<PAGE>   1

                                                                     EXHIBIT 4.1


THESE SECURITIES (INCLUDING ANY UNDERLYING SECURITIES) HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR AN
EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.



                        PROMISSORY NOTE & LOAN AGREEMENT

                                     (MELBY)

$5,000,000                                                           May 6, 2001

                                                             Scottsdale, Arizona

      1. LOAN; ADVANCEMENT OF FUNDS. Subject to receipt of the funds to be
advanced to it hereunder, SAF-T-HAMMER CORPORATION, a Nevada corporation (the
"Company"), hereby promises to pay to the order of COLTON MELBY, at his offices
located at the address listed below ("Registered Holder"), or at such other
place as he shall designate to the Company in writing, in lawful money of the
United States of America, the principal amount of Five Million Dollars
($5,000,000) and to pay interest (computed on the basis of a 365-day year and
the actual number of days elapsed) on the unpaid principal amount hereof at the
Interest Rate (as defined below). The Company promises to pay the said principal
sum and interest in accordance with the terms of this Note (the "Note"). The
Registered Holder agrees to advance to the Company Five Million Dollars
($5,000,000) (the "Funds") on May 7, 2001, which advance shall be made via wire
transfer to Skadden, Arps, Slate, Meagher & Flom LLP accompanied solely by that
certain instruction attached hereto as Exhibit "D." The date of receipt by the
Company or pursuant to its direction of the Funds shall be the "Advancement
Date."

      2. ISSUANCE OF NOTE. This Note, the Warrant and the related documents have
been issued by the Company pursuant to the authorization of the Board of
Directors of the Company. The Note, together with any notes from time to time
issued in replacement thereof, whether pursuant to transfer and assignment or
otherwise, are collectively referred to herein as the "Note."

      3. PAYMENT. Interest shall accrue and be computed at the rate of twelve
percent (12%) per annum (the "Interest Rate") on the outstanding principal
balance

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of this Note for the period from the Advancement Date until the date of such
principal is fully repaid (the "Repayment Date"). Unless earlier repaid, on May
15, 2002 (the "Termination Date"), the Company shall pay the Registered Holder
all unpaid principal and interest on this Note. The Company may prepay this
Note, in whole or in part, at any time. On the later of five business days after
the consummation of the SW Transaction (as defined below) or May 15, 2001, the
Company shall prepay to the Registered Holder $600,000 (the "Interest
Prepayment"), which shall be deemed to be a prepayment of interest for the first
year. In the event that all or any portion of the principal balance of the Note
is prepaid prior to the first anniversary of the Advancement Date, any overage
between the Interest Prepayment and the Actual Interest Amount (as defined
below) shall be credited as a repayment of principal on the Repayment Date.
"Actual Interest Amount" shall mean the amount of interest computed at the
Interest Rate on the outstanding balance of the Note, from time to time, for the
period from the Advancement Date through the Repayment Date. The "Repayment
Date" shall mean the date the outstanding balance of this Note is fully repaid.
The Interest Rate shall automatically increase to fifteen percent (15%) per
annum without notice or act by any party upon an Event of Default (as defined
below).

      4. SW TRANSACTION. The Company agrees to use the Funds solely for the
consummation of its acquisition of Smith & Wesson Corp. (the "SW Transaction").
In the event the SW Transaction has not been consummated within five (5)
business days of the Advancement Date, then the Registered Holder may terminate
and rescind the transactions contemplated hereby by written notice to the
Company ("Rescission Request"). Upon receipt of a Rescission Request, the
Company shall repay the Funds to the Registered Holder together with accrued
interest. Notwithstanding any other provision of this Note to the contrary, in
the event the Registered Holder exercises his right to make the Rescission
Request, then the Company's sole obligation to the Registered Holder shall be to
repay the Funds along with the accrued interest as set forth in this paragraph 4
and the remainder of the transactions contemplated hereby shall be void and of
no further force or effect.

      5. SECURITY; WARRANT; REGISTRATION RIGHTS AGREEMENT. Concurrently with the
closing of the SW Transaction, this Note will be secured pursuant to the terms
of the Stock Pledge Agreement between the Registered Holder and the Company,
substantially in the form attached hereto as Exhibit "B" (the "Stock Pledge
Agreement"). The Company shall execute and deliver to the Registered Holder the
Stock Pledge Agreement concurrently with the closing of the SW Transaction. The
collateral pursuant to the Stock Pledge Agreement shall be referred to as the
"Collateral". Concurrently with the advancement of the Funds, the Company will
issue to the Registered Holder a Common Stock Purchase Warrant

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(the "Warrant") to purchase Seven Million Ninety-four Thousand Five Hundred
(7,094,500) shares of common stock of the Company, par value $0.001 ("Shares"),
which shall be substantially in the form attached hereto as Exhibit "A."
Concurrently with the advancement of the Funds, the Company and the Registered
Holder shall enter into a Registration Rights Agreement substantially in the
form attached hereto as Exhibit "C" (the "Registration Rights Agreement"). In
the event the Registered Holder makes the Rescission Request, each of the
Warrant and Registration Rights Agreement shall immediately terminate and,
without action by any party, be of no further force or effect. As a condition
precedent to the Rescission Request, the Registered Holder shall deliver the
Warrant and Registration Rights Agreement to the Company for cancellation.

            6. REPRESENTATIONS AND COVENANTS OF THE COMPANY. The Company
represents, warrants and covenants the following:

            (a) As of the date of this Note, the Company is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Nevada and the Company has all requisite corporate power and authority to
carry on its business as presently conducted, and to carry out the transactions
contemplated in this Note and the other agreements contemplated herein. The
Company has duly authorized and executed this Note and the Warrant, and shall
duly authorize and execute any related documents required to be delivered by the
Company hereafter.

            (b) As of the date of this Note, the authorized capital stock of the
Company consists of 100,000,000 shares of Company Common Stock, of which
17,006,163 shares are issued and outstanding on the date of this Note, and no
shares of preferred stock. Such issued and outstanding shares of Company Common
Stock are validly issued, fully paid and nonassessable. As of the date of this
Note, 11,550,000 shares of Common Stock have been reserved for issuance pursuant
to outstanding warrants or other rights to purchase shares of Common Stock
issued by the Company.

            (c)   The Company shall not make any material change in the
business of the Company or Smith & Wesson Corp. (the "Subsidiary") nor
any change in the principal place of business of the Company or the
Subsidiary.

            (d) Except for any security interests held by the Registered Holder,
the Company has or will have as of the consummation of the SW Transaction, fee
simple title to the Collateral free from any lien, security interest,
encumbrance or claim ("Lien").

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            (e) The Company will, at the Company's expense, keep the Collateral
free from any other Liens and defend and hold the Registered Holder harmless
from any action which may adversely affect the Registered Holder's security
interest or the Company's title to the Collateral.

            (f) The Company will execute and/or deliver to the Registered Holder
all documents the Registered Holder reasonably considers necessary or convenient
to perfect and maintain Registered Holder's security interest in the Collateral
and its proceeds, including, but not limited to, uniform commercial code
financing statements. The Registered Holder may file or record in the
appropriate public offices in all jurisdictions in which the Collateral may be
located and all such documents required or permitted by law to be filed or
recorded.

            (g) Without the prior written consent of Colton Melby, until the
repayment in full of all amounts due under this Note, the Company agrees that:


                  (i) it shall, and shall cause the Subsidiary and its
subsidiaries (the "SW Group") to operate only in the ordinary course of business
and consistent with past practice;

                  (ii) the Company shall not cause it or any member of the SW
Group to, nor permit the Company or any member of the SW Group to, loan or
otherwise transfer any cash or other assets out of the SW Group to the Company
or to any Affiliate (as defined in the Stock Purchase Agreement between the
Company and Tomkins Corporation to be executed in connection with the SW
Transaction (the "SW SPA")) of the Company; provided, that dividends payable by
the Subsidiary to the Company in an amount not in excess of $600,000 in the
first twelve (12) month period following the closing of the SW Transaction and
not in excess of $1,800,000 per annum thereafter, may be paid subject to
applicable law, and this Section 7(g) shall not prohibit any other transactions
which are expressly permitted under other provisions of this Note; and

                  (iii) the Company shall not cause any member of the SW Group
to, nor permit any member of the SW Group to pay any employee, officer or
director of the Company or any member of the SW Group a salary, bonus or other
compensation that is not a reasonable salary, bonus, stock options or other
stock rights or other compensation.

<PAGE>   5

            (h) Without the prior written consent of Colton Melby, until the
repayment in full of all amounts due under this Note, the Company agrees that
the Company shall not cause any member of the SW Group to, nor permit any member
of the SW Group to, directly or indirectly, declare, order, pay any sum for, or
make, any Restricted Payment (as defined in the SW SPA).

            (i) Without the prior written consent of Colton Melby, the Company
agrees that, until repayment of this Note:

                  (i) the Company shall not cause itself or any member the SW
Group to, nor permit itself or any member of the SW Group to, directly or
indirectly, create, incur, assume or guaranty, or otherwise become or remain
directly or indirectly liable with respect, to any Indebtedness (as defined in
the SW SPA), except for this Note, obligations related to the consummation of
the SW Transaction, obligations of the Company and the SW Group existing as of
the closing of the SW Transaction and Permitted Indebtedness ("Permitted
Indebtedness" means Indebtedness incurred in the ordinary course of business
(which ordinary course may include the leasing of equipment for the business
conducted in the ordinary course by the Company and the SW Group) of the Company
and the SW Group in connection with the purchase, acquisition or lease of
equipment for use in the business of the Company and the SW Group, the purchase
or acquisition of inventory or the manufacture of products or delivery of
services.); and

                  (ii) the Company shall not cause the Company or any member of
the SW Group to, nor permit the Company or any member of the SW Group to make
any payment or prepayment of principal of, pay any premium, if any, or interest
on, or pay any redemption, purchase, retirement, defeasance (including
in-substance or legal defeasance), sinking fund or similar payment with respect
to, any Indebtedness other than Indebtedness permitted by Section 6(i)(i).

            (j) Without the prior written consent of Colton Melby, the Company
agrees that the Company shall not cause itself or the SW Group, nor permit
itself or any member of the SW Group to:

                  (i) enter into any transaction of merger or consolidation,
convey, sell, lease or sub-lease (as lessor or sublessor), transfer or otherwise
dispose of, or grant a Lien over, in one transaction or a series of
transactions, all or any part of its business, assets or property of any kind
whatsoever, whether real, personal or mixed and whether tangible, intangible or
contingent, whether now owned or hereafter acquired until the Note has been
repaid;

<PAGE>   6

                  (ii) liquidate, wind-up or dissolve itself, or suffer any
liquidation or dissolution of, in one transaction or a series of transactions,
all or any part of its business, assets or property of any kind whatsoever,
whether real, personal or mixed and whether tangible, intangible or contingent,
whether now owned or hereafter acquired, until the Note has been repaid; and

                  (iii) acquire by purchase, or otherwise, the property or fixed
assets of, the business of, or stock or other evidence of beneficial ownership
of, any Person (as defined in the SW SPA) or any division or line of business or
other business unit of any Person until the Note has been repaid.

            (k) Without the prior written consent of Colton Melby, until the
repayment in full of all amounts due under the Note, the Company agrees that it
shall not cause the Company or any member of the SW Group to, nor permit the
Company or any member of the SW Group to, directly or indirectly, enter into or
permit to exist any transaction (including the purchase, sale, lease or exchange
of any property or the rendering of any service) with any holder of 5% or more
of any class of capital stock of the Company or the SW Group or with any
Affiliate of the Company, or of any such holder (each, a "Restricted Party")
except for Permitted Affiliate Transactions. "Permitted Affiliate Transactions"
shall mean (i) "arms-length" transactions between the Company and the Subsidiary
which in the aggregate do not exceed $500,000 and (ii) other "arms-length"
transactions between the Company or any member of the SW Group, on the one hand,
and each Restricted Party, on the other, where the aggregate amount of all
transactions between any two such parties does not exceed $50,000.

       (l) The Company will pay before delinquency all taxes, governmental
charges, assessments or liens now or hereafter imposed on the Collateral;


            (m) The Company shall deliver to the Registered Holder with respect
to the Company and the Subsidiary:

                  (i) as soon as practicable, but in any event within ninety
(90) days after the end of each fiscal year of the Company and the Subsidiary,
an income statement for such fiscal year, a balance sheet and statement of
shareholder's equity as of the end of such year, and a statement of cash flows
for such year, such year-end financial reports to be in reasonable detail,
prepared in accordance with generally accepted accounting principles ("GAAP"),
and audited and certified by Stonefield Josephson or independent public
accountants of nationally recognized standing;

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                  (ii) as soon as practicable, but in any event within
forty-five (45) days after the end of each of the first three (3) quarters of
each fiscal year of the Company and the Subsidiary, an unaudited income
statement, statement of cash flows for such fiscal quarter and an unaudited
balance sheet as of the end of such fiscal quarter.

                  (iii) within thirty (30) days of the end of each month, an
unaudited income statement and statement of cash flows and balance sheet for the
Company and the Subsidiary for and as of the end of such month, in reasonable
detail;

                  (iv) with respect to the financial statements called for in
subsections (ii) and (iii) of this Section, an instrument executed by the Chief
Financial Officer or President of the Company or the Subsidiary certifying that
such financials were prepared in accordance with GAAP consistently applied with
prior practice for earlier periods (with the exception of footnotes that may be
required by GAAP) and fairly present the financial condition of the Company and
the Subsidiary and their results of operation for the period specified, subject
to year-end audit adjustment; and

                  (v) such other information relating to the financial
condition, business, prospects or corporate affairs of the Company and the
Subsidiary as the Registered Holder may from time to time reasonably request.

            7.    NEGATIVE COVENANTS OF THE COMPANY.  The Company shall
not, nor shall it cause the Subsidiary or any member of the SW Group,
without the prior written consent of Colton Melby to:

            (a)   Sell, lease or transfer any portion of the Collateral;

            (b)   Guaranty the Indebtedness of any third party;

            (c)   Make any capital expenditure in excess of $500,000;

            8. PREEMPTIVE RIGHTS. Subject to the terms and conditions specified
in this Section 8, the Company hereby grants to the Registered Holder a
preemptive right with respect to future sales by the Company of its New Shares
(as hereinafter defined). For purposes of exercising the rights to acquire New
Shares granted under this Section 8 only, the Registered Holder includes any
affiliates of the Registered Holder. The Registered Holder shall be entitled to
apportion the right of first offer hereby granted it among itself and its
affiliates in such proportions as it deems appropriate. Each time the Company
proposes to offer any shares of, or

<PAGE>   8

securities convertible into or exchangeable or exercisable for any shares of,
any class of its capital stock ("New Shares"), the Company shall first make an
offering of such New Shares to the Registered Holder in accordance with the
following provisions:

            (a) The Company shall deliver a notice ("NOTICE") to the Registered
Holder stating (A) its bona fide intention to offer such New Shares, (B) the
number of such New Shares to be offered, and (C) the price and terms upon which
it proposes to offer such New Shares.

            (b) By written notification received by the Company, within twenty
(20) calendar days after receipt of the Notice, the Registered Holder may elect
to purchase or obtain, at the price and on the terms specified in the Notice, up
to that portion of such New Shares that equals the proportion that the number of
shares of Common Stock issued and held, or issuable upon exercise of any rights
to purchase Common Stock of the Company then held, by the Registered Holder
bears to the total number of shares of Common Stock of the Company.

            (c) If all New Shares that the Registered Holder is entitled to
obtain pursuant to Section 8(b) are not elected to be obtained as provided in
Section 8(b) hereof, the Company may, during the one hundred twenty day (120)
period following the expiration of the period provided in Section 8(c) hereof,
offer the remaining unsubscribed portion of such New Shares to any person or
persons at a price not less than, and upon terms no more favorable to the
offeree than those specified in the Notice. If the Company does not enter into
an agreement for the sale of the New Shares within such period, or if such
agreement is not consummated within one hundred twenty (120) days of the
execution thereof, the right provided hereunder shall be deemed to be revived
and such New Shares shall not be offered unless first reoffered to the
Registered Holder in accordance herewith.

The right of first offer in this Section 8 shall not be applicable to the
issuance or sale of shares of Common Stock (or options therefor) to employees,
directors and consultants for the primary purpose of soliciting or retaining
their services pursuant to Board-approved stock purchase or stock option plans,
including options granted prior to the date of this Note. This Section 8 shall
survive the repayment of the Note for a period of six (6) years.

      9.    EVENTS OF DEFAULT. The following shall each constitute an
"Event of Default" by the Company under this Note:

<PAGE>   9

      (a) default in the due and punctual payment of interest upon or principal
of the Note as and when the same becomes due and payable either at maturity or
otherwise; or

      (b) with respect to any other covenant or agreement contained in the Note,
failure on the part of the Company to duly observe or perform covenants or
agreements; which failure then remains uncured for a period of fifteen (15) days
after notice from the party claiming the default; or

      (c) a decree or order by a court having jurisdiction has been entered
adjudging the Company as bankrupt or insolvent, or approving a petition seeking
reorganization of the Company under any applicable bankruptcy law and such
decree or order has continued undischarged or unstayed for a period of sixty
(60) days; or a decree or order of a court having jurisdiction for the
appointment of a receiver or liquidator or trustee or assignee in bankruptcy or
insolvency of the Company or of all or substantially all of its property, or for
the winding-up or liquidation of its affairs, has been entered, and has remained
in force undischarged or unstayed for a period of thirty (30) days; or

      (d) the Company institutes proceedings to be adjudicated a voluntary
bankrupt, or consents to the filing of a bankruptcy proceeding against it, or
files a petition or answer or consent seeking reorganization under applicable
law, or consents to the filing of any such petition or to the appointment of a
receiver or liquidator or trustee or assignee in bankruptcy or insolvency of it
or of all or substantially all of its property, or makes an assignment for the
benefit of creditors, or admits in writing its inability to pay its debts
generally as they become due; or if the Company shall suffer any writ of
attachment or execution or any similar process to be issued or levied against it
or any significant part of its property which is not released, stayed, bonded or
vacated within sixty (60) days after its issue or levy; or if the Company takes
corporate action in furtherance of any of the aforesaid purposes or conditions;
or

      (e) any declared default of the Company or the Subsidiary under any
Indebtedness that gives the holder the right to accelerate such Indebtedness,
which Indebtedness is not cured within fifteen (15) days after any applicable
grace or cure periods and which is in excess of $200,000; or

      (f) any material adverse change in the business, operations, assets,
liabilities or financial condition of the Company or the Subsidiary which is not
cured within fifteen (15) days after the Registered Holder has provided the
Company with written notice thereof; or

<PAGE>   10

       (g) the adoption of any plan of liquidation, dissolution or winding up of
the Company or the Subsidiary, or the involuntary occurrence thereof; or

       (h) a Change of Control as defined in the SW SPA.

Unless the principal of the Note has already become due and payable, upon an
Event of Default, unless such Event of Default has already been remedied, the
Registered Holder by notice in writing to the Company, may declare the principal
of the Note then outstanding and the interest accrued thereof, if not already
due and payable and if not already paid, to be due and payable immediately, and
upon any such declaration the same shall become and shall be immediately due and
payable.

      10. TRANSFERABILITY. This Note is not transferable, in whole or in part
without the prior written consent of the Company (in its reasonable discretion),
except that the Registered Holder may, upon thirty (30) days prior written
notice to the Company but without the prior written consent of the Company,
assign all but not less than all of this Note to (a) an entity as to which the
Registered Holder is the beneficial owner of a least a majority of the equity
therein and the Registered Holder has voting control thereover, (b) a member of
the Registered Holder's family or a trust for the benefit of the Registered
Holder or (c) a successor by inheritance or intestate succession (each, a
"Permitted Transferee").

      11.   REMEDIES CUMULATIVE. The rights, powers and remedies given
to the payee under this Note shall be in addition to all rights, powers
and remedies given to it by virtue of any document or instrument
executed in connection herewith, or any statute or rule of law.

      12. NON-WAIVER. Any forbearance, failure or delay by the payee in
exercising any right, power or remedy under this Note, any documents or
instruments executed in connection therewith or otherwise available to the payee
shall not be deemed to be a waiver of such right, power or remedy, nor shall any
single or partial exercise of any right, power or remedy preclude the further
exercise thereof.

      13. MODIFICATIONS AND WAIVERS. No modification or waiver of any provision
of this Note or any documents or instruments executed in connection therewith is
effective unless it is in writing and signed by the payee, and any such
modification or waiver shall apply only in the specific instance for which
given.

      14. ATTORNEY'S FEES. If this Note shall not be paid when due and shall be
placed by the Registered Holder hereof in the hands of an attorney for
collection, through legal proceedings or otherwise, or in the event the
Registered Holder fails to

<PAGE>   11

perform as required hereby and an action is brought by the non-breaching party
with respect thereto, the breaching party shall pay attorney's fees to the
non-breaching party hereof, together with reasonable costs and expenses of
collection or enforcement incurred in connection with any such action.

       15. ENFORCEMENT; SPECIFIC PERFORMANCE.

      (a) In case any one or more Events of Default of the Company or in the
event of a breach or default by the Registered Holder hereunder shall occur and
be continuing, in addition to the Registered Holder's rights and remedies under
the Pledge Agreement, the non-breaching party may proceed to protect and enforce
the rights of such non-breaching party by an action at law, suit in equity or
other appropriate proceeding, whether for the specific performance of any
agreement contained herein or for an injunction against a violation of any of
the terms hereof or thereof, or in aid of the exercise of any power granted
hereby or thereby or by law.

      (b) The parties hereto expressly agree that they may not have adequate
remedies at law if the parties do not perform their obligations under this Note.
Upon a breach of the terms or covenants of this Note by either party, the other
party shall, each in addition to all other remedies, be entitled to obtain
injunctive relief, and an order for specific performance of the obligations
hereunder.

      16. CHOICE OF LAW. This Note and the rights and obligations of the parties
hereto, shall be governed, construed and interpreted according to the laws of
the State of Washington. The Company agrees that any final judgment after
exhaustion of all appeals or the expiration of time to appeal in any such action
or proceeding shall be conclusive and binding, and may be enforced in any
federal or state court in the United States by suit on the judgment or in any
other manner provided by law. Nothing contained in this Note shall affect or
limit the right of the Registered Holder to serve any process or notice or
motion or other application in any other manner permitted by law, or limit or
affect the right of the Registered Holder to bring any action or proceeding
against the Company or any of its property in the courts of any other
jurisdiction. The Company hereby consents to the jurisdiction of the federal
courts whose districts encompass any part of the City of Seattle or the state
courts of the State of Washington sitting in the City of Seattle in connection
with any dispute arising under this Note, and hereby waives, to the maximum
extent permitted by law, any objection, including any objections based on forum
non conveniens, to the bringing of any such proceeding in such jurisdictions.

      17. REIMBURSEMENT OF FEES. The Company shall pay or reimburse the legal
fees and expenses of Perkins Coie LLP and the accounting fees and expenses of
Moss Adams which are incurred by the Registered Holder in connection

<PAGE>   12

with the negotiation and delivery of this Note and the documents to be executed
and delivered in accordance herewith and with the consummation of the SW
Transaction.

      18. OBSERVER RIGHTS. As long as Colton Melby or any Permitted Transferee
holds rights to acquire (pursuant to the Warrant) or owns more than five percent
(5%) of the outstanding Company Common Stock (on a fully diluted basis), the
Company shall invite Colton Melby or his representative to attend all meetings
of the Boards of Directors of the Company and the Subsidiary in a nonvoting
observer capacity, and shall provide such observer copies of all notices,
minutes, consents and all other materials that it provides to its directors,
provided (a) that such observer shall first execute a commercially reasonable
Confidentiality Agreement with respect thereto and (b) that the foregoing
observer rights shall not apply with respect to the Company if Colton Melby or
his representative is a member of its Board of Directors and shall not apply to
the Subsidiary if Colton Melby is a member of its Board of Directors.

      19. WRITTEN CONSENT OF COLTON MELBY NOT NECESSARY UNDER CERTAIN
CIRCUMSTANCES. Notwithstanding anything else contained herein to the contrary,
the prior written consent of Colton Melby shall not be required with respect to
the matters described in Sections 6 and 7 of this Note if, after the Company
gives Colton Melby written notice of the proposed matter (which notice shall
summarize the proposed transaction), ten (10) business days elapse without the
Company receiving a written notice from Colton Melby stating that he is
withholding such consent.

       20. PAYEE DEFINED. The term "payee" as used herein shall be deemed to
include the payee and its successors, endorsees and assigns.

       21. WAIVER OF PRESENTMENT, ETC. The Company hereby waives presentment,
demand for payment, protest, notice of protest and notice of non-payment hereof.

       22. CONSTRUCTION. The terms of this Note constitute the written
expression of the mutual agreement of the parties and shall be construed
neutrally and not for or against either party. Whenever a noun or pronoun is
used in this Note in the singular and when required by the context, the same
shall include the plural, and the masculine gender shall include the feminine
and neuter genders and vice versa. The term "person" shall include any
individual, entity, trust or association. The headings in this Note are inserted
for convenience; the provisions of this Note shall control in determining the
intent hereof.

       23. HOLIDAYS. If this Note or any installment hereof becomes due and
payable on a Saturday, Sunday or public holiday under the laws of the State of
Arizona, the due date hereof shall be extended to the next succeeding business
day

<PAGE>   13

and interest shall be payable at the Interest Rate during such extension. All
payments received by the Registered Holder shall be applied first to the payment
of all accrued interest payable hereunder.

       24. NOTICES. Except as otherwise expressly provided for herein, all
notices, requests and other communications to any party hereunder shall be in
writing (including facsimile or similar writing) and shall be given to such
party at its address or facsimile number set forth below, or such other address
or facsimile number as such party may hereinafter specify for the purpose (in
the case of the Company, by notice in accordance herewith to the Registered
Holder or, in the case of the Registered Holder, by notice in accordance
herewith to the Company). Each such notice, request or other communication shall
be effective (i) if given by facsimile, when such facsimile is transmitted to
the facsimile number specified in this SECTION 24 or, (ii) if given by mail, 48
hours after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid or, (iii) if given by any other means,
when delivered at the address specified in this SECTION 24. Notices shall be
addressed as follows:

      If to the Company:
      Saf-T-Hammer Corporation
      14500 N. Northsight Boulevard, Suite 221
      Scottsdale, AZ 85260
      Attn: Robert Scott, President
      Facsimile No.: (480) 949-9747

      With a copy to:
      Stephen R. Boatwright, Esq.
      Gammage & Burnham, PLC
      2 N. Central Ave., 18th floor
      Phoenix, AZ 85004-2322
      Facsimile No.: (602) 256-4475

      If to the Registered Holder:
      Colton Melby
      20400 92nd Ave. S
      Kent, WA 98031

      With a copy to:
      Gail Runnfeldt, Esq.
      Perkins Coie LLP
      1201 Third Ave, Suite 4800

<PAGE>   14

      Seattle, WA 98101
      Facsimile No.: (206) 583-8500


      If a notice or communication is delivered in the manner provided above, it
is duly given, whether or not the addressee receives it.

      IN WITNESS WHEREOF, the parties have caused this Promissory Note & Loan
Agreement to be effective as of the date first written above.

      Oral agreements or oral commitments to loan money, extend credit, or to
forbear from enforcing repayment of debt are not enforceable under Washington
law.

                                       SAF-T-HAMMER CORPORATION, a
                                       Nevada
                                       corporation


                                       By: ___________________________________
                                       Name: _________________________________
                                       Title: ________________________________

Agreed to and accepted by:



By: __________________________
    Colton Melby