Document:

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                                                                   EXHIBIT 10.40

                          REGISTRATION RIGHTS AGREEMENT

          REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT"), dated as of December
15, 2006, by and among Smith & Wesson Holding Corporation, a Nevada corporation
with headquarters located at 2100 Roosevelt Avenue, Springfield, Massachusetts
01104 (the "COMPANY"), and the undersigned buyers (each, a "BUYER", and
collectively, the "BUYERS").

          WHEREAS:

          A. The Company has authorized the issuance of up to $80,000,000
principal amount of its 4% Convertible Senior Notes (the "NOTES") pursuant to
the Indenture dated of even date herewith, between the Company and The Bank of
New York Trust Company, N.A., as Trustee (as the same may be amended from time
to time, the "INDENTURE"), which Notes will, among other things, be convertible
into shares of Common Stock (as defined below) (as converted, the "CONVERSION
SHARES"), in accordance with the terms of the Notes and the Indenture.

          B. In connection with the Securities Purchase Agreement by and among
the parties hereto of even date herewith (the "SECURITIES PURCHASE AGREEMENT"),
the Company has agreed, upon the terms and subject to the conditions set forth
in the Securities Purchase Agreement, to issue and sell to the Buyers an
aggregate of $80,000,000 principal amount of the Notes.

          C. To induce the Buyers to execute and deliver the Securities Purchase
Agreement, the Company has agreed to provide certain registration rights to the
Buyers under the Securities Act of 1933, as amended, and the rules and
regulations thereunder, or any similar successor statute (collectively, the
"1933 ACT"), and applicable state securities laws.

          NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and each
of the Buyers hereby agree as follows:

          1. Definitions.

          Capitalized terms used herein and not otherwise defined herein shall
have the respective meanings set forth in the Securities Purchase Agreement. As
used in this Agreement, the following terms shall have the following meanings:

          "1933 ACT" has the meaning set forth in the recitals of this
Agreement.

          "1934 ACT" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated thereunder.

          "ADDITIONAL INTEREST" has the meaning set forth in Section 2(e)
hereof.

          "ADDITIONAL INTEREST PAYMENT DATE" means each June 15 and December 15.

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          "AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling,"
"controlled by", and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such Person
whether through the ownership of voting securities or by agreement or otherwise.

          "BUSINESS DAY" means any day other than Saturday, Sunday or any other
day on which commercial banks in The City of New York are authorized or required
by law to remain closed.

          "BUYERS" has the meaning set forth in the recitals of this Agreement.

          "CLOSING DATE" means the date of the closing of the sale of the Notes
as contemplated by the Securities Purchase Agreement.

          "COMMON STOCK" means the common stock, par value $0.001 per share, of
the Company, as it exists on the date of this Agreement and any other shares of
capital stock or other securities of the Company into which such Common Stock
may be reclassified or changed, together with any and all other securities which
may from time to time be issuable upon conversion of Notes.

          "COMPANY" has the meaning set forth in the recitals of this Agreement.

          "CONVERSION SHARES" has the meaning set forth in the recitals of this
Agreement.

          "EFFECTIVE DATE" means the date the Shelf Registration Statement has
been declared effective by the SEC.

          "EFFECTIVENESS DEADLINE" means the date that is one hundred eighty
(180) calendar days after the Closing Date.

          "FILING DEADLINE" means ninety (90) calendar days after the Closing
Date.

          "HOLDER" means a Person who is a holder or beneficial owner of any
Notes or Conversion Shares.

          "HOLDER INFORMATION" with respect to any Holder means information with
respect to such Holder required to be included in any Shelf Registration
Statement or the related Prospectus pursuant to the 1933 Act and which
information is included therein in reliance upon and in conformity with
information furnished to the Company in writing by such Holder specifically for
inclusion therein.

          "INDENTURE" has the meaning set forth in the recitals of this
Agreement.

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          "LEGAL COUNSEL" means one firm or counsel designated by the Company
(and reasonably acceptable to the Buyers acting on behalf of the Holders) to act
as counsel for the Holders in connection therewith, which firm shall be Schulte
Roth & Zabel LLP.

          "LOSSES" has the meaning set forth in Section 5(d) hereof.

          "MAJORITY HOLDERS" means the Holders of a majority of the then
outstanding aggregate principal amount of Notes being registered under a Shelf
Registration Statement; provided that Holders of the shares of Common Stock
issued upon conversion of Notes shall be deemed to be Holders of the aggregate
principal amount of Notes from which such Common Stock was converted; and
provided further, that Notes or shares of Common Stock which have been sold or
otherwise transferred pursuant to the Shelf Registration Statement shall not be
included in the calculation of Majority Holders.

          "NASD" means the National Association of Securities Dealers, Inc.

          "NOTES" has the meaning set forth in the recitals hereto.

          "NOTICE AND QUESTIONNAIRE" means a Selling Securityholder Notice and
Questionnaire substantially in the form of Exhibit A attached hereto.

          "NOTICE HOLDER" means any Holder of Transfer Restricted Securities
that has delivered a properly completed and signed Notice and Questionnaire to
the Company in accordance with Section 2(b) hereof.

          "PERSON" has the meaning set forth in the Indenture.

          "PROSPECTUS" means the prospectus included in any Shelf Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A under the 1933 Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Notes or Conversion Shares covered by such
Shelf Registration Statement, and all amendments and supplements to such
prospectus, including all documents incorporated or deemed to be incorporated by
reference in such prospectus.

          "QUESTIONNAIRE DEADLINE" has the meaning set forth in Section 2(b)
hereof.

          "RECORD HOLDER" means each Person who is registered on the books of
the registrar as the holder of Notes at the close of business on June 1 and
December 1 immediately preceding such Additional Interest Payment Date.

          "REGISTRATION DEFAULT" has the meaning set forth in Section 2(e)
hereof.

          "RULE 144" means Rule 144 under the 1933 Act (or any similar provision
promulgated by the SEC).

          "RULE 144A" means Rule 144A under the 1933 Act (or any successor
provision promulgated by the SEC).

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          "RULE 144(K)" means Rule 144(k) under the 1933 Act (or any successor
provision promulgated by the SEC).

          "RULE 415" means Rule 415 under the 1933 Act (or any successor
provision promulgated by the SEC).

          "SEC" means the Securities and Exchange Commission.

          "SECURITIES PURCHASE AGREEMENT" has the meaning set forth in the
recitals of this Agreement.

          "SHELF REGISTRATION" means a registration effected pursuant to Section
2 hereof.

          "SHELF REGISTRATION PERIOD" has the meaning set forth in Section 2(c)
hereof.

          "SHELF REGISTRATION STATEMENT" means any "shelf" registration
statement of the Company filed pursuant to the provisions of Section 2(a) hereof
which covers the Transfer Restricted Securities on Form S-3 or on another
appropriate form (as determined by the Company) for an offering to be made on a
delayed or continuous basis pursuant to Rule 415 and all amendments and
supplements to such registration statement, including post-effective amendments,
in each case including the Prospectus contained therein, all exhibits thereto
and all documents incorporated or deemed to be incorporated by reference
therein.

          "SUSPENSION PERIOD" has the meaning set forth in Section 2(d) hereof.

          "TRANSFER RESTRICTED SECURITIES" means (a) the Notes; and (b) the
Conversion Shares issued and issuable upon conversion of the Notes (and any
security issued with respect thereto upon any stock dividend, split, or similar
event) until the earliest to occur of the date on which such Notes, Conversion
Shares, or any security issued with respect thereto upon any stock dividend,
split or similar event, as the case may be: (i) has been transferred pursuant to
a Shelf Registration Statement or another registration statement covering such
Notes or Conversion Shares which has been filed with the SEC pursuant to the
1933 Act, in either case after such registration statement has become effective
and while such registration statement is effective under the 1933 Act; (ii) has
been transferred pursuant to Rule 144; (iii) may be sold or transferred pursuant
to Rule 144(k); or (iv) ceases to be outstanding.

          "TRUSTEE" means the trustee with respect to the Notes under the
Indenture.

          All references in this Agreement to financial statements and schedules
and other information which is "contained," "included," or "stated" in the Shelf
Registration Statement, any preliminary Prospectus or Prospectus (and all other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information incorporated or deemed
to be incorporated by reference in such Shelf Registration Statement,
preliminary Prospectus or Prospectus, as the case may be; and all references in
this Agreement to amendments or supplements to the Shelf Registration Statement,
any preliminary Prospectus, or Prospectus shall be deemed to mean and include
any document filed with the SEC under the 1934 Act, after the date of such Shelf
Registration Statement, preliminary Prospectus, or

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Prospectus, as the case may be, which is incorporated or deemed to be
incorporated by reference therein.

          2. Shelf Registration Statement.

               a. The Company shall, at its expense, prepare and, as soon as
practicable but in no event later than the Filing Deadline, file with the SEC a
Shelf Registration Statement with respect to resales of the Transfer Restricted
Securities by the Holders from time to time on a delayed or continuous basis
pursuant to Rule 415 and in accordance with the methods of distribution set
forth in such Shelf Registration Statement and thereafter shall use its
reasonable best efforts to cause such Shelf Registration Statement to be
declared effective under the 1933 Act as soon as possible, but no later than the
Effectiveness Deadline. The Shelf Registration Statement shall contain the
"Selling Securityholders" and "Plan of Distribution" sections in substantially
the form attached hereto as Exhibit B. The Company shall supplement or amend the
Shelf Registration Statement if required by the rules, regulations or
instructions applicable to the registration form used by the Company for the
Shelf Registration Statement, or by the 1933 Act, the 1934 Act or the SEC. By
9:30 a.m., New York City time, on the second Business Day following the
Effective Date, the Company shall file with the SEC in accordance with Rule 424
under the 1933 Act the final Prospectus to be used in connection with sales
pursuant to such Shelf Registration Statement.

               b. (i) The Company shall name each Holder that delivers a
properly completed and signed Notice and Questionnaire to the Company as a
selling security holder in the Shelf Registration Statement. A Holder of
Transfer Restricted Securities may include such securities in the Shelf
Registration Statement only if the Holder sends by first-class registered mail
or by courier with delivery confirmation, a properly completed Notice and
Questionnaire to the Company. The Company shall deliver the Notice and
Questionnaire to the Buyers within ten (10) Business Days of the Closing Date.
In order for the Transfer Restricted Securities to be included in the Shelf
Registration Statement at the time of its effectiveness, a completed Notice and
Questionnaire must be sent to the Company on or prior to the 30th Business Day
after the date the Notice and Questionnaire is deemed to have been given in
accordance with Section 6(c) hereof (or, in the case of a Holder that is a
transferee of Transfer Restricted Securities, on or prior to the earlier of (x)
the 20th Business Day after the completion of the transfer of Transfer
Restricted Securities to the transferee and (y) 9:00 a.m., New York time, on the
fifth Business Day prior to effectiveness of the Shelf Registration Statement)
(in any case, the "QUESTIONNAIRE DEADLINE"). The Company agrees and undertakes
that it shall distribute a Notice and Questionnaire (A) no later than 30
Business Days prior to the expected effectiveness of the Shelf Registration
Statement to each Holder in accordance with Section 6(c) hereof, and (B) in the
case of a Holder that is a transferee of Transfer Restricted Securities upon the
request of such transferee Holder given in accordance with Section 6(c) hereof,
to such Holder at the address set forth in such request.

                    (ii) Following the effectiveness of the Shelf Registration
Statement, upon receipt of a completed Notice and Questionnaire from a Holder,
the Company will, as promptly as practicable, but in any event within ten (10)
Business Days after its receipt thereof, file any amendments to the Shelf
Registration Statement or supplements to the related Prospectus as are necessary
to permit the Holder to deliver the Prospectus to purchasers of

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Transfer Restricted Securities (subject to the right of the Company to suspend
the use of the Prospectus as described in Section 2(d) hereof); provided,
however, that (i) if a supplement to the related Prospectus is required to
permit the Holder (or other Holders not included in the Shelf Registration
Statement upon effectiveness) to deliver the Prospectus to purchasers of
Transfer Restricted Securities, the Company shall not be required to file more
than one (1) such supplement during any twenty (20) day period and (ii) if a
post-effective amendment to the Shelf Registration Statement is required to
permit the Holder (or other Holders not included in the Shelf Registration
Statement upon effectiveness) to deliver the Prospectus to purchasers of
Transfer Restricted Securities, the Company shall have twenty-one (21) Business
Days to file such post-effective amendment and shall not be required to file
more than one (1) post-effective amendment to the Shelf Registration Statement
in any ninety (90) day period. The Company shall use its reasonable best efforts
to cause any such post-effective amendment to become effective under the 1933
Act as promptly as is practicable; provided, that if a Notice and Questionnaire
is delivered to the Company during a Suspension Period, the Company shall not be
obligated to amend the Shelf Registration Statement or supplement the Prospectus
until the termination of such Suspension Period.

                    (iii) Each Holder as to which the Shelf Registration
Statement is being effected agrees to furnish promptly to the Company upon the
written reasonable request of the Company, which request shall only be made
within three days of the proposed effectiveness of the Registration Statement or
an amendment thereto, (x) such other information as the Company may reasonably
request for use in connection with the Shelf Registration Statement or
Prospectus or in any application to be filed with or under state securities laws
and (y) all information required to be disclosed in order to make the
information previously furnished to the Company by such Holder not misleading.

               c. The Company shall use its reasonable best efforts to keep the
applicable Shelf Registration Statement continuously effective, supplemented,
and amended under the 1933 Act in order to permit the Prospectus forming a part
thereof to be usable by the Notice Holders, subject to Section 2(e) hereof, by
all Notice Holders until the earliest to occur of: (i) the two year anniversary
of the Issue Date (as defined in the Notes); (ii) the last date on which in the
opinion of counsel to the Company the holding period applicable to sales of all
applicable Transfer Restricted Securities under Rule 144(k) has expired; (iii)
the date as of which all applicable Transfer Restricted Securities have been
transferred under Rule 144; and (iv) such date as of which all applicable
Transfer Restricted Securities have been sold pursuant to the applicable Shelf
Registration Statement (in any such case, such period being called the "SHELF
REGISTRATION PERIOD"). The Company will, in order to fulfill its obligations and
this Section 2(c): (x) subject to Section 2(d), prepare and file with the SEC
such amendments and post-effective amendments to the Shelf Registration
Statement as may be necessary to keep the Shelf Registration Statement
continuously effective for the Shelf Registration Period; (y) subject to Section
2(d), cause the related Prospectus to be supplemented by any required
supplement, and as so supplemented to be filed pursuant to Rule 424 (or any
similar provisions then in force) under the 1933 Act; and (z) comply in all
material respects with the provisions of the 1933 Act with respect to the
disposition of all Transfer Restricted Securities covered by the Shelf
Registration Statement during the Shelf Registration Period.

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               d. The Company may suspend the availability of any Shelf
Registration Statement and the use of any Prospectus (the period during which
the availability of any Shelf Registration Statement and any Prospectus may be
suspended herein referred to as the "SUSPENSION PERIOD"), without incurring any
obligation to pay Additional Interest pursuant to Section 2(e), for a period not
to exceed: (i) 30 days in the aggregate in any three-month period; or (iii) 90
days in the aggregate during any 12-month period, in each case for valid
business reasons determined in good faith by the Company in its reasonable
judgment (which shall not include the avoidance of the Company's obligations
hereunder), including, without limitation, the acquisition or divestiture of
assets, pending corporate developments, public filings with the SEC and similar
events; provided, that the Company promptly thereafter complies with the
requirements of Section 3(j) hereof, if applicable.

               e. The Company and the Buyers agree that the Holders of Transfer
Restricted Securities will suffer damages, and it would not be feasible to
ascertain the extent of such damages with precision, if the Company fails to
fulfill its obligations under Section 2 hereof. Accordingly, if: (i) the Shelf
Registration Statement covering all the Transfer Restricted Securities required
to be covered thereby and required to be filed by the Company pursuant to this
Agreement is (A) not filed with the SEC on or before the Filing Deadline or (B)
not declared effective by the SEC on or before the Effectiveness Deadline or
(ii) the Shelf Registration Statement is filed and declared effective but shall
thereafter cease to be effective (without being succeeded immediately by a
replacement Shelf Registration Statement filed and declared effective) or usable
(including as a result of a Suspension Period) for the offer and sale of
Transfer Restricted Securities for a period of time (including any Suspension
Period) which exceeds: (x) 30 days in the aggregate in any three-month period;
or (y) 90 days in the aggregate in any 12-month period (each such event referred
to in clauses (i) or (ii), a "REGISTRATION DEFAULT"); the Company shall pay to
each Notice Holder (who is also a Record Holder) during any period in which a
Registration Default has occurred or is continuing, as partial relief (which
remedy shall not be exclusive of any other remedies available at law or in
equity), in an amount (the "ADDITIONAL INTEREST") equal to seventy five one
hundredths of a percent (75 basis points) per 30 day period of such Registration
Default per $1,000 principal amount of Notes related to the Transfer Restricted
Securities subject to such Shelf Registration Statement for the period during
which such Registration Default has occurred and is continuing, it being
understood that all calculations pursuant to this and the preceding sentence
shall be carried out to five decimal places and shall be pro rated for periods
totaling less than thirty days. Following the cure of all Registration Defaults,
Additional Interest will cease to accrue with respect to such Registration
Defaults. All accrued Additional Interest shall be paid by the Company on each
Additional Interest Payment Date in cash to the date of such cure and Additional
Interest will be calculated on the basis of a 360-day year consisting of twelve
30-day months. Notwithstanding anything in the Agreement to the contrary,
Additional Interest shall only be payable to Notice Holders. Notwithstanding
anything herein or in the Securities Purchase Agreement to the contrary in no
event shall the aggregate amount of Additional Interest exceed, in the
aggregate, 8% of the aggregate Purchase Price.

               f. All of the Company's obligations (including, without
limitation, the obligation to pay Additional Interest) set forth in the
preceding paragraph which are outstanding or exist with respect to any Transfer
Restricted Security at the time such security ceases to be a Transfer Restricted
Security shall survive until such time as all such obligations with respect to

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such security shall have been satisfied in full. Notwithstanding the foregoing,
no Additional Interest shall accrue as to any Transfer Restricted Security from
and after the earlier of: (i) the date such security is no longer a Transfer
Restricted Security; and (ii) the expiration of the Shelf Registration Period.

               g. Immediately upon the occurrence or the termination of a
Registration Default, the Company shall give the Trustee, so long as the Notes
remain outstanding, notice of such commencement or termination of the obligation
to pay Additional Interest with regard to the Notes, and the amount thereof and
of the nature of the default giving rise to such commencement or the event
giving rise to such termination, as the case may be (such notice to be contained
in an Officer's Certificate (as such term is defined in the Indenture)), and
prior to receipt of such Officer's Certificate the Trustee and the transfer and
paying agent shall be entitled to assume that no such commencement or
termination has occurred, as the case may be.

          3. Registration Procedures.

          In connection with any Shelf Registration Statement, the following
provisions shall apply:

               a. The Company shall: (i) furnish to the Buyers, within a
reasonable period of time, but in any event within five (5) Business Days, prior
to the filing thereof with the SEC to afford the Buyers and their counsel a
reasonable opportunity for review, a copy of each Shelf Registration Statement,
and each amendment thereof, and a copy of each Prospectus, and each amendment or
supplement thereto (excluding amendments caused by the filing of a report under
the 1934 Act), and shall reflect in each such document, when so filed with the
SEC, such comments as the Buyers may reasonably propose therein; and (ii)
include information regarding the Notice Holders and the methods of distribution
they have elected for their Transfer Restricted Securities provided to the
Company in Notice and Questionnaires as necessary to permit such distribution by
the methods specified therein.

               b. Subject to Section 2(d), the Company shall ensure that: (i)
any Shelf Registration Statement and any amendment thereto and any Prospectus
forming a part thereof and any amendment or supplement thereto comply in all
material respects with the 1933 Act and the rules and regulations thereunder;
(ii) any Shelf Registration Statement and any amendment thereto does not, when
it becomes effective, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading; and (iii) any Prospectus forming a part of
any Shelf Registration Statement, and any amendment or supplement to such
Prospectus, does not include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided
that the Company makes no representation with respect to any Holder Information.

               c. The Company, as promptly as reasonably practicable (but in any
event within two Business Days), shall notify each Notice Holder:

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                    (i) when any Prospectus or any supplement thereto has been
filed with the SEC and when the Shelf Registration Statement or any
post-effective amendment thereto has become effective;

                    (ii) of the issuance by the SEC or any other federal or
state governmental authority of any stop order suspending the effectiveness of
the Shelf Registration Statement or of any order preventing or suspending the
use of any Prospectus or the initiation or threat of any proceedings for that
purpose;

                    (iii) of the receipt by the Company of any notification with
respect to the suspension of the qualification or exemption from qualification
of the Transfer Restricted Securities included in any Shelf Registration
Statement for sale in any jurisdiction or the initiation or threat of any
proceeding for that purpose;

                    (iv) of the occurrence of, but not the nature of or details
concerning, any event or the existence of any condition that requires the making
of any changes in the Shelf Registration Statement or the Prospectus so that, as
of such date, such Shelf Registration Statement or Prospectus do not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein (in the case of
the Prospectus, in the light of the circumstances under which they were made)
not misleading;

                    (v) of the Company's determination that a post-effective
amendment to the Shelf Registration Statement is necessary (other than a
post-effective amendment pursuant to Section 2(b)(ii)); and

                    (vi) of the commencement (including as a result of any of
the events or circumstances described in Section 2(b)(ii)) and termination of
any Suspension Period.

               d. The Company shall use its reasonable best efforts to obtain:
(i) the withdrawal of any order suspending the effectiveness of any Shelf
Registration Statement and the use of any related Prospectus; and (ii) the
lifting of any suspension of the qualification (or exemption from qualification)
of any of the Transfer Restricted Securities for offer or sale in any
jurisdiction in which they have been qualified for sale, in each case at the
earliest possible time, and shall provide notice to each Notice Holder and the
Buyers of the withdrawal of any such orders or suspensions.

               e. The Company shall promptly furnish, upon written request and
without charge, to the Buyers and any Notice Holder, (i) at least one copy of
any Shelf Registration Statement and any post-effective amendment thereto,
excluding all documents incorporated or deemed to be incorporated therein by
reference and all exhibits thereto, (ii) promptly after the same is prepared and
filed with the SEC, one copy of any Shelf Registration Statement and any
amendment(s) thereto, including financial statements and schedules, all
documents incorporated therein by reference, if requested by an Investor, and
all exhibits and (iii) upon the effectiveness of any Shelf Registration
Statement, one copy of the prospectus included in such Registration Statement
and all amendments and supplements thereto, provided that the Company shall only
be obligated to furnish those documents which are not available on

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the EDGAR System. The Company shall promptly furnish, without charge, to Legal
Counsel copies of any correspondence from the SEC or the staff of the SEC to the
Company or its representatives relating to any Shelf Registration Statement.

               f. The Company shall, during the Shelf Registration Period,
promptly deliver, upon written request and without charge, to the Buyers and
each Notice Holder, as many copies of the Prospectus (including each preliminary
Prospectus) included in any Shelf Registration Statement, and any amendment or
supplement thereto, as such person may reasonably request and except as provided
in Sections 2(d) and 3(p) hereof; and the Company hereby consents (except during
a Suspension Period or during the continuance of an event described in Section
3(c)(ii) through (v)) to the use of the Prospectus and any amendment or
supplement thereto by each of the selling Holders in connection with the
offering and sale of the Transfer Restricted Securities covered by the
Prospectus or any amendment or supplement thereto during the Shelf Registration
Period.

               g. The Company shall submit to the SEC, within five (5) Business
Days after the Company learns that no review of a particular Shelf Registration
Statement will be made by the staff of the SEC or that the staff has no further
comments on a particular Shelf Registration Statement, as the case may be, a
request for acceleration of effectiveness of such Shelf Registration Statement
to a time and date not later than 48 hours after the submission of such request.

               h. Prior to any offering of Transfer Restricted Securities
pursuant to any Shelf Registration Statement, the Company shall register or
qualify or cooperate with the Notice Holders and their respective counsel in
connection with the registration or qualification (or exemption from such
registration or qualification) of such Transfer Restricted Securities for offer
and sale, under the securities or blue sky laws of such jurisdictions within the
United States as any such Notice Holders reasonably request and shall maintain
such qualification in effect so long as required and do any and all other acts
or things necessary or advisable to enable the offer and sale in such
jurisdictions of the Transfer Restricted Securities covered by such Shelf
Registration Statement; provided, however, that the Company will not be required
to: (i) qualify generally to do business as a foreign corporation or as a dealer
in securities in any jurisdiction where it is not then so qualified or; (ii)
take any action which would subject it to service of process or taxation in
excess of a nominal dollar amount in any such jurisdiction where it is not then
so subject.

               i. If the Transfer Restricted Securities are in certificated
form, the Company shall cooperate with the Holders to facilitate the timely
preparation and delivery of certificates representing Transfer Restricted
Securities sold pursuant to any Shelf Registration Statement free of any
restrictive legends and, with respect of any Notes, in such denominations
permitted by the Indenture and registered in such names as Holders may request
at least two (2) Business Days prior to settlement of sales of Transfer
Restricted Securities pursuant to such Shelf Registration Statement.

               j. Subject to the exceptions contained in (i) and (ii) of Section
3(h) above, the Company shall use its reasonable best efforts to cause the
Transfer Restricted Securities covered by the applicable Shelf Registration
Statement to be registered with or

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approved by such other federal, state and local governmental agencies or
authorities, and self-regulatory organizations in the United States as may be
necessary to enable the Holders to consummate the disposition of such Transfer
Restricted Securities as contemplated by the Shelf Registration Statement;
without limitation to the foregoing, the Company shall provide all such
information as may be required by the NASD in connection with the offering under
the Shelf Registration Statement of the Transfer Restricted Securities
(including, without limitation, such as may be required by NASD Rule 2710 or
2720), and shall cooperate with each Holder in connection with any filings
required to be made with the NASD by such Holder in that regard.

               k. Upon the occurrence of any event described in Section 3(c)(iv)
or 3(c)(v) hereof, the Company shall promptly prepare and file with the SEC a
post-effective amendment to any Shelf Registration Statement, or an amendment or
supplement to the related Prospectus, or any document incorporated therein by
reference, or file a document which is incorporated or deemed to be incorporated
by reference in such Shelf Registration Statement or Prospectus, as the case may
be, so that, as thereafter delivered to purchasers of the Transfer Restricted
Securities included therein, the Shelf Registration Statement and the
Prospectus, in each case as then amended or supplemented, will not contain an
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein (in
the case of the Prospectus, in the light of the circumstances under which they
were made) not misleading and, in the case of a post-effective amendment, use
its reasonable best efforts to cause it to become effective as promptly as
practicable; provided that the Company's obligations under this paragraph (k)
shall be suspended if the Company has suspended the use of the Prospectus in
accordance with Section 2(d) hereof and given notice of such suspension to
Notice Holders, it being understood that the Company's obligations under this
Section 3(k) shall be automatically reinstated at the end of such Suspension
Period.

               l. The Company shall provide, prior to the effective date of any
Shelf Registration Statement hereunder, a CUSIP number for the Transfer
Restricted Securities registered under such Shelf Registration Statement.

               m. The Company shall use its reasonable best efforts to comply
with all applicable rules and regulations of the SEC and shall make generally
available to its security holders an earnings statement satisfying the
provisions of Section 11(a) of the 1933 Act and Rule 158 promulgated by the SEC
thereunder (or any similar rule promulgated under the 1933 Act) for a 12-month
period commencing on the first day of the first fiscal quarter of the Company
commencing after the effective date of any Shelf Registration Statement or each
post-effective amendment to any Shelf Registration Statement, which such
statements shall be made available no later than 45 days after the end of the
12-month period or 90 days after the end of the 12-month period, if the 12-month
period coincides with the fiscal year of the Company.

               n. The Company shall use its reasonable best efforts to cause all
shares of Common Stock issuable upon conversion of the Notes to be reserved for
listing on each securities exchange or quotation system on which the Common
Stock is then listed no later than the date the applicable Shelf Registration
Statement is declared effective and shall use its reasonable best efforts to
cause all Common Stock to be so listed when issued, and, in connection
therewith, to make such filings as may be required under the 1934 Act and use
its reasonable best efforts to have such filings declared effective as and when
required thereunder.

                                       11

<PAGE>

               o. If any Notice Holder is required to be described in the
Registration Statement as an underwriter, then upon the reasonable written
request of such Notice Holder in connection with any disposition of Transfer
Restricted Securities pursuant to a Shelf Registration Statement, make
reasonably available for inspection during normal business hours by a
representative for the Notice Holders of such Transfer Restricted Securities and
any broker-dealers, attorneys and accountants retained by such Notice Holders,
all relevant financial and other records, pertinent corporate documents and
properties of the Company and its subsidiaries, and cause the appropriate
executive officers, directors and designated employees of the Company and its
subsidiaries to make reasonably available for inspection during normal business
hours all relevant information reasonably requested by such representative for
the Notice Holders or any such broker-dealers, attorneys or accountants in
connection with such disposition, in each case as is customary for similar "due
diligence" examinations; provided, however, that any information that is
designated by the Company, in good faith, as confidential at the time of
delivery of such information shall be kept confidential by such Persons, unless
disclosure thereof is made in connection with a court, administrative or
regulatory proceeding or required by law, or such information has become
available to the public generally through the Company or through a third party
without an accompanying obligation of confidentiality.

               p. Each Notice Holder agrees that, upon receipt of notice of the
happening of an event described in Sections 3(c)(ii) through and including
3(c)(vi), it shall forthwith discontinue (and shall cause its agents and
representatives to discontinue) disposition of Transfer Restricted Securities
and will not resume disposition of Transfer Restricted Securities until such
Holder has received copies of an amended or supplemented Prospectus contemplated
by Section 3(k) hereof, or until such Notice Holder is advised in writing by the
Company that the use of the Prospectus may be resumed or that the relevant
Suspension Period has been terminated, as the case may be, provided that the
foregoing shall not prevent the sale, transfer or other disposition of Transfer
Restricted Securities by a Holder in a transaction which is exempt from, or not
subject to, the registration requirements of the 1933 Act, so long as such
Holder does not and is not required to deliver the applicable Prospectus or
Shelf Registration Statement in connection with such sale, transfer or other
disposition, as the case may be; and provided, further, that the provisions of
this Section 3(q) shall not prevent the occurrence of a Registration Default or
otherwise limit the obligation of the Company to pay Additional Interest.

               q. The Company shall use its reasonable best efforts to take all
other steps necessary to effect the registration of the Notes covered by the
Shelf Registration Statement contemplated hereby.

          4. Registration Expenses.

          The Company shall bear all fees and expenses incurred in connection
with the performance of its obligations under Sections 2 and 3 hereof and shall
reimburse the Holders for the reasonable fees and disbursements of the Legal
Counsel which amount shall be limited to $10,000. Such fees and expenses shall
include, without limitation: (i) all registration and filing fees and expenses
(including filings made with the NASD); (ii) all fees and expenses of compliance
with federal securities and state Blue Sky or securities laws; (iii) all
expenses of printing (including printing of Prospectuses and certificates for
the Common Stock to be issued upon conversion of the Notes) and the Company's
expenses for messenger and delivery services

                                       12

<PAGE>

and telephone; (iv) all fees and disbursements of counsel to the Company; (v)
all application and filing fees in connection with listing (or authorizing for
quotation) the Common Stock on a national securities exchange or automated
quotation system pursuant to the requirements hereof; and (vi) all fees and
disbursements of independent certified public accountants of the Company. The
Company shall bear its internal expenses (including, without limitation, all
salaries and expenses of their officers and employees performing legal,
accounting or other duties), the expenses of any annual audit and the fees and
expenses of any Person, including special experts, retained by the Company.
Notwithstanding the provisions of this Section 4, each Holder shall bear the
expense of any broker's commission, agency fee, or underwriter's discount or
commission, if any, relating to the sale or disposition of such Holder's
Transfer Restricted Securities pursuant to a Shelf Registration Statement.

          5. Indemnification and Contribution.

               a. The Company agrees to indemnify and hold harmless each Holder
of Transfer Restricted Securities covered by any Shelf Registration Statement,
its directors, officers, partners, members, and employees and each Person, if
any, who controls any such Holder within the meaning of either Section 15 of the
1933 Act or Section 20 of the 1934 Act (collectively referred to for purposes of
this Section 5 as a "HOLDER") against any losses, claims, damages, or
liabilities, joint or several, or actions in respect thereof, to which any of
them may become subject, under the 1933 Act or otherwise, insofar as such
losses, claims, damages, liabilities, or actions arise out of or are based upon
an untrue statement or alleged untrue statement of a material fact contained in
the Shelf Registration Statement, or in any Prospectus, or any amendment thereof
or supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact necessary to make the statements
therein (in the case of any Prospectus, in the light of the circumstances under
which they were made) not misleading, and will reimburse each such party for any
legal or other expenses reasonably incurred by such party in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that: (i) the Company shall not be liable in any
such case to the extent that any such loss, claim, damage or liability arises
out of or is based upon Holder Information; and (ii) with respect to any untrue
statement or omission of material fact made in any Shelf Registration Statement,
or in any Prospectus, the indemnity agreement contained in this Section 5(a)
shall not inure to the benefit of a Holder from whom the Person asserting any
such loss, claim, damage or liability purchased the securities concerned, to the
extent that any such loss, claim, damage or liability of such Holder occurs
under the circumstance where it shall have been established that: (w) the
Company had previously furnished copies of the Prospectus, and any amendments
and supplements thereto, to such Holder; (x) delivery of the Prospectus, and any
amendment or supplements thereto, was required by the 1933 Act to be made to
such Holder; (y) the untrue statement or omission of a material fact contained
in the Prospectus was corrected in amendments or supplements thereto; and (z)
there was not sent or given to such Holder, at or prior to the written
confirmation of the sale of such securities to such Holder, a copy of such
amendments or supplements to the Prospectus. This indemnity agreement will be in
addition to any liability that the Company may otherwise have. This indemnity
agreement will not apply to any loss, damage, expense, liability or claim
arising from an offer or sale, occurring during a Suspension Period, of Transfer
Restricted Securities by a Notice Holder who has previously received notice from
the Company of the commencement of the Suspension Period pursuant to Section
3(c)(vi).

                                       13

<PAGE>

               b. Each Holder, severally and not jointly, agrees to indemnify
and hold harmless the Company, each of its directors and officers and each
Person, if any, who controls the Company within the meaning of either Section 15
of the 1933 Act or Section 20 of the 1934 Act, to the same extent as the
foregoing indemnity from the Company to the Holders and agrees to reimburse each
such indemnified party, as incurred, for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any loss, claim,
damage, liability or action, but only with reference to Holder Information
supplied by such Holder in writing to the Company for the express purpose of
being used in the Registration Statement. In no event shall any Holder, its
directors, officers, partners, members or employees or any Person, if any, who
controls such Holder be liable or responsible for any amount in excess of the
amount by which the total amount received by such Holder with respect to its
sale of Transfer Restricted Securities pursuant to a Shelf Registration
Statement exceeds: (i) the amount paid by such Holder for such Transfer
Restricted Securities; plus (ii) the amount of any damages that such Holder, its
directors, officers or any Person who controls such Holder has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. This indemnity agreement will be in addition to any
liability that such Holder may otherwise have.

               c. Promptly after receipt by an indemnified party under this
Section 5 of notice of any claim or the commencement of any action or proceeding
(including any governmental investigation), such indemnified party will, if a
claim for indemnification in respect thereof is to be made against the
indemnifying party under Section 5(a) or 5(b) hereof, notify the indemnifying
party in writing of the commencement thereof; but the omission so to notify the
indemnifying party will not relieve it from any liability which it may have to
any indemnified party to the extent it is not materially prejudiced as a result
thereof and in any event shall not relieve it from any liability which it may
have otherwise than on account of this indemnity agreement. In case any such
action or proceeding is brought against any indemnified party, and it notifies
the indemnifying party of the commencement thereof, the indemnifying party will
be entitled to participate therein (jointly with any other indemnifying party
similarly notified), and to the extent that it may elect, by written notice,
delivered to such indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified party; provided, however, that if
the defendants (including any impleaded parties) in any such action include both
the indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to those
available to the indemnifying party, the indemnified party or parties shall have
the right to select separate counsel to defend such action on behalf of such
indemnified party or parties. Upon receipt of notice from the indemnifying party
to such indemnified party of its election so to appoint counsel to defend such
action and approval by the indemnified party of such counsel, the indemnifying
party will not be liable to such indemnified party under this Section 5 for any
legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof unless: (i) the indemnified party shall have
employed separate counsel in accordance with the proviso to the preceding
sentence (it being understood, however, that the indemnifying party shall not be
liable for the expense of more than one separate counsel (in addition to any
local counsel), approved by the Holders in the case of paragraph (a) of this
Section 5, representing the indemnified parties under such paragraph (a) who are
parties to such action); (ii) the indemnifying party shall not

                                       14

<PAGE>

have employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice or
commencement of the action; (iii) the indemnifying party has authorized the
employment of counsel for the indemnified party at the expense of the
indemnifying party; or (iv) the use of counsel chosen by the indemnifying party
to represent the indemnified party would present such counsel with a conflict of
interest. An indemnifying party will not, without the prior written consent of
the indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes (1) an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding, and (2) does
not include a statement as to or an admission of fault, culpability, or failure
to act by or on behalf of any indemnified party. Subject to the provisions of
the immediately following sentence, no indemnifying party shall be liable for
any settlement, compromise or the consent to the entry of judgment in connection
with any such action effected without its written consent, but if settled with
its written consent or if there be a final judgment for the plaintiff in any
such action other than a judgment entered with the consent of such indemnified
party, the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of such
settlement or judgment. If at any time an indemnified party shall have requested
that an indemnifying party reimburse the indemnified party for reasonable fees
and expenses of counsel as contemplated by this Section 5(c) and to which it
would be entitled under Section 5(a) or 5(b) hereof, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if: (x) such settlement is entered into more than 45
days after receipt by such indemnifying party of such request for reimbursement,
(y) such indemnifying party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered into and (z)
such indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.

               d. In the event that the indemnity provided in paragraph (a) or
(b) of this Section 5 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, each indemnifying party agrees to contribute
to the aggregate losses, claims, damages and liabilities (including legal or
other expenses reasonably incurred in connection with investigating or defending
same) (collectively, "LOSSES") to which the indemnified party may be subject in
such proportion as is appropriate to reflect the relative benefits received by
the Company from the sale of the Notes, on the one hand, and a Holder with
respect to the sale by such Holder of Notes or Common Stock, on the other hand;
provided, however, that in no case shall an indemnifying party that is a Holder
be responsible for any amount in excess of the total price at which the Transfer
Restricted Securities are sold by such Holder to a purchaser. If the allocation
provided by the immediately preceding sentence is unavailable for any reason,
the Company and such Holder shall contribute in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and of such Holder on the other in
connection with the statements or omissions which resulted in such Losses, as
well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and such Holder on the other shall be
deemed to be in the same respective proportions as the total net proceeds from
the sale of the Notes (before deducting expenses) received by or on behalf of
the Company, on the one hand, and the total proceeds received by

                                       15

<PAGE>

such Holder with respect to its sale of Transfer Restricted Securities under the
Shelf Registration Statement, on the other hand, bear to the total gross
proceeds from the sale of the Notes. Relative fault shall be determined by
reference to, among other things, whether any untrue or any alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information provided by the Company on the one hand or
relates to Holder Information supplied by such Holder, on the other, the intent
of the parties and their relative knowledge, information and opportunity to
correct or prevent such untrue statement or omission. The parties agree that it
would not be just and equitable if contribution pursuant to this paragraph (d)
were determined by pro rata allocation or any other method of allocation that
does not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), no Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933
Act) shall be entitled to contribution from any Person who was not guilty of
such fraudulent misrepresentation. For purposes of this Section 5(d), each
Person who controls such Holder within the meaning of either the 1933 Act or the
1934 Act shall have the same rights to contribution as such Holder, and each
Person who controls the Company within the meaning of either the 1933 Act or the
1934 Act shall have the same rights to contribution as the Company, subject in
each case to the applicable terms and conditions of this paragraph (d).

               e. The provisions of this Section 5 will remain in full force and
effect, regardless of any investigation made by or on behalf of any Holder, any
underwriter or the Company or any of the officers, directors or controlling
Persons referred to in Section 5 hereof, and will survive the sale by a Holder
of Transfer Restricted Securities covered by a Shelf Registration Statement.

               f. Rules 144 and 144A. The Company covenants that it shall use
its reasonable best efforts to file the reports required to be filed by it under
the 1933 Act and the 1934 Act in a timely manner so long as the Transfer
Restricted Securities remain outstanding. If at any time the Company is not
required to file such reports, it will, upon request of any Holder or beneficial
owner of Transfer Restricted Securities, make available such information
necessary to permit sales pursuant to Rule 144A. The Company further covenants
that, for as long as any Transfer Restricted Securities remain outstanding, it
will take such further action as any Holder of Transfer Restricted Securities
may reasonably request, all to the extent required from time to time to enable
such Holder to sell Transfer Restricted Securities without registration under
the 1933 Act within the limitation of the exemptions provided by Rule 144 and
Rule 144A. Upon the written request of any Holder of Transfer Restricted
Securities, the Company shall deliver to such Holder a written statement as to
whether it has complied with such requirements.

          6. Holder's Obligations. Each Buyer agrees, by acquisition of the
Notes, that no Buyer of Notes shall be entitled to sell any of the Notes or
Conversion Shares pursuant to a Shelf Registration Statements or to receive a
Prospectus relating thereto unless such Buyer has furnished the Company with a
completed Notice and Questionnaire as required pursuant to Section 2(b).

          7. Miscellaneous.

               a. No Inconsistent Agreements. Except as disclosed in the
Securities Purchase Agreement, the Company has not, as of the date hereof,
entered into nor shall it, on or

                                       16
<PAGE>

after the date hereof, enter into, any agreement with respect to its securities
that is inconsistent with the rights granted to the Holders herein or otherwise
conflicts with the provisions hereof. In addition, the Company shall not grant
to any of its Noteholders (other than the Holders of Transfer Restricted
Securities in such capacity) the right to include any of its securities in the
Shelf Registration Statement provided for in this Agreement other than the
Transfer Restricted Securities.

               b. Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, qualified,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the Company consents in writing and
the Company has obtained the written consent of at least the Majority Holders;
provided that with respect to any matter that directly or indirectly affects the
rights of the Buyers hereunder, the Company shall obtain the written consent of
the Buyers against which such amendment, qualification, supplement, waiver or
consent is to be effective. Notwithstanding the foregoing (except the foregoing
proviso), a waiver or consent to departure from the provisions hereof with
respect to a matter that relates exclusively to the rights of Holders whose
Transfer Restricted Securities are being sold pursuant to a Shelf Registration
Statement and that does not directly or indirectly affect the rights of other
Holders may be given by the Majority Holders.

               c. Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail,
telecopier, or air courier guaranteeing overnight delivery:

                    (i) if to the Buyers, initially at their address set forth
in the Securities Purchase Agreement;

                    (ii) if to any other Holder, at the most current address of
such Holder maintained by the Registrar under the Indenture or the registrar of
the Common Stock (provided that while the Notes or the Common Stock are in
book-entry form, notice to the Trustee shall serve as notice to the Holders),
or, in the case of the Notice Holder, the address set forth in its Notice and
Questionnaire;

                    (iii) if to the Company, to:

                    Smith & Wesson Holding Corporation
                    2100 Roosevelt Avenue
                    Springfield, Massachusetts 01104
                    Telephone: (413) 747-3305
                    Facsimile: (413) 739-8528
                    Attention: John A. Kelly

                    With a copy to:

                                       17

<PAGE>

                    Greenberg Traurig, LLP
                    2375 East Camelback Rd., Ste 700
                    Phoenix, AZ  85016
                    Telephone: (602) 445-8302
                    Facsimile: (602) 445-8100
                    Attention: Robert S. Kant, Esq.

                    (iv) if to Legal Counsel, to:

                    Schulte Roth & Zabel LLP
                    919 Third Avenue
                    New York, NY 10022
                    Telephone: (212) 756-2000
                    Facsimile: (212) 593-5955
                    Attention: Eleazer Klein, Esq.

          All such notices and communications shall be deemed to have been duly
given when received, if delivered by hand or air courier, and when sent, if sent
by first-class mail or telecopier.

          The Buyers or the Company by notice to the other may designate
additional or different addresses for subsequent notices or communications.

               d. Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including, without the need for an express assignment or any consent by
the Company thereto, subsequent Holders. The Company hereby agrees to extend the
benefits of this Agreement to any Holder and underwriter and any such Holder and
underwriter may specifically enforce the provisions of this Agreement as if an
original party hereto. In the event that any other Person shall succeed to the
Company under the Indenture, then such successor shall enter into an agreement,
in form and substance reasonably satisfactory to the Buyers, whereby such
successor shall assume all of the Company's obligations under this Agreement.

               e. Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

               f. Headings. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.

               g. Governing Law. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed by
the internal laws of the State of New York, without giving effect to any choice
of law or conflict of law provision or rule (whether of the State of New York or
any other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of New York. Each party hereby irrevocably

                                       18

<PAGE>

submits to the exclusive jurisdiction of the state and federal courts sitting in
The City of New York, Borough of Manhattan, for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, that such suit, action or proceeding is
brought in an inconvenient forum or that the venue of such suit, action or
proceeding is improper. Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address for such
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION
OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

               h. Severability. In the event that any one of more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired
or affected thereby, it being intended that all of the rights and privileges of
the parties shall be enforceable to the fullest extent permitted by law.

               i. Notes Held by the Company, Etc. Whenever the consent or
approval of Holders of a specified percentage of principal amount of Notes or
the shares of Common Stock issuable upon conversion thereof is required
hereunder, Notes or the shares of Common Stock issued upon conversion thereof
held by the Company or its Affiliates (other than subsequent Holders of Notes or
the Common Stock issued upon conversion thereof if such subsequent Holders are
deemed to be Affiliates solely by reason of their holdings of such Notes) shall
not be counted in determining whether such consent or approval was given by the
Holders of such required percentage.

               j. Termination. This Agreement and the obligations of the parties
hereunder shall terminate upon the end of the Shelf Registration Period, except
for any liabilities or obligations under Section 2(e), 4 or 5.

               k. Independent Nature of Buyers' Obligations and Rights. The
obligations of each Buyer under any Transaction Document are several and not
joint with the obligations of any other Buyer, and no Buyer shall be responsible
in any way for the performance of the obligations of any other Buyer under any
Transaction Document. Nothing contained herein or in any other Transaction
Document, and no action taken by any Buyer pursuant hereto or thereto, shall be
deemed to constitute the Buyers as a partnership, an association, a joint
venture or any other kind of entity, or create a presumption that the Buyers

                                       19

<PAGE>

are in any way acting in concert or as a group with respect to such obligations
or the transactions contemplated by the Transaction Documents. Each Buyer
confirms that it has independently participated in the negotiation of the
transaction contemplated hereby with the advice of its own counsel and advisors.
Each Buyer shall be entitled to independently protect and enforce its rights,
including, without limitation, the rights arising out of this Agreement or out
of any other Transaction Documents, and it shall not be necessary for any other
Buyer to be joined as an additional party in any proceeding for such purpose.

                                       20

<PAGE>

          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.

                                        COMPANY:

                                        SMITH & WESSON HOLDING CORPORATION

                                        By: /s/ Michael F. Golden
                                            ------------------------------------
                                        Name: Michael F. Golden
                                        Title: President and Chief Executive
                                               Officer

<PAGE>

          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.

                                        BUYERS:

                                        HIGHBRIDGE INTERNATIONAL LLC

                                        By: HIGHBRIDGE CAPITAL MANAGEMENT, LLC

                                        By: /s/ Adam J. Chill
                                            ------------------------------------
                                        Name: Adam J. Chill
                                        Title: Managing Director

<PAGE>

          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.

                                        CAPITAL VENTURES INTERNATIONAL

                                        BY: HEIGHTS CAPITAL MANAGEMENT, INC.
                                        ITS AUTHORIZED AGENT

                                        By: /s/ Martin Kobinger
                                            ------------------------------------
                                        Name: Martin Kobinger
                                        Title: Investment Manager

<PAGE>

          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.

                                        CORNELL CAPITAL PARTNERS, LP

                                        By: /s/ Mark Angelo
                                            ------------------------------------
                                        Name: Mark Angelo
                                        Title:
                                               ---------------------------------

<PAGE>

          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.

                                        CRANSHIRE CAPITAL, L.P.

                                        By: /s/ Mitchell P. Kopin
                                            ------------------------------------
                                        Name: Mitchell P. Kopin
                                        Title: President - Downsview Capital
                                               The General Partner

<PAGE>

          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.

                                        D.B. ZWIRN SPECIAL OPPORTUNITIES FUND,
                                        LTD

                                        By: /s/ Lawrence D. Cutler
                                            ------------------------------------
                                        Name: Lawrence D. Cutler
                                        Title: Chief Administrative &
                                               Compliance Officer

<PAGE>

          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.

                                        D.B. ZWIRN SPECIAL OPPORTUNITIES FUND,
                                        LP

                                        By: /s/ Lawrence D. Cutler
                                            ------------------------------------
                                        Name: Lawrence D. Cutler
                                        Title: Chief Administrative &
                                               Compliance Officer

<PAGE>

          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.

                                        ENABLE GROWTH PARTNERS LP

                                        By: /s/ Brendan O'Neil
                                            ------------------------------------
                                        Name: Brendan O'Neil
                                        Title: Principal and Portfolio Manager

<PAGE>

          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.

                                        EVOLUTION MASTER FUND LTD. SPC,
                                        SEGREGATED PORTFOLIO M

                                        By: /s/ Michael Lerch
                                            ------------------------------------
                                        Name: Michael Lerch
                                        Title: Director

<PAGE>

          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.

                                        GLG MARKET NEUTRAL FUND

                                        BY: GLG PARTNERS LP ACTING AS INVESTMENT
                                            MANAGER TO GLG MARKET NEUTRAL FUND

                                        By: /s/ Bob Price
                                            ------------------------------------
                                        Name: Bob Price
                                        Title: Head of Operations
                                               GLG Partners LP

                                        By: /s/ Tim Kuschill
                                            ------------------------------------
                                        Name: Tim Kuschill
                                        Title: Legal Counsel
                                               GLG Partners LP

<PAGE>

          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.

                                        HUDSON BAY FUND LP

                                        By: /s/ Yoav Roth
                                            ------------------------------------
                                        Name: Yoav Roth
                                        Title: Principal and Portfolio Manager

<PAGE>

          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.

                                        HUDSON BAY OVERSEAS FUND LTD

                                        By: /s/ Yoav Roth
                                            ------------------------------------
                                        Name: Yoav Roth
                                        Title: Principal and Portfolio Manager

<PAGE>

          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.

                                        IROQUOIS MASTER FUND LTD.

                                        By: /s/ Joshua Silverman
                                            ------------------------------------
                                        Name: Joshua Silverman
                                        Title: Authorized Signator

<PAGE>

          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.

                                        KAMUNTING STREET MASTER FUND, LTD

                                        By: /s/ Gregor Dannacher
                                            ------------------------------------
                                        Name: Gregor Dannacher
                                        Title: Director of Research
                                               Kamunting Street Capital
                                               Management, L.P.
                                               As Investment Manager For
                                               Kamunting Street Master Fund, LTD

<PAGE>

          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.

                                        KINGS ROAD INVESTMENTS LTD.

                                        By: /s/ Brandon L. Jones
                                            ------------------------------------
                                        Name: Brandon L. Jones
                                        Title: Co-head, Private Investments

<PAGE>

          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.

                                        LBI GROUP INC.

                                        By: /s/ Eric Salzman
                                            ------------------------------------
                                        Name: Eric Salzman
                                        Title: SVP

<PAGE>

          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.

                                        PORTSIDE GROWTH AND OPPORTUNITY FUND

                                        By: /s/ Jeffrey Smith
                                            ------------------------------------
                                        Name: Jeffrey Smith
                                        Title: Authorized Signatory
<PAGE>

          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.

                                        BUYER:

                                        RADCLIFFE SPC, LTD. FOR AND ON BEHALF OF
                                        THE CLASS A SEGREGATED PORTFOLIO

                                        By: RG Capital Management, L.P.

                                        By: RGC Management Company, LLC

                                        By: /s/ Gerald F. Stahlecker
                                            ------------------------------------
                                        Name: Gerald F. Stahlecker
                                        Title: Managing Director

<PAGE>

          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.

                                        ROCKMORE INVESTMENT MASTER FUND LIMITED

                                        By: /s/ Brian Daly
                                            ------------------------------------
                                        Name: Brian Daly
                                        Title: Managing Director

<PAGE>

          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.

                                        SCOGGIN CAPITAL MANAGEMENT, LP II

                                        By: S&E Partners, LP
                                            Its: general partner

                                        By: Scoggin, Inc.
                                            Its: general partner

                                        By: /s/ Curtis Schener
                                            ------------------------------------
                                        Name: Curtis Schener
                                        Title: CEO

<PAGE>

          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.

                                        SILVER OAK CAPITAL, LLC

                                        By: /s/ Fred Berger
                                            ------------------------------------
                                        Name: Fred Berger
                                        Title: Manager

<PAGE>

          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.

                                        UBS O'CONNOR LLC FBO O'CONNOR PIPES
                                        CORPORATE STRATEGIES MASTER LIMITED

                                        By: /s/ George Locasto
                                            ------------------------------------
                                        Name: George Locasto
                                        Title: Managing Director

<PAGE>

          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.

                                        UBS O'CONNOR LLC FBO O'CONNOR GLOBAL
                                        CONVERTIBLE ARBITRAGE II MASTER LIMITED

                                        By: /s/ George Locasto
                                            ------------------------------------
                                        Name: George Locasto
                                        Title: Managing Director

<PAGE>

          IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.

                                        UBS O'CONNOR LLC FBO O'CONNOR GLOBAL
                                        CONVERTIBLE ARBITRAGE MASTER LIMITED

                                        By: /s/ George Locasto
                                            ------------------------------------
                                        Name: George Locasto
                                        Title: Managing Director
<PAGE>

                                                                       EXHIBIT A

                 SELLING SECURITYHOLDER NOTICE AND QUESTIONNAIRE

1.   (a)  Full Legal Name of Selling Securityholder:

          ______________________________________________________________________

     (b)  Full Legal Name of Registered Holder (if not the same as (a) above)
          through which Transfer Restricted Securities Listed in Item 3 below
          are held:

          ______________________________________________________________________

     (c)  Full Legal Name of DTC participant (if applicable and if not the same
          as (b) above) through which Transfer Restricted Securities listed in
          Item 3 below are held:

          ______________________________________________________________________

2.   Address for Notices to Selling Securityholder:

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

Telephone: _____________________________________________________________________

Fax: ___________________________________________________________________________

Contact Person: ________________________________________________________________

3.   Beneficial Ownership of Transfer Restricted Securities:

     (a)  Type and Principal Amount of Transfer Restricted Securities
          beneficially owned:

          ______________________________________________________________________

          ______________________________________________________________________

     (b)  CUSIP No(s). of such Transfer Restricted Securities beneficially
          owned:

          ______________________________________________________________________

     (c)  Did you acquire the securities listed in Item 3(a) in the ordinary
          course of business?

          Yes [ ]   No [ ]

<PAGE>

     (d)  At the time of your purchase of the securities listed in Item 3(a),
          did you have any agreements or understandings, directly or indirectly,
          with any person to distribute the securities?

          Yes [ ]   No [ ]

     (e)  If your response to Item 3(d) is yes, please describe such agreements
          or understandings.

          ______________________________________________________________________

          ______________________________________________________________________

4.   Beneficial Ownership of Other Securities of the Company Owned by the
     Selling Securityholder.

     Except as set forth below in this Item 4, the undersigned is not the
     beneficial or registered owner of any securities of the Company other than
     the Transfer Restricted Securities listed above in Item 3.

     (a)  Type and Amount of Other Securities beneficially owned by the Selling
          Securityholder:

          ______________________________________________________________________

          ______________________________________________________________________

     (b)  CUSIP No(s). of such Other Securities beneficially owned:

          ______________________________________________________________________

          ______________________________________________________________________

5.   Relationships with the Company:

     Except as set forth below, neither the undersigned nor any of its
     affiliates, officers, directors or principal equity holders (owners of 5%
     of more of the equity securities of the undersigned) has held any position
     or office or has had any other material relationship with the Company (or
     its predecessors or affiliates) during the past three years.

     State any exceptions here:

          ______________________________________________________________________

          ______________________________________________________________________

6.   Broker-Dealers and their Affiliates

     (a)  Is the Selling Securityholder a broker-dealer:

<PAGE>

          Yes [ ]   No [ ]

          If so, please answer the remaining question in this section.

          (i) Please advise whether the notes were received by the Selling
          Securityholder as compensation for investment banking services or as
          investment shares, and if so please describe the circumstances.

          Note that in general we may be required to identify any registered
          broker-dealer as an underwriter in the prospectus.

          (ii) Except as set forth below, if the Selling Securityholder is a
          registered broker- dealer, the Selling Securityholder does not plan to
          make a market in the Transfer Restricted Securities. If the Selling
          Securityholder plans to make a market in the Transfer Restricted
          Securities, please indicate whether the Selling Securityholder plans
          to use the prospectus relating to the Transfer Restricted Securities
          as a market-making prospectus.

          (b)  Affiliation with Broker-Dealers

               Is the Selling Securityholder an affiliate(1) of a registered
               broker-dealer?

          Yes [ ]   No [ ]

          If so, please answer the remaining questions in this section.

          (i)  Please describe the affiliation between the Selling
               Securityholder and any registered broker-dealer.

          (ii) If the notes were purchased by the Selling Securityholder other
               than in the ordinary course of business, please describe the
               circumstances.

          (iii) Please advise whether the notes were received by the Selling
               Securityholder as compensation for investment banking services or
               as investment shares, and if so please describe the
               circumstances.

          (iv) If the Selling Securityholder, at the time of its purchase of
               Transfer Restricted Securities, had any agreements or
               understandings, directly or indirectly, with any person to
               distribute the Transfer Restricted Securities, please describe
               such agreements or undertakings.

----------
(1)  An "affiliate" of a specified person or entity means a person or entity
     that directly, or indirectly through one or more intermediaries, controls
     or is controlled by, or is under common control with, the person or entity
     specified.

<PAGE>

     Note that if the Selling Securityholder is an affiliate of a broker-dealer
     and did not purchase its notes in the ordinary course of business or at the
     time of the purchase had any agreements or understandings, directly or
     indirectly, to distribute the securities, we may be required to identify
     the Selling Securityholder as an underwriter in the prospectus.

7.   Beneficial Ownership by Entities:

     If the Selling Securityholder is an entity, does any natural person have
     voting or dispositive power over the Transfer Restricted Securities held by
     the Selling Securityholder?(2)

     If so, please state the person's or persons' name(s):

8.   Beneficial Ownership by Natural Persons or by a Board or Committee

     Is the Selling Securityholder a reporting entity with the Securities and
     Exchange Commission?

     If the Selling Securityholder is a majority owned subsidiary of a reporting
     entity, identify the majority stockholder that is a reporting entity.

     Yes [ ]   No [ ]

     If No, please answer the remaining questions in this section.

     (i)  Please name the natural person or person(s) having voting and/or
          investment control over the Selling Securityholder.(3)

     (ii) If the voting and/or investment control over the Selling
          Securityholder is held by board or committee, please state the name of
          the natural person or person(s) on such board or committee.

----------
(2)  Please answer "Yes" if any natural person, directly or indirectly, through
     any contract, arrangement, understanding, relationship, or otherwise has or
     shares: (a) voting power which includes the power to vote, or to direct the
     voting of, such security; and/or, (b) investment power which includes the
     power to dispose, or to direct the disposition of, the Transfer Restricted
     Securities held by the Selling Securityholder.

(3)  Please include any natural person that, directly or indirectly, through any
     contract, arrangement, understanding, relationship, or otherwise has or
     shares: (a) voting power which includes the power to vote, or to direct the
     voting of, such security; and/or, (b) investment power which includes the
     power to dispose, or to direct the disposition of, the Transfer Restricted
     Securities held by the Selling Securityholder.

<PAGE>

9.   Plan of Distribution:

     Except as set forth below, the undersigned (including its donees or
     pledgees) intends to distribute the Transfer Restricted Securities listed
     above in Item 3 pursuant to the Shelf Registration Statement only as
     follows (if at all): Such Transfer Restricted Securities may be sold from
     time to time directly by the undersigned or, alternatively, through
     underwriters, broker-dealers, or agents. If the Transfer Restricted
     Securities are sold through underwriters, broker-dealers, or agents, the
     Selling Securityholder will be responsible for underwriting discounts or
     commissions or agents' commissions. Such Transfer Restricted Securities may
     be sold in one or more transactions at fixed prices, at prevailing market
     prices at the time of sale, at varying prices determined at the time of
     sale or at negotiated prices. These sales may be effected in transactions,
     which may involve crosses or block transactions,

     -    on any national securities exchange or quotation service on which the
          securities may be listed or quoted at the time of sale;

     -    in the over-the-counter market;

     -    in transactions otherwise than on these exchanges or systems or in the
          over-the-counter market;

     -    through the writing of options, whether such options are listed on an
          options exchange or otherwise;

     -    in ordinary brokerage transactions and transactions in which the
          broker-dealer solicits purchasers;

     -    in block trades in which the broker-dealer will attempt to sell the
          shares as agent but may position and resell a portion of the block as
          principal to facilitate the transaction;

     -    in purchases by a broker-dealer as principal and resale by the
          broker-dealer for its account;

     -    in an exchange distribution in accordance with the rules of the
          applicable exchange;

     -    in privately negotiated transactions;

     -    in short sales;

     -    in sales pursuant to Rule 144;

     -    in which broker-dealers may agree with the selling securityholders to
          sell a specified number of such shares at a stipulated price per
          share;

<PAGE>

     -    in a combination of any such methods of sale; and

     -    in any other method permitted pursuant to applicable law.

     State any exceptions here:

     ___________________________________________________________________________

     ___________________________________________________________________________

Note: In no event will such method(s) of distribution take the form of an
underwritten offering of the Transfer Restricted Securities without the prior
written agreement of the Company.

The undersigned acknowledges its obligation to comply with the provisions of the
1934 Act and the rules thereunder relating to stock manipulation, particularly
Regulation M thereunder (or any successor rules or regulations), in connection
with any offering of Transfer Restricted Securities pursuant to the Registration
Rights Agreement. The undersigned agrees that neither it nor any person acting
on its behalf will engage in any transaction in violation of such provisions.

The Selling Securityholder hereby acknowledges its obligations under the
Registration Rights Agreement to indemnify and hold harmless certain persons as
set forth therein.

Pursuant to the Registration Rights Agreement, the Company has agreed under
certain circumstances to indemnify the Selling Securityholder against certain
liabilities.

In accordance with the undersigned's obligation under the Registration Rights
Agreement to provide such information as may be required by law for inclusion in
the Shelf Registration Statement, the undersigned agrees to promptly notify the
Company, upon written request (which request shall be made within three days of
the proposed effeteness of the Registration Statement or an amendment thereto),
of any inaccuracies or changes in the information provided herein that may occur
subsequent to the date hereof at any time while the Shelf Registration Statement
remains effective.

All notices hereunder and pursuant to the Registration Rights Agreement shall be
made in writing by hand delivery, first class mail or air courier guaranteeing
overnight delivery to the address set forth below.

By signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items 1 through 6 and the inclusion of such
information in the Shelf Registration Statement and the related prospectus. The
undersigned understands that such information will be relied upon by the Company
in connection with the preparation or amendment of the Shelf Registration
Statement and the related prospectus.

Once this Notice and Questionnaire is executed by the Selling Securityholder and
received by the Company, the terms of this Notice and Questionnaire, and the
representations and warranties contained herein, shall be binding on, shall
inure to the benefit of and shall be enforceable by the

<PAGE>

respective successors, heirs, personal representatives and assigns of the
Company and the Selling Securityholder with respect to the Transfer Restricted
Securities beneficially owned by such Selling Securityholder and listed in Item
(3) above. This Agreement shall be governed in all respects by the laws of the
State of New York.

<PAGE>

IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this
Notice and Questionnaire to be executed and delivered either in person or by its
duly authorized agent.

Dated:                                  Beneficial Owner:
       ------------------------------                     ----------------------

                                        By:
                                             -----------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

               PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND
               QUESTIONNAIRE TO SMITH & WESSON HOLDING CORPORATION

                         Smith & Wesson Holding Corporation
                         2100 Roosevelt Avenue
                         Springfield, Massachusetts 01104
                         Attention: Chief Financial Officer

<PAGE>

                                                                       EXHIBIT B

                             SELLING SECURITYHOLDERS

     The notes and shares of common stock issuable upon conversion of the notes
that may be offered pursuant to this prospectus will be offered by the selling
securityholders. For additional information regarding the issuance of those
notes and the shares of common stock issuable upon conversion of the notes, see
"Private Placement of Convertible Notes" above. We are registering the notes and
shares of common stock issuable upon conversion of the notes in order to permit
the selling stockholders to offer the notes and the shares of common stock
issuable upon conversion of the notes for resale from time to time. Except for
the ownership of the notes issued pursuant to the Securities Purchase Agreement,
the selling stockholders have not had any material relationship with us within
the past three years.

     The following table sets forth the selling securityholders and other
information regarding the beneficial ownership of the shares of common stock and
notes by each of the selling securityholders. The second column lists the
principal amount of notes benefically owned by each selling securityholder as of
________, 200_. The third column lists the number of shares of common stock
beneficially owned by each selling securityholder, based on its ownership of the
notes, as of ________, 200_, assuming conversion of all notes held by the
selling securityholders on that date, without regard to any limitations on
conversions.

     The fourth column lists the notes being offered by this prospectus by each
selling securityholder. The fifth column lists the shares of common stock being
offered by this prospectus by each selling securityholder.

     In accordance with the terms of a registration rights agreement among the
Company and the selling securityholders, this prospectus generally covers the
resale of the notes and the number of shares of common stock issued or issuable
upon conversion of the notes as of the trading day immediately preceding the
date the registration statement is initially filed with the SEC. Because the
conversion price of the notes may be adjusted, the number of shares that will
actually be issued may be more or less than the number of shares being offered
by this prospectus. The sixth column assumes the sale of all of the notes
offered by the selling securityholders pursuant to this prospectus. The seventh
column assumes the sale of all of the shares of common stock offered by the
selling securityholders pursuant to this prospectus.

     Under the terms of the notes, a selling securityholder may not convert the
notes to the extent such conversion would cause such selling securityholder,
together with its affiliates, to beneficially own a number of shares of common
stock which would exceed 4.99% of our then outstanding shares of common stock
following such conversion, excluding for purposes of such determination shares
of common stock issuable upon conversion of the notes which have not been
converted. The number of shares in the fourth column does not reflect this
limitation. The selling securityholders may sell all, some or none of their
notes or shares of common stock issuable upon conversion of the notes in this
offering. See "Plan of Distribution."

<PAGE>

<TABLE>
<CAPTION>
                                      PRINCIPAL                  MAXIMUM      MAXIMUM
                                      AMOUNT AT                 NUMBER OF    NUMBER OF
                                      MATURITY     NUMBER OF    NOTES TO     SHARES TO   NUMBER OF
                                      OF NOTES      SHARES       BE SOLD      BE SOLD      NOTES       NUMBER OF
                                    BENEFICIALLY     OWNED      PURSUANT     PURSUANT      OWNED     SHARES OWNED
                                     OWNED PRIOR    PRIOR TO     TO THIS      TO THIS      AFTER         AFTER
NAME OF SELLING SECURITYHOLDER       TO OFFERING    OFFERING   PROSPECTUS   PROSPECTUS   OFFERING      OFFERING
------------------------------      ------------   ---------   ----------   ----------   ---------   ------------
<S>                                 <C>            <C>         <C>          <C>          <C>         <C>
Highbridge International LLC (1)                                                                           0

Capital Ventures International

Cornell Capital Partners, LP

Cranshire Capital L.P.

D.B. Zwirn Special Opportunities
Fund, LTD

D.B. Zwirn Special Opportunities
Fund, LP

Enable Growth Partners LP

Evolution Master Fund Ltd. SPC,
Segregated Portfolio M

GLG Market Neutral Fund

Hudson Bay Fund LP

Hudson Bay Overseas Fund Ltd

Iroquois Master Fund Ltd.

Kamunting Street Master Fund, Ltd

Kings Road
Investments Ltd.

LBI Group, Inc.

Portside Growth and Opportunity
Fund

Radcliffe SPC, Ltd.
For and on behalf of the Class A
Segregated Portfolio
</TABLE>

<PAGE>

<TABLE>
<S>                                 <C>            <C>         <C>          <C>          <C>         <C>
Rockmore Investment Master Fund,
Ltd

Scoggin Capital Management, LP II

Silver Oak Capital, LLC

UBS O'Connor LLC fbo O'Connor
PIPES Corporate Strategies
Master Limited

UBS O'Connor LLC fbo O'Connor
Global Convertible Arbitrage II
Master Limited

UBS O'Connor LLC fbo O'Connor
Global Convertible Arbitrage
Master Limited
</TABLE>

(1)  Highbridge Capital Management, LLC is the trading manager of Highbridge
     International LLC and has voting control and investment discretion over
     securities held by Highbridge International LLC. Glenn Dubin and Henry
     Swieca control Highbridge Capital Management, LLC. Each of Highbridge
     Capital Management, LLC, Glenn Dubin and Henry Swieca disclaim beneficial
     ownership of the securities held by Highbridge International LLC.

<PAGE>

                              PLAN OF DISTRIBUTION

     We are registering the notes and the shares of common stock issuable upon
conversion of the notes to permit the resale of these notes and shares of common
stock by the holders of the notes from time to time after the date of this
prospectus. We will not receive any of the proceeds from the sale by the selling
securityholders of the notes and shares of common stock issuable upon conversion
of the notes. We will bear all fees and expenses incident to our obligation to
register the notes and shares of common stock issuable upon conversion of the
notes.

     The selling securityholders may sell all or a portion of the notes or
shares of common stock issuable upon conversion of the notes beneficially owned
by them and offered hereby from time to time directly or through one or more
underwriters, broker-dealers or agents. If the notes or shares of common stock
issuable upon conversion of the notes are sold through underwriters or
broker-dealers, the selling securityholders will be responsible for underwriting
discounts or commissions or agent's commissions. The notes and shares of common
stock issuable upon conversion of the notes may be sold in one or more
transactions at fixed prices, at prevailing market prices at the time of the
sale, at varying prices determined at the time of sale, or at negotiated prices.
These sales may be effected in transactions, which may involve crosses or block
transactions,

     -    on any national securities exchange or quotation service on which the
          securities may be listed or quoted at the time of sale;

     -    in the over-the-counter market;

     -    in transactions otherwise than on these exchanges or systems or in the
          over-the-counter market;

     -    through the writing of options, whether such options are listed on an
          options exchange or otherwise;

     -    ordinary brokerage transactions and transactions in which the
          broker-dealer solicits purchasers;

     -    block trades in which the broker-dealer will attempt to sell the
          shares as agent but may position and resell a portion of the block as
          principal to facilitate the transaction;

     -    purchases by a broker-dealer as principal and resale by the
          broker-dealer for its account;

     -    an exchange distribution in accordance with the rules of the
          applicable exchange;

     -    privately negotiated transactions;

     -    short sales;

<PAGE>

     -    sales pursuant to Rule 144;

     -    broker-dealers may agree with the selling securityholders to sell a
          specified number of such shares at a stipulated price per share;

     -    a combination of any such methods of sale; and

     -    any other method permitted pursuant to applicable law.

     If the selling securityholders effect such transactions by selling notes or
common stock issuable upon conversion of the notes to or through underwriters,
broker-dealers or agents, such underwriters, broker-dealers or agents may
receive commissions in the form of discounts, concessions or commissions from
the selling securityholders or commissions from purchasers of the notes or such
common stock, as applicable, for whom they may act as agent or to whom they may
sell as principal (which discounts, concessions or commissions as to particular
underwriters, broker-dealers or agents may be in excess of those customary in
the types of transactions involved). In connection with sales of the shares of
common stock issuable upon conversion of the notes or otherwise, the selling
securityholders may enter into hedging transactions with broker-dealers, which
may in turn engage in short sales of the shares of common stock issuable upon
conversion of the notes in the course of hedging in positions they assume. The
selling securityholders may also sell shares of common stock issuable upon
conversion of the notes short and deliver shares of common stock covered by this
prospectus to close out short positions and to return borrowed shares in
connection with such short sales. The selling securityholders may also loan or
pledge the notes or shares of common stock issuable upon conversion of the notes
to broker-dealers that in turn may sell such shares.

     The selling securityholders may pledge or grant a security interest in some
or all of the notes or shares of common stock issuable upon conversion of the
notes owned by them and, if they default in the performance of their secured
obligations, the pledgees or secured parties may offer and sell the notes and
shares of common stock issuable upon conversion of the notes from time to time
pursuant to this prospectus or any amendment to this prospectus under Rule
424(b)(3) or other applicable provision of the Securities Act of 1933, as
amended, amending, if necessary, the list of selling securityholders to include
the pledgee, transferee or other successors in interest as selling
securityholders under this prospectus. The selling securityholders also may
transfer and donate the notes and shares of common stock issuable upon
conversion of the notes in other circumstances in which case the transferees,
donees, pledgees or other successors in interest will be the selling beneficial
owners for purposes of this prospectus.

     The selling securityholders and any broker-dealer participating in the
distribution of the notes and shares of common stock issuable upon conversion of
the notes may be deemed to be "underwriters" within the meaning of the
Securities Act, and any commission paid, or any discounts or concessions allowed
to, any such broker-dealer may be deemed to be underwriting commissions or
discounts under the Securities Act. At the time a particular offering of the
notes or shares of common stock issuable upon conversion of the notes is made, a
prospectus supplement, if required, will be distributed which will set forth the
aggregate amount of notes or shares of common stock issuable upon conversion of
the notes being offered and the terms of the offering, including the name or
names of any broker-dealers or agents, any discounts,

<PAGE>

commissions and other terms constituting compensation from the selling
securityholders and any discounts, commissions or concessions allowed or
reallowed or paid to broker-dealers.

     Under the securities laws of some states, the notes and shares of common
stock issuable upon conversion of the notes may be sold in such states only
through registered or licensed brokers or dealers. In addition, in some states
the notes and shares of common stock issuable upon conversion of the notes may
not be sold unless such shares have been registered or qualified for sale in
such state or an exemption from registration or qualification is available and
is complied with.

     There can be no assurance that any selling securityholder will sell any or
all of the notes and shares of common stock issuable upon conversion of the
notes registered pursuant to the registration statement, of which this
prospectus forms a part.

     The selling securityholders and any other person participating in such
distribution will be subject to applicable provisions of the Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder, including,
without limitation, Regulation M of the Exchange Act, which may limit the timing
of purchases and sales of any of the notes and shares of common stock issuable
upon conversion of the notes by the selling securityholders and any other
participating person. Regulation M may also restrict the ability of any person
engaged in the distribution of the notes and shares of common stock issuable
upon conversion of the notes to engage in market-making activities with respect
to the notes or shares of common stock issuable upon conversion of the notes.
All of the foregoing may affect the marketability of the notes or shares of
common stock issuable upon conversion of the notes and the ability of any person
or entity to engage in market-making activities with respect to the notes and
shares of common stock issuable upon conversion of the notes.

     We will pay all expenses of the registration of the notes and the
underlying shares of common stock pursuant to the registration rights agreement,
estimated to be $[________] in total, including, without limitation, Securities
and Exchange Commission filing fees and expenses of compliance with state
securities or "blue sky" laws; provided, however, that a selling securityholder
will pay all underwriting discounts and selling commissions, if any. We will
indemnify the selling securityholders against liabilities, including some
liabilities under the Securities Act, in accordance with the registration rights
agreements, or the selling securityholders will be entitled to contribution. We
may be indemnified by the selling securityholders against civil liabilities,
including liabilities under the Securities Act, that may arise from any written
information furnished to us by the selling securityholder specifically for use
in this prospectus, in accordance with the related registration rights
agreement, or we may be entitled to contribution.

     Once sold under the registration statement, of which this prospectus forms
a part, the notes and shares of common stock issuable upon conversion of the
notes will be freely tradable in the hands of persons other than our affiliates.<PAGE>

                                                                   EXHIBIT 10.41

                                                                  Execution Copy

                          AGREEMENT AND PLAN OF MERGER

                          DATED AS OF DECEMBER 15, 2006

                                      AMONG

                       SMITH & WESSON HOLDING CORPORATION;

                                 SWAC-TC, INC.;

                          BEAR LAKE ACQUISITION CORP.;

                                       AND

                        TGV PARTNERS-TCA INVESTORS, LLC;

                               E.G. KENDRICK, JR.;

                                       AND

                                 GREGORY J. RITZ

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                           <C>
SECTION 1. MERGER OF SWAC AND BEAR LAKE.....................................   1

    1.1  Merger.............................................................   1
    1.2  Effect of the Merger...............................................   1
    1.3  Certificate of Incorporation and Bylaws............................   1
    1.4  Directors..........................................................   2
    1.5  Officers...........................................................   2
    1.6  Status and Conversion of Securities................................   2
    1.7  Further Documents..................................................   4
    1.8  Effective Time.....................................................   4
    1.9  Closing............................................................   4

SECTION 2. STOCKHOLDER APPROVALS............................................   4

SECTION 3. REPRESENTATIONS AND WARRANTIES...................................   5

    3.1 Representations and Warranties of Bear Lake.........................   5
    3.2 Representations and Warranties of Smith & Wesson and SWAC...........  13
    3.3 Representations and Warranties of Principal Stockholders............  15

SECTION 4. COVENANTS........................................................  15

    4.1  Mutual Covenants of the Parties....................................  15
    4.2  Covenants of Bear Lake.............................................  16
    4.3  Environmental Remediation Plan; Environmental Escrow...............  18
    4.4  Filings Under the HSR Act and Other Antitrust Filings..............  24
    4.5  Other Acquisition Proposals........................................  25
    4.6  OSHA Compliance....................................................  26
    4.7  Press Releases and Announcements...................................  26
    4.8  Advice of Changes..................................................  26

SECTION 5. CONDITIONS PRECEDENT TO OBLIGATIONS..............................  26

    5.1  Conditions Precedent to the Obligations of Smith
         & Wesson and SWAC..................................................  26
    5.2  Conditions Precedent to the Obligations of Bear Lake...............  29

SECTION 6. WAIVER, MODIFICATION, ABANDONMENT................................  30

    6.1  Waivers............................................................  30
    6.2  Modification.......................................................  30
    6.3  Abandonment........................................................  30
    6.4  Effect of Abandonment..............................................  31

SECTION 7. INDEMNIFICATION..................................................  31

    7.1  Indemnification by the Principal Stockholders......................  31
    7.2  Notice and Right to Defend Third-Party Claims......................  32
    7.3  Limitations Related to Indemnity...................................  33

SECTION 8. APPOINTMENT OF STOCKHOLDERS' REPRESENTATIVE......................  33

    8.1  Appointment........................................................  33
    8.2  Reliance by Stockholders' Representative...........................  34
    8.3  Expenses of Stockholders' Representative...........................  34
    8.4  Indemnification....................................................  34
</TABLE>

<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<S>                                                                           <C>
    8.5  Contribution......................................................   35
    8.6  Approval..........................................................   35

SECTION 9. GENERAL.........................................................   35

    9.1  Indemnity Against Finders.........................................   35
    9.2  Controlling Law...................................................   35
    9.3  Notices...........................................................   35
    9.4  Binding Nature of Agreement; No Assignment........................   37
    9.5  Entire Agreement..................................................   37
    9.6  Paragraph Headings................................................   37
    9.7  Gender............................................................   37
    9.8  Expenses..........................................................   37
    9.9  Validity..........................................................   37
    9.10 Counterparts......................................................   37
    9.11 Attorneys' Fees...................................................   37
</TABLE>

EXHIBITS

A    Certificate of Merger
B    Voting Agreement
C    Site Assessment Plan
D    Form of Escrow Agreement

                                       ii
<PAGE>

                          AGREEMENT AND PLAN OF MERGER

      AGREEMENT AND PLAN OF MERGER dated as of December 15, 2006, among SMITH &
WESSON HOLDING CORPORATION, a Nevada corporation ("Smith & Wesson"); SWAC-TC,
INC., a Delaware corporation, which is a wholly owned subsidiary of Smith &
Wesson ("SWAC"); BEAR LAKE ACQUISITION CORP., a Delaware corporation ("Bear
Lake"); and TGV PARTNERS-TCA INVESTORS, LLC, E.G. KENDRICK, JR., AND GREGORY J.
RITZ, (the "Principal Stockholders").

                                    RECITALS

      WHEREAS, the respective Boards of Directors of Smith & Wesson, SWAC, and
Bear Lake have approved this Agreement providing for the merger of SWAC with and
into Bear Lake (the "Merger") as a result of which Bear Lake would become a
wholly owned subsidiary of Smith & Wesson, upon the terms and subject to the
conditions set forth in this Agreement; and

      WHEREAS, Smith & Wesson, SWAC, and Bear Lake desire to make certain
representations, warranties, covenants, and agreements in connection with the
Merger and to prescribe various conditions to the Merger; and

      WHEREAS, the Principal Stockholders will agree to vote their shares of
Common Stock and Preferred Stock of Bear Lake in favor of this Agreement and the
transactions provided for herein and to indemnify Smith & Wesson pro rata
according to their respective stockholdings in Bear Lake as set forth herein.

                                    AGREEMENT

      NOW, THEREFORE, the parties hereto hereby approve and adopt this Agreement
and do mutually covenant and agree as follows:

                                   SECTION 1.
                          MERGER OF SWAC AND BEAR LAKE

            1.1 MERGER. At the Effective Time (as that term is hereinafter
defined), SWAC shall be merged with and into Bear Lake, which shall be the
surviving corporation, pursuant to the Certificate of Merger attached as Exhibit
A hereto (the "Certificate of Merger").

            1.2 EFFECT OF THE MERGER. Upon the Merger becoming effective, the
separate existence of SWAC shall cease, and Bear Lake shall succeed to and
possess all the properties, rights, privileges, powers, franchises, and
immunities, of a public as well as of a private nature, and be subject to all
the debts, liabilities, obligations, restrictions, disabilities, and duties of
SWAC, all without further act or deed, as provided in Section 251 of the
Delaware General Corporation Law.

            1.3 CERTIFICATE OF INCORPORATION AND BYLAWS. The Amended and
Restated Certificate of Incorporation, as amended (the "Certificate of
Incorporation"), and the Bylaws of Bear Lake shall be amended and restated at
the Effective Time to read as did the certificate of incorporation and bylaws of
SWAC immediately prior to the Effective Time, except that an

<PAGE>

amendment of the Certificate of Incorporation shall be effected by the Merger to
change the name of Bear Lake to "Thompson Center Holding Corporation."

            1.4 DIRECTORS. The directors of SWAC immediately prior to the
Effective Time shall be the directors of Bear Lake as of the Effective Time
until the earlier of their resignation or removal or until their respective
successors are duly elected and qualified, as the case may be.

            1.5 OFFICERS. The officers of Bear Lake immediately prior to the
Effective Time, or such other persons as Smith & Wesson shall designate, shall
be the officers of Bear Lake until the earlier of their resignation or removal
or until their respective successors are duly elected and qualified, as the case
may be.

            1.6 STATUS AND CONVERSION OF SECURITIES.

                  (a) CONVERSION OF BEAR LAKE STOCK INTO RIGHT TO RECEIVE MERGER
CONSIDERATION. At the Effective Time, by virtue of the Merger and without any
action on the part of the holder of any shares of common stock, par value $.001
per share, of Bear Lake ("Bear Lake Common Stock"), all of the shares of Bear
Lake Common Stock issued and outstanding immediately prior to the Effective Time
(other than Bear Lake Common Stock owned by SWAC, Dissenting Shares (as that
term is hereinafter defined), and Bear Lake Common Stock held in the treasury of
Bear Lake), shall be converted into the right to receive in cash, without
interest thereon, from Smith & Wesson an aggregate amount of $102,000,000 (the
"Merger Consideration") as follows: each holder shall be entitled to such amount
per share of Bear Lake Common Stock (the "Per Share Merger Consideration") that
is determined by dividing (i) the Merger Consideration less (A) the amount, if
any, of any Bear Lake Indebtedness, (B) the amount of any Option Payments (as
that term is hereinafter defined), and (C) the amount paid into the
Environmental Escrow pursuant to Section 4.3(j), by (ii) the number of shares of
Bear Lake Common Stock issued and outstanding immediately prior to the Effective
Time; except that any shares of Bear Lake Capital Stock held in the treasury of
Bear Lake shall be cancelled and all rights in respect thereof shall cease to
exist and no Merger Consideration or other property shall be issued with respect
thereto. As of the Effective Time, all shares of Bear Lake Capital Stock (as
that term is hereinafter defined) shall no longer be outstanding, shall be
automatically cancelled, and shall cease to exist, and each holder of any such
shares of Bear Lake Capital Stock shall cease to have any rights with respect
thereto, except the right of holders of Bear Lake Common Stock to receive the
Merger Consideration.

                  For purposes of this Agreement, "Bear Lake Indebtedness" means
(i)(A) all obligations and amounts payable by Bear Lake and its subsidiaries,
including Bear Lake Holdings, Inc., as borrowers to Citizens Bank of
Massachusetts and certain of its affiliates (collectively "Citizens Bank")
pursuant to the Amended and Restated Loan and Security Agreement entered into on
December 2, 2004, as amended to date, under which Citizens Bank extended to Bear
Lake a revolving line of credit and a term loan, and pursuant to the Master
Equipment Lease Agreement entered into on March 9, 2006 as a financing agreement
for certain capital expenditures and (B) all obligations and any amounts payable
by Bear Lake and its subsidiaries, including Bear Lake Holdings, Inc., as
borrowers to Robert Gustafson and Joseph Behre, former stockholders of Bear Lake
Holdings, Inc., pursuant to promissory notes and loan

                                       2
<PAGE>

agreements entered into on December 2, 2004, including, in each case, all
interest, charges, fees, or other amounts, including prepayment penalties, which
become due as a result of the consummation of the Merger; and (ii) all unpaid
management and similar fees payable to certain Principal Stockholders and their
affiliates, all unpaid costs and amounts payable pursuant to the termination of
the employment agreement with Gregg Ritz, and any other obligation or amount
payable to any Principal Stockholder or its affiliates.

                  (b) EXCHANGE OF CERTIFICATES. At the Effective Time, each
holder of an outstanding certificate or certificates theretofore representing
Bear Lake Common Stock ("Bear Lake Stock Certificates"), upon surrender thereof
to Smith & Wesson, shall be entitled to receive in exchange therefor the portion
of the Merger Consideration that the Bear Lake Common Stock theretofore
represented by such surrendered certificate or certificates shall have been
converted into the right to receive. Until so surrendered, each outstanding Bear
Lake Stock Certificate theretofore representing Bear Lake Common Stock shall be
deemed after the Effective Time for all purposes only to have the right to
receive the applicable portion of the Merger Consideration.

                  (c) CONVERSION OF SWAC CAPITAL STOCK. As of the Effective
Time, each issued and outstanding share of common stock of SWAC, par value
$.001, shall be converted into one newly issued share of Bear Lake Common Stock.

                  (d) OPTIONS TO PURCHASE BEAR LAKE COMMON STOCK. Each
outstanding option, right, award, or instrument to purchase or otherwise acquire
Bear Lake Common Stock ("Bear Lake Options"), whether or not vested,
exercisable, or convertible, shall be terminated, shall cease to exist, shall be
null and void, and shall have no right to receive any Merger Consideration. In
consideration for such termination, each holder of a Bear Lake Option shall be
entitled to receive in cash, in payment therefor, that amount equal to (i) the
total number of shares of Bear Lake Common Stock subject to the Bear Lake Option
multiplied by the Per Share Merger Consideration, less (ii) the total number of
shares of Bear Lake Common Stock subject to the Bear Lake Option multiplied by
the per share exercise price of such Bear Lake Option (the "Option Payments").
Prior to the Effective Time, Bear Lake shall enter into an agreement, in a form
reasonably satisfactory to Smith & Wesson, with each holder of a Bear Lake
Option providing for the termination of such Bear Lake Option effective as of
the Effective Time, in exchange for the payment provided for in this Section
1.6(d). Bear Lake shall take such actions as are necessary or required,
including under the Bear Lake Acquisition Corp. 2005 Stock Incentive Plan, to
provide for the termination of the Bear Lake options in exchange for the cash
payment provided for in this Section 1.6(d) and shall provide evidence, in a
form reasonably satisfactory to Smith & Wesson, of such actions.

                  (e) DISSENTING SHARES. Notwithstanding anything in this
Agreement to the contrary, shares of Bear Lake Common Stock issued and
outstanding immediately prior the Effective Time and held by any stockholder
that did not vote in favor of the Merger and that complies with Section 262 of
the Delaware General Corporation Law (the "Dissenting Shares") shall not be
converted into the right to receive any Merger Consideration, but instead shall
be converted into the right to receive such consideration as may be determined
to be due such holder pursuant to the Delaware General Corporation Law. If any
such holder shall have failed to perfect or shall have effectively withdrawn or
lost such holder's rights to appraisal under the

                                       3
<PAGE>

Delaware General Corporation Law, that holder's Bear Lake Common Stock shall
thereupon be converted into the right to receive, as of the Effective Time, the
applicable portion of the Merger Consideration without any interest. Bear Lake
shall give Smith & Wesson (i) prompt notice of any written demands for appraisal
of Bear Lake Common Stock, attempted withdrawals of such demands, and any other
instruments served pursuant to the Delaware General Corporation Law and received
by Bear Lake relating to stockholders' rights of appraisal and (ii) the
opportunity to participate in all negotiations and proceedings with respect to
demands for appraisal under the Delaware General Corporation Law. Bear Lake
shall not, except with the prior written consent of Smith & Wesson, voluntarily
make any payment with respect to any demands for appraisal of Bear Lake Common
Stock, offer to settle or settle any demands, or approve any withdrawal of any
such demands.

            1.7 FURTHER DOCUMENTS. From time to time, on and after the Effective
Time, as and when requested by Smith & Wesson, the appropriate officers and
directors of Bear Lake as of the Effective Time shall, for and on behalf and in
the name of Bear Lake or otherwise, execute and deliver all such deeds, bills of
sale, assignments, and other instruments and shall take or cause to be taken
such further or other actions as Smith & Wesson may deem reasonably necessary or
desirable in order to confirm of record or otherwise to Smith & Wesson or Bear
Lake title to and possession of all of the properties, rights, privileges,
powers, franchises, and immunities of Bear Lake and otherwise to carry out fully
the provisions and purposes of this Agreement.

            1.8 EFFECTIVE TIME. The Merger shall become effective on such date
(the "Effective Time") as of which all applicable legal requirements have been
fulfilled to consummate the Merger. The parties shall use their best efforts to
consummate the Merger within five business days following the satisfaction of
all conditions precedent that shall not have been waived.

            1.9 CLOSING. Subject to the fulfillment or waiver of the conditions
set forth in Section 5, the closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Greenberg Traurig
LLP, 2375 East Camelback Road, Phoenix, Arizona at 9:00 a.m., local time, on the
date on which the Effective Time is expected to occur or other date or time as
may be determined by the parties.

                                   SECTION 2.
                              STOCKHOLDER APPROVALS

            Meetings or written consents of the stockholders of SWAC and Bear
Lake shall be held or obtained in accordance with the applicable provisions of
the Delaware General Corporation Law, on or before December 22, 2006, in each
case, among other things, to consider and act upon the adoption of this
Agreement (except, in the case of SWAC, the adoption of this Agreement may be
consented to in writing by Smith & Wesson, as the sole stockholder of SWAC, on
or before that date). As a further inducement to the parties to enter into this
Agreement, the Principal Stockholders are separately agreeing to vote the Bear
Lake Capital Stock owned by them in favor of this Agreement and the transactions
contemplated hereby pursuant to the Voting Agreement constituting Exhibit B
hereto.

                                       4
<PAGE>

                                   SECTION 3.
                         REPRESENTATIONS AND WARRANTIES

            3.1 REPRESENTATIONS AND WARRANTIES OF BEAR LAKE. Except as otherwise
set forth in the Bear Lake Disclosure Schedule heretofore delivered by Bear Lake
to Smith & Wesson, Bear Lake represents and warrants to Smith & Wesson and SWAC
as follows:

                  (a) DUE INCORPORATION, GOOD STANDING, AND QUALIFICATION. Each
of Bear Lake and its subsidiaries is a corporation duly organized, validly
existing, and in good standing under the laws of the jurisdiction of its
incorporation with the requisite corporate power and authority to own, operate,
and lease its properties and to carry on its business as now being conducted. As
used in this Agreement with reference to Bear Lake, the term "subsidiaries"
shall include all direct or indirect subsidiaries of Bear Lake, including its
wholly owned subsidiary, Thompson/Center Arms Company, Inc. Neither Bear Lake
nor any subsidiary of Bear Lake is subject to any material liability by reason
of the failure to be duly qualified as a foreign corporation for the transaction
of business or to be in good standing under the laws of any jurisdiction.
Schedule 3.1(a) hereto sets forth, as of the date of this Agreement, each
jurisdiction in which Bear Lake or any subsidiary of Bear Lake is qualified to
do business.

                  (b) CORPORATE AUTHORITY. Bear Lake has the corporate power and
authority to enter into this Agreement and, subject to the requisite approval of
the Bear Lake stockholders, to carry out the transactions contemplated hereby.
The Board of Directors of Bear Lake has duly authorized the execution, delivery,
and performance of this Agreement. Other than stockholder approvals, no other
corporate proceedings on the part of Bear Lake or its subsidiaries are necessary
to authorize the execution and delivery by Bear Lake of this Agreement or the
consummation by Bear Lake of the transactions contemplated hereby. This
Agreement has been duly executed and delivered by Bear Lake and, assuming due
authorization, execution, and delivery hereof by each of the other parties
hereto, constitutes a legal, valid, and binding agreement of Bear Lake,
enforceable against Bear Lake in accordance with its terms, except that (i) such
enforcement may be subject to bankruptcy, insolvency, reorganization,
moratorium, or other similar laws now or hereafter in effect relating to
creditors' rights, and (ii) the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to equitable defenses and to
the discretion of the court before which any proceeding therefore may be
brought.

                  (c) CAPITAL STOCK. As of the date hereof, Bear Lake has
authorized capital stock consisting of 5,455 shares of preferred stock, $.001
par value (the "Bear Lake Preferred Stock," and collectively with the Bear Lake
Common Stock referred to as the "Bear Lake Capital Stock"), of which 5,445
shares are issued and outstanding, and 10,000 shares of Bear Lake Common Stock,
$.001 par value, none of which are issued and outstanding. As of such date,
830.363 shares of Bear Lake Common Stock are reserved for issuance upon the
terms of outstanding Bear Lake Options. All of the issued and outstanding shares
of capital stock of Bear Lake and of each of its subsidiaries have been duly
authorized and validly issued and are fully paid and nonassessable and free of
preemptive rights. As of the date of this Agreement, the Principal Stockholders
own all of the outstanding shares of Bear Lake Capital Stock.

                                       5
<PAGE>

                  (d) OPTIONS, WARRANTS, AND RIGHTS. Neither Bear Lake nor any
subsidiary of Bear Lake has outstanding any options, rights, awards, or
instruments to purchase or otherwise acquire any shares of its capital stock,
other than as set forth in Schedule 3.1(d) hereto.

                  (e) SUBSIDIARIES. Schedule 3.1(e) hereto sets forth, as of the
date of this Agreement, (i) the name, jurisdiction of incorporation, and list of
stockholders of each subsidiary of Bear Lake, and (ii) the name and a
description of every other person, corporation, partnership, joint venture, or
other business association in which Bear Lake directly or indirectly owns a
material interest. The outstanding shares of capital stock of the subsidiaries
of Bear Lake are owned by Bear Lake free and clear of all claims, liens,
charges, and encumbrances. Bear Lake does not own, directly or indirectly, any
capital stock or other equity securities of any corporation or have any direct
or indirect equity or ownership interest in any corporation or other business.

                  (f) FINANCIAL STATEMENTS. The Consolidated Balance Sheet of
Bear Lake Holdings, Inc. and its subsidiaries as of December 31, 2003 and the
related Consolidated Statements of Income and Retained Earnings and Cash Flows,
and all related schedules and notes to the foregoing, have been audited by
Nathan Wechsler & Company Professional Association; the Consolidated Balance
Sheet of Bear Lake Holdings, Inc. and its subsidiaries as of December 5, 2004
and the related Consolidated Statements of Income and Retained Earnings and Cash
Flows, and all related schedules and notes to the foregoing, have been audited
by Grant Thornton LLP, registered independent public accountants; and the
Consolidated Balance Sheets of Bear Lake and its subsidiaries for the period
December 5, 2004 to December 31, 2004 and as of December 31, 2005, and the
related Consolidated Statements of Operations, Consolidated Statements of
Changes in Stockholders' Equity, and Consolidated Statements of Cash Flows for
such periods and all related schedules and notes to the foregoing, have been
audited by Grant Thornton LLP, registered independent public accountants; and
the Consolidated Balance Sheet of Bear Lake and subsidiaries as of September 30,
2006, and the Consolidated Statements of Operations, Changes in Stockholders'
Equity, and Cash Flows of Bear Lake and its subsidiaries for the nine months
ended September 30, 2006, and all related schedules and notes to the foregoing,
have been prepared by Bear Lake without audit. All of the foregoing financial
statements have been prepared in accordance with generally accepted accounting
principles, applied on a consistent basis (except as may be indicated in the
notes thereto or, in the case of interim consolidated financial statements,
where information and footnotes contained in such financial statements are not
required to be in compliance with generally accepted accounting principles), and
fairly present, in all material respects, the financial position, results of
operations, and changes in financial position of Bear Lake and its subsidiaries
as of their respective dates and for the periods indicated.

                  (g) NO MATERIAL CHANGE. Since December 31, 2005, there has not
been and, to the knowledge of Bear Lake, there is not threatened (i) any
Material Adverse Effect (as that term is hereinafter defined); (ii) any loss or
damage (whether or not covered by insurance) to any of the assets or properties
of Bear Lake or any subsidiary of Bear Lake that materially affects or impairs
the ability of Bear Lake and its subsidiaries to conduct their business as a
whole; or (iii) any mortgage or pledge of any material amount of the assets or
properties of Bear Lake or any subsidiary of Bear Lake, or any indebtedness
incurred by Bear

                                       6
<PAGE>

Lake or any subsidiary of Bear Lake, other than indebtedness, not material in
the aggregate, incurred in the ordinary course of business. For purposes of this
Agreement, "Material Adverse Effect" means any material adverse effect on the
business, assets, properties, or operations, or on the condition, financial or
otherwise, of Bear Lake and its subsidiaries, taken as a whole; provided,
however, that in no event shall any of the following be taken into account in
determining whether there has been or will be a Material Adverse Effect:
changes, events, circumstances, or effects caused by (A) changes in general
economic or market conditions (except to the extent those changes have a
materially disproportionate effect on Bear Lake and its subsidiaries relative to
other similarly situated persons in the industries in which they operate), (B)
compliance with the terms and conditions of this Agreement, (C) the public
announcement of the transactions contemplated by this Agreement, or (D) any
outbreak of major hostilities in which the United States is involved or any act
of terrorism within the United States or directed against its facilities or
citizens wherever located.

                  (h) TITLE TO PROPERTIES. Each of Bear Lake and its
subsidiaries has good and marketable title to all of its real and personal
assets and properties, including all assets and properties reflected in the
Consolidated Balance Sheet of Bear Lake and its subsidiaries as of December 31,
2005 (the "Bear Lake Base Balance Sheet"), or acquired subsequent to the date of
the Bear Lake Base Balance Sheet, except assets or properties disposed of
subsequent to that date in the ordinary course of business or as contemplated by
this Agreement. Such assets and properties are not subject to any mortgage,
pledge, lien, claim, encumbrance, charge, security interest, title retention, or
other security arrangement (each a "Lien" and collectively, the "Liens"), except
for (i) statutory liens not yet delinquent that are being contested in good
faith by appropriate proceedings, and liens for taxes not yet due, (ii) defects
and irregularities of title and encumbrances that do not materially impair the
use thereof for the purposes for which they are held, (iii) mechanics',
materialmen's, workmen's, repairmen's, warehousemen's, carriers', and other
similar liens arising in the ordinary course of business, (iv) any Liens that do
not materially adversely affect the use of any property or asset for its
intended purposes, and (v) properties and assets the loss of which would not,
individually or in the aggregate, have a Material Adverse Effect (collectively,
the "Permitted Liens"). All leases pursuant to which Bear Lake or any subsidiary
of Bear Lake leases any substantial amount of real or personal property are
valid and effective in accordance with their respective terms. Schedule 3.1(h)
hereto sets forth, as of the date hereof, the location, physical description,
basis of occupancy, ownership, and terms of any mortgages or leases with respect
to the properties used in the conduct of the business of Bear Lake or any of its
subsidiaries.

                  (i) CONDITION OF ASSETS AND PROPERTIES. Except as would not
have a Material Adverse Effect, the buildings, equipment, machinery, fixtures,
furniture, furnishings, office equipment, and all other tangible personal assets
and properties presently used in, or necessary for the operation of, the
business of Bear Lake or its subsidiaries, do not require any repairs other than
normal maintenance and are in good operating condition and in a state of
reasonable maintenance and repair.

                  (j) LITIGATION. There are no actions, suits, proceedings, or
other litigation pending or, to the knowledge of Bear Lake, threatened against
Bear Lake or any of its subsidiaries, at law or in equity, or before or by any
federal, state, municipal, or other governmental department, commission, board,
bureau, agency, or instrumentality that, if

                                       7
<PAGE>

determined adversely to Bear Lake or its subsidiaries, would individually or in
the aggregate have a Material Adverse Effect. Neither Bear Lake nor any
subsidiary of Bear Lake is a party to any decree, order, or arbitration award
(or agreement entered into in any administrative, judicial, or arbitration
proceeding with any governmental authority) with respect to or affecting any of
its assets or properties or the use thereof or the conduct of its business.
Neither Bear Lake nor any subsidiary of Bear Lake has admitted to any liability
or any set of facts, conditions, or circumstances that establishes any product
defect or other malfunction, condition, circumstance, or set of facts determined
under any law or contractual, equitable, or other legal theory to cause, result
in, or contribute to injury, death, or other damages (a "Product Defect"), and
there has not been any adverse judgment against Bear Lake or any subsidiary of
Bear Lake that establishes any such liability or facts, conditions, or
circumstances. There are no material claims pending, anticipated or, to the
knowledge of Bear Lake, threatened against Bear Lake or any subsidiary of Bear
Lake with respect to a Product Defect.

                  (k) LICENSES AND PERMITS. Neither Bear Lake nor any subsidiary
of Bear Lake is subject to any material disability or liability by reason of its
failure to possess any license, permit, franchise, certificate, consent,
approval, or authorization. Each of Bear Lake and its subsidiaries has all
licenses, permits, franchises, certificates, consents, approvals, and
authorizations of whatever kind and type, governmental or private, necessary for
the business conducted by it and the ownership or use of all assets and
properties and the premises occupied by it. Schedule 3.1(k) hereto sets forth,
as of the date hereof, a true, correct, and complete list of all licenses,
permits, franchises, certificates, consents, approvals, and authorizations
necessary for the conduct of the business of Bear Lake and its subsidiaries.

                  (l) INTELLECTUAL PROPERTY. Each of Bear Lake and its
subsidiaries owns or holds all of the rights to use all patents, trademarks,
copyrights, trade names, trade secrets, logos, fictitious names, service marks,
and slogans that are used in or necessary to the operation of its business,
except where such failure to own or have the right to use such intellectual
property would not, individually or in the aggregate, have a Material Adverse
Effect. Schedule 3.1(l) hereto constitutes, as of the date hereof, a true,
complete, and correct list of all of the intellectual property owned or used by
Bear Lake or any subsidiary of Bear Lake. To the knowledge of Bear Lake, none of
the matters covered by the intellectual property, nor any of the products or
services sold or provided by Bear Lake or any subsidiary of Bear Lake, nor any
of the processes used or the business practices followed by Bear Lake or any
subsidiary of Bear Lake, infringes, or has infringed within the past seven
years, upon any patent, trademark, trademark right, trade name, trade name
right, trade secret, logo, fictitious name, service mark, slogan, or copyright
owned by any person or entity (or any application with respect thereto), or
constitutes unfair competition. Neither Bear Lake nor any subsidiary of Bear
Lake is, and following the Effective Time Smith & Wesson will not be, obligated
to pay any royalty or other payment with respect to any intellectual property.
To the knowledge of Bear Lake, no person or entity is producing, providing,
selling, or using products or services that would constitute an infringement of
any intellectual property of Bear Lake or any of its subsidiaries.

                  (m) NO VIOLATION. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby will not violate or
result in a breach by Bear Lake or any subsidiary of Bear Lake of, or constitute
a default under, or conflict with, or cause any acceleration of any  obligation
with respect to (i) any provision or restriction of any

                                       8
<PAGE>

charter or bylaw of Bear Lake or any subsidiary of Bear Lake; (ii) any
stockholders' agreement, voting trust, proxy, or other similar agreement of Bear
Lake; (iii) any loan agreement, indenture, lease, or mortgage of Bear Lake or
any subsidiary of Bear Lake; (iv) any provision or restriction of any lien,
lease agreement, contract, or instrument to which Bear Lake or any subsidiary of
Bear Lake is a party or by which any of them is bound; or (v) any order,
judgment, award, decree, law, rule, ordinance, or regulation or any other
restriction of any kind or character to which any assets or properties of Bear
Lake or any subsidiary of Bear Lake is subject or by which Bear Lake or any
subsidiary of Bear Lake is bound, except, with respect to clauses (iii) through
(v), for any such violations, breaches, defaults or conflicts, acceleration, or
other occurrences, which would not, individually or in the aggregate, have a
Material Adverse Effect. Neither the execution and delivery by Bear Lake of this
Agreement or any of the other agreements contemplated hereby, nor the
consummation of the transactions contemplated hereby or thereby, will result in
the creation of any Lien with respect to any of the stock or assets or
properties of any of Bear Lake or any subsidiary of Bear Lake.

                  (n) TAXES. Bear Lake has duly filed in correct form all Tax
Returns (as defined below) relating to the activities of Bear Lake and its
subsidiaries required or due to be filed (with regard to applicable extensions)
on or prior to the date hereof. All such Tax Returns are complete and accurate
in all material respects, and Bear Lake has paid or made provision for the
payment of all Taxes (as defined below) that have been incurred or are due or
claimed to be due from Bear Lake or any of its subsidiaries by foreign, federal,
state, or local taxing authorities for all periods ending on or before the date
hereof, other than Taxes or other charges that are not delinquent or are being
contested in good faith and have not been finally determined and have been
disclosed to Smith & Wesson. The amounts set up as reserves for Taxes on the
books of Bear Lake and its subsidiaries are sufficient in the aggregate for the
payment of all unpaid Taxes (including any interest or penalties thereon),
whether or not disputed, accrued, or applicable. No claims for Taxes or
assessments are being asserted or, to the knowledge of Bear Lake, threatened
against Bear Lake or any of its subsidiaries. Bear Lake has furnished to Smith &
Wesson a copy of all Tax Returns filed for it or its subsidiaries within the
five-year period prior to the date of the Agreement. For purposes of this
Agreement, the term "Taxes" shall mean all taxes, charges, fees, levies, or
other assessments, including, without limitation, income, gross receipts,
excise, property, sales, transfer, license, payroll, and franchise taxes,
imposed by the United States or any state, local, or foreign government or
subdivision or agency thereof, and such term shall include any interest,
penalties, or additions to tax attributable to such assessments or to the
failure to file any Tax Return; and the term "Tax Return" shall mean any report,
return, or other information required to be supplied to a taxing authority or
required by a taxing authority to be supplied to any other person.

                  (o) ACCOUNTS RECEIVABLE. Each account receivable of Bear Lake
or any subsidiary of Bear Lake has been acquired in the ordinary course of
business, is valid and enforceable, and is fully collectible, subject to no
known defenses, setoffs, or counterclaims, except to the extent of the reserve
reflected in the books of Bear Lake and its subsidiaries or in such other amount
that is not material in the aggregate.

                  (p) CONTRACTS. Neither Bear Lake nor any subsidiary of Bear
Lake is a party to (i) any plan or contract providing for bonuses, incentives,
pensions, stock options, stock purchases, deferred compensation, retirement
payments, pension, profit sharing, or welfare

                                       9
<PAGE>

benefits; (ii) any plan or agreement providing for fringe benefits to present or
former employees, including sick leave, severance pay, medical, hospitalization,
life insurance, or related benefits; (iii) any lease, installment purchase
agreement, or other contract with respect to any real or personal property used
or proposed to be used in its operations, excepting, in each case, items
included within aggregate amounts disclosed or reflected in the Bear Lake Base
Balance Sheet; (iv) any employment, consulting, or other similar arrangement not
terminable by it upon 30 days or less notice without penalty to it or that
provides for payments upon or after termination; (v) any contract or agreement,
including any purchase commitment with a supplier, creating an obligation of
$50,000 or more; (vi) any mortgage, deed of trust, pledge agreement, security
agreement, lease, or other contract or agreement, which by its terms does not
terminate or is not terminable by it without penalty to it; (vii) any loan
agreement, letter of credit, financing agreement, indenture, promissory note, or
other similar type of arrangement; or (viii) any contract (other than those
described in clauses (i) through (vii)) that by its operation or termination
would have a Material Adverse Effect (all of the foregoing, collectively, the
"Contracts"). All Contracts to which Bear Lake or any subsidiary of Bear Lake is
a party are valid and enforceable in accordance with their terms, except that
the enforcement thereof may be limited by (A) bankruptcy, insolvency,
reorganization, moratorium, or other similar laws now or hereafter in effect
relating to creditors' rights generally, and (B) general principles of equity
(regardless of whether enforceability is considered in a proceeding in equity or
at law); and Bear Lake, its subsidiaries, and all other parties to each of the
foregoing have performed all obligations required to be performed to date and
have waived no rights thereunder. Neither Bear Lake nor any subsidiary of Bear
Lake has received any written notice of any default under (or any condition
which with the passage of time or the giving of notice would cause such a
default under) any Contract. Neither Bear Lake nor any subsidiary of Bear Lake
is bound by any agreement or arrangement to sell or provide goods or services at
prices below the prevailing market prices therefor or to purchase goods or
services at prices above the then prevailing market prices therefor. To the
knowledge of Bear Lake, no manufacturer for or supplier to Bear Lake or any of
its subsidiaries has threatened to terminate their business relationship with
Bear Lake or any of its subsidiaries which termination would not result in a
Material Adverse Effect.

                  (q) COMPLIANCE WITH LAW AND OTHER REGULATIONS.

                        (i) GENERAL. Each of Bear Lake and its subsidiaries is
in compliance in all material respects with all requirements of foreign,
federal, state, and local law and all requirements of all governmental bodies
and agencies having jurisdiction over it, the conduct of its business, the use
of its assets and properties, and all premises occupied by it, including without
limitation under any Occupational Safety and Health Administration ("OSHA")
requirements, but excluding Environmental Laws (as defined in Section
4.3(m)(iv)). Without limiting the foregoing, each of Bear Lake and its
subsidiaries has properly filed all reports, paid all monies, and obtained all
licenses, permits, certificates, and authorizations needed or required for the
conduct of its business and the use of its assets and properties and the
premises occupied by it in connection therewith except where the failure to
obtain such licenses, permits, certificates, and authorizations would not,
individually or in the aggregate, have a Material Adverse Effect, and is in
compliance in all material respects with all conditions, restrictions, and
provisions of all of the foregoing. Neither Bear Lake nor any subsidiary of Bear
Lake has received any notice from any foreign, federal, state, or local
authority or any insurance or inspection body that any of its assets,
properties, facilities, equipment, or business procedures

                                       10
<PAGE>

or practices fails to comply with any applicable law, ordinance, regulation,
building, or zoning law, or requirement of any public authority or body. Bear
Lake makes no representation or warranty regarding compliance with any
Environmental Laws.

                  (r) EMPLOYEE BENEFIT AND EMPLOYMENT MATTERS.

                        (i) ERISA MATTERS. For purposes of this Agreement,
"Company Benefit Plan" means any plan, program, policy, practice, contract,
agreement, or other arrangement providing for compensation, severance,
termination pay, deferred compensation, performance awards, stock or
stock-related awards, fringe benefits, or other employee benefits or
remuneration of any kind, whether written, unwritten, or otherwise, funded or
unfunded, including, without limitation, each "employee benefit plan," within
the meaning of Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA") (whether or not ERISA is applicable to such plan),
that is or has been maintained, contributed to, or required to be contributed
to, by Bear Lake, any subsidiary or affiliate of Bear Lake, or any predecessor
of Bear Lake or any subsidiary of Bear Lake for the benefit of any employee of
Bear Lake or any subsidiary of Bear Lake, or with respect to which Bear Lake,
any subsidiary of Bear Lake, or any affiliate of Bear Lake has or may have any
liability or obligation. To Bear Lake's knowledge, each of Bear Lake, its
subsidiaries, and its affiliates have substantially performed all material
obligations required to be performed by them under, are not in default or
violation of, and have no knowledge of any default or violation by, any other
party to, the material terms of any Company Benefit Plan. Each Company Benefit
Plan has been established and maintained substantially in accordance with its
terms and in substantial compliance with applicable laws, including ERISA and
the Internal Revenue Code of 1986, as amended (the "Code"). Any Company Benefit
Plan intended to be qualified under section 401(a) of the Code has obtained a
favorable determination letter (or opinion letter, if applicable) as to its
qualified status under the Code. Neither Bear Lake nor any subsidiary or
affiliate of Bear Lake has maintains, sponsors, participates in, or contributes
to, or has maintained, sponsored, or contributed to (or is in the process of
establishing), and has no liability under any (i) Company Benefit Plan subject
to Title IV of ERISA, (ii) "multiemployer plan" within the meaning of Section
(3)(37) of ERISA, (iii) any Company Benefit Plan in which stock of Bear Lake,
its subsidiaries, or its affiliates is or was held as a plan asset, (iv) plan or
arrangement subject to the laws of a country other than the United States, or
(v) any plan or arrangement that provides for any payments or benefits after
termination of employment (except as required by applicable law). Schedule
3.1(r)(i) hereto contains a list as of the date hereof, complete and accurate in
all material respects, of each Company Benefit Plan and Bear Lake has furnished
to Smith & Wesson true and complete copies of each such Company Benefit Plan. To
Bear Lake's knowledge, no "prohibited transaction," within the meaning of
Section 4975 of the Code or Sections 406 and 407 of ERISA, and not otherwise
exempt under Section 408 of ERISA, has occurred with respect to any Company
Benefit Plan. There are no claims or legal actions pending, or to Bear Lake's
knowledge, threatened (other than routine claims for benefits), against any
Company Benefit Plan or against the assets of any Company Benefit Plan. There
are no audits, inquiries, or proceedings pending or threatened by the Internal
Revenue Service, the Department of Labor, or any other governmental authority
with respect to any Company Benefit Plan. Bear Lake, Company, its subsidiaries,
and its affiliates have made all contributions and other payments required by
and due under the terms of each Company Benefit Plan.

                                       11
<PAGE>

                        (ii) LABOR MATTERS. Each of Bear Lake and its
subsidiaries has complied in all material respects with all other applicable
foreign, federal, state, and local laws, rules, regulations, and ordinances,
relating to the employment of labor, including, without limitation, the
provisions thereof relative to wages, hours, collective bargaining, working
conditions, and payment of taxes of any kind, and neither Bear Lake nor any
subsidiary of Bear Lake is liable for any arrears of wages or any taxes or
penalties for failure to comply with any of the foregoing or has any obligations
for any vacation, sick leave, or other compensatory time. Neither Bear Lake nor
any subsidiary of Bear Lake is a party to any collective bargaining or other
contract or agreement with any labor union, and there is no request for union
representation pending or, to the knowledge of Bear Lake, threatened against
Bear Lake or any subsidiary of Bear Lake. There is not pending or, to the
knowledge of Bear Lake, threatened any (A) labor dispute, grievance, strike, or
work stoppage involving any of the employees of Bear Lake or any subsidiary of
Bear Lake, (B) charge or complaint against or involving any employees of Bear
Lake or any subsidiary of Bear Lake by the National Labor Relations Board, the
Department of Labor, OSHA, or any similar foreign, federal, state, or local
board or agency, or (C) unfair employment or labor practice charges by or on
behalf of any employee of Bear Lake or any subsidiary of Bear Lake.

                        (iii) ARRANGEMENTS WITH EMPLOYEES. The employment of
each employee of Bear Lake or any subsidiary of Bear Lake is terminable at will
without cost to Bear Lake or any subsidiary of Bear Lake. Bear Lake has
delivered to Smith & Wesson a true and complete schedule of the salaries or
other compensation and personal benefits paid to or accrued for all officers of
Bear Lake and its subsidiaries as of the date of this Agreement.

                  (s) NO PAYMENTS TO DIRECTORS, OFFICERS, STOCKHOLDERS, OR
OTHERS. Since the date of the Bear Lake Base Balance Sheet, there has not been
any purchase or redemption of any shares of capital stock of Bear Lake or any
subsidiary of Bear Lake or any transfer, distribution, or payment by Bear Lake
or its subsidiaries, directly or indirectly, of any assets or properties to any
director, officer, stockholder, or other person, other than the payment of
compensation for services actually rendered at rates not in excess of the rates
prevailing on the date of the Bear Lake Base Balance Sheet.

                  (t) NO PROHIBITED PAYMENTS. Neither Bear Lake, nor any
subsidiary of Bear Lake, nor, to the knowledge of Bear Lake, any officer,
director, employee, independent contractor, or agent, acting on behalf of Bear
Lake or any subsidiary of Bear Lake, has at any time (i) made any contributions
to any candidate for political office in violation of law or failed to disclose
fully any contributions to any candidate for political office in accordance with
any applicable statute, rule, regulation, or ordinance requiring such
disclosure; (ii) made any payment to any local, state, federal, or foreign
governmental officer or official, or other person charged with similar public or
quasi-public duties, other than payments required or allowed by applicable law;
(iii) made any payment outside the ordinary course of business to any purchasing
or selling agent or person charged with similar duties of any entity to which
Bear Lake or any subsidiary of Bear Lake sells products or renders services or
from which Bear Lake or any subsidiary of Bear Lake buys products or services
for the purpose of influencing such agent or person to buy products or services
from or sell products or services to Bear Lake or any subsidiary of Bear Lake;
or (iv) engaged in any transaction, maintained any bank account, or used any
corporate

                                       12
<PAGE>

funds, except for transactions, bank accounts, and funds that have been and are
reflected in the normally maintained books and records of Bear Lake or any
subsidiary of Bear Lake.

                  (u) GOVERNING DOCUMENTS AND MINUTE BOOKS. Bear Lake has
previously delivered to Smith & Wesson true and complete copies of the
certificate of incorporation and bylaws of Bear Lake and its subsidiaries as
currently in effect. The minute book of Bear Lake contains complete and accurate
records of all meetings and other corporate actions held or taken by its Boards
of Directors (or committees of the Boards of Directors) and stockholders of Bear
Lake since its incorporation.

                  (v) INSURANCE. Each of Bear Lake and its subsidiaries
maintains in full force and effect insurance coverage on its assets, properties,
premises, operations, and personnel in such amounts and against such risks and
losses as are adequate, in the reasonable judgment of Bear Lake management, for
the businesses engaged in by it. Schedule 3.1(v) hereto sets forth, as of the
date hereof, a complete and accurate list of each insurance policy maintained by
Bear Lake or any of its subsidiaries, copies of which have been furnished to
Smith & Wesson.

                  (w) LIST OF ACCOUNTS. Schedule 3.1(w) hereto contains a list
of all bank and securities accounts and all safe deposit boxes, maintained by
Bear Lake or any of its subsidiaries, and a listing of all authorized
signatories to such accounts or safe deposit boxes.

                  (x) ACCURACY OF STATEMENTS. Neither this Agreement nor any
other agreement, instrument, certificate, or other document to be entered into
in connection with this Agreement contains or will contain an untrue statement
of a material fact or omits or will omit to state a material fact necessary to
make the statements contained herein or therein, in light of circumstances in
which they are made, not misleading. Notwithstanding the foregoing or any other
provision of this Agreement, Bear Lake does not make any representation or
warranty regarding any forward-looking information regarding Bear Lake,
including any such information contained in any strategic plans, operating
budgets, financial projections, or other document that may have been disclosed
to Smith & Wesson by Bear Lake.

            3.2 REPRESENTATIONS AND WARRANTIES OF SMITH & WESSON AND SWAC.
Except as otherwise set forth in the Smith & Wesson Disclosure Schedule
heretofore delivered by Smith & Wesson to Bear Lake, Smith & Wesson and SWAC
jointly and severally represent and warrant to Bear Lake as follows:

                  (a) DUE INCORPORATION, GOOD STANDING AND QUALIFICATION. Each
of Smith & Wesson and its subsidiaries (including SWAC) is a corporation duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation with the requisite corporate power and
authority to own, operate, and lease its properties and to carry on its business
as now being conducted. SWAC is a wholly owned subsidiary of Smith & Wesson and,
apart from matters arising under this Agreement, has no significant assets,
liabilities, or business. As used in this Agreement with reference to Smith &
Wesson, the term "subsidiaries" shall include SWAC and all other direct or
indirect subsidiaries of Smith & Wesson as of the date of this Agreement.

                                       13
<PAGE>

            (b) CORPORATE AUTHORITY. Each of Smith & Wesson and SWAC has the
corporate power and authority to enter into this Agreement and to carry out the
transactions contemplated hereby. Except for the approval by Smith & Wesson as
the sole stockholder of SWAC, the Boards of Directors of each of Smith & Wesson
and SWAC has duly authorized the execution, delivery, and performance of this
Agreement. No other corporate proceedings on the part of Smith & Wesson or SWAC
are necessary to authorize the execution and delivery by Smith & Wesson and SWAC
of this Agreement or the consummation by Smith & Wesson or SWAC of the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by each of Smith & Wesson and SWAC and, assuming the due
authorization, execution, and delivery hereof by each of the other parties
hereto, constitutes a legal, valid, and binding agreement of Smith & Wesson and
SWAC, enforceable against them in accordance with its terms, except that (i)
such enforcement may be subject to bankruptcy, insolvency, reorganization,
moratorium, or other similar laws now or hereafter in effect relating to
creditors' rights, and (ii) the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to equitable defenses and to
the discretion of the court before which any proceeding therefor may be brought.

            (c) NO VIOLATION. The execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby will not violate or
result in a breach by Smith & Wesson or SWAC of, or constitute a default under,
or conflict with, or cause any acceleration of any obligation with respect to
(i) any provision or restriction of any charter or bylaw of Smith & Wesson or
SWAC; (ii) any stockholders' agreement, voting trust, proxy, or other similar
agreement; (iii) any loan agreement, indenture, lease, or mortgage of Smith &
Wesson or SWAC; (iv) any provision or restriction of any lien, lease agreement,
contract, or instrument to which Smith & Wesson or SWAC is a party or by which
either of them is bound; or (v) any order, judgment, award, decree, law, rule,
ordinance, or regulation or any other restriction of any kind or character to
which any assets or properties of Smith & Wesson or SWAC are subject or by which
Smith & Wesson or SWAC is bound, except, with respect to clauses (iii) through
(v), for any such violations, breaches, defaults or conflicts, acceleration, or
other occurrences, which would not, individually or in the aggregate, have a
material adverse effect on the business, assets, properties, or operations, or
on the condition, financial or otherwise, of Smith & Wesson and its
subsidiaries, taken as a whole, provided, however, that in no event shall any
shall any of the following be taken into account in determining whether there
has been or will be a material adverse effect on Smith & Wesson and its
subsidiaries: changes, events, circumstances, or effects caused by (A) changes
in general economic or market conditions (except to the extent those changes
have a materially disproportionate effect on Smith & Wesson and its subsidiaries
relative to other similarly situated persons in the industries in which they
operate), (B) compliance with the terms and conditions of this Agreement, (C)
the public announcement of the transactions contemplated by this Agreement or
(D) any outbreak of major hostilities in which the United States is involved or
any act of terrorism within the United States or directed against its facilities
or citizens wherever located.

            (d) ACCURACY OF STATEMENTS. Neither this Agreement nor any other
agreement, instrument, certificate, or other document to be entered into in
connection with this Agreement contains or will contain an untrue statement of a
material fact or omits or will omit to state a material fact necessary to make
the statements contained herein or therein, in light of the circumstances in
which they are made, not misleading.

                                       14
<PAGE>

            (e) AVAILABLE FUNDS. Smith & Wesson has, or will have immediately
prior to Closing, sufficient funds available to it to pay the Merger
Consideration in accordance with this Agreement.

      3.3 REPRESENTATIONS AND WARRANTIES OF PRINCIPAL STOCKHOLDERS. Each
Principal Stockholder severally as to such Principal Stockholder and not jointly
with any other Principal Stockholder represents and warrants to Smith & Wesson
and SWAC as follows:

            (a) AUTHORITY. Such Principal Stockholder has all requisite power
and authority to enter into this Agreement and to fulfill such Principal
Stockholder's obligations under this Agreement. This Agreement has been duly
executed and delivered by and constitutes a legal, valid, and binding agreement
of such Principal Stockholder enforceable against such Principal stockholder in
accordance with its terms, except that (i) such enforcement may be subject to
bankruptcy, insolvency, reorganization, moratorium, or other similar laws nor or
hereafter in effect relating to creditors' rights, and (ii) the remedy of
specific performance and injunctive and other forms of equitable relief may be
subject to equitable defines and to the discretion of the court before which nay
proceeding therefor may be brought.

            (b) NO VIOLATION. The execution, delivery, and performance by such
Principal Stockholder will not violate or result in a breach by such Principal
Stockholder of, a constitute a default under, or conflict with, or cause any
acceleration of any obligation with respect to (i) any provision or restriction
of any governing instrument or document of such Principal Stockholder; (ii) any
stockholders' agreement, voting trust, proxy, or other similar agreement; (iii)
any loan agreement, indenture, lease, or mortgage to which such Principal
Stockholder is a party or by which such Principal Stockholder is bound; or (iv)
any order, judgment, award, decree, law, rule, ordinance, regulation, or other
restriction of any kind or character to which any assets or properties of such
Principal Stockholder is subject or by which such Principal stockholder is
bound, except with respect to clauses (iii) through (iv), for any such
violations, breaches, defaults or conflicts, acceleration, or other occurrences,
which would not, individually or in the aggregate, have a material adverse
effect on the business, assets, properties, or operations, or on the condition,
financial or otherwise, of such Principal Stockholder.

                                   SECTION 4.
                                    COVENANTS

      4.1 MUTUAL COVENANTS OF THE PARTIES.

            (a) BEST EFFORTS. Subject to the terms and conditions of this
Agreement, each of the parties to this Agreement agrees to use its best efforts
in good faith to take, or cause to be taken, all actions, and to do, or cause to
be done, all things necessary, proper, desirable, or advisable under applicable
laws, so as to enable the parties to consummate, as soon as practicable, the
Merger and the other transactions contemplated hereby that are required to be
performed prior to or at the Effective Time, including the satisfaction of the
conditions set forth in this Agreement, and the parties shall cooperate fully
with each other to that end.

            (b) APPROPRIATE ACTIONS; CONSENTS; FILINGS. Each of the parties to
this Agreement shall use their best efforts to (i) obtain from any domestic or
foreign governmental, administrative, judicial or regulatory authority, agency,

                                       15
<PAGE>
governmental, administrative, judicial or regulatory authority, agency,
commission, body, court, or other legislative, executive, or judicial
governmental entity (each a "Governmental Entity" and collectively, the
"Governmental Entities") any consents, approvals, authorizations, permits, or
orders of Governmental Entities that are required by applicable law to be
obtained to permit the parties to consummate the Merger (collectively, the
"Government Approvals") required to be obtained or made by parties, or to avoid
or cause to be withdrawn or terminated, without prejudice to the parties, any
action or proceeding by any Governmental Entity, in connection with the
authorization, execution, and delivery of this Agreement and the consummation of
the Merger; and (ii) make all necessary filings, and thereafter make any other
required submissions, with respect to this Agreement and the Merger under any
applicable laws; provided, that the parties to this Agreement shall cooperate
with each other in connection with the preparation and making of all such
filings, including, if requested and subject to applicable laws regarding the
exchange of information by providing copies of all such documents to the
non-filing party and its advisors prior to filing and, if requested, to accept
all reasonable changes suggested in connection therewith provided that the
reviewing party agrees to act reasonably and as promptly as practicable. As
promptly as practicable after the date of this Agreement, Bear Lake shall
provide to Smith & Wesson the audited consolidated financial statements of Bear
Lake and its subsidiaries as of and for the nine months ended September 30,
2006, which financial statements will comply as to form in all material respects
with the published rules and regulations of the Securities and Exchange
Commission with respect thereto. Smith & Wesson shall, within five (5) days
after receipt of each invoice submitted by Bear Lake to Smith & Wesson, pay the
fees of Grant Thornton, LLP ("Grant Thornton"), the independent registered
public accounting firm of Bear Lake, for the review and audit of the foregoing
financial statements of Bear Lake.

            4.2 COVENANTS OF BEAR LAKE. Bear Lake agrees that, unless permitted
by this Agreement, required by applicable law, or Smith & Wesson otherwise
agrees in writing, prior to the Effective Time, it will use its best efforts to
comply and cause its subsidiaries to comply with the following:

                  (a) PRESERVATION OF BUSINESS. Bear Lake shall use its best
efforts to (i) preserve intact the present business organization of Bear Lake
and its subsidiaries; (ii) preserve the present goodwill and advantageous
relationships of Bear Lake and its subsidiaries with all persons having business
dealings with Bear Lake or its subsidiaries; and (iii) preserve and maintain in
full force and effect all licenses, registrations, franchises, patents,
trademarks, copyrights, and other similar rights of Bear Lake and its
subsidiaries. Bear Lake and its subsidiaries shall maintain in full force and
effect all forms of insurance that they are presently carrying.

                  (b) ORDINARY COURSE. Bear Lake and its subsidiaries shall
operate their businesses only in the usual, regular, and ordinary course and
manner. Without limiting the foregoing, neither Bear Lake nor any subsidiary of
Bear Lake shall (i) encumber or mortgage any of its material assets or
properties; (ii) incur any obligation (contingent or otherwise) or purchase or
acquire, or transfer or convey, any material assets or properties or enter into
any transaction or make or enter into any contract or commitment, except in the
ordinary course of business; (iii) acquire any stock or other equity interest in
any corporation, trust, or other entity; (iv) create, incur, or assume any
indebtedness for borrowed money, except in the ordinary course of business, or
incur, assume, or become subject, whether directly or indirectly, by way of
guaranty

                                       16
<PAGE>

or otherwise, to any obligation or liability (whether absolute, accrued,
contingent, or otherwise and whether due or to become due) other than
obligations or liabilities incurred in the ordinary course of business; (v) fail
to discharge or to satisfy any lien, claim, or encumbrance or fail to pay or
satisfy any claim, obligation, or liability (whether absolute, accrued,
contingent, or otherwise) when the same shall become due and payable; (vi) sell,
lease, assign, transfer, or otherwise dispose of any asset or property having a
book value in excess of $50,000 individually or $100,000 in the aggregate,
except for sales of inventory in the ordinary course of business; (vii)
knowingly permit or allow any material asset or property to be subjected to any
Lien (other than Permitted Liens) or enter into any conditional sale or other
title retention agreement with respect to any material asset or property; (viii)
change in any material respect the accounting methods or practices followed by
Bear Lake or any subsidiary of Bear Lake, except as required by generally
accepted accounting principles or by a Governmental Entity; (ix) enter into any
agreement with any labor union or association representing any employee of Bear
Lake or any subsidiary of Bear Lake; (x) enter into, amend, terminate or fail to
renew any material contract, except in the ordinary course of business; (xi)
make any capital expenditures, capital additions, or capital improvements in
excess of $50,000 individually or $100,000 in the aggregate, other than capital
expenditures, capital additions, or capital improvements contemplated in Bear
Lake's 2006 operating budget, a copy of which has been furnished to Smith &
Wesson; (xii) make or revoke any material tax election, other than consistent
with past practice, unless required by applicable law, or resolve any tax audit
or other similar proceeding in respect of material taxes paid by Bear Lake or
any subsidiary of Bear Lake; (xiii) waive or settle any material claims or
rights relating to the business of Bear Lake or of any subsidiary of Bear Lake;
(xiv) transfer to or license any person or otherwise extend, modify, or amend in
any material respect, any rights to intellectual property, other than in the
ordinary course of business; or (xv) take any actions outside the ordinary
course of business designed to increase Bear Lake's cash position prior to the
Effective Time. Notwithstanding anything in this Agreement to the contrary, Bear
Lake (or any of its subsidiaries) shall be entitled to effect a distribution
prior to the Effective Time of those certain real properties located at Route
11, Farmington, New Hampshire and consisting of an aggregate of 94.6 acres, and
Nadeau Drive, Gonic, New Hampshire and consisting of 17.5 acres, each currently
held in the name of O.L. Development, Inc. (the "Permitted Distribution").

                  (c) BOOKS AND RECORDS. Bear Lake and its subsidiaries shall
maintain their books, accounts, and records in the usual, regular, and ordinary
manner and on a basis consistent with prior years.

                  (d) COMPLIANCE WITH LAW. Bear Lake and its subsidiaries shall
comply in all material respects with all laws, regulations, and rules applicable
by them, the conduct of their business, and the ownership or use of their assets
and properties.

                  (e) NO ORGANIC CHANGE. Neither Bear Lake nor any subsidiary of
Bear Lake shall (i) amend its certificate of incorporation or bylaws; (ii) make
any change in its capital stock by reclassification, subdivision,
reorganization, or otherwise; or (iii) merge or consolidate with any other
corporation, trust, or other entity or change the character of its business.

                  (f) NO ISSUANCE BY BEAR LAKE OF SHARES, OPTIONS, OR OTHER
RIGHTS. Neither Bear Lake nor any subsidiary of Bear Lake shall (i) issue any
shares of capital stock

                                       17
<PAGE>

except pursuant to the terms of Bear Lake Options; or (ii) grant any option,
warrant, instrument, or other right to purchase or acquire shares of capital
stock of Bear Lake or any of its subsidiaries.

                  (g) COMPENSATION. Neither Bear Lake nor any subsidiary of Bear
Lake shall (i) increase the compensation payable to any officer or to other
senior management personnel, except in accordance with normal and customary
practice; or (ii) establish or change any Company Benefit Plan, except for
insubstantial changes necessary to comply with the minimum requirements of the
Code or ERISA, or except as disclosed in the Bear Lake Disclosure Schedule. Bear
Lake and its subsidiaries shall not enter into any employment agreements with
any of their officers or management personnel that may not be cancelled without
penalty upon notice not exceeding 90 days.

                  (h) DIVIDENDS. Neither Bear Lake nor any subsidiary of Bear
Lake shall (i) declare or pay any dividends on or make other distributions in
respect of any of its capital stock, except for dividends by a direct or
indirect wholly owned subsidiary of Bear Lake to its parent or the Permitted
Distribution; (ii) split, combine, or reclassify any of its capital stock or
issue or authorize or propose the issuance of any other securities in respect
of, in lieu of, or in substitution for shares of its capital stock; or (iii)
repurchase, redeem, or otherwise acquire any shares of capital stock or Bear
Lake or its subsidiaries or any other securities thereof.

                  (i) PREFERRED STOCK, BEAR LAKE OPTIONS, AND BEAR LAKE
INDEBTEDNESS. Bear Lake shall take all actions as may be necessary to assure
that only Bear Lake Common Stock shall be outstanding at the Effective Time,
that the Bear Lake Stock Options will be exercised or terminated as of the
Effective Time, and that the Bear Lake Indebtedness will be repaid at the
Effective Time, upon receipt of the Merger Consideration.

            4.3 ENVIRONMENTAL REMEDIATION PLAN; ENVIRONMENTAL ESCROW.

                  (a) The Principal Stockholders severally and not jointly agree
to investigate and assess Environmental Conditions (as defined in Section
4.3(m)(ii)) existing as of the Effective Time on the real property located at
400 North Main Street, Rochester, New Hampshire (the "Site"), and, to the extent
necessary, Remediate (as defined in Section 4.3(m)(vii)) the Site to the
satisfaction of the New Hampshire Department of Environmental Services ("DES"),
including, as applicable, the delivery of completion and no further action
certificates (the "DES Closure").

                  (b) The Principal Stockholders' environmental consultant shall
implement the site assessment plan mutually agreed upon by the parties
respective environmental consulting firms and attached hereto as Exhibit C (the
"SAP") and shall immediately provide Smith & Wesson with copies of all sample
analytical results and boring logs upon receipt, and all draft and final copies
of the SAP report for Smith & Wesson's review and comment. The Principal
Stockholders' environmental consultant shall use its best efforts to complete
the work contemplated by the SAP within 60 days of the date of this Agreement;
provided, however, that in no event will such work be completed any later than
120 days of the date of this Agreement. In addition, upon mutual agreement of
the Principal Stockholders' environmental consultant and Smith & Wesson, or its
designee, within five business days following the date of this Agreement,

                                       18
<PAGE>

the Principal Stockholders' environmental consultant shall submit a letter to
the DES notifying DES that the Principal Stockholders will be submitting an
environmental site assessment report for review in accordance with the
procedures provided in guidance document WMD-REM-10, and shall also identify the
Site and provide a designated contact (the "DES Letter"). The DES letter shall
be sent to the DES by certified mail, return receipt requested, with a copy to
Smith & Wesson and to Smith & Wesson's environmental consulting firm. In the
event the Principal Stockholders' environmental consultant and Smith & Wesson
are unable to agree on the advisability of submitting the DES Letter, the
parties shall submit the matter in accordance with the dispute resolution
described in Section 4.3(c)(ii) below.

                  (c) If the results of the SAP indicate that Hazardous
Materials (as defined in Section 4.3(m)(v)) exist in the soil or groundwater at
levels above DES groundwater quality standards, then:

                        (i) The Principal Stockholders' environmental consultant
shall notify the DES in accordance with applicable DES policies and procedures
of the Environmental Conditions on the Site and complete in a commercially
reasonable time any response or other action required by the DES; and

                        (ii) The Principal Stockholders' environmental
consultant shall promptly meet and confer with the DES for the purpose of
developing a proposed remedial action plan ("RAP") for the Site and any impaired
down gradient properties that will be sufficient to obtain DES Closure if
implemented. The Principal Stockholders' environmental consultant shall also
promptly meet and confer with Smith & Wesson, or its designee, to develop an
agreed RAP. If the parties are unable to agree on a proposed RAP, the parties
shall promptly retain Sanborn Head & Associates or, if Sanborn Head & Associates
is unavailable, another mutually acceptable independent environmental consultant
(collectively, the "IEC"), to resolve the dispute. The parties shall exchange
all communications with the IEC regarding the dispute, the IEC's resolution of
the dispute shall be binding and final. The parties shall each pay fifty percent
of the IEC's fees for providing such dispute resolution services.

                  (d) The RAP shall be developed and proposed in accordance with
applicable DES policies and procedures to achieve DES Closure, be commercially
reasonable for the Site and formulated so as not to unreasonably interrupt,
interfere, impair, or limit Smith & Wesson's commercially reasonable use of the
Site in substantially the same manner as it is being used at the Effective Time.

                  (e) Upon the DES' approval of the RAP, the Principal
Stockholders' environmental consulting firm will implement the RAP in a
commercially reasonable time, and will serve as the primary point of contact
with the DES regarding RAP implementation.

                  (f) Smith & Wesson agrees, warrants, and covenants that the
Principal Stockholders, their consultants, agents, contractors and
representatives, shall have the right to enter upon the Site, take samples from
the Site, erect structures and equipment upon the Site, and make such
installations and take such remediation and other actions upon the Site as may
be required to complete the SAP and the RAP, and to obtain DES Closure
(collectively, the "Work"), subject to the following terms and conditions:

                                       19
<PAGE>

                        (i) Smith & Wesson hereby grants each Principal
Stockholder (each a "Licensee") a limited license (the "License"), with the
right to sublicense to the Licensee Parties (as defined below) to enter upon the
Site for the sole purpose of completing the Work. Each Licensee severally agrees
that (1) this License does not convey an easement or other legal interest in the
Site; (2) Smith & Wesson makes no representations or warranties regarding either
the Site's physical condition or the presence or absence of conditions that
might pose a danger to persons entering thereon; and (3) each Licensee knowingly
and intentionally assumes for itself and for its contractors, subcontractors,
employees, agents, representatives, consultants, and all other persons
associated with or involved in the Work ("Licensee Parties"), all risk of
economic loss or personal injury that might occur during the Work due to all
pre-existing Site conditions, all Licensee Parties' acts or omissions, or
otherwise. This License terminates without notice upon the DES Closure.

                        (ii) Smith & Wesson or its designee may accompany and
observe all Licensee Parties who enter the Site at all times, and shall be
entitled to take split samples at Smith & Wesson's sole cost and expense;
provided, however, that Smith & Wesson and its designee shall comply with the
requirements of the health and safety plan prepared by the Licensee Parties
pursuant to Section 4.3(f)(v)(3) while present within active Work areas.

                        (iii) The Licensee Parties shall give Smith & Wesson
reasonable notice of the time and place that Work is to occur. All Work shall be
performed at the Licensees' sole cost and expense and in a good and workman-like
manner by contractors reasonably acceptable to Smith & Wesson, which acceptance
shall not be unreasonably withheld or delayed. Each Licensee is severally
responsible for keeping the Site free of judgments and liens by any person who
performs any Work, and each Licensee agrees to promptly bond or cause such
judgments or liens to be discharged upon demand by Smith & Wesson.

                        (iv) The Licensees shall cause each Licensee Party to
obtain all necessary governmental and utility permits and approvals for any
Work, and to provide copies and certification thereof to Smith & Wesson not less
than three business days prior to commencement thereof.

                        (v) Each Licensee severally warrants and agrees that:
(1) all Work shall be performed in compliance with Environmental Laws; (2) all
the Licensee Parties' workers shall be appropriately trained and licensed; (3)
an OSHA site-specific health and safety plan that complies with 29 CFR Section
1910.120 and all other applicable law shall be prepared and furnished to Smith &
Wesson prior to any Licensee Party's entry onto the Site; (4) the Licensees
shall be solely responsible for the appropriate handling, storage,
transportation, and disposal of all waste generated during the Work, including
but not limited to soil borings, cuttings, and groundwater samples, and be
listed as the waste "generator" on all manifests and filings; and (5) the
Licensees shall immediately notify Smith & Wesson of any Site condition that may
threaten or impair the health or safety of persons on, entering, or adjacent to
the Site.

                        (vi) The Licensee Parties shall not unreasonably
interfere with the ingress or egress of Smith & Wesson employees, contractors,
invitees, or other persons permitted or having a lawful right to be on the Site.
All Licensee Party workers shall carry and display identification cards
substantially in the same form and manner as Smith & Wesson's own

                                       20
<PAGE>

employees. Except as otherwise expressly authorized by Smith & Wesson in
writing, the Licensee Parties shall perform Work on the Site only between the
hours of 8:00 a.m. and 5:00 p.m., Monday through Friday, excluding legal
holidays. The Licensees shall cause the Licensee Parties to use best efforts to
limit noise, dust, debris, odors, and all other adverse effects and disruption
due to the Work.

                        (vii) The Licensee Parties shall stage and/or store all
equipment or material for the Work in a commercially reasonable manner, with the
understanding that Smith & Wesson is not responsible for any loss of or damage
thereto. The Licensees shall cause the Licensee Parties to ensure all areas of
the Site on which Work is being performed shall be supervised, secured, and/or
protected in a commercially reasonable manner and in accordance with applicable
law.

                        (viii) Unless otherwise agreed in writing by Smith &
Wesson, the Licensees shall cause the Licensee Parties to promptly: (1) restore
all Site areas disturbed or affected by Work; (2) remove all equipment,
materials and waste used or generated during the Work; (3) fill excavated areas
with clean fill compacted to 95% Standard Proctor density; (4) seal all bore
holes; (5) cap and lock monitoring wells; (6) promptly repair or replace in a
commercially reasonable manner all sidewalks, pavement, foundations and
improvements damaged or impaired by the Work; and (7) leave the Site in a safe
condition.

                        (ix) The Licensees shall cause the Licensee Parties to
maintain insurance to cover any litigation, claims, demands, damages, liability,
losses, costs and expenses arising out of or due to the Work. Before the Work
commences and the Licensee Parties enter the Site, the Licensees shall cause
each Licensee Party performing any work to provide Smith & Wesson with
Certificates of Insurance from their insurers with an AM Best's rating of B++ or
better that provides the following coverage and limits: (1) $5 million per
occurrence and annual aggregate for commercial general liability including
contractor's pollution liability coverage; (2) $2 million per occurrence for
auto liability; and (3) $1 million per occurrence and annual aggregate for
employer's liability coverage. Smith & Wesson shall be an additional insured on
all such Licensee Parties' policies.

                        (x) Notwithstanding any other provision of this
Agreement, the Licensees shall severally indemnify, defend (using counsel
approved by Smith & Wesson), and hold harmless Smith & Wesson, its directors,
officers, employees, agents, and representatives (collectively the
"Indemnitees") from and against any and all causes of action, damages, claims,
demands, judgments, liens, litigation, liability, penalties, orders, loss, cost
and/or expense, including attorneys' fees, which may at any time be asserted
against or incurred by any one or more of the Indemnitees due to acts or
omissions of a Licensee Party performing the Work or the off-site disposal of
waste or Hazardous Materials generated by the Work.

                        (xi) The Licensees do not have an express or implied
right by reason of this Agreement or otherwise to make any commitments or
agreements that will cause the imposition of land use or "deed restrictions" or
long term engineering controls on the Site without the consent of Smith &
Wesson, which consent shall not be unreasonably withheld or delayed.

                                       21
<PAGE>

                  (g) Each of Smith & Wesson and the Licensees acknowledges that
it desires to complete the Work and obtain DES Closure as soon as practicable.
Accordingly, Smith & Wesson shall cooperate in a commercially reasonable manner
with the Principal Stockholders and the Licensee Parties to complete the Work
and obtain DES Closure, including by promptly providing approval as may be
required from time to time pursuant to applicable provisions under this Section
4.3. The Principal Stockholders shall, and shall use their best efforts to cause
the Licensee Parties to, complete the Work and obtain DES Closure within a
commercially reasonable time.

                  (h) Smith & Wesson shall receive notice of and/or copies of
all communications (including but not limited to, letters and emails) between
either the Principal Stockholders, their environmental consulting firm, and/or
any other person acting by or on the Principal Stockholders' behalf, and the
DES. Smith & Wesson shall receive reasonable prior notice of and have the right
to participate in any meetings or calls between the DES and the Principal
Stockholders, their environmental consulting firm, and/or any other person
acting by or on the Principal Stockholders' behalf. Unless otherwise required by
law, and provided that the Principal Stockholders are otherwise in compliance
with this Agreement, Smith & Wesson agrees that neither it nor any of its agents
or representatives, including its environmental consulting firm, will initiate
communications with the DES regarding the SAP or RAP without first communicating
with the Principal Stockholders and upon the Principal Stockholders' prior
approval, which shall not be unreasonably be withheld.

                  (i) Upon the DES' approval of the RAP and before its
implementation, the Principal Stockholders' environmental consulting firm shall
make a reasonable estimate of the costs to implement the RAP, including a
reasonable and appropriate contingency (the "Estimated Environmental Costs").
The Principal Stockholders shall provide the estimate to Smith & Wesson for
review and comment. If Smith & Wesson objects to the estimate, Smith & Wesson
shall promptly identify its objections in writing to the Principal Stockholders,
who shall promptly review the objections and make reasonable efforts to meet and
confer with Smith & Wesson to reach agreement regarding the estimate. If the
parties are unable to agree on a mutually acceptable estimate, then the parties
shall promptly refer their dispute to the IEC for resolution. The IEC's
determination shall be binding and final.

                  (j) At the Closing, Smith & Wesson shall deposit $8,000,000 of
the Merger Consideration, less any amounts paid by Bear Lake and/or the
Principal Stockholders prior to Closing in connection with the activities
described in this Section 4.3 and Section 4.6, into an escrow account (the
"Environmental Escrow") upon the terms and conditions of an escrow agreement
substantially in the form attached hereto as Exhibit D (the "Escrow Agreement").
The Environmental Escrow shall serve (i) to pay for the Environmental Costs (as
defined in Section 4.3(m)(iii)), up to $5,500,000 and (ii) as security for the
Principal Stockholders' indemnification obligations under Section 7.1(b), up to
$2,500,000 (the "Environmental Indemnity Escrow"). The Principal Stockholders
may, in their sole discretion, either submit Environmental Costs directly to the
escrow agent for payment or may seek reimbursement for Environmental Costs paid
by the Principal Stockholders from the escrow agent, which shall be paid in
accordance with the Escrow Agreement. The escrow agent shall provide an
accounting to the parties of Environmental Costs submitted and paid at the end
of

                                       22
<PAGE>

each calendar quarter. The Principal Stockholders, as a group, and Smith &
Wesson shall bear the costs of the escrow agent fees equally.

                  (k) Upon the earlier of (i) eighteen months after the
Effective Time and (ii) a final determination of the Estimated Environmental
Costs, an amount equal to the difference between (I)(A) the amount in the
Environmental Escrow at the Effective Time less (B) $2,500,000 and (II) the
Environmental Costs shall be distributed to the Principal Stockholders on a pro
rata basis. In the event the Environmental Costs exceed $5,500,000, Smith &
Wesson shall pay all costs in excess of such amount.

                  (l) Upon the eighteenth month anniversary of the Effective
Time, any remaining amounts in the Environmental Escrow shall be distributed to
the Principal Stockholders on a pro rata basis, provided, however, that if there
are any known actual or reasonably ascertainable Indemnified Environmental
Losses (as defined in Section 7.1(b)), then any amount distributable under this
Section 4.3(l) shall first be applied to such Indemnified Environmental Losses
in accordance with the procedures and limitations set forth in Section 7 before
any distribution to the Principal Stockholders; provided, further that the
aggregate amount of the Environmental Indemnity Escrow distributed in respect of
such Indemnified Environmental Losses shall not exceed $2,500,000.

                  (m) For purposes of this Agreement, the following terms shall
have the meanings set forth below:

                        (i) "Environment" means all surface water, ground water,
drinking water supply, land surface or subsurface strata, or ambient air, and
includes, but is not limited to, all "facilities" as defined at 42 U.S.C.
Section 9601(9).

                        (ii) "Environmental Condition" means the actual or
threatened Release of Hazardous Materials into the Environment in, on, or from
the Site or by Bear Lake or its subsidiaries.

                        (iii) "Environmental Costs" means all costs and expenses
associated with the development and implementation of the SAP and RAP, to obtain
DES Closure, and to complete the OSHA Compliance Tasks (as defined in Section
4.6).

                        (iv) "Environmental Laws" means all federal, state, and
local statutes, ordinances, orders (including orders on consent), permits,
judgments, agreements, rules, regulations, guidance, and common law duties
relating to or concerning human health or the Environment. "Environmental Law"
includes, but is not limited to, statutes, permits, rules, and common law duties
regulating or relating to human exposure to or the discharge, Release, removal,
generation, storage, transportation, or disposal of Hazardous Materials into the
Environment.

                        (v) "Hazardous Materials" means any and all substances
(whether solid, liquid or gas): (A) that are "pollutants," as defined at 33
U.S.C. Section 1362(6), "solid waste," as defined at 42 U.S.C. Section 6903(27),
"hazardous waste," as defined at 42 U.S.C. Section 6903(5), or "hazardous
substances," as defined at 42 U.S.C. Section 9601(14); or (B) that may harm or
impair human health or the Environment, including, but not limited to, petroleum
and petroleum

                                       23
<PAGE>

products and constituents, asbestos and asbestos-containing materials,
polychlorinated biphenyls, lead, radon, chlorinated solvents, radioactive
materials, flammables, explosives, and biological contaminants such as mold or
microbial matter, or (C) that are regulated by Environmental Laws.

                        (vi) "Release" means any "release" as defined at 42
U.S.C. Section 9601(22), "disposal," as defined at 42 U.S.C. Section 6903(3),
spill, migration, or other movement of, or human exposure to, Hazardous
Materials.

                        (vii) "Remediate" or "Remediation" means the
implementation and completion of the RAP and such other measures as required by
the DES to achieve DES Closure.

            4.4 FILINGS UNDER THE HSR ACT AND OTHER ANTITRUST FILINGS.

                  (a) GENERAL. The parties acknowledge that the Merger may
require filings with the United States Federal Trade Commission ("FTC") and the
Antitrust Division of the United States Department of Justice (the "Antitrust
Division") under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and the rules and regulations promulgated thereunder (the "HSR Act")
and with certain foreign jurisdictions under applicable foreign competition or
merger Laws (each an "Antitrust Law" and collectively, the "Antitrust Laws").

                  (b) CONSENTS; APPROVALS.

                        (i) The parties shall use their best efforts to as
promptly as practicable obtain, and cooperate with each other in order to
obtain, all consents, waivers, approvals, authorizations, or orders and to make
all filings (including, without limitation, the filings under the HSR Act and
other Antitrust Laws and all other filings with Governmental Entities) lawfully
required to be obtained from or filed with all applicable Governmental Entities
in connection with the authorization, execution, and delivery of this Agreement
and the consummation of the transactions contemplated hereby.

                        (ii) Each party shall (A) file or cause to be filed with
the FTC and the Antitrust Division, and with any other Governmental Entities, if
applicable, as promptly as practicable but in no event later than the tenth
business day after the execution and delivery of this Agreement, all reports and
other documents required to be filed by such party under the HSR Act or other
applicable Antitrust Laws concerning the transactions contemplated hereby and
(B) promptly comply with or cause to be complied with any requests by any
Governmental Entity for additional information concerning such transactions, in
each case so that the waiting period applicable to this Agreement shall expire
as soon as practicable after the execution and delivery of this Agreement.

                        (iii) The parties shall furnish to the other parties'
outside counsel all information about such party or its affiliates, if any,
required to be included in any application or other filing to be made by such
other party pursuant to the rules and regulations of any Governmental Entity in
connection with the Merger, subject to applicable law and privileges, including
the attorney-client privilege.

                                       24
<PAGE>

                        (iv) In furtherance and not in limitation of the
agreements of the parties contained in this Section 4.4, each party shall use
its reasonable efforts to resolve such objections, if any, as may be asserted by
a Governmental Entity or other person with respect to the transactions
contemplated hereby under any applicable law. Smith & Wesson shall pay the
applicable HSR Act filing fee and all other antitrust notification filing fees
required in any other applicable jurisdiction.

            4.5 OTHER ACQUISITION PROPOSALS.

                  (a) NO SOLICITATION. Bear Lake shall not, nor shall it permit
any of its affiliates or subsidiaries, or any of their respective officers,
directors, or employees or any agent, representative, investment banker,
financial advisor, attorney, accountant, or other person or firm engaged by it
or any of it subsidiaries, to directly or indirectly, (i) solicit, initiate, or
encourage the submission of proposals or offers from any third party relating to
any Acquisition Proposal (as defined below) relating to Bear Lake or any of its
affiliates or subsidiaries; (ii) cooperate with or furnish or cause to be
furnished any Evaluation Material (as defined in the Confidentiality Agreement
between Smith & Wesson and Bear Lake) concerning Bear Lake to any third party in
connection with any Acquisition Proposal relating to Bear Lake or any of its
affiliates or subsidiaries; (iii) participate in any negotiations regarding, or
take any other action to facilitate any inquiries or the making of any proposal
that constitutes, or may reasonably be expected to lead to, any Acquisition
Proposal relating to Bear Lake or any of its affiliates or subsidiaries; or (iv)
enter into any agreement or understanding with any other person or entity with
the intent to effect any Acquisition Proposal relating to Bear Lake or any of
its affiliates or subsidiaries. As used in this Agreement, "Acquisition
Proposal" means any of the following transactions involving Bear Lake or any of
its subsidiaries, other than negotiating a mutually acceptable business
combination as contemplated by this Agreement, (i) any merger, consolidation,
share exchange or purchase, reorganization, recapitalization, business
combination, or other similar transaction; (ii) any sale, lease, exchange,
mortgage, pledge, transfer, or other disposition (whether in a single
transaction or series of transactions), of assets either constituting 5% or more
of Bear Lake's consolidated assets or which generate 5% or more of Bear Lake's
consolidated revenue; (iii) any tender offer or exchange offer for 5% or more of
the outstanding shares of Bear Lake's capital stock, including tender offers;
(iv) any person acquiring beneficial ownership or the right to acquire
beneficial ownership of, or any "group" (as such term is defined under Section
13(d) of the Securities Exchange Act of 1934, as amended, being formed, which
beneficially owns or has the right to acquire beneficial ownership of, 5% or
more of the then outstanding shares of Bear Lake's capital stock (other than
persons or "groups" that beneficially own or have the right to acquire
beneficial ownership of 5% of more of the outstanding shares of Bear Lake's
capital stock as of the date hereof); or (v) any public announcement of a
proposal, plan, or intention to do any of the foregoing or any agreement to
engage in any of the foregoing.

                  (b) CHANGE IN RECOMMENDATION. Neither the Board of Directors
of Bear Lake nor any committee thereof shall (i) withdraw or modify, or propose
to withdraw or modify, in a manner adverse to Smith & Wesson, the approval or
recommendation of this Agreement or the Merger by the Board of Directors or such
committee; (ii) approve or recommend, or propose to approve or recommend, any
Acquisition Proposal; or (iii) cause Bear Lake to enter into any agreement with
respect to any Acquisition Proposal.

                                       25
<PAGE>

            4.6 OSHA COMPLIANCE. The Principal Stockholders severally and not
jointly warrant and agree that the OSHA compliance tasks set forth on Schedule
4.6 (the "OSHA Compliance Tasks") shall be completed at the Principal
Stockholders' sole cost and expense, subject to reimbursement from the
Environmental Escrow pursuant to Section 4.3(j). The Principal Stockholders
shall cause Bear Lake to use its best efforts to complete the OSHA Compliance
Tasks prior to the Effective Time.

            4.7 PRESS RELEASES AND ANNOUNCEMENTS. Before the Effective Time, no
press releases related to this Agreement and the transactions contemplated
herein or other announcements to the employees, customers, or suppliers of Bear
Lake shall be issued by any party without the mutual approval of the parties,
except for any public disclosure which any party in good faith believes is
required by law or regulation (in which case the disclosure shall be prepared
jointly by Bear Lake and Smith & Wesson). After the Effective Time, no press
releases related to this Agreement and the transactions contemplated herein, or
other announcements to the employees, customers, or suppliers of Smith & Wesson
or any of its subsidiaries shall be issued by Bear Lake without the prior
approval of Smith & Wesson, except for any public disclosure which is required
by law or regulation (in which case the disclosure shall be prepared jointly by
Bear Lake and Smith & Wesson).

            4.8 ADVICE OF CHANGES. The parties shall promptly advise each other
orally and in writing of (a) any representation or warranty made by it contained
in this Agreement becoming untrue or inaccurate in any material respect, (b) the
failure by it to comply with or satisfy in any material respect any covenant,
condition, or agreement to be complied with or satisfied by it under this
Agreement or (c) any change or event which has resulted, or which, insofar as
can reasonably be foreseen, would result, in any of the conditions set forth in
Section 5 not being satisfied; provided, however, that no such notification
shall affect the representations, warranties, covenants or agreements of the
parties or the conditions to the obligations of the parties under this
Agreement.

                                   SECTION 5.
                       CONDITIONS PRECEDENT TO OBLIGATIONS

            5.1 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SMITH & WESSON AND
SWAC. The obligations of Smith & Wesson and SWAC under this Agreement are, at
the option of Smith & Wesson and SWAC, subject to the satisfaction or waiver of
the following conditions on or before the Effective Time:

                  (a) ACCURACY OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties of Bear Lake herein contained shall have been
true and correct in all material respects when made, and, in addition, shall be
true and correct in all material respects on and as of the Effective Time with
the same force and effect as though made on and as of the Effective Time, except
as affected by transactions contemplated hereby.

                  (b) PERFORMANCE OF AGREEMENTS. Bear Lake shall have, in all
material respects, performed all obligations and agreements and complied with
all covenants and conditions contained in this Agreement to be performed and
complied with by it on or prior to the Effective Time.

                                       26
<PAGE>

                  (c) CORPORATE APPROVALS. All necessary corporate action on the
part of the directors and stockholders of Bear Lake adopting this Agreement and
approving the transactions contemplated hereby shall have been taken by December
22, 2006. Without limiting the foregoing, the Principal Stockholders shall have
executed and delivered to Smith & Wesson the Voting Agreement forming Exhibit B
hereto.

                  (d) OPINION OF COUNSEL FOR BEAR LAKE. Smith & Wesson shall
have received an opinion of Stradling Yocca Carlson & Rauth, counsel for Bear
Lake and the Principal Stockholders, dated the Effective Time, in form and
substance reasonably satisfactory to Smith & Wesson and its counsel, to the
effect that:

                        (i) Bear Lake is a corporation duly organized, validly
existing, and in good standing under the laws of the state of Delaware and has
the corporate power and authority under the laws of such state to own, lease,
and operate its properties, to carry on its business as being conducted, and to
consummate the Merger;

                        (ii) Each subsidiary of Bear Lake (including Thompson
Center Arms, Inc.) is a corporation duly organized, validly existing, and in
good standing under the laws of the state of its incorporation and has the
corporate power and authority under the laws of such state to own, lease, and
operate its assets and properties, to carry on its business as being conducted,
and to consummate the transactions contemplated hereby;

                        (iii) All necessary corporate proceedings of the board
of directors and the stockholders of Bear Lake to approve and adopt this
Agreement and to authorize the execution and delivery of this Agreement and the
consummation of the Merger contemplated hereby have been duly and validly taken;

                        (iv) Bear Lake has the corporate power and authority to
execute and deliver this Agreement, and this Agreement has been duly authorized,
executed, and delivered by it and constitutes its legal, valid, and binding
obligation except that the enforceability thereof may be subject to (A)
bankruptcy, insolvency, reorganization, moratorium, or other similar laws now or
hereafter in effect relating to creditors' rights generally, and (B) general
principles of equity (regardless of whether such enforcement is sought in a
proceeding in equity or at law);

                        (v) Such counsel knows of no actions, suits, or
proceedings pending or threatened against or affecting Bear Lake of any of its
subsidiaries at law or in equity, or before or by any foreign, federal, state,
municipal, or other governmental department, commission, board, bureau, agency,
or instrumentality that would result in a breach of the representation and
warranty set forth in Section 3.1(j) of this Agreement;

                        (vi) The consummation of the Merger will not violate or
result in a breach of or constitute a default by Bear Lake or any subsidiary of
Bear Lake under any provision of any Contract, order, judgment, decree, award,
ordinance, regulation, or any other restriction set forth on Schedule 3.1(p) of
the Bear Lake Disclosure Schedule, to which Bear Lake or any subsidiary of Bear
Lake is a party or by which it is bound; and

                                       27
<PAGE>

                        (vii) Each Principal Stockholder has the power and
authority to execute, deliver, and perform this Agreement and the Voting
Agreement and to consummate the transactions contemplated hereby and thereby.
The execution, delivery, and performance of this Agreement and the Voting
Agreement and the consummation of the transactions contemplated hereby and
thereby have been duly authorized by all necessary action on the part of each
Principal Stockholder. This Agreement and the Voting Agreement have been duly
executed by or on behalf of each Principal Stockholder and constitute legal,
valid, and binding obligations of the Principal Stockholders, enforceable
against such Principal Stockholders in accordance with their terms, except as
enforcement may be limited by bankruptcy, insolvency, moratorium, or other
similar laws and except that the availability of equitable remedies, including
specific performance, is subject to the direction of the court before which any
proceeding for such remedy may be brought.

                  (e) NO MATERIAL ADVERSE EFFECT. There shall be no Material
Adverse Effect since the date of this Agreement.

                  (f) LITIGATION. No action or proceeding by any governmental
agency shall have been instituted or threatened that would enjoin, restrain, or
prohibit, or might result in substantial damages in respect of this Agreement or
the consummation of the transactions contemplated by this Agreement, and would,
in the reasonable judgment of Smith & Wesson and SWAC, make it inadvisable to
consummate such transaction, and no court order shall have been entered in any
action or proceeding instituted by any other party that enjoins, restrains, or
prohibits this Agreement or consummation of the transactions contemplated by
this Agreement.

                  (g) DISSENTERS' RIGHTS. Dissenters' rights of appraisal under
the Delaware General Corporation Law shall not have been effectively preserved
as of the Effective Time by owners of more than 5% of the outstanding shares of
Bear Lake Capital Stock.

                  (h) OFFICERS' CERTIFICATE. Bear Lake shall deliver to Smith &
Wesson a certificate in form and substance reasonably satisfactory to Smith &
Wesson and its counsel, executed by the Chief Executive Officer and Chief
Financial Officer of Bear Lake, certifying that the conditions specified in
Sections 5.1(a) and 5.1(b) have been fulfilled.

                  (i) TERMINATION OF HSR ACT WAITING PERIOD. Any and all
applicable waiting periods under the HSR Act and other applicable Antitrust Laws
with respect to the transactions contemplated by this Agreement shall have
expired or shall have been terminated.

                  (j) RETIREMENT OF OBLIGATIONS. Upon the receipt of the Merger
Consideration, there shall be no outstanding shares of Bear Lake Preferred
Stock, Bear Lake Options, or Bear Lake Indebtedness.

                  (k) ESCROW AGREEMENT. The Principal Stockholders and Smith &
Wesson shall have entered into the Escrow Agreement.

                  (l) OSHA MATTERS. The OSHA Compliance Tasks shall either have
been completed by Bear Lake or its subsidiaries or the Principal Stockholders
shall have made

                                       28
<PAGE>

provision, including through deposit of cash or other resources, which to the
reasonable satisfaction of Smith & Wesson shall be sufficient to obtain
completion.

            5.2 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BEAR LAKE. The
obligations of Bear Lake under this Agreement are, at the option of Bear Lake,
subject to the satisfaction or waiver of the following conditions on or before
the Effective Time:

                  (a) ACCURACY OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties of Smith & Wesson and SWAC herein contained shall
have been true and correct in all material respects when made and, in addition,
shall be true and correct in all material respects on and as of the Effective
Time with the same force and effect as though made on and as of the Effective
Time, except as affected by transactions contemplated hereby.

                  (b) PERFORMANCE OF AGREEMENTS. Smith & Wesson and SWAC shall
have, in all material respects, performed all obligations and agreements and
complied with all covenants and conditions contained in this Agreement to be
performed and complied with by them on or prior to the Effective Time.

                  (c) CORPORATE APPROVAL. All necessary corporate action on the
part of the directors of Smith & Wesson and the directors and stockholders of
SWAC approving and adopting this Agreement and approving the transactions
contemplated hereby shall have been taken by December 22, 2006.

                  (d) OPINION OF COUNSEL FOR SMITH & WESSON AND SWAC. Bear Lake
shall have received an opinion of Greenberg Traurig, LLP, counsel for Smith &
Wesson and SWAC, dated the Effective Time, in form and substance reasonably
satisfactory to Bear Lake and its counsel, to the effect that:

                        (i) Each of Smith & Wesson and SWAC is a corporation
duly organized, validly existing, and in good standing under the laws of the
state of its incorporation and has the corporate power and authority under the
laws of such state to own, lease, and operate its properties, to carry on its
business as being conducted, and to consummate the Merger contemplated hereby;

                        (ii) All necessary corporate proceedings of the Board of
Directors of Smith & Wesson and the Board of Directors and stockholders of SWAC
to approve and adopt this Agreement and to authorize the execution and delivery
of this Agreement and the consummation of the Merger have been duly and validly
taken; and

                        (iii) Each of Smith & Wesson and SWAC has the corporate
power and authority to execute and deliver this Agreement, and this Agreement
has been duly authorized, executed and delivered by it and constitutes its
legal, valid, and binding obligation except that the enforceability thereof may
be subject to (A) bankruptcy, insolvency, reorganization, moratorium, or other
similar laws now or hereafter in effect relating to creditors' rights generally,
and (B) general principles of equity (regardless of whether such enforcement is
sought in a proceeding in equity or at law).

                                       29
<PAGE>

                  (e) LITIGATION. No action or proceeding by any governmental
agency shall have been instituted or threatened that would enjoin, restrain, or
prohibit, or might result in substantial damages in respect of this Agreement or
the consummation of the transactions contemplated by this Agreement, and would,
in the reasonable judgment of Bear Lake, make it inadvisable to consummate such
transaction, and no court order shall have been entered in any action or
proceeding instituted by any other party that enjoins, restrains, or prohibits
this Agreement or consummation of the transactions contemplated by this
Agreement.

                  (f) OFFICERS' CERTIFICATE. Smith & Wesson shall deliver to
Bear Lake a certificate in form and substance reasonably satisfactory to Bear
Lake and its counsel, executed by the Chief Executive Officers and Chief
Financial Officers of Smith & Wesson and SWAC, certifying that the conditions
specified in Sections 5.2(a) and 5.2(b) have been fulfilled.

                  (g) TERMINATION OF HSR ACT WAITING PERIOD. Any and all
applicable waiting periods under the HSR Act and other applicable Antitrust Laws
with respect to the transactions contemplated by this Agreement shall have
expired or shall have been terminated.

                  (h) ESCROW AGREEMENT. The Principal Stockholders and Smith &
Wesson shall have entered into the Escrow Agreement.

                  (i) OSHA MATTERS. The OSHA Compliance Tasks shall have been
completed by Bear Lake or its subsidiaries.

                                   SECTION 6.
                        WAIVER, MODIFICATION, ABANDONMENT

            6.1 WAIVERS. The failure of Bear Lake to comply with any of its
obligations, agreements, or conditions as set forth herein may be waived
expressly in writing by Smith & Wesson and SWAC, by action of their respective
Boards of Directors without the requirement for a vote of stockholders. The
failure of Smith & Wesson and SWAC to comply with any of their obligations,
agreements, or conditions as set forth herein may be waived expressly in writing
by Bear Lake by action of its Board of Directors without the vote of
stockholders.

            6.2 MODIFICATION. This Agreement may be modified at any time in any
respect by the written mutual consent of all of the parties, notwithstanding
prior approval by stockholders. Any such modification may be approved for any
party by its Board of Directors, without further stockholder approval, except
that the Merger Consideration to be issued in exchange for the shares of Bear
Lake Capital Stock may not be decreased without the consent of Bear Lake
stockholders given by the same vote as is required under applicable state law
for approval of this Agreement.

            6.3 ABANDONMENT. The Merger may be abandoned on or before the
Effective Time notwithstanding adoption of this Agreement by the parties hereto:

                  (a) By the mutual agreement of the Boards of Directors of
Smith & Wesson, SWAC, and Bear Lake;

                                       30
<PAGE>

                  (b) By the Boards of Directors of Smith & Wesson and SWAC, if
any of the conditions provided in Section 5.1 shall not have been satisfied,
complied with, or performed in any material respect, and Smith & Wesson and SWAC
shall not have waived in writing such failure of satisfaction, noncompliance, or
nonperformance;

                  (c) By the Board of Directors of Bear Lake, if any of the
conditions provided in Section 5.2 shall not have been satisfied, complied with,
or performed in any material respect, and Bear Lake shall not have waived in
writing such failure of satisfaction, noncompliance, or nonperformance; or

                  (d) At the option of Smith & Wesson, SWAC, and Bear Lake, if
there shall have been instituted and be pending or threatened any legal
proceeding before any court or governmental agency seeking to restrain or
prohibit or to obtain damages in respect of this Agreement or the consummation
of the Merger contemplated by this Agreement, or if any order restraining or
prohibiting the Merger shall have been issued by any court or governmental
agency and shall be in effect.

      In the event of any termination pursuant to this Section 6.3 (other than
pursuant to Section 6.3(a) hereof) written notice setting forth the reasons
thereof shall forthwith be given by Bear Lake if it is the terminating party, to
Smith & Wesson and SWAC, or by Smith & Wesson and SWAC, if they are the
terminating parties, to Bear Lake. This Agreement shall terminate automatically
if the Effective Time shall not have occurred on or before January 31, 2007, or
such later date as shall have been agreed to by the parties hereto under Section
6.2.

            6.4 EFFECT OF ABANDONMENT. If the Merger is abandoned as provided
for in this Section 6, (a) this Agreement shall forthwith become wholly void and
of no effect without liability to any party to this Agreement or to the
directors, officers, representatives, and agents of any such party; provided,
however, that each party shall remain liable for any liabilities resulting from
(i) any breach of any covenant contained herein occurring prior to such
termination, or (ii) any breach of or inaccuracy in any representation or
warranty occurring prior to such termination, and (b) each of Smith & Wesson,
SWAC, Bear Lake, and the Principal Stockholders shall each pay its own fees and
expenses incident to the negotiation, preparation, and execution of this
Agreement and the obtaining of the necessary approvals thereof, including fees
and expenses of its counsel, accountants, investment bankers, and other experts.
This Section 6.4, Section 6.5, and Section 9 shall remain in full force and
effect following such termination in accordance with their respective terms.

                                   SECTION 7.
                                 INDEMNIFICATION

            7.1 INDEMNIFICATION BY THE PRINCIPAL STOCKHOLDERS.

            (a) The Principal Stockholders covenant and agree, severally and not
jointly, to defend, indemnify, and hold harmless for, from, and against, and
will pay to Smith & Wesson, the amount of any and all damages, losses,
liabilities (absolute and contingent), fines, penalties, costs, and expenses,
including, without limitation, reasonable counsel and accountants fees, costs,
and expenses, (collectively "Losses") (including those incurred in the
investigation,

                                       31
<PAGE>

defense, or settlement with respect to or arising out of any demand, claim,
inquiry, investigation, proceeding, action, or cause of action), whether or not
involving a third-party claim, that Smith & Wesson may suffer or incur by reason
of (a) the inaccuracy of any of the representations or warranties of Bear Lake
contained in this Agreement, or any of the agreements, certificates, documents,
exhibits, or schedules delivered in connection with this Agreement; or (b) the
failure of Bear Lake to comply with, or the breach, or the default by Bear Lake
of, any of the covenants or agreements made by Bear Lake contained in this
Agreement, or any of the agreements, certificates, documents, exhibits, or
schedules delivered in connection with this Agreement.

            (b) In addition, the Principal Stockholders covenant and agree,
severally and not jointly, to defend, indemnify, and hold harmless for, from,
and against, and will pay to Smith & Wesson the amount of any and all Losses
resulting from any third party claims, demands, suits, orders (including orders
on consent), or judgments (including judgments on consent) (i) alleging a
violation of Environmental Laws by Bear Lake or any of its subsidiaries prior to
the Effective Time, including Losses incurred due to third party claims,
demands, suits, orders (including orders on consent), or judgments (including
judgments on consent) that are for or in the nature of statutory response,
removal, remediation, or cleanup of real property, soil, surface water, or
groundwater; penalties or fines; natural resource damages; equitable remedies;
contribution; common law nuisance; or personal injury or property damage torts
or (ii) that arise from, relate to, or are allegedly a result of: (A) any
Environmental Conditions existing as of or prior to the Effective Time; (B) the
Release into the Environment of Hazardous Materials generated, transported or
disposed by Bear Lake and/or its subsidiaries (including but not limited to
Hazardous Materials disposed off-Site) prior to the Effective Time; or (C) human
exposure to Hazardous Materials Released, generated, transported, or disposed by
Bear Lake and/or its subsidiaries prior to the Effective Time, including
employee exposure to Hazardous Materials during Bear Lake and/or its
subsidiaries' manufacturing activities prior to the Effective Time (clauses (i)
and (ii) collectively "Indemnified Environmental Losses").

            7.2 NOTICE AND RIGHT TO DEFEND THIRD-PARTY CLAIMS. Promptly upon
receipt of notice of any claim, demand, or assessment or the commencement of any
suit, action, or proceeding with respect to which indemnity may be sought
pursuant to Sections 7.1(a) or (b), Smith & Wesson shall notify in writing, if
possible, within sufficient time to respond to such claim or answer or otherwise
plead in such action, the Principal Stockholders. In case any claim, demand, or
assessment shall be asserted, or suit, action, or proceeding commenced against
Smith & Wesson or Bear Lake, the Principal Stockholders shall be entitled, at
the Principal Stockholders' expense, to participate therein, and, to the extent
that such stockholders may wish, to assume the defense, conduct, or settlement
thereof, at their own expense, with counsel satisfactory to Smith & Wesson,
whose consent to the selection of counsel shall not be unreasonably withheld or
delayed, provided that the Principal Stockholders confirm to Smith & Wesson that
it is a claim to which its rights of full indemnification apply without the
effect of Section 7.3(b). Subject to the foregoing, the Principal Stockholders
shall have the right to settle or compromise monetary claims without the consent
of Smith & Wesson; however, as to any other claim, the Principal Stockholders
shall first obtain the prior written consent from Smith & Wesson, which consent
shall be exercised in the sole discretion of Smith & Wesson. After notice from
the Principal Stockholders to Smith & Wesson of the Principal Stockholders'
intent so to assume the defense, conduct, settlement, or compromise of such
action, the Principal Stockholders shall not be liable to the Smith & Wesson for
any legal or other expenses

                                       32
<PAGE>
(including, without limitation, settlement costs) subsequently incurred by Smith
& Wesson in connection with the defense, conduct, or settlement of such action
while the Principal Stockholders are diligently defending, conducting, settling,
or compromising such action. The Principal Stockholders shall keep Smith &
Wesson apprised of the status of the suit, action, or proceeding and shall make
the Principal Stockholders' counsel available to Smith & Wesson, at the
Principal Stockholders' expense, upon the request of Smith & Wesson. Smith &
Wesson shall cooperate with the Principal Stockholders in connection with any
such claim and shall make personnel, books, records, and other information
relevant to the claim available to the Principal Stockholders to the extent that
such personnel, books, and records and other information are in the possession
and/or control of Smith & Wesson. If the Principal Stockholders decide not to
participate, Smith & Wesson shall be entitled, at the Principal Stockholders'
expense, to defend, conduct, settle, or compromise such matter with counsel
satisfactory to the Principal Stockholders, whose consent to the selection of
counsel shall not be unreasonably withheld or delayed.

      7.3 LIMITATIONS RELATED TO INDEMNITY.

            (a) DEDUCTIBLE. Notwithstanding the foregoing, and except as
provided below, Smith & Wesson shall not be entitled to indemnification under
Section 7.1(a) until the total amount of the damages actually incurred by Smith
& Wesson for which it shall be entitled to indemnification exceeds $1,020,000
(the "Deductible Amount"), and then only the excess amounts above the Deductible
Amount shall be payable.

            (b) CAP. Smith & Wesson may recover for the indemnification provided
under Section 7.1(a) only up to a maximum aggregate amount of $4,000,000 and may
recover for the indemnification provided under Section 7.1(b) only up to a
maximum aggregate amount of $4,000,000 (the "Environmental Indemnity Cap
Amount"), it being understood by the parties that the Environmental Indemnity
Cap Amount includes any amounts paid from the Environmental Indemnity Escrow and
in no event shall such amounts be aggregated for purpose of determining the
maximum liability pursuant to Section 7.1(b).

            (c) PROPORTIONATE RESPONSIBILITY. Each Principal Stockholder shall
be responsible only for a portion of any indemnification payment proportionate
to such stockholder's ownership of Bear Lake Capital Stock.

            (d) SURVIVAL OF INDEMNITY. Any claims for indemnification under
Section 7.1(a) other than for Indemnified Environmental Losses must be made
within 18 months after the Effective Time. Any claims for indemnification under
Section 7.1(b) for Indemnified Environmental Losses must be made within 42
months after the Effective Time.

                                   SECTION 8.
                   APPOINTMENT OF STOCKHOLDERS' REPRESENTATIVE

      8.1 APPOINTMENT. Each Principal Stockholder does hereby irrevocably
appoint TGV Capital Partners as such stockholder's true and lawful
attorney-in-fact and agent, with full power of substitution or resubstitution,
to act solely and exclusively on behalf such stockholder with respect to any
matters relating to this Agreement (the Stockholders'

                                       33
<PAGE>

Representative"). All action required to be taken by any or all of the Principal
Stockholders in connection with this Agreement, (including, without limitation,
the giving and receiving of all notices, consents, and waivers and the execution
and delivery of any documents, including the execution and delivery of any
agreement) shall be taken by the Stockholders' Representative, and Smith &
Wesson and Bear Lake shall be entitled to rely on all actions taken or
authorized by the Stockholders' Representative as being the binding acts of the
Principal Stockholders and any of them. With respect to all such actions, the
Stockholders' Representative shall only take or authorize such actions approved
orally or in writing by the Principal Stockholders holding a majority of the
outstanding Bear Lake Capital Stock immediately prior to the Effective Time. The
Stockholders' Representative shall not have any duties or responsibilities
except those expressly set forth in this Agreement, and no implied covenants,
functions, responsibilities, duties, obligations, or liabilities shall be read
into this Agreement or shall otherwise exist against the Stockholders'
Representative.

      8.2 RELIANCE BY STOCKHOLDERS' REPRESENTATIVE. The Stockholders'
Representative shall be entitled to rely, and shall be fully protected in
relying, upon any statements furnished to it by any Principal Stockholder or
Bear Lake, or any other evidence deemed by the Stockholders' Representative to
be reliable, and the Stockholders' Representative shall be entitled to act on
the advice of counsel selected by it. The Stockholders' Representative shall be
fully justified in failing or refusing to take any action under this Agreement
unless the Stockholders' Representative shall have received such advice or
concurrence of the Principal Stockholders as the Stockholders' Representative
deems appropriate or shall have been expressly indemnified to its satisfaction
by the Principal Stockholders against any and all liability and expense that the
Stockholders' Representative may incur by reason of taking or continuing to take
any such action. The Stockholders' Representative shall in all cases be fully
protected in acting, or refraining from acting, under this Agreement in
accordance with a request of Principal Stockholders owning a majority of the
outstanding Bear Lake Capital Stock immediately prior to the Effective Time, and
such request, and any action taken or failure to act pursuant thereto, shall be
binding upon all of the Principal Stockholders.

      8.3 EXPENSES OF STOCKHOLDERS' REPRESENTATIVE. The Stockholders'
Representative shall be entitled to retain counsel and to incur such expenses
(including court costs and reasonable attorneys' fees and expenses) as the
Stockholders' Representative deems to be necessary or appropriate in connection
with the Stockholders' Representative performance of the Stockholders'
Representative's obligations under this Agreement, and all such fees and
expenses incurred by the Stockholders' Representative shall be borne by the
Principal Stockholders severally in accordance with each Principal Stockholders'
percentage ownership in Bear Lake Capital Stock.

      8.4 INDEMNIFICATION. The Principal Stockholders hereby agree severally to
indemnify the Stockholders' Representative (in its capacity as such) ratably
according to their respective ownership of Bear Lake Capital Stock against, and
to hold the Stockholders' Representative (in the Stockholders' Representative
capacity as such) harmless from, any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses, or disbursements
of whatever kind that may at any time be imposed upon, incurred by, or asserted
against the Stockholders' Representative in such capacity in any way relating to
or arising out of the Stockholders' Representative actions or failures to take
action pursuant to this Agreement or

                                       34
<PAGE>

in connection herewith in such capacity; provided, that no Principal Stockholder
shall be liable for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses, or
disbursements resulting solely from the gross negligence or willful misconduct
of the Stockholders' Representative. The agreements in this Section 8 shall
survive termination of this Agreement.

      8.5 CONTRIBUTION. To the extent this Agreement provides that the Principal
Stockholders shall be liable to personally pay any cost, expense, or other
liability, the Principal Stockholders shall share such payment in accordance
with their respective percentage ownership of Bear Lake Capital Stock, and shall
reimburse each other as necessary to give effect to the intent of this
provision.

      8.6 APPROVAL. The adoption of this Agreement and the approval of the
Merger by the Bear Lake's stockholders in accordance with the Delaware General
Corporation Law shall also constitute approval of all of the arrangements
relating hereto, including, without limitation, the appointment of the
Stockholders' Representative.

                                   SECTION 9.
                                     GENERAL

      9.1 INDEMNITY AGAINST FINDERS. Each party hereto shall indemnify and hold
the other parties harmless against any claim for finders' fees based on alleged
retention of a finder by it.

      9.2 CONTROLLING LAW. This Agreement, and all questions relating to its
validity, interpretation, performance, and enforcement, shall be governed by and
construed in accordance with the laws of the state of Delaware, notwithstanding
any Delaware or other conflict-of-law provisions to the contrary. Each of the
parties hereto irrevocably submits to the exclusive jurisdiction of the courts
of the state of Delaware located in New Castle County and the United States
District Court for the District of Delaware for the purpose of any suit, action,
proceeding or judgment relating to or arising out of this Agreement and the
transactions contemplated hereby. Service of process in connection with any such
suit, action, or proceeding may be served on each party hereto anywhere in the
world by the same methods as are specified for the giving of notices under this
Agreement. Each of the parties hereto irrevocably consents to the jurisdiction
of any such court in any such suit, action, or proceeding and to the laying of
venue in such court. Each party hereto irrevocably waives any objection to the
laying of venue of any such suit, action or proceeding brought in such courts
and irrevocably waives any claim that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient forum. EACH OF THE
PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION
WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED
SPECIFICALLY AS TO THIS WAIVER.

      9.3 NOTICES. All notices, requests, consents, demands, and other
communications under this Agreement shall be in writing and shall be deemed to
have been duly given and received (a) if mailed by registered or certified mail,
three business days after deposit in the United States mail, postage prepaid,
return receipt requested; (b) upon confirmation of

                                       35
<PAGE>

a receipt of a facsimile or e-mail transmission; (c) if hand delivered, upon
delivery against receipt or upon refusal to accept the notice; or (d) if
delivered by a standard overnight courier, one business day after deposit with
such courier, postage prepaid, in each case, addressed to such party at the
address set forth below:

                                    If to Smith & Wesson or SWAC:

                                    Smith & Wesson Holding Corporation
                                    2100 Roosevelt Avenue
                                    Springfield, Massachusetts 01104-1606
                                    Attention:  Michael F. Golden
                                    Phone:  (413) 747-3349
                                    Fax:  (413) 739-8528
                                    E-mail: mgolden@smith-wesson.com

                                    with a copy given in the manner
                                    prescribed above, to:

                                    Greenberg Traurig, LLP
                                    2375 E. Camelback Road, Suite 700
                                    Phoenix, Arizona 85016
                                    Attention: Robert S. Kant, Esq.
                                    Phone: (602) 445-8000
                                    Fax: (602) 445-8100
                                    E-mail: kantr@gtlaw.com

                                    If to Bear Lake or Principal Stockholders:

                                    c/o TGV Capital Partners
                                    24 Corporate Plaza, Suite 100
                                    Newport Beach, California 92660
                                    Attention: Geoffrey Moore and Mitchell Vance
                                    Phone: (949) 720-4679
                                    Fax:  (949) 720-9481
                                    E-mail: gmoore@tgvcapital.com
                                            mvance@tgvcapital.com

                                    with a copy given in the manner
                                    prescribed above, to:

                                    Stradling Yocca Carlson & Rauth
                                    660 Newport Center Drive, Suite 1600
                                    Newport Beach, California 92660
                                    Attention:  Michael E. Flynn, Esq.
                                    Phone: (949) 725-4245
                                    Fax: (949) 725-4100
                                    E-mail: mflynn@sycr.com

                                       36
<PAGE>

  Any party may alter the address to which communications or copies are to
be sent by giving notice to such of change of address in conformity with the
provisions of this paragraph for the giving of notice.

      9.4 BINDING NATURE OF AGREEMENT; NO ASSIGNMENT. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that no party may assign or transfer its rights
or obligations under this Agreement without the prior written consent of the
other parties hereto.

      9.5 ENTIRE AGREEMENT. This Agreement and the Confidentiality Agreement,
dated August 3, 2006, by and between Bear Lake and Smith & Wesson, contain the
entire understanding among the parties hereto with respect to the subject matter
hereof, and supersede all prior and contemporaneous agreements and
understandings, inducements, or conditions, express or implied, oral or written,
except as herein or therein contained. The express terms hereof control and
supersede any course of performance or usage of the trade inconsistent with any
of the terms hereof. This Agreement may not be modified or amended other than by
an agreement in writing.

      9.6 PARAGRAPH HEADINGS. The paragraph headings in this Agreement are for
convenience only; they form no part of this Agreement and shall not affect its
interpretation.

      9.7 GENDER. Words used herein, regardless of the number and gender
specifically used, shall be deemed and construed to include any other number,
singular or plural, and any other gender, masculine, feminine, or neuter, as the
context requires.

      9.8 EXPENSES. Whether or not the Merger shall be consummated and except as
otherwise provided in this Agreement, each party will pay all costs and expenses
incident to its negotiation and preparation of this Agreement and to its
performance and compliance with all the agreements and conditions contained
herein on its part to be performed or complied with, including the fees,
expenses, and disbursements of its counsel, investment bankers, and independent
public accountants.

      9.9 VALIDITY. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, each of which shall remain in full force and
effect.

      9.10 COUNTERPARTS. For the convenience of the parties hereto, this
Agreement may be executed in any number of counterparts, each such counterpart
being deemed to be an original instrument, and all such counterparts shall
together constitute the same agreement.

      9.11 ATTORNEYS' FEES. If any action, suit, or other proceeding is
instituted to remedy, prevent, or obtain relief from a default in the
performance by either party of any of its obligations under this Agreement, the
prevailing party shall recover all of such party's attorneys' fees incurred in
each and every such action, suit, or other proceeding, including any and all
appeals or petitions therefrom. As used in this Section 9.11, attorneys' fees
shall be deemed to mean the full and actual costs of any legal services actually
performed in connection with the matters involved calculated on the basis of the
usual fee charged by the attorney performing such

                                       37
<PAGE>

services and shall not be limited to "reasonable attorneys' fees" as defined in
any statute or rule of court.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       38
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
15th day of December, 2006, as of the day and year first above written.

                                    SMITH & WESSON HOLDING CORPORATION

                                    /s/ Michael F. Golden
                                    --------------------------------------------
                                    By:  Michael F. Golden
                                    Its:  President and Chief Executive Officer

                                    SWAC-TC, INC.

                                    /s/ Michael F. Golden
                                    --------------------------------------------
                                    By:  Michael F. Golden
                                    Its:  President

                                    BEAR LAKE ACQUISITION CORP.

                                    /s/ Mitchell Vance
                                    --------------------------------------------
                                    By:  Mitchell Vance
                                    Its:  Executive Vice President

                                    TGV PARTNERS - TCA INVESTORS, LLC

                                    /s/ Mitchell Vance
                                    --------------------------------------------
                                    By:  Mitchell Vance
                                    Its:  Managing Member

                                    /s/ E.G. Kendrick, Jr.
                                    --------------------------------------------
                                    E.G. Kendrick, Jr.

                                    /s/ Gregory J. Ritz
                                    --------------------------------------------
                                    Gregory J. Ritz

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