Exhibit 10.47

EQUIPMENT LINE OF CREDIT NOTE

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

     FOR VALUE RECEIVED, the undersigned, Smith & Wesson Corp., a Delaware
corporation having a principal place of business at 2100 Roosevelt Avenue,
Springfield, Massachusetts (the “Borrower”), promises to pay to the order, of
Banknorth, N.A., a national banking association (“Lender”), having a usual place
of business at 1441 Main Street, Springfield, Massachusetts, , the principal sum
of Five Million and 00/100 Dollars ($5,000,000.00) or the (then) current balance
of Borrower’s Loan Account upon Equipment Loans made on or after the date
hereof, as reflected on the books, records and ledgers of the Lender, as well as
all other obligations of the Borrower which may at any time be due the Lender
(if such balances or obligations are other than Five Million and 00/100 Dollars
($5,000,000.00), together with interest thereon prior to the Conversion Date at
the rate hereinafter provided which shall be due and payable upon the
outstanding principal balance, in accordance with a certain Loan and Security
Agreement dated January 11, 2005 (the “Loan Agreement”). Prior to the Conversion
Date, interest shall be payable in arrears. It shall be calculated daily and
payable monthly, commencing thirty (30) days from the date hereof and thereafter
on the same day of each succeeding month, on the outstanding and unpaid
principal amount of Equipment Loans during the preceding month at a rate per
annum equal to:

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

B. For LIBOR Loan at a rate equal to the adjusted LIBOR Interest Rate, plus two
and one-half percent (2.50%) based upon the Interest Period selected by the
Borrower and confirmed in writing to the Borrower following Borrower’s request
for a LIBOR Loan or a conversion to a LIBOR Loan. Notwithstanding the forgoing,
the LIBOR Interest Rate for a LIBOR Loan shall be reduced to LIBOR, plus two and
one-quarter percent (2.25%) when Maximum Leverage is less than or equal to
2.00:1.00 and shall be further reduced to LIBOR, plus two percent (2.00%) at
such time when Maximum Leverage is equal to or less than 1.25:1.00.

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

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

1

--------------------------------------------------------------------------------

 

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

A. A variable rate of interest equal to the Lender’s one (1) month LIBOR rate,
plus two hundred fifty (250) basis points. Notwithstanding the forgoing, the
LIBOR Interest Rate for a LIBOR Loan shall be reduced to LIBOR, plus two and
one-quarter percent (2.25%) when Maximum Leverage is less than or equal to
2.00:1.00 and shall be further reduced to LIBOR, plus two percent (2.00%) at
such time when Maximum Leverage is equal to or less than 1.25:1.00.

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

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

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

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

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

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

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

2

--------------------------------------------------------------------------------

 

granted in the Loan Agreement.

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

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

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

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

     Borrower agrees that the Lender shall make Loan Advances to the Borrower
upon written or verbal authority of Borrower and deliver loan proceeds by direct
deposit to any demand deposit account of the Borrower with the Lender, or
otherwise, as so directed; and that all such Loans and Advances as evidenced
solely by the Lender’s books, ledgers and records shall represent binding
obligations of the Borrower hereunder.

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

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

3

--------------------------------------------------------------------------------

 

hereby evidenced, to the extent permitted by law.

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

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

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

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

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

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

4

--------------------------------------------------------------------------------

 

     Lender shall have the unrestricted right at any time and from time to time,
and without the consent of or notice to Borrower, to grant to one or more banks
or other financial institutions (each, a “Participant”) participating interests
in Lender’s obligation to lend hereunder and/or any or all of the loans held by
Lender hereunder. In the event of any such grant by Lender of a participating
interest to a Participant, whether or not upon notice to Borrower, Lender shall
remain responsible for the performance of its obligations hereunder and Borrower
shall continue to deal solely and directly with Lender in connection with
Lender’s rights and obligations hereunder. Bank may furnish any information
concerning Borrower in its possession from time to time to prospective
Participants, provided that Lender shall require any such prospective
Participant to agree in writing to maintain the confidentiality of such
information.

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

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

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

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

     This Note shall take effect as an instrument under seal.

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

5