Exhibit 10.3


PROMISSORY NOTE


$50,000,000.00


July 20, 2007


Force Protection Industries, Inc.


9801 Highway 78


Ladson, South Carolina
29456


Force Protection, Inc.


9801 Highway 78


Ladson, South Carolina
29456


Force Protection Technologies, Inc.


9801 Highway 78


Ladson, South Carolina 29456


(Individually and collectively, “Borrower”)


Wachovia Bank, National Association


177 Meeting Street, Suite 450


Charleston, South Carolina 29401


(Hereinafter referred to as the “Bank”)


Borrower
promises to pay to the order of Bank, in lawful money of the United States of
America by debiting a direct deposit account as herein provided, the sum of Fifty Million and No/100 Dollars ($50,000,000.00) or such sum as may be advanced and outstanding
from time to time, with interest on the unpaid principal balance at the rate
and on the terms provided in this Promissory Note (including all renewals,
extensions or modifications hereof, this “Note”).


LOAN
AGREEMENT.  This Note
is subject to the provisions of that certain Loan Agreement between Bank and
Borrower of even date herewith, as modified from time to time.


LINE OF CREDIT.  Borrower may borrow, repay and reborrow, and,
upon the request of Borrower, Bank shall advance and readvance under this Note
from time to time until the maturity hereof (each an “Advance” and together the
“Advances”), so long as the total principal balance outstanding  under this  Note at any
one time does not exceed the principal amount stated on the face of this  Note, subject to the limitations described in any loan agreement
to which this Note is subject.  Bank’s
obligation to make Advances under this  Note shall
terminate if Borrower is in Default. As of the date of each proposed Advance,
Borrower shall be deemed to represent that each representation made in the Loan
Documents is true as of such date, except to the extent of changes in the
ordinary course of business that singly or in the aggregate are not materially
adverse and to the extent such representations and warranties expressly relate
to an earlier date.


If Borrower subscribes to Bank’s cash management services and such
services are applicable to this line of credit, the terms of such service shall
control the manner in which funds are transferred between the applicable demand
deposit account and the line of credit for credit or debit to the line of
credit.


USE OF
PROCEEDS.  Borrower
shall use the proceeds of the loan(s) evidenced by this Note for the commercial
purposes of Borrower, as follows:  bridge
facility for working capital to be repaid with delayed collection of Department
of Defense accounts receivable, proceeds of secondary stock offering or
refinancing.












SECURITY.  Borrower has granted Bank a security interest in the
collateral described in the Loan Documents, including, but not limited to,
personal property collateral described in that certain Security Agreement of
even date herewith.


INTEREST RATE.  Interest shall accrue on the unpaid principal
balance of this Note from the date hereof at the LIBOR Market Index Rate plus
2.00%, as that rate may change from day to day in accordance with changes in
the LIBOR Market Index Rate (“Interest Rate”). 
“LIBOR Market Index Rate”, for any day, means the rate for 1 month U.S.
dollar deposits as reported on Telerate Successor Page 3750 as of 11:00 a.m.,
London time, on such day, or if such day is not a London business day, then the
immediately preceding London business day (or if not so reported, then as
determined by Bank from another recognized source or interbank quotation).


DEFAULT RATE.  In addition to all other rights contained in
this Note, if a Default (as defined herein) occurs and as long as a Default
continues, all outstanding Obligations, other than Obligations under any
swap agreements (as defined in 11 U.S.C. § 101, as in effect from time to time)
between Borrower and Bank or its affiliates,
shall bear interest at the Interest Rate plus 2% (“Default Rate”).  The Default Rate shall also apply from
acceleration  until the Obligations or any
judgment thereon is paid in full.


INTEREST AND FEE(S) COMPUTATION (ACTUAL/360).  Interest
and fees, if any, shall be computed on the basis of a 360-day year for the
actual number of days in the applicable period (“Actual/360 Computation”).  The Actual/360 Computation determines the
annual effective yield by taking the stated (nominal) rate for a year’s period
and then dividing said rate by 360 to determine the daily periodic rate to be
applied for each day in the applicable period. 
Application of the Actual/360 Computation produces an annualized
effective interest rate exceeding the nominal rate.


REPAYMENT
TERMS.  This Note shall be due and  payable in consecutive monthly payments of accrued interest only, commencing on
August 31, 2007, and continuing on
the same day of each month thereafter until fully paid.  In any event, all principal and accrued
interest shall be due and payable on September 30, 2007, unless renewed in
writing by Bank in its sole discretion.


AUTOMATIC
DEBIT OF CHECKING ACCOUNT FOR LOAN PAYMENT.  Borrower
authorizes Bank to debit demand deposit account number 2000028274719 or any
other account with Bank  (routing
number 053207766) designated in writing by Borrower, beginning August 31, 2007
for any payments due under this Note. 
Borrower further certifies that Borrower holds legitimate ownership of
this account and preauthorizes this periodic debit as part of its right under
said ownership.


APPLICATION OF PAYMENTS.  Monies received by Bank from any
source for application toward payment of the Obligations shall be applied to
accrued interest and then to principal. 
If a Default occurs, monies
may be applied to the Obligations in any manner or order deemed appropriate by
Bank.


If any payment received by Bank under this Note or other Loan Documents
is rescinded, avoided or for any reason returned by Bank because of any adverse
claim or threatened action, the returned payment shall remain payable as an
obligation of all persons liable under this Note or other Loan Documents as
though such payment had not been made.


DEFINITIONS.  Loan Documents.  The term “Loan
Documents”, as used in this Note and the other Loan Documents, refers to all
documents executed in connection with or related to the loan evidenced by this
Note and any prior notes which evidence all or any portion of the loan
evidenced by this Note, and any letters of credit issued pursuant to any loan
agreement to which this Note is subject, any applications for such letters of
credit and any other documents executed in connection therewith or related
thereto,  and may include, without limitation, a
commitment letter that survives closing, a loan agreement, this Note, guaranty
agreements, security agreements, security instruments, financing statements,
mortgage instruments, any renewals or modifications, whenever any of the
foregoing are executed, but does not include swap agreements (as defined in 11
U.S.C. § 101, as in effect from time to time). 
Obligations.  The term “Obligations”, as used in this Note
and the other Loan Documents, refers to any and all indebtedness and other
obligations under this Note, all other obligations under any other Loan



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Document(s), and all obligations under any swap agreements (as defined in
11 U.S.C. § 101, as in effect from time to time) between Borrower and
Bank, or its affiliates, whenever
executed.  Certain
Other Terms.  All terms that
are used but not otherwise defined in any of the Loan Documents shall have the
definitions provided in the Uniform Commercial Code.


LATE CHARGE.  If any payments are not timely made, Borrower
shall also pay to Bank a late charge equal to 5% of each payment past
due for 15 or more days.  This late
charge shall not apply to payments due at maturity or by acceleration hereof,
unless such late payment is in an amount not greater than the highest periodic
payment due hereunder.


Acceptance by Bank of any late payment without an accompanying late
charge shall not be deemed a waiver of Bank’s right to collect such late charge
or to collect a late charge for any subsequent late payment received.


ATTORNEYS’ FEES AND OTHER COLLECTION COSTS.  Borrower
shall pay all of Bank’s reasonable expenses actually incurred to enforce or collect any of the
Obligations including, without limitation, reasonable arbitration, paralegals’,
attorneys’ and experts’ fees and expenses, whether incurred without the
commencement of a suit, in any trial, arbitration, or administrative
proceeding, or in any appellate or bankruptcy proceeding.


USURY.  If at any time the effective interest rate
under this Note would, but for this paragraph, exceed the maximum lawful rate,
the effective interest rate under this Note shall be the maximum lawful rate,
and any amount received by Bank in excess of such rate shall be applied to
principal and then to fees and expenses, or, if no such amounts are owing,
returned to Borrower.


DEFAULT.  If any of the following occurs, a default (“Default”)
under this Note shall exist:  Nonpayment; Nonperformance. 
The failure of timely payment or performance of the Obligations or
Default under this Note or any other Loan Documents within three (3) days of
due date thereof.  False
Warranty.  A warranty or
representation made or deemed made in the Loan Documents or furnished Bank in
connection with the loan evidenced by this Note proves materially false, or if
of a continuing nature, becomes materially false.  Cross Default.  At Bank’s option, any default in payment or
performance of any obligation under any other loans, contracts or agreements of
Borrower, any Subsidiary or Affiliate of Borrower, any general partner of or
the holder(s) of the majority ownership interests of Borrower with Bank or its
affiliates (“Affiliate” shall have the meaning as defined in 11 U.S.C. § 101,
as in effect from time to time, except that the term “Borrower” shall be
substituted for the term “Debtor” therein; “Subsidiary” shall mean any business
in which Borrower holds, directly or indirectly, a controlling interest).  Cessation; Bankruptcy.  The death of, appointment of a guardian for,
dissolution of, termination of existence of, loss of good standing status by,
appointment of a receiver for, assignment for the benefit of creditors of, or
commencement of any bankruptcy or insolvency proceeding by or against Borrower,
its Subsidiaries or Affiliates, if any, or any general partner of or the
holder(s) of the majority ownership interests of Borrower, or any party to the
Loan Documents.  Material Capital Structure or Business
Alteration.  Without prior written consent of Bank, (i) a
material alteration in the kind or type of Borrower’s business or that of
Borrower’s Subsidiaries or Affiliates, if any; (ii) the sale of substantially
all of the business or assets of Borrower, any of Borrower’s Subsidiaries or
Affiliates or any guarantor, or a material portion (10% or more) of such
business or assets if such a sale is outside the ordinary course of business of
Borrower, or any of Borrower’s Subsidiaries or Affiliates or any guarantor, or
more than 50% of the outstanding stock or voting power of or in any such entity
in a single transaction or a series of transactions; (iii) the acquisition of
substantially all of the business or assets or more than 50% of the outstanding stock or voting power of any
other entity; or (iv) should any Borrower or any of Borrower’s Subsidiaries or
Affiliates or any guarantor enter into any merger or consolidation.  Material
Adverse Change.  Bank
determines in good faith, in its sole discretion, that the prospects for
payment or performance of the Obligations are impaired or there has occurred a
material adverse change in the business or prospects of Borrower, financial or
otherwise.


REMEDIES
UPON DEFAULT.  If a
Default occurs under this Note or any Loan Documents, Bank may at any time
thereafter, take the following actions:  Bank Lien.  Foreclose its security interest or lien
against



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Borrower’s deposit
accounts and investment property without notice.  Acceleration Upon Default.  Accelerate the maturity of this Note and, at
Bank’s option, any or all other Obligations, other than Obligations under any
swap agreements (as defined in 11 U.S.C. § 101, as in effect from time to time)
between Borrower and Bank, or its affiliates, which shall be due in accordance
with and governed by the provisions of said swap agreements; whereupon this
Note and the accelerated Obligations shall be immediately due and payable;
provided, however, if the Default is based upon a bankruptcy or insolvency
proceeding commenced by or against Borrower or any guarantor or endorser of
this Note, all Obligations (other than Obligations under any swap agreement as
referenced above) shall automatically and immediately be due and payable.  Cumulative.  Exercise any rights and remedies as provided
under the Note and other Loan Documents, or as provided by law or equity.


FINANCIAL AND OTHER INFORMATION.  Borrower
shall deliver to Bank such information as Bank may reasonably request from time
to time, including without limitation, financial statements and information
pertaining to Borrower’s financial condition. 
Such information shall be true, complete, and accurate.


WAIVERS AND AMENDMENTS.  No waivers, amendments or
modifications of this Note and other Loan Documents shall be valid unless in
writing and signed by an officer of Bank. 
No waiver by Bank of any Default  shall operate as a waiver of any other Default or the same Default on a
future occasion.  Neither the failure nor
any delay on the part of Bank in exercising any right, power, or remedy under
this Note and other Loan Documents shall operate as a waiver thereof, nor shall
a single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or remedy.


Except to the
extent otherwise provided by the Loan Documents or prohibited by law, each
Borrower and each other person liable under this Note waives presentment,
protest, notice of dishonor, demand
for payment, notice of intention to
accelerate maturity, notice of acceleration of maturity, notice of sale and all
other notices of any kind.  Further, each
agrees that Bank may (i) extend,
modify or renew this Note or make a novation of the loan evidenced by
this Note, and/or (ii) grant releases, compromises or indulgences with respect
to any collateral securing this Note, or with respect to any Borrower or other
person liable under this Note or any other Loan Documents, all without notice
to or consent of each Borrower and other such person, and without affecting the
liability of each Borrower and other such person; provided, Bank may not
extend, modify or renew this Note or make a novation of the loan evidenced by
this Note without the consent of the Borrower, or if there is more than one
Borrower, without the consent of at least one Borrower; and further provided,
if there is more than one Borrower, Bank may not enter into a modification of
this Note which increases the burdens of a Borrower without the consent of that
Borrower.


MISCELLANEOUS
PROVISIONS.  Assignment.  This Note
and the other Loan Documents shall inure to the benefit of and be binding upon
the parties and their respective heirs, legal representatives, successors and
assigns.  Bank’s interests in and rights
under this Note and the other Loan Documents are freely assignable, in whole or
in part, by Bank.  In addition, nothing
in this Note or any of the other Loan Documents shall prohibit Bank from
pledging or assigning this Note or any of the other Loan Documents or any
interest therein to any Federal Reserve Bank. 
Borrower shall not assign its rights and interest hereunder without the
prior written consent of Bank, and any attempt by Borrower to assign without
Bank’s prior written consent is null and void. 
Any assignment shall not release Borrower from the Obligations.  Applicable Law; Conflict Between
Documents.  This Note and, unless otherwise provided in
any other Loan Document, the other Loan Documents shall be governed by and interpreted
the laws of the state named in Bank’s
address on the first page hereof
without regard to that state’s conflict of laws principles.  If the terms of this Note should conflict
with the terms of any loan agreement or any commitment letter that survives
closing, the terms of this Note shall control. 
Borrower’s Accounts.  Except as prohibited by law, Borrower grants
Bank a security interest in all of Borrower’s deposit
accounts and investment property with
Bank and any of its affiliates.  Swap Agreements.  All
swap agreements (as defined in 11 U.S.C. § 101, as in effect from time to time), if any, between Borrower and
Bank or its affiliates are independent agreements governed by the written
provisions of said swap agreements, which will remain in full force and effect,
unaffected by any repayment, prepayment, acceleration, reduction, increase or
change in the terms of this Note, except as otherwise expressly provided in
said written swap agreements, and any payoff statement from Bank relating to
this Note shall not apply to said swap



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agreements
except as otherwise expressly provided in such payoff statement.  Jurisdiction.  Borrower
irrevocably agrees to non-exclusive personal jurisdiction in the state
identified as the Jurisdiction above.  Severability.  If any provision of this Note or of the other
Loan Documents shall be prohibited or invalid under applicable law, such
provision shall be ineffective but only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Note or other such document.  Payments.  All payments if paid by check or other
negotiable instrument shall be mailed to Bank at Commercial Loan Services, P.
O. Box 740502, Atlanta, GA 30374-0502; or other such address as provided by
Bank in writing.  Notices.  Any notices to Borrower shall be sufficiently
given, if in writing and mailed or delivered to the Borrower’s address shown
above or such other address as provided hereunder, and to Bank, if in writing
and mailed or delivered to Wachovia Bank, National Association, Mail
Code VA7628, P. O. Box 13327, Roanoke, VA 24040 or Wachovia Bank, National
Association, Mail Code VA7628, 10 South Jefferson Street, Roanoke, VA 24011 or such other address as Bank may specify in
writing from time to time.  Notices
to Bank must include the mail code.  In the event that Borrower changes Borrower’s
address at any time prior to the date the Obligations are paid in full,
Borrower agrees to promptly give written notice of said change of address by
registered or certified mail, return receipt requested, all charges
prepaid.  Plural;
Captions.  All references in
the Loan Documents to Borrower, guarantor, person, document or other nouns of
reference mean both the singular and plural form, as the case may be, and the
term “person” shall mean any individual, person or entity.  The captions contained in the Loan Documents
are inserted for convenience only and shall not affect the meaning or
interpretation of the Loan Documents.  Advances.  Bank may,
in its sole discretion, make other advances which shall be deemed to be
advances under this Note, even though the stated principal amount of this Note
may be exceeded as a result thereof.  Posting of Payments. 
All payments received by check or other negotiable instrument, if any,
during normal banking hours after 2:00 p.m. local time at the office of
Bank first shown above shall be deemed received at the opening of the next
banking day.  Joint and
Several Obligations.  If
there is more than one Borrower, each is jointly and severally obligated
together with all other parties obligated for the Obligations.  Fees and Taxes. 
Borrower shall promptly pay all documentary, intangible recordation
and/or similar taxes on this transaction whether assessed at closing or arising
from time to time.  LIMITATION ON LIABILITY; WAIVER OF PUNITIVE DAMAGES. EACH
OF THE PARTIES HERETO, INCLUDING BANK BY ACCEPTANCE HEREOF, AGREES THAT IN ANY
JUDICIAL, MEDIATION OR ARBITRATION PROCEEDING OR ANY CLAIM OR CONTROVERSY
BETWEEN OR AMONG THEM THAT MAY ARISE OUT OF OR BE IN ANY WAY CONNECTED WITH
THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY OTHER AGREEMENT OR DOCUMENT BETWEEN
OR AMONG THEM OR THE OBLIGATIONS EVIDENCED HEREBY OR RELATED HERETO, IN NO
EVENT SHALL ANY PARTY HAVE A REMEDY OF, OR BE LIABLE TO THE OTHER FOR, (1)
INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES OR (2) PUNITIVE OR EXEMPLARY
DAMAGES.   EACH OF THE PARTIES HEREBY
EXPRESSLY WAIVES ANY RIGHT OR CLAIM TO PUNITIVE OR EXEMPLARY DAMAGES THEY MAY
HAVE OR WHICH MAY ARISE IN THE FUTURE IN CONNECTION WITH ANY SUCH PROCEEDING,
CLAIM OR CONTROVERSY, WHETHER THE SAME IS RESOLVED BY ARBITRATION, MEDIATION,
JUDICIALLY OR OTHERWISE.  Patriot Act Notice. 
To help fight the funding of terrorism and money laundering
activities, Federal law requires all financial institutions to obtain, verify,
and record information that identifies each person who opens an account.  For purposes of this section, account shall
be understood to include loan accounts.  Final Agreement. 
This Note and the other Loan Documents represent the final
agreement between the parties and may not be contradicted by evidence of prior,
contemporaneous or subsequent agreements of the parties.  There are no unwritten agreements between the
parties.


WAIVER OF JURY TRIAL.  TO THE EXTENT PERMITTED BY
APPLICABLE LAW, EACH OF  BORROWER  BY EXECUTION HEREOF AND BANK BY ACCEPTANCE HEREOF,
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT EACH MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON, OR ARISING OUT OF, UNDER OR
IN CONNECTION WITH THIS NOTE, THE LOAN DOCUMENTS OR ANY AGREEMENT CONTEMPLATED
TO BE EXECUTED IN CONNECTION WITH THIS  NOTE, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF ANY PARTY WITH RESPECT HERETO.  THIS PROVISION IS A MATERIAL INDUCEMENT TO
BANK TO ACCEPT THIS  NOTE.  EACH OF THE PARTIES AGREES THAT THE TERMS HEREOF SHALL SUPERSEDE AND
REPLACE ANY PRIOR AGREEMENT RELATED TO ARBITRATION OF DISPUTES BETWEEN THE



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PARTIES CONTAINED IN ANY LOAN DOCUMENT OR ANY OTHER DOCUMENT OR
AGREEMENT HERETOFORE EXECUTED IN CONNECTION WITH, RELATED TO OR BEING REPLACED,
SUPPLEMENTED, EXTENDED OR MODIFIED BY, THIS NOTE.


[SIGNATURE PAGE ATTACHED]



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IN WITNESS WHEREOF,
Borrower, on the day and year first above written, has caused this Note to be duly executed under seal.


	
  

  	
  Force Protection
  Industries, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael S.
  Durski

  	
  (SEAL)

  
	
   

  	
   

  
	
   

  	
  Name: Michael S.
  Durski, Title: Chief Financial Officer and Treasurer

  
	
   

  	
   

  
	
   

  	
  Force
  Protection, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael S.
  Durski

  	
  (SEAL)

  
	
   

  	
   

  
	
   

  	
  Name: Michael S.
  Durski, Title: Chief Financial Officer and Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Force Protection
  Technologies, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael S.
  Durski

  	
  (SEAL)

  
	
   

  	
   

  
	
   

  	
  Name: Michael S.
  Durski, Title: Chief Financial Officer and Treasurer

  



 



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