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EXHIBIT 10.39
SMITH & WESSON HOLDING CORPORATION
LOCK-UP AGREEMENT
December 15, 2006
Smith & Wesson Holding Corporation
2100 Roosevelt Avenue
Springfield, Massachusetts 01104
Re:
Smith & Wesson Holding Corporation - Lock-Up Agreement
Dear Sirs:
In
connection with (i) the issuance by Smith & Wesson Holding
Corporation
(the "COMPANY") of up to $80,000,000 principal amount of its 4%
Convertible
Senior Notes due 2026 (the "NOTES") pursuant to the Indenture to be
dated
December 15, 2006 (the "INDENTURE") by and between the Company and
The Bank of
New York, as trustee, which Notes will among other things be
convertible into
shares of common stock, par value $.001 per share (the "COMMON
STOCK"), of the
Company (as converted the "CONVERSION SHARES," and together with
the Notes,
each, a "SECURITY" and collectively, the "SECURITIES"), and (ii)
the sale of the
Notes pursuant to the Securities Purchase Agreement entered into by
and among
the Company and the investors named on the Schedule of Buyers
attached thereto
(the "BUYERS"), on the date hereof (the "SECURITIES PURCHASE
AGREEMENT"), the
undersigned agrees that, commencing on the date hereof and ending
on the earlier
to occur of (1) the date the Closing Sale Price (as defined in the
Indenture) of
the Common Stock has exceeded 150% of the Conversion Price (as
defined in the
Indenture) for five (5) consecutive Trading Days (as defined in the
Indenture)
and (2) 90 days from the Closing Date (as defined in the Securities
Purchase
Agreement) (the "LOCK-UP PERIOD"), the undersigned will not,
without the written
consent of Buyers' that purchased a majority of the Notes on the
Closing Date
(the "MAJORITY BUYERS"), (A) sell, offer to sell, contract or agree
to sell,
hypothecate, hedge, pledge, grant any option to purchase, make any
short sale or
otherwise dispose of or agree to dispose of, directly or
indirectly, any shares
of Common Stock, owned directly by the undersigned (including
holding as a
custodian) or with respect to which the undersigned has beneficial
ownership (as
determined pursuant to Section 13(d) of the Securities Exchange Act
of 1934, as
amended, and the rules promulgated thereunder), or (B) enter into
any swap or
other arrangement that transfers to another, in whole or in part,
any of the
economic consequences of ownership of any shares of Common Stock,
owned directly
by the undersigned (including holding as a custodian) or with
respect to which
the undersigned has beneficial ownership within the rules and
regulations of the
Securities and Exchange Commission, whether any such transaction is
to be
settled by delivery of such securities, in cash or otherwise,
(collectively, the
"UNDERSIGNED'S SHARES").
This
Lock-Up Agreement shall not apply
