retain such payment or required under this Agreement to make such payment, in
either case except as otherwise mandated by applicable law. 
 (e) The amount of any indemnification payment pursuant to this
Section 2.01 shall be reduced by the amount of any reduction in Taxes actually realized by the Indemnified Party by the end of the taxable year in which the indemnity payment is made, and shall be increased if and to the
extent necessary to ensure that, after all required Taxes on the indemnity payment are paid (including Taxes applicable to any increases in the indemnity payment under this Section 2.01(e)), the Indemnified Party receives
the amount it would have received if the indemnity payment was not taxable. 
 (f) The determination of the Tax liabilities of SWBI and
AOUT, respectively, shall be made in a manner consistent with the Employee Matters Agreement and the Separation Agreement. 

  
 5 

 Section 2.02. Determination of Taxes Attributable to the Outdoor Products and
Accessories Business. 
 (a) For purposes of Section 2.01(b)(ii), the amount of Taxes attributable to the
Outdoor Products and Accessories Business shall be determined by SWBI on a pro forma Combined Tax Return of the AOUT Group prepared: (i) assuming that the members of the AOUT Group were not included in the group that filed the relevant Combined
Tax Return; (ii) including only Tax items of members of the AOUT Group that were included in the relevant Combined Tax Return; (iii) using all elections, accounting methods and conventions used on the relevant Combined Tax Return for such
period; (iv) applying the highest statutory marginal corporate income Tax rate in effect for the relevant taxable period; (v) assuming that the AOUT Group elects not to carry back any net operating losses; and (vi) assuming that the
AOUT Group’s utilization of any Tax Attribute carryforward or carryback is limited to the Tax Attributes of the AOUT Group that would be available if the Tax liability of the AOUT Group for each prior taxable year were determined in accordance
with this Section 2.02. 
 (b) The Parties shall cooperate in good faith in order to jointly determine the
allocation of items of income and expense and intercompany eliminations for purposes of preparing the pro forma Combined Tax Return of the AOUT Group pursuant to Section 2.02(a). 

Section 2.03. Preparation of Tax Returns. 

(a) SWBI’s Responsibility. SWBI shall prepare and timely file (taking into account applicable extensions) all (i) Combined
Tax Returns that any member of the SWBI Group is required to file or elects to file, and (ii) SWBI Separate Tax Returns. To the extent that such a Combined Tax Return reflects operations of the AOUT Group for a taxable period that includes the
Distribution Date, SWBI shall include in such Combined Tax Return the results of such member of the AOUT Group on the basis of the Closing of the Books Method to the extent permitted by applicable law. 

(b) AOUT’s Responsibility. Subject to any arrangement under the Transaction Documents, AOUT shall prepare and timely file (taking
into account applicable extensions) all Tax Returns required to be filed by or with respect to any member of the AOUT Group other than those Tax Returns that SWBI is required to prepare and file under Section 2.03(a). 

Section 2.04. Payment of Sales, Use or Similar Taxes. Transfer Taxes shall be borne fifty percent (50%) by SWBI and fifty percent
(50%) by AOUT. Notwithstanding anything in this Section 2.04 to the contrary, the Party required by applicable law shall remit payment for any Transfer Taxes and duly and timely file any related Tax Returns, subject to any
indemnification rights it may have against the other Party, which shall be paid in accordance with Section 2.01(c). The Parties shall cooperate in: (i) determining the amount of such Taxes; (ii) providing all
available exemption certificates; and (iii) preparing and timely filing any and all required Tax Returns for or with respect to such Taxes with any and all appropriate Tax Authorities. 

Section 2.05. Treatment of Equity Awards. 

(a) To the extent permitted by law, income Tax deductions with respect to the issuance, exercise, vesting or settlement after the Distribution
Date of any SWBI Equity Awards or AOUT Equity Awards shall be claimed: (i) in the case of an active officer or employee, solely by the Group that employs such officer or employee at the time of such issuance, exercise, vesting, or settlement,
as applicable; (ii) in the case of a former officer or employee, solely by the Group that was the last to employ such former officer or employee; and (iii) in the case of a director or former director (who is not an officer or employee or
former officer or employee of a member of either Group), (A) solely by the SWBI Group if such person was, at any time before or after the Distribution, a director of any member of the SWBI Group, and (B) in any other case, solely by the AOUT
Group. 

  
 6 

 (b) If, notwithstanding clause (a), the AOUT Group actually utilizes any deductions for a
taxable period ending after the Distribution Date with respect to (i) the issuance, exercise, vesting or settlement after the Distribution Date of any SWBI Equity Awards, or (ii) any liability with respect to compensation required to be
paid or satisfied by, or otherwise allocated to, any member of the SWBI Group in accordance with any Transaction Document, AOUT shall promptly remit an amount equal to the overall net reduction in actual cash Taxes paid by the AOUT Group (determined
on a “with and without” basis) resulting from the event giving rise to such deduction in the year of such event. If a Tax Authority subsequently reduces or disallows the use of such a deduction by the AOUT Group, SWBI shall return an
amount equal to the overall net increase in Tax liability of the AOUT Group owing to the Tax Authority to the remitting party. 
 (c) For
any taxable period (or portion thereof), except as SWBI may at any time determine in its reasonable discretion, SWBI shall satisfy, or shall cause to be satisfied, all applicable withholding and reporting responsibilities (including all income,
payroll or other Tax reporting related to income to any current or former employees) with respect to the issuance, exercise, vesting or settlement of SWBI Equity Awards that settle with or with respect to stock of SWBI. For any taxable period (or
portion thereof), AOUT shall satisfy, or shall cause to be satisfied, all applicable withholding and reporting responsibilities (including all income, payroll or other Tax reporting related to income to any current or former employees) with respect
to the exercise, vesting or settlement of AOUT Equity Awards that settle with or with respect to stock of AOUT. SWBI and AOUT acknowledge and agree that the Parties shall cooperate with each other and with third-party providers to effectuate
withholding and remittance of Taxes, as well as required Tax reporting, in a timely manner. 
 Section 2.06. Tax Refunds. SWBI
shall be entitled to any refund (and any interest thereon received from the applicable Tax Authority) of Taxes for which SWBI is responsible for hereunder, AOUT shall be entitled to any refund (and any interest thereon received from the applicable
Tax Authority) of Taxes for which AOUT is responsible for hereunder, and a Party receiving a refund to which the other Party is entitled hereunder shall pay over such refund to such other Party within twenty (20) days after such refund is
received. 
 Section 2.07. Audits and Proceedings. 

(a) Notwithstanding any other provision hereof, if after the Distribution Date, an Indemnified Party receives any notice, letter,
correspondence, claim or decree from any Tax Authority (a “Tax Notice”) and, upon receipt of such Tax Notice, believes it has suffered or potentially could suffer any Tax liability for which it is indemnified pursuant to
Section 2.01, the Indemnified Party shall deliver such Tax Notice to the Indemnifying Party within ten (10) days of the receipt of such Tax Notice; provided, however, that the failure of the Indemnified
Party to provide the Tax Notice to the Indemnifying Party shall not affect the indemnification rights of the Indemnified Party pursuant to Section 2.01, except to the extent that the Indemnifying Party is prejudiced by the
Indemnified Party’s failure to deliver such Tax Notice. The Indemnifying Party shall have the right to handle, defend, conduct and control, at its own expense, any Tax audit or other proceeding that relates to such Tax Notice; provided
that, in all events, SWBI shall have the right to control any Tax audit or proceeding relating to Transaction Taxes or the Tax-Free Status of the Transactions. The Indemnifying Party shall also have the right
to compromise or settle any such Tax audit or other proceeding that it has the authority to control pursuant to the preceding sentence subject, in the case of a compromise or settlement that could adversely affect the Indemnified Party, to the
Indemnified Party’s consent, which consent shall not be unreasonably withheld. If the Indemnifying Party fails within a reasonable time after notice to defend any such Tax 

  
 7 

 
Notice or the resulting audit or proceeding as provided herein, the Indemnifying Party shall be bound by the results obtained by the Indemnified Party in connection therewith. The Indemnifying
Party shall pay to the Indemnified Party the amount of any Tax liability within fifteen (15) days after a Final Determination of such Tax liability. 

(b) If after the Distribution Date, SWBI or AOUT receive a Tax Notice that could have an impact on the other Party, SWBI or AOUT, as
applicable, shall deliver such Tax Notice to the other Party within ten (10) days of the receipt of such Tax Notice. 

Section 2.08. Carryforwards and Carrybacks. 

(a) SWBI shall notify AOUT after the Distribution Date of any consolidated carryover item which may be partially or totally attributed to and
carried over by AOUT or a member of its Affiliated Group and will notify AOUT of subsequent adjustments which may affect such carryover item. 

(b) To the extent permitted by applicable law, AOUT shall not carry back any federal income Tax item to any
Pre-Distribution Period. 
 Section 2.09. Tax Attributes. Tax Attributes arising in a Pre-Distribution Period shall be allocated to the SWBI Group and the AOUT Group in accordance with the Code and Treasury Regulations. The Parties shall jointly determine the allocation of such Tax Attributes arising
in Pre-Distribution Periods as soon as reasonably practicable following the Distribution Date, and hereby agree to compute all Taxes for Post-Distribution Periods consistently with that determination unless
otherwise required by a Final Determination. 
 Section 2.10. Section 336(e) Election. 

(a) Pursuant to Treasury Regulations Section 1.336-2(h) and (j), SWBI and AOUT agree that SWBI may
make a timely protective election under Section 336(e) of the Code and the Treasury Regulations issued thereunder with respect to the Distribution for each member of the AOUT Group that is a domestic corporation for federal income Tax purposes.

 (b) In the event that an election contemplated in Section 2.10(a) is made and becomes effective, then the
Parties shall share in any Tax benefit derived as a result of such election in accordance with the Parties’ relative responsibility for such Taxes under this Article II, and payments shall be made between the Parties, if necessary. 

(c) The Parties shall cooperate in good faith in order to determine whether to make any elections contemplated in
Section 2.10(a) and in the timely completion of such elections, if any. 
 ARTICLE III 

TAX-FREE STATUS OF THE TRANSACTIONS 

Section 3.01. Representations and Warranties. 

(a) AOUT. AOUT hereby represents and warrants or covenants and agrees, as appropriate, that the facts presented and the representations
made in the AOUT Tax Representation Letter are, or will be from the time presented or made through and including the Effective Time and thereafter, true, correct and complete in all respects. 

  
 8 

 (b) SWBI. SWBI hereby represents and warrants or covenants and agrees, as
appropriate, that the facts presented and the representations made in the SWBI Tax Representation Letter and any other materials (including the Revenue Procedure 96-30 checklist) delivered or deliverable by
SWBI in connection with the rendering by the Tax Advisor of the Tax Opinion are, or will be from the time presented or made through and including the Effective Time and thereafter, true, correct and complete in all respects. 

(c) No Contrary Knowledge. Each of SWBI and AOUT represents and warrants that it knows of no fact that may cause the Tax treatment of
the Contribution or the Distribution to be other than the Tax-Free Status of the Transactions. 

Section 3.02. Covenants. 

(a) Preservation of Tax-Free Status. Neither SWBI nor AOUT shall take or fail to take any action
within its control that would negate the Tax-Free Status of the Transactions. 
 (b) Tax
Reporting. Each of SWBI and AOUT covenants and agrees that it will not take any position on any Tax Return that is inconsistent with the Tax-Free Status of the Transactions. 

(c) Actions Consistent with Representations and Covenants. Neither SWBI nor AOUT shall take any action, or to fail to take any action,
which action or failure would be inconsistent with or cause to be untrue any material information, covenant, or representation in this Agreement, the Separation Agreement, or the Tax Opinion Documents. 

(d) Plan or Series of Related Transactions. For a period of two (2) years from the Distribution Date, none of AOUT, its
affiliates, or any of their respective officers, directors or authorized agents will enter into any agreement, understanding or arrangement or any substantial negotiations with respect to any transaction or series of transactions, including any
issuance or transfer of an option (within the meaning of Section 355(e) of the Code), that is for purposes of Section 355(e) of the Code and the Treasury Regulations thereunder (including, for purposes of this
Section 3.02(d), any proposed income tax regulations to the extent no final or temporary income tax regulations have been issued that supersede such proposed regulations), part of a plan or series of related transactions
with the Distribution pursuant to which one or more Persons acquire, directly or indirectly, stock possessing fifty percent (50%) or more of the total combined voting power or value of all classes of stock of AOUT. 

(e) During the two-year period following the Distribution Date: 

(i) AOUT shall (A) maintain its status as a company engaged in an active trade or business for purposes of
Section 355(b)(2) of the Code, and (B) not engage in any transaction that would result in it ceasing to be a company engaged in an active trade or business for purposes of Section 355(b)(2) of the Code. 

(ii) AOUT shall not, and shall not agree to, liquidate or merge, consolidate, or amalgamate with any other Person. 

(iii) AOUT shall not sell or otherwise dispose of, or allow the sale or other disposition of, more than 30% of the consolidated
gross assets of the AOUT Group or more than 30% of the gross assets of the Outdoor Products and Accessories Business, in each case measured based on fair market values as of the Distribution Date. 

  
 9 

 (iv) AOUT shall not purchase any of its outstanding stock, other than
through stock purchases meeting the requirements of Section 4.05(1)(b) of IRS Revenue Procedure 96-30 (as in effect prior to the amendment of such Revenue Procedure by IRS Revenue Procedure 2003-48). 
 (v) AOUT shall not amend its certificate of incorporation (or other
organizational documents), or take any other action, affecting the voting rights of the equity interests of AOUT. 
 (f) Notwithstanding the
provisions of Section 3.02(d) and Section 3.02(e), AOUT and the other members of the AOUT Group may take any action that would reasonably be expected to be inconsistent with the covenants contained
in Section 3.02(d) or Section 3.02(e) if either: (i) AOUT notifies SWBI of its proposal to take such action and AOUT and SWBI obtain a ruling from the IRS to the effect that such action will
not affect the Tax-Free Status of the Transactions, provided that AOUT agrees in writing to bear any expenses associated with obtaining such a ruling and, provided further that AOUT shall
not be relieved of any liability under Section 2.01 of this Agreement by reason of seeking or having obtained such a ruling; or (ii) AOUT notifies SWBI of its proposal to take such action and obtains, at its own
expense, an unqualified opinion of counsel (A) from a Tax advisor recognized as an expert in federal income Tax matters and acceptable to SWBI in its sole discretion, (B) on which SWBI may rely, and (C) to the effect that such action
“will” not affect the Tax-Free Status of the Transactions, provided that AOUT shall not be relieved of any liability under Section 2.01 of this Agreement by
reason of having obtained such an opinion. 
 ARTICLE IV 

COOPERATION 

Section 4.01. General Cooperation. The Parties shall each cooperate fully with all reasonable requests in writing from the other
Party, or from an agent, representative or advisor to such Party, in connection with the preparation and filing of Tax Returns, claims for Tax refunds, Tax proceedings, and calculations of amounts required to be paid pursuant to this Agreement, in
each case, related or attributable to or arising in connection with Taxes of any of the Parties covered by this Agreement and the establishment of any reserve required in connection with any financial reporting (a “Tax Matter”).
Such cooperation shall include the provision of any information reasonably necessary or helpful in connection with a Tax Matter and shall include, at each Party’s own cost: 

(a) the provision of any Tax Returns of the Parties, books, records (including information regarding ownership and Tax basis of property),
documentation and other information relating to such Tax Returns, including accompanying schedules, related work papers, and documents relating to rulings or other determinations by Tax Authorities; 

(b) the execution of any document (including any power of attorney) in connection with any Tax proceedings of any of the Parties, or the
filing of a Tax Return or a Tax refund claim of the Parties; 
 (c) the use of the Party’s reasonable best efforts to obtain any
documentation in connection with a Tax Matter; and 
 (d) the use of the Party’s reasonable best efforts to obtain any Tax Returns
(including accompanying schedules, related work papers, and documents), documents, books, records or other information in connection with the filing of any Tax Returns of any of the Parties. 

  
 10 

 Each Party shall make its employees, advisors, and facilities available, without charge, on
a reasonable and mutually convenient basis in connection with the foregoing matters. 
 Section 4.02. Retention of Records. SWBI
and AOUT shall retain or cause to be retained all Tax Returns, schedules and workpapers, and all material records or other documents relating thereto in their possession, until sixty (60) days after the expiration of the applicable statute of
limitations (including any waivers or extensions thereof) of the taxable periods to which such Tax Returns and other documents relate or until the expiration of any additional period that any Party reasonably requests, in writing, with respect to
specific material records or documents. A Party intending to destroy any material records or documents required to be retained pursuant to this Section 4.02 shall provide the other Party with reasonable advance notice and
the opportunity to copy or take possession of such records and documents. The Parties hereto will notify each other in writing of any waivers or extensions of the applicable statute of limitations that may affect the period for which the foregoing
records or other documents must be retained. 
 ARTICLE V 

MISCELLANEOUS 

Section 5.01. Tax Sharing Agreements. All Tax sharing, indemnification and similar agreements, written or unwritten, as between
SWBI, on the one hand, and AOUT, on the other (other than this Agreement and any other Transaction Document), shall be or shall have been terminated no later than the Effective Time and, after the Effective Time, neither SWBI nor AOUT shall have any
further rights or obligations under any such Tax sharing, indemnification or similar agreement. 
 Section 5.02. Interest on Late
Payments. With respect to any payment between the Parties pursuant to this Agreement not made by the due date set forth in this Agreement for such payment, the outstanding amount will accrue interest at a rate per annum equal to the rate in
effect for underpayments under Section 6621 of the Code from such due date to and including the payment date. 
 Section 5.03.
Survival of Covenants. Except as otherwise contemplated by this Agreement, all covenants and agreements of the Parties contained in this Agreement shall survive the Effective Time and remain in full force and effect in accordance with their
applicable terms; provided, however, that the representations and warranties and all indemnification for Taxes shall survive until sixty (60) days following the expiration of the applicable statute of limitations (taking into
account all extensions thereof), if any, of the Tax that gave rise to the indemnification; provided, further, that, in the event that notice for indemnification has been given within the applicable survival period, such indemnification
shall survive until such time as such claim is finally resolved. 
 Section 5.04. Termination. Notwithstanding any provision to
the contrary, this Agreement may be terminated and the Distribution abandoned at any time prior to the Effective Time by and in the sole discretion of SWBI without the prior approval of any Person, including AOUT. In the event of such termination,
this Agreement shall become void and no party, or any of its officers and directors, shall have any liability to any Person by reason of this Agreement. After the Effective Time, this Agreement may not be terminated except by an agreement in writing
signed by each of the Parties to this Agreement. 
 Section 5.05. Severability. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced under any law or as a matter of public policy, all other conditions and provisions of this Agreement shall remain in full force and effect. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the Parties to this Agreement shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in
order that the transactions contemplated by this Agreement be consummated as originally contemplated to the greatest extent possible. 

  
 11 

 Section 5.06. Entire Agreement. Except as otherwise expressly provided in this
Agreement, this Agreement constitutes the entire agreement of the Parties hereto with respect to the subject matter of this Agreement and supersedes all prior agreements and undertakings, both written and oral, between or on behalf of the Parties
hereto with respect to the subject matter of this Agreement. 
 Section 5.07. Effective Date. This Agreement shall become
effective only upon the occurrence of the Distribution. 
 Section 5.08. Dispute Resolution. In the event of any dispute
relating to this Agreement, the Parties shall work together in good faith to resolve such dispute within thirty (30) days. In the event that such dispute is not resolved, upon written notice by a Party after such thirty (30)-day period, the matter shall be referred to a Tax counsel or other Tax advisor of recognized national standing (the “Tax Arbiter”) that will be jointly chosen by SWBI and AOUT. The Tax Arbiter
may, in its discretion, obtain the services of any third party necessary to assist it in resolving the dispute. The Tax Arbiter shall furnish written notice to the parties to the dispute of its resolution of the dispute as soon as practicable, but
in any event no later than ninety (90) days after acceptance of the matter for resolution. Any such resolution by the Tax Arbiter shall be binding on the Parties, and the Parties shall take, or cause to be taken, any action necessary to
implement such resolution. All fees and expenses of the Tax Arbiter shall be shared equally by the Parties. 
 Section 5.09.
Other. Sections 1.2 (Interpretation), 6.1 (Notices), 6.2 (Amendments; No Waivers), 6.4 (Successors and Assigns) 6.5 (Governing Law), 6.6 (Counterparts; Effectiveness; Third-Party Beneficiaries), 6.9 (Jurisdiction), 6.10 (Waiver of Jury
Trial), 6.14 (Captions), 6.15 (Interpretation), 6.16 (Specific Performance), and 6.17 (Performance) of the Separation Agreement are incorporated herein by reference, mutatis mutandis. 

[Signature Page Follows] 

  
 12 

 IN WITNESS WHEREOF the Parties hereto have caused this Agreement to be duly by their
respective authorized officers as of the date first above written. 
  

			
	SMITH & WESSON BRANDS, INC.
		
	By:	 	 /s/ Mark P. Smith

	Name:    Mark P. Smith
	Title:      President and Chief Executive Officer
	
	AMERICAN OUTDOOR BRANDS, INC.
		
	By:	 	 /s/ Brian D. Murphy

	Name:    Brian D. Murphy
	Title:      President and Chief Executive Officer

  
 Signature Page to Tax
Matters Agreement

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00313-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00313-of-00352.parquet"}]]