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                                                                 EXHIBIT 10.01
                                                                 EXECUTION COPY

                           SECOND AMENDMENT dated as of December 23, 1996 (this
                  "Second Amendment"), to the Credit Agreement dated as of July
                  31, 1996 (the "Credit Agreement"), among Firearms Training
                  Systems, Inc., a Delaware corporation ("FATS"), the Lenders
                  (as defined therein) and NationsBank, N.A. (South), as Agent,
                  Swingline Lender and Issuing Bank (each as defined therein).

         The parties hereto have agreed, subject to the terms and conditions
hereof, to amend the Credit Agreement as provided herein.

         Capitalized terms used and not otherwise defined herein shall have the
meanings assigned to such terms in the Credit Agreement (the Credit Agreement,
as amended by, and together with, this Second Amendment, and as hereinafter
amended, modified, extended or restated from time to time, being called the
"Amended Agreement").

         Accordingly, the parties hereto hereby agree as follows:

         SECTION 1.01. Amendments to Section 1.01. (a) The definition of
"Additional Drop Down Margin" in Section 1.01 of the Credit Agreement is hereby
amended by deleting the date "January 1, 1997" in the second line thereof and
substituting the date "February 15, 1997" in lieu thereof.

         (b) The definition of "Borrower" in Section 1.01 of the Credit
Agreement is hereby amended by inserting the following phrase in the first line
thereof between the word "the" and the word "Permitted": "contribution of
substantially all of the assets and liabilities of FATS to the Drop Down
Subsidiary in connection with the".

         (c) The definition of "Excess Cash Flow" in Section 1.01 is hereby
amended by inserting the following phrase in the next to last line thereof
between the word "redrawn" and the comma immediately following such word: "and,
in the case of any mandatory prepayment made during such period, only to the
extent that the Net Cash Proceeds of the Prepayment Event giving rise to such
prepayment are included in EBITDA for such period".

         (d) The definition of "Permitted Drop Down Transaction" in Section 1.01
of the Credit Agreement is hereby amended by deleting clause (i) of the proviso
thereto and substituting therefor the following:

         "(i)(A) prior to such contribution of assets and liabilities to the
         Drop Down Subsidiary, the Agent shall be satisfied that the U.S.
         Government Department of Defense is willing to enter into a novation
         agreement with FATS and the Drop Down Subsidiary with respect to any
         Material Contracts for which such novation is necessary or desirable
         and (B) after such contribution of assets and liabilities but prior to
         February 15, 1997, such novation agreement shall be entered into and
         delivered by FATS and the U.S. Government Department of Defense,".



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         SECTION 1.02. Department of Defense Novation. Based on the memorandum
to the Agent dated December 13, 1996, from Venable, Baetjer, Howard & Civiletti,
counsel to the Company, a copy of which is attached hereto as Annex A, the Agent
hereby advises the Borrower that the Agent is satisfied that the U.S. Government
Department of Defense is willing to enter into a novation agreement with FATS
and the Drop Down Subsidiary with respect to any Material Contracts for which
such novation is necessary or desirable, and the Lenders hereby authorize the
Agent to so advise the Borrower.

         SECTION 1.03. Representations and Warranties. The Borrower hereby
represents and warrants to the Agent and the Lenders, as follows:

                  (a) The representations and warranties set forth in Article
         III of the Amended Agreement and the representations and warranties of
         the Borrower and the other Loan Parties set forth in the other Loan
         Documents are true and correct in all material respects on and as of
         the date hereof and on and as of the Second Amendment Effective Date
         (as defined below) with the same effect as though made on and as of the
         date hereof or the Second Amendment Effective Date, as the case may be,
         except to the extent such representations and warranties expressly
         relate to an earlier date (in which case such representations and
         warranties are true and correct in all material respects on and as of
         such earlier date).

                  (b) On the date hereof and on the Second Amendment Effective
         Date, no Default or Event of Default has occurred and is continuing.

                  (c) The execution, delivery and performance by the Borrower of
         this Second Amendment have been duly authorized by the Borrower.

                  (d) This Second Amendment constitutes the legal, valid and
         binding obligation of the Borrower, enforceable against it in
         accordance with its terms.

                  (e) The execution, delivery and performance by the Borrower of
         this Second Amendment will not (i) violate, (A) any provision of law,
         statute, rule or regulation, (B) any provision of the certificate of
         incorporation or by-laws of the Borrower, (C) any order of any
         Governmental Authority or (D) any provision of any indenture, agreement
         or other instrument to which the Borrower or any of the Loan Parties is
         a party or by which any of them or any of their property is or may be
         bound, (ii) be in conflict with, result in a breach of or constitute
         (alone or with notice or lapse of time or both) a default or give rise
         to increased, additional, accelerated or guaranteed rights of any
         person under any such indenture, agreement or other instrument or (iii)
         result in the creation or imposition of any Lien upon or with respect
         to any property or assets now owned or hereafter acquired by the
         Borrower or any of the other Loan Parties.

         SECTION 1.04. Effectiveness. This Second Amendment shall become
effective as to the Lenders only upon satisfaction of the following conditions
precedent (the first date upon which each such condition has been satisfied
being herein called the "Second Amendment Effective Date"):

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                  (a) The Agent shall have received duly executed counterparts
         of this Second Amendment which, when taken together, bear the
         authorized signatures of the Borrower and the Lenders.

                  (b) The representations and warranties set forth in Section
         1.03 shall be true and correct on and as of the Second Amendment
         Effective Date.

                  (c) The Lenders shall have received such other documents,
         legal opinions, instruments and certificates as they shall reasonably
         request and such other documents, legal opinions, instruments and
         certificates shall be satisfactory in form and substance to the Lenders
         and their counsel. All corporate and other proceedings taken or to be
         taken in connection with this Second Amendment and all documents
         incidental thereto, whether or not referred to herein, shall be
         satisfactory in form and substance to the Lenders and their counsel.

         SECTION 1.05. APPLICABLE LAW. THIS SECOND AMENDMENT SHALL BE CONSTRUED
IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

         SECTION 1.06. Expenses. The Borrower shall pay all reasonable
out-of-pocket expenses incurred by the Agent and the Lenders in connection with
the preparation, negotiation, execution, delivery and enforcement of this Second
Amendment, including, but not limited to, the reasonable fees and disbursements
of counsel. The agreement set forth in this Section 1.06 shall survive the
termination of this Second Amendment and the Amended Agreement.

         SECTION 1.07. Counterparts. This Second Amendment may be executed in
any number of counterparts, each of which shall constitute an original but all
of which when taken together shall constitute but one agreement.

         SECTION 1.08. Credit Agreement. Except as expressly set forth herein,
the amendments provided herein shall not by implication or otherwise limit,
constitute a waiver of, or otherwise affect the rights and remedies of the
Lenders, the Agent or the other Secured Parties under the Amended Agreement or
any other Loan Document, nor shall they constitute a waiver of any Default or
Event of Default, nor shall they alter, modify, amend or in any way affect any
of the terms, conditions, obligations, covenants or agreements contained in the
Amended Agreement or any other Loan Document. Each of the amendments provided
herein shall apply and be effective only with respect to the provisions of the
Amended Agreement specifically referred to by such amendment. Except as
expressly amended herein, the Amended Agreement shall continue in full force and
effect in accordance with the provisions thereof. As used in the Amended
Agreement, the terms "Agreement", "herein", "hereinafter", "hereunder", "hereto"
and words of similar import shall mean, from and after the date hereof, the
Amended Agreement.

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         IN WITNESS WHEREOF, the parties hereto have caused this Second
Amendment to be duly executed by their duly authorized officers, all as of the
date first above written.

                                  FIREARMS TRAINING SYSTEMS, INC.

                                  By:  /s/ David A. Apseloff
                                       ----------------------------------------
                                  Name:    David A. Apseloff
                                  Title:   Chief Financial Officer

                                  NATIONSBANK, N.A. (SOUTH), as Agent, Issuing
                                  Bank and Swingline Lender and as a Lender

                                  By:  /s/ Greg McCrery
                                       ----------------------------------------
                                  Name:    Greg McCrery
                                  Title:   Vice President

                                  FIRST BANK NATIONAL ASSOCIATION

                                  By:  /s/ Mark R. Olman
                                       ----------------------------------------
                                  Name:    Mark R. Olman
                                  Title:   Vice President

                                  FIRST SOURCE FINANCIAL LLP,
                                  by First Source Financial, Inc., as 
                                  Agent/Manager

                                  By:  /s/ Gary L. Francis
                                       ----------------------------------------
                                  Name:    Gary L. Francis
                                  Title:   Senior Vice President

                                  BHF-BANK AKTIENGESELLSCHAFT

                                  By:  /s/ Perry Forrest
                                       ----------------------------------------
                                  Name:    Perry Forrest
                                  Title:   Vice President

                                  By:  /s/ Thomas J. Scifo
                                       ----------------------------------------
                                  Name:    Thomas J. Scifo
                                  Title:   Assist. Vice President

                                  CREDITANSTALT CORPORATE FINANCE, INC.

                                  By:  /s/ Carl G. Drake
                                       ----------------------------------------
                                  Name:    Carl G. Drake
                                  Title:   Senior Associate

                                  By:  /s/ Robert M. Biringer
                                       ----------------------------------------
                                  Name:    Robert M. Biringer
                                  Title:   Executive Vice President