<PAGE>

                                                                   EXHIBIT 10.1



                                 LOAN AGREEMENT


         THIS AGREEMENT is made this 14th day of November, 1996, between ARMOR
HOLDINGS, INC., a Delaware corporation (the "Borrower"), and BARNETT BANK,
N.A. (the "Bank").

                                    RECITALS

         The Borrower wishes to obtain credit from the Bank on the terms and
conditions set forth herein.

         NOW THEREFORE, for good and valuable consideration, the parties agree
as follows:

                                   ARTICLE I
                             BORROWING AND PAYMENT

         1.01 Revolving Credit Advances.

                  (a) The Bank hereby establishes in favor of the Borrower a
         revolving line of credit. The Borrower shall be entitled to borrow,
         repay and reborrow funds from the Bank in accordance with the terms
         hereof so long as the total principal amount owed to the Bank under
         the revolving line of credit does not exceed $10,000,000.00 (or such
         lesser amount as is set forth herein) from the date hereof through
         November 14, 1997. The Bank's obligation to make advances
         hereunder shall terminate on November 14, 1997, or such earlier date
         as is set forth herein.

                  (b) The Borrower's indebtedness under the revolving line
         of credit shall be evidenced by a promissory note of even date
         herewith (as amended, extended or renewed from time to time, the
         "Note") executed by the Borrower in favor of the Bank in the original
         principal amount of $10,000,000.00. The Note shall bear interest at
         the rate set forth therein and shall be payable as set forth therein.

                  (c) The Bank shall make each advance under the revolving
         line of credit upon notice from the Borrower to the Bank specifying
         the date and amount of the advance. The Bank must receive the notice
         not later than 12:00 noon (Eastern time) on the business day of the
         advance. Alternatively, the Borrower may request advances by drawing
         checks on a deposit account which is linked to the credit facility
         hereunder in accordance with disbursement arrangements that are
         mutually satisfactory to the parties. The Bank will make each
         requested advance available to the Borrower not later than the close
         of business on the business day of the request by crediting the
         Borrower's account maintained with the Bank in the amount of the
         advance if as of such time: (i) the Bank's obligation to make
         advances hereunder has not terminated or expired; (ii) a Default or
         Event of Default (as defined herein) has not


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         occurred; and (iii) all conditions to the advance set forth herein or
         in any other Loan Documents (as defined herein) have been satisfied.

         1.02 Acceptances. Subject to the terms set forth herein and in that
certain Acceptance Credit Agreement (as amended or restated from time to time,
the "Acceptance Agreement") of even date herewith between the Borrower and the
Bank, the Bank shall from time to time prior to November 14, 1997, make
available to the Borrower an acceptance facility pursuant to which the Bank
may accept drafts drawn upon it by the Borrower (each, an "Acceptance"). The
aggregate face amount of outstanding Acceptances shall not at any one time
exceed $5,000,000 (or such lesser amount as is set forth herein). The Bank
shall not be required to create any Acceptance which has a maturity date after
November 14, 1997. Upon the Bank's payment of an Acceptance upon maturity
thereof, the Bank may at its option obtain an advance under the Note (without
further notice to or consent of the Borrower) to reimburse the Bank for such
payment. If the Bank elects not to obtain an advance under the Note or if
credit in the amount of the Acceptance is not then available under the Note,
the Borrower shall immediately upon demand reimburse the Bank for the face
amount of each Acceptance upon the maturity thereof together with such other
amounts as may be due in connection therewith in accordance with the
Acceptance Agreement. The parties acknowledge that the Bank may at any time
sell, discount, rediscount or otherwise dispose of any Acceptances. The
Borrower shall pay the Bank such fees and costs in connection with the
Acceptances as are set forth in the Acceptance Agreement.

         1.03 Loan Documents and Related Terms.

                  (a) The indebtedness (the "Indebtedness") now or hereafter
         evidenced by the Note and the Acceptance Agreement shall: (i) be
         secured by a first priority lien pursuant to the Security Agreement
         (as amended or restated from time to time, the "Security Agreement")
         of even date herewith executed by the Borrower in favor of the Bank
         covering the Borrower's inventory, accounts receivable and other
         assets described therein; and (ii) be guaranteed by each of the
         Borrower's current Subsidiaries pursuant to guaranties
         (collectively, as amended or restated from time to time, the
         "Guaranties") of even date herewith executed by such Subsidiaries in
         favor of the Bank. The Guaranties and the Indebtedness shall be
         secured by security agreements (collectively, as amended or restated
         from time to time, the "Subsidiary Security Agreements") of even date
         herewith executed by each of the Borrower's current Subsidiaries
         in favor of the Bank covering the inventory, receivables and other
         assets of such Subsidiaries described therein. The Borrower and each
         such Subsidiary shall execute and deliver such financing statements
         and other documents as the Bank may reasonably request to

                                       2

<PAGE>



         perfect and continue perfection of the Bank's liens. In addition,
         the Borrower shall execute and deliver an Environmental Agreement (as
         amended or restated from time to time the "Environmental Agreement")
         of even date herewith in favor of the Bank. The Guaranties and the
         Subsidiary Security Agreements shall include, in addition to the
         Guaranties and Subsidiary Security Agreements contemplated in this
         subparagraph, all guaranties and security agreements, as the case may
         be, now or hereafter executed by any Subsidiaries pursuant to
         subparagraph (b) below.

                  (b) For purposes of this Agreement, the following terms
         shall have the following meanings:

                      (i) "Loan Documents" shall mean and include this
                  Agreement (as amended from time to time), the Note, the
                  Acceptance Agreement, the Acceptances, the Security
                  Agreement, the Guaranties, the Subsidiary Security
                  Agreements, the Environmental Agreement and all documents
                  related to the foregoing documents.

                      (ii) "Included Subsidiary" shall mean and include
                  each Subsidiary that has satisfied the following
                  conditions:

                                            (aa) The Subsidiary has granted
                           the Bank a perfected security interest in its
                           inventory and accounts receivable subject only to
                           such prior liens and claims as the Bank, in its
                           discretion, may approve; and

                                            (bb) The Subsidiary has executed
                           the following documents in favor of the Bank
                           substantially in the form of such documents
                           executed by the Borrower's current Subsidiaries
                           on the date hereof: (1) Guaranty of Payment; (2)
                           Security Agreement; (3) Waiver of Jury Trial; and
                           (4) financing statements (conforming in each case
                           to the requirements of the applicable jurisdictions
                           where such statements will be filed). Each such
                           document shall be deemed to be a Loan Document
                           hereunder.

                     (iii) "Subsidiary" shall mean and include any
                  partnership, corporation or other entity if the Borrower now
                  or hereafter directly or indirectly owns or controls a
                  majority of the equity or voting interests in such
                  partnership, corporation or entity.

                  (c) For purposes of this Agreement, the plural shall
         include the singular, and vice versa, as the context requires.


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         1.04 Borrowing Limitations.

                  (a) Notwithstanding any contrary provision set forth herein
         or in any other Loan Document, the Borrower agrees that the
         outstanding principal balance of the Note, when combined with the
         aggregate face amount of outstanding Acceptances, shall not at any
         time exceed the lesser of: (i) $10,000,000; or (ii) the Borrowing
         Base (as defined herein) then in effect. The outstanding principal
         balance of the Note, together with the aggregate face amount of
         outstanding Acceptances, is referred to herein as the "Outstanding
         Credit."

                  (b) For purposes hereof, the "Borrowing Base" shall mean the
         sum of: (i) 85% of the face amount of Eligible Receivables; and (ii)
         50% of the book value of Eligible Inventory. The Borrower
         specifically agrees that: (i) the book value of Eligible Inventory
         included in the Borrowing Base shall not in any event exceed
         $6,000,000; and (ii) the book value of Eligible Inventory consisting
         of work in process included in the Borrowing Base shall not in any
         event exceed $1,000,000. For purposes hereof, the book value of
         Eligible Inventory shall be calculated on a first in, first out basis
         in accordance with generally accepted accounting principles.
         Notwithstanding any contrary provision set forth herein, the portion
         of the Borrowing Base attributable to the inventory or accounts
         receivable of any Included Subsidiary shall not at any time exceed
         the maximum liability of such Included Subsidiary under any Guaranty
         (as defined herein) executed by such Included Subsidiary. The amount
         of Eligible Receivables and Eligible Inventory shall be determined as
         follows:

                                    (i) "Eligible Receivables" shall mean all
                  accounts receivable then outstanding for goods, merchandise
                  and other items of tangible property (collectively,
                  "Products") sold by the Borrower or any Included Subsidiary
                  in the ordinary course of business. However, Eligible
                  Receivables shall not include any account receivable with
                  respect to which: (aa) a final invoice has not been issued;
                  (bb) delivery of the Products has not been substantially
                  completed; (cc) the invoice is conditional, permits returns
                  or restricts collection rights or assignments in any respect
                  (except, however, that the invoice may permit returns in the
                  ordinary course of business with respect to defective
                  goods); (dd) the invoice permits payment: (1) in any
                  currency other than United States dollars; or (2) at any
                  location outside the United States (except for foreign
                  receivables permitted under subparagraph (nn) below); (ee)
                  the obligation to pay is evidenced by chattel paper or any
                  note or other instrument (unless duly endorsed and delivered
                  to the Bank); (ff) the Products have been rejected, returned
                  or disputed in any material respect,

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                  whether in whole or in part, in which case the receivable
                  shall be ineligible to the extent of such rejection, return
                  or dispute; (gg) the customer has attempted to renegotiate
                  the invoiced price or asserted any material right of
                  reduction, set-off, recoupment, counterclaim or defense;
                  (hh) the account is outstanding 90 days or more after the
                  invoice date (except, however, that the account of Aardvark,
                  Inc. evidenced by an agreement disclosed by the Borrower to
                  the Bank prior to the date hereof may be outstanding for
                  more than 90 days from the invoice date so long as Aardvark,
                  Inc. is not more than 60 days delinquent in the payment of
                  any amount due under such agreement); (ii) the account is 60
                  days or more past due from the due date; (jj) the obligor
                  under the receivable is also a creditor or supplier of the
                  Borrower or any Subsidiary (in which case the amount of the
                  receivable shall be reduced, for eligibility purposes, by
                  the amount owed by the Borrower or such Subsidiary to such
                  obligor); (kk) the Bank does not have a perfected first
                  priority security interest in the receivable; (ll) the
                  customer has a history of late payments, returns,
                  rejections, renegotiations or disputes; (mm) the customer is
                  an affiliate of the Borrower or any Subsidiary; (nn) the
                  customer is located outside the continental United States,
                  its territories or possessions (except, however, that
                  Eligible Receivables may include other receivables having an
                  aggregate face amount of not more than $500,000 owed by
                  customers located in any of the countries listed on Exhibit
                  "A" attached hereto so long as such receivables otherwise
                  constitute "Eligible Receivables" in accordance with the
                  other provisions of this paragraph (i)); (oo) the customer
                  does not meet the established credit standards of the
                  Borrower and its Subsidiaries; (pp) the account receivable
                  exceeds 15% of the Borrower's Tangible Net Worth (as
                  defined herein) (in which case, the amount of the excess
                  shall be deemed ineligible); (qq) the account receivable is
                  owed by a customer who is 90 days or more past due on 50% or
                  more of its obligations owed to the Borrower and its
                  Subsidiaries (in which event all receivables owed by the
                  customer to the Borrower and its Subsidiaries shall be
                  deemed ineligible); or (rr) the Bank otherwise determines in
                  its reasonable discretion that the receivable is ineligible
                  hereunder. Eligible Receivables shall not in any event
                  include any receivables owed by governmental agencies,
                  departments or authorities other than: (aa) receivables
                  otherwise qualifying as Eligible Receivables that are owed
                  by municipalities located in the United States whose
                  long-term debt is rated BBB or better by Standard &
                  Poor's Corporation; and (bb) other governmental
                  receivables otherwise qualifying as Eligible Receivables to
                  the extent that such receivables do not at any one

                                       5

<PAGE>



                  time exceed an aggregate of $500,000. All receivables owed
                  by United States agencies, departments and authorities shall
                  be assigned to the Bank under the federal Assignment of
                  Claims Act.

                               (ii) "Eligible Inventory" shall mean all
                  inventory of raw materials, work in process and finished
                  goods then owned by the Borrower or any Included Subsidiary
                  and held for sale in the ordinary course of business as then
                  conducted. However, Eligible Inventory shall not include any
                  item of inventory that: (aa) is not of merchantable quality;
                  (bb) is defective or does not meet the established
                  specifications of the Borrower or any Included Subsidiary
                  for its type; (cc) is obsolete or has been held by the
                  Borrower or any Included Subsidiary for more than twelve
                  months (unless subject to a current purchase order); (dd)
                  together with other items of its type exceed reasonably
                  expected sales over the next 12 months by more than 50%;
                  (ee) is held by any person other than the Borrower, any
                  Included Subsidiary or a party to a bailment agreement with
                  the Bank (in such form and substance as may be reasonably
                  acceptable to the Bank); (ff) is located at any location
                  other than those locations set forth in Exhibit "B" attached
                  hereto; (gg) is subject to any prior lien, encumbrance or
                  claim so that the Bank does not hold a perfected first
                  priority security interest in the inventory; (hh) is the
                  subject of any financing statement, lien or other
                  encumbrance other than in favor of the Bank; (ii) is the
                  subject of any other person's claim of ownership,
                  whether legal, beneficial or otherwise; or (jj) is otherwise
                  deemed ineligible by the Bank in its reasonable discretion.
                  In addition, Eligible Inventory shall exclude any inventory
                  on which the Bank, for any reason, does not hold a perfected
                  security interest subject to no prior liens or claims. The
                  Bank may elect to treat as ineligible any inventory located
                  at leased premises if the landlord is not a party to a
                  subordination and access agreement reasonably acceptable to
                  the Bank (except, however, that the Borrower shall not be
                  required to provide, prior to December 31, 1997, any such
                  agreement for the premises located at 191 Nassau Place Road,
                  Yulee, Florida).

                  (c) The Bank has the right to deem any inventory or
         receivable as ineligible for lending purposes if it is not in the
         Bank's reasonable judgment adequately documented by the books and
         records of the Borrower or its Included Subsidiaries or if the Bank
         otherwise reasonably deems such inventory or receivable as
         ineligible. If at any time the Outstanding Credit exceeds the
         Borrowing Base, the Borrower shall immediately pay to the Bank the
         amount of such excess. The Borrower shall not be entitled to obtain
         any advance under the

                                       6

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         Note or other credit hereunder if the advance or credit would result
         in a violation of the lending limits set forth herein. The Borrower
         shall deliver a borrowing base certificate to the Bank demonstrating
         compliance with the lending limits set forth herein: (i) on the
         fifteenth day of each calendar month based upon the then Outstanding
         Credit and the Borrowing Base as of the end of the immediately
         preceding calendar month; and (ii) at such other times as the Bank
         may reasonably request.

         1.05 Facility Fees. The Borrower shall pay the Bank a fee on the
daily average unused amount of the revolving line of credit under the Note for
a period commencing on the date hereof and continuing until the expiration or
termination of the line of credit. The fee shall accrue at the rate of
one-eighth of one percent (0.125%) per annum calculated on the basis of a
360-day year (based on actual days elapsed). The Borrower shall pay the fee
quarterly in arrears: (a) within 15 days after the end of each calendar
quarter; and (b) on the expiration or termination of the line of credit. In
calculating the fee: (a) the amount of outstanding Acceptances shall be
treated as amounts outstanding under the Note; and (b) the maximum amount of
borrowings available under the line of credit shall be $10,000,000 without
reduction for Borrowing Base limitations set forth herein.

                                   ARTICLE II
                                   CONDITIONS

         2.01 Conditions to Initial Advance.  The obligation of the
Bank to make an initial extension of credit hereunder is subject,
without limitation, to satisfaction of the following conditions
precedent:

                  (a) The Bank shall have received on or before the date
         hereof and the date of such extension of credit in form reasonably
         satisfactory to it: (i) the duly executed Loan Documents; (ii) such
         evidence of corporate authorization from the Borrower and each
         Subsidiary as the Bank may reasonably require; (iii) good standing
         certificates indicating that the Borrower and each Subsidiary are in
         good standing in their respective states of incorporation and in any
         other states where they are required to qualify to do business; and
         (iv) certified articles of incorporation and bylaws of the Borrower
         and each Subsidiary.

                  (b) The Bank shall have received on or before the date
         hereof, from attorneys for the Borrower reasonably acceptable to the
         Bank, an opinion addressed to the Bank in form and substance
         reasonably satisfactory to the Bank.

         2.02 Conditions to Advances.  The obligation of the Bank to
make any advances hereunder or under the Note, or to create any



                                       7

<PAGE>


Acceptances, is subject, without limitation, to satisfaction of the
following additional conditions precedent:

                  (a) The representations and warranties of the Borrower and
         each Subsidiary set forth in this Agreement and in the Loan Documents
         shall be true and correct in all material respects on and as of the
         date of each such advance or extension of credit.

                  (b) On the date of each such advance or extension of credit,
         the Borrower shall be in compliance with all the material terms and
         provisions set forth in this Agreement on its part to be observed or
         performed, and no Default or Event of Default shall have occurred.

         2.03 Other Documents. The Bank shall have received on or before the
date hereof or the date of any advance or credit extension hereunder such
other documents or items as the Bank may reasonably request.

                                  ARTICLE III
                             AFFIRMATIVE COVENANTS

         The Borrower as to itself and as to any Subsidiaries covenants and
agrees that from the date hereof:

         3.01 Financial Statements of the Borrower.  The Borrower will
deliver to the Bank the following:

                  (a) Within forty-five (45) days after the end of each
         quarter of the Borrower's fiscal year: (i) a balance sheet,
         income statement and statement of cash flows for the Borrower and its
         Subsidiaries on a consolidated basis as of the end of and for such
         period in reasonable detail certified by an authorized officer of the
         Borrower; and (ii) a balance sheet and income statement for each of
         the Borrower and its Subsidiaries on a stand alone basis for each
         such entity as of the end of and for such period in reasonable detail
         certified by an authorized officer of the Borrower.

                  (b) Within ninety (90) days after the end of each fiscal
         year of the Borrower, a balance sheet, income statement and statement
         of cash flows for the Borrower and its Subsidiaries on a consolidated
         basis as of the end of and for such period in reasonable detail,
         audited and certified by independent certified public accountants of
         recognized national standing, whose opinion thereon shall be
         reasonably satisfactory to the Bank in scope and substance.

                  (c) Within fifteen (15) days after the end of each calendar
         quarter, accounts receivable aging schedules and inventory status
         reports for the Borrower and each Subsidiary 


                                       8

<PAGE>



         as of the end of such quarter certified to the Bank by an authorized
         officer of the Borrower.

                  (d) Promptly upon receipt thereof, copies of all management
         letters submitted to the Borrower by independent certified public
         accountants in connection with each annual or interim audit of the
         books of the Borrower by such accountants.

                  (e) With each delivery required under subparagraphs (a) and
         (b) above, a compliance certificate in form approved by the Bank
         executed by an executive officer of the Borrower demonstrating
         compliance with the Loan Documents.

                  (f) Promptly upon the occurrence of any Default or Event
         of Default, a notice thereof, specifying the nature thereof.

                  (g) Promptly upon becoming available, a copy of all: (i)
         reports, registration statements and other materials filed with the
         Securities and Exchange Commission; (ii) all offering circulars made
         in connection with any distribution or sale of the Borrower's
         securities; and (iii) all notices, proxy statements and other
         materials mailed or distributed to the Borrower's shareholders.

                  (h) Such other material information as the Bank may from
         time to time reasonably request.

         3.02 Financial Information. All financial information submitted by
the Borrower or any Subsidiary hereunder shall be prepared in accordance with
generally accepted accounting principles as in effect as of the time that such
financial statements are prepared. The Borrower and its Subsidiaries will
maintain books of account in accordance with generally accepted accounting
principles.

         3.03 Taxes and Other Charges. The Borrower and the Subsidiaries, as
applicable, will pay and discharge or cause to be paid and discharged all
taxes, charges, liabilities or claims of any type at any time assessed against
or incurred by the Borrower or any Subsidiary, or which could become a lien
against the Borrower or any Subsidiary or any of their properties. Nothing in
this subsection shall require the payment of any such sum if the Borrower by
appropriate proceedings contests the same in good faith and so long as the
Borrower, if required by generally accepted accounting principles, creates a
funded reserve in an amount required by generally accepted accounting
principles.

         3.04 Insurance. The Borrower and its Subsidiaries will maintain
adequate insurance with responsible insurers with coverage normally obtained
by businesses similar to that of the Borrower or its Subsidiaries, but
covering at least: (i) damage to physical


                                       9

<PAGE>



property from fire and other hazards; (ii) liability on account of injury to
persons; (iii) product liability risks; and (iv) insurance against theft,
forgery or embezzlement or other illegal acts of officers or employees in
reasonable amounts. If requested by the Bank, the Borrower will provide the
Bank, within ninety (90) days after the end of each fiscal year, a certificate
of the Borrower specifying the types and amounts of insurance in force and the
insurers of each risk covered by such insurance.

         3.05 Maintenance of Corporate Existence. The Borrower and its
Subsidiaries will do or cause to be done all things necessary to preserve and
keep in full force and effect their existence, franchises, rights and
privileges as corporations under the laws of their states of incorporation and
any other jurisdiction where the conduct of their business or the ownership of
their properties would require them to be qualified to do business (except
where the failure to be so qualified would not have a material adverse effect
on the Borrower and its Subsidiaries, taken as a whole).

         3.06 Use of Proceeds. The funds borrowed under the Note shall be used
for working capital purposes and for such other purposes as the Bank may
approve from time to time.

         3.07 Notice of Litigation. Promptly after the commencement thereof,
the Borrower shall furnish the Bank notice of all material actions, suits and
proceedings before any court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, affecting the Borrower
or any Subsidiary.

         3.08 Notice of ERISA Requirements. As soon as possible and in any
event within thirty (30) days after the Borrower knows or has reason to know
that any reportable event, accumulated funding deficiency, prohibited
transaction, disqualification or termination (as such terms are defined in the
Employee Retirement Income Security Act of 1974, as amended) with respect to
any Plan has occurred, the Borrower shall furnish the Bank with the statement
of the chief financial officer of the Borrower setting forth details as to
such event and the action which the Borrower proposes to take with respect
thereto, together with a copy of the notice of such event to the Pension
Benefit Guaranty Corporation. For purposes of this Agreement, "Plan" shall
mean any employee benefit plan maintained in whole or in part for employees of
the Borrower or its Subsidiaries which is subject to the provisions of Title
IV of the Employee Retirement Income Security Act of 1974, as amended from
time to time, or subject to the minimum funding standards under Section 412 of
the Internal Revenue Code of 1986, as amended from time to time.

         3.09 Other Events. The Borrower shall promptly notify the Bank of any
material default under or violation of any material agreement, law or
regulation to which the Borrower or any Subsidiary is a party or by which it is
bound. The Borrower and

 
                                       10


<PAGE>



its Subsidiaries shall promptly perform all of their material obligations under
any material agreements to which any of them is a party, and each of them shall
use its best efforts to ensure compliance by other parties in all material
respects with such agreements.

         3.10 Compliance with Laws. The Borrower and its Subsidiaries shall
comply in all material respects at all times with all statutes, regulations,
orders and judgments to which they, or any of them, are subject.

         3.11 Access. The Bank (by any of its officers, employees or agents)
shall have the right, exercisable as frequently as the Bank reasonably
determines to be appropriate, to inspect and make extracts from all of the
records, files and books of account of the Borrower or its Subsidiaries. All
reasonable costs, fees and expenses incurred by the Bank, or for which the
Bank has become obligated, in connection with any such inspection, and
verification shall be payable by the Borrower to the Bank. Notwithstanding the
foregoing provisions of this Section, the Bank shall not exercise its right of
inspection hereunder more than once per calendar year for so long as no Event
of Default is continuing hereunder.

         3.12 Deposits. The Borrower and the Included Subsidiaries shall
maintain their primary operating accounts with the Bank (except, however, that
the Borrower and its Included Subsidiaries shall be entitled to maintain
deposit accounts with other banks in market areas where the Bank does not
maintain a banking office to the extent reasonably necessary to support the
operations of the Borrower and its Subsidiaries in those market areas).

         3.13 Landlord's Agreements. The Borrower and the Included
Subsidiaries shall at all times use their best efforts to obtain and maintain
in effect subordination and access agreements executed by any lessor or
sublessor who holds any interest in premises utilized by the Borrower or any
Included Subsidiary if the aggregate value of property of the Borrower and its
Included Subsidiaries located thereon exceeds $100,000 (except, however, that
no such agreement shall be required prior to December 31, 1997, for the
premises located at 191 Nassau Place Road, Yulee, Florida). The agreements
shall be in form and substance reasonably satisfactory to the Bank.

         3.14 Further Assurances. If at any time counsel for the Bank is of
the reasonable opinion that any portion of the Outstanding Credit is not
secured by a first priority lien on the property described in the Security
Agreement, or as contemplated herein, subject only to exceptions described in
the Security Agreement, and has so advised the Bank in writing, then the
Borrower shall, after written notice of such opinion from the Bank, do all
things and matters necessary to assure to the reasonable satisfaction of
counsel for the Bank that any part of the Outstanding Credit is


                                       11

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secured or will be secured as contemplated by this Agreement and the Security
Agreement.

                                   ARTICLE IV
                               NEGATIVE COVENANTS

         The Borrower and its Subsidiaries shall comply with the following
covenants during the term hereof:

         4.01 Liens. Neither the Borrower nor any Subsidiary will create,
incur, assume or suffer to exist any mortgage, pledge, lien, charge or other
encumbrance of any nature whatsoever on any of the assets of the Borrower or
any Subsidiary now or hereafter owned, or enter into or suffer to exist any
conditional sales contracts or other title retention agreements except for
Permitted Liens. For purposes hereof, Permitted Liens shall mean:

             (a) liens in favor of the Bank;

             (b) existing liens described on Exhibit "C" attached hereto
         (together with any replacement lien arising out of any extension,
         renewal or refinancing of any such lien provided that: (i) the
         indebtedness secured by each such replacement lien shall not exceed
         the indebtedness secured by the lien theretofore existing; and (ii)
         such replacement lien attaches only to the same property theretofore
         securing the indebtedness so extended, renewed or refinanced);

             (c) liens on equipment to secure indebtedness permitted
         hereunder to finance the acquisition thereof;

             (d) the lien of ad valorem and other taxes and
         assessments not yet due and payable;

             (e) liens arising out of pledges, deposits, or other amounts
         owed under worker's compensation laws, unemployment insurance,
         old age pensions or other social security or retirement benefits, or
         similar legislation, or to secure payment of premiums for insurance
         purchased in the usual course of operations or in connection with
         self-insurance or to secure the performance of bids, tenders or trade
         contracts incurred in the ordinary course of operations and not in
         connection with the borrowing of money;

              (f) deposits for indemnity bonds and other bonds
         required in the ordinary course of the Borrower's or any
         Subsidiary's business, and not in connection with borrowed
         money;

              (g) inchoate materialmen's, suppliers', operators', mechanics',
         workmen's, repairmen's, employees', carriers', warehousemen's or
         attorneys' liens or other like statutory

 
                                       12

<PAGE>



         liens arising in the ordinary course of business and securing
         obligations (i) which are not delinquent or (ii) the amounts or
         validity of which are being contested in good faith as to which the
         Borrower has established appropriate funded reserves to the extent
         required by generally accepted accounting principles;

              (h) deposits made by the Borrower or any Subsidiary in
         the ordinary course of business;

              (i) liens of financial institutions arising in the
         ordinary process of collection of instruments;

              (j) statutory landlord's liens, and contractual landlord's 
         liens created prior to this date provided that amounts secured 
         thereby are not past due by more than 30 days; and

              (k) liens securing Permitted Acquisition Debt (as defined
         herein) so long as such liens do not encumber any assets of the
         Borrower or any Included Subsidiary.

         4.02 Obligations.

              (a) Neither the Borrower nor any Subsidiary is or will
         become directly or indirectly obligated in any way for any obligation
         for borrowed money except for Permitted Obligations. For purposes
         hereof, Permitted Obligations shall mean:

                      (i) any and all obligations now or hereafter owed
                  by the Borrower or any Subsidiary to the Bank;

                      (ii) indebtedness incurred solely to finance the
                  acquisition of equipment in the ordinary course of business
                  so long as no Default or Event of Default has occurred and
                  is continuing hereunder and so long as such indebtedness
                  will not result in a default in the financial covenants
                  hereunder: (aa) at the time such indebtedness is incurred
                  after giving effect to such indebtedness; and (bb) on a
                  projected basis based upon reasonable projections for the
                  term of such indebtedness after giving effect to such
                  indebtedness;

                     (iii) customer deposits in the ordinary course of
                  business;

                     (iv) obligations described on Exhibit "D" attached
                  hereto;

                                       13

<PAGE>




                     (v) obligations subordinated to the Indebtedness
                  pursuant to subordination agreements reasonably
                  acceptable to the Bank;

                     (vi) Permitted Acquisition Debt (as defined herein);
                  and

                     (vii) Obligations resulting from loans and advances
                  permitted under Section 4.04 hereof.

                  (b) Neither the Borrower nor any Subsidiary shall without
         the Bank's prior written consent: (i) guarantee or purchase any
         obligations of any other person or entity (except pursuant to the
         Guaranties and except that any such entity shall be entitled to
         guarantee any Permitted Obligations of the Borrower or any other
         Subsidiary); (ii) enter into any credit support, financial
         maintenance, credit enhancement or similar arrangement in favor of
         any person or entity; or (iii) enter into any other transaction which
         is intended to assure performance of the obligations of any other
         person or entity.

                  (c) For purposes hereof, "Permitted Acquisition Debt" shall
         mean any indebtedness incurred by the Borrower or any of its
         Subsidiaries to finance any Permitted Acquisition (as defined in
         Section 4.04 hereof) or assumed by the Borrower or any such
         Subsidiary in connection with any Permitted Acquisition.

         4.03 Merger; Consolidation; Sale of Substantial Assets. Neither the
Borrower nor any Subsidiary will: (a) merge into, consolidate with, or sell or
transfer all or a substantial part of its assets to, any other person or
entity; (b) sell or transfer any stock or equity interest in any Subsidiary to
any other person or entity (except for transfers to the Borrower or any other
wholly owned Included Subsidiary); (c) take any action which would reduce the
ownership or voting interest of the Borrower and its Subsidiaries in any
Subsidiary; or (d) pledge or encumber any stock of any Subsidiary (except for
pledges in favor of the Bank). Notwithstanding the foregoing, each of the
Borrower and its Subsidiaries shall be entitled to sell or transfer assets to
wholly owned Included Subsidiaries.

         4.04 Loans, Investments and Acquisitions.

                  (a) Neither the Borrower nor any Subsidiary will purchase
         any stock, securities or evidence of indebtedness, or make or permit
         to exist any loans or advances to, or make any investment or acquire
         any interest in, any other corporation, partnership or other entity
         or person (except, however, that the Borrower and its Subsidiaries
         shall be entitled to make Permitted Acquisitions in accordance with
         the terms thereof).
                                       14

<PAGE>



         Neither the Borrower nor any Subsidiary shall, without the Bank's prior
         written cosent, enter into partnership or joint venture agreements
         with any other person or entity. Notwithstanding the foregoing: (i)
         the Borrower and its Subsidiaries shall be entitled to extend credit
         and make advances to wholly owned Included Subsidiaries; (ii) the
         Borrower and its Subsidiaries shall be entitled to extend credit and
         make advances to Subsidiaries, other than wholly owned Included
         Subsidiaries, so long as the total outstanding amount of such credit
         and advances, on a combined basis, does not exceed $250,000 at any
         one time; (iii) the Borrower and its Subsidiaries may extend credit
         and make advances in the ordinary course of business, in addition to
         credit and advances permitted under the foregoing subparagraphs (i)
         and (ii), so long as the total outstanding amount of such credit and
         advances, on a combined basis under this subparagraph (iii), does not
         exceed $250,000 at any time; (iv) the Borrower and its Subsidiaries
         may extend trade credit to purchasers in the ordinary course of
         business in connection with the sale of inventory to such purchasers;
         (v) the Borrower and its Subsidiaries may invest in direct
         obligations of the United States government and time certificates of
         deposit of banks maturing within one year from the date of the
         acquisition thereof; and (vi) the Borrower and its Subsidiaries may
         invest in Eligible Securities. For purposes hereof, "Eligible
         Securities" shall mean: (i) government bonds rated BBB or better by
         Standard & Poor's Corporation ("S&P") or Baa2 or better by Moody's
         Investors Service, Inc. ("Moody's"); (ii) commercial paper rated BBB
         or better by S&P or Baa2 or better by Moody's; (iii) corporate bonds
         or debt rated BBB or better by S&P or Baa2 or better by Moody's; (iv)
         preferred stock rated BBB or better by S&P or Baa2 or better by
         Moody's; and (v) common stock of any publicly traded corporation.
         Notwithstanding anything to the contrary in this Section 4.04(a), the
         limitations of this Section 4.04(a) shall not be applicable in
         connection with the Borrower's or any Subsidiary's formation and
         funding of a newly created Subsidiary for the purposes of
         consummating a Permitted Acquisition in accordance with the terms of
         this Agreement.

                  (b) The Borrower and its Subsidiaries shall be entitled to
         acquire businesses through stock acquisitions, asset purchases or
         mergers upon satisfaction of the following conditions:

                           (i) Each such acquisition shall be made on arms
                  length terms. The Borrower or one of its Subsidiaries shall,
                  after consummation of the acquisition, own and control more
                  than 50% of the outstanding equity and voting rights in any
                  corporation, partnership or other entity acquired by the
                  Borrower or any such Subsidiary in connection with the
                  acquisition.

                                       15

<PAGE>



                      (ii) The aggregate acquisition consideration payable
                  by the Borrower and its Subsidiaries for any acquisition
                  shall not exceed 50% of the Borrower's Tangible Net Worth
                  (as defined herein) after giving effect to the acquisition
                  (except, however, that the Borrower and its Subsidiaries
                  shall be entitled to make acquisitions for acquisition
                  consideration in excess of such amount with the Bank's
                  prior written consent). The acquisition consideration
                  payable in connection with any such acquisition shall mean
                  the sum of the following items (without duplication): (aa)
                  all cash paid by the Borrower and its Subsidiaries in
                  connection with the acquisition; (bb) the fair market value
                  of all property transferred (including, without limitation,
                  the fair market value of all securities issued) by the
                  Borrower and its Subsidiaries in connection with the
                  acquisition; (cc) the principal amount of all indebtedness
                  payable by the Borrower and its Subsidiaries to the sellers
                  in connection with the acquisition; (dd) the principal
                  amount of all obligations assumed by the Borrower and its
                  Subsidiaries in connection with any asset acquisition; and
                  (ee) all amounts paid or payable under or with respect to
                  covenants not to compete in connection with the acquisition.

                     (iii) The acquisition will not result in a default under
                  the financial or other covenants hereunder: (aa) at the time
                  such acquisition is consummated after giving effect to such
                  acquisition; and (bb) on a projected basis based upon
                  reasonable projections after giving effect to such
                  acquisition. In addition, the acquisition will not result in
                  a default or event of default under any Guaranty or any
                  Subsidiary Security Agreement.

                  (c) For purposes of this Agreement, the term "Permitted
         Acquisition" shall mean any acquisition made in accordance with the
         foregoing subparagraph (b).

                  (d) The Borrower shall, as promptly as practicable after
         consummation of any Permitted Acquisition, take all such action as
         may be required to cause any Subsidiary acquired in connection
         therewith, or resulting therefrom, to become an Included Subsidiary
         hereunder (except to the extent that any obligations incurred or
         assumed in connection with the acquisition prohibit such action).

         4.05 Sale or Pledge of Property. Neither the Borrower nor any
Subsidiary will sell, lease or otherwise dispose of or transfer any of its
interests in any of its assets except in the ordinary course of business
(except for transfers permitted in Section 4.03 hereof).

                                       16

<PAGE>




         4.06 Dividends and Distributions.  Neither the Borrower nor
any Subsidiary which is not wholly owned by the Borrower will pay
or declare any dividends on or make any other distribution with
respect to any class of its stock whether in cash or in property. In addition,
neither the Borrower nor any Subsidiary shall redeem, purchase or otherwise
acquire any stock or any outstanding securities of the Borrower or any
Subsidiary (other than redemptions of the Subordinated Notes in accordance
with the terms thereof). Notwithstanding the foregoing: (a) the Borrower may
pay a stock dividend or declare a stock split which does not result in a
reduction in the total value of the Borrower's stockholders' equity
determined immediately prior to the stock dividend or stock split; and (b)
each of the Borrower's Subsidiaries may pay dividends and distributions to
the Borrower or any Included Subsidiary.

         4.07 Pension Plan Funding Deficiency. Neither the Borrower nor any
Subsidiary shall incur or suffer to exist any material accumulated funding
deficiency within the meaning of the Employee Retirement Income Security Act
of 1974 or incur any material liability to the Pension Benefit Guaranty
Corporation (or any successor) established thereunder in connection with any
Plan.

         4.08 Transactions with Affiliates. The Borrower and its Subsidiaries
shall not directly or indirectly enter into any transaction with any affiliate
other than in the ordinary course and pursuant to the reasonable business
requirements of the Borrower or such Subsidiaries. Any such transaction shall
be upon fair and reasonable terms and provisions no less favorable to the
Borrower or any such Subsidiary than it could have obtained in a comparable
arm's-length transaction with a person who is not an affiliate of the
Borrower or such Subsidiary.

         4.09 Financial Covenants. The Borrower and its Subsidiaries shall
comply at all times with the following financial covenants. All accounting
terms not specifically defined herein shall be construed in accordance with
generally accepted accounting principles as in effect at the time in question
on a basis consistently applied.

                  (a) The Borrower's Debt Service Coverage Ratio shall be
         the ratio of: (i) the Borrower's and all Subsidiaries'
         earnings before interest, taxes, lease obligations, depreciation and
         amortization (including, without limitation, any income tax credits
         utilized) on a consolidated basis for the four preceding fiscal
         quarters to (ii) the sum of all principal, interest and lease
         obligations (excluding principal payable hereunder, principal payable
         under the Note Agreement (as defined herein) and principal payable
         under Permitted Acquisition Debt (including, without limitation,
         Permitted Acquisition Debt incurred in connection with the
         Borrower's acquisition of NIK Public Safety, Inc. and Defense
         Technology 
                                       17

<PAGE>



         Corporation of America) during the one year period
         following the acquisition to which such debt relates) payable by the
         Borrower or any such subsidiary during such fiscal quarters.
         The Debt Service Coverage Ratio shall be computed quarterly, so long
         as the Indebtedness to the Bank is outstanding, commencing December
         31, 1996, and each March 31, June 30, September 30 and December 31
         thereafter and shall not be less than 1.3 to 1.

                  (b) The Borrower's Interest Coverage Ratio shall be the
         ratio of: (i) the Borrower's and all Subsidiaries' earnings
         before interest, taxes, depreciation and amortization (including,
         without limitation, any income tax credits utilized) on a
         consolidated basis for the four preceding fiscal quarters to (ii) the
         sum of all interest payable by the Borrower or any such subsidiary
         during such fiscal quarters. The Interest Coverage Ratio shall be
         computed quarterly, so long as the Indebtedness to the Bank is
         outstanding, commencing December 31, 1996, and each March 31, June
         30, September 30 and December 31 thereafter and shall not be less
         than 2.0 to 1.

                  (c) The ratio of the Borrower's consolidated current
         assets to consolidated current liabilities shall at no time be less
         than 2.0 to 1. "Current assets" shall mean the aggregate amount of
         all assets of an entity that may properly be classified as current
         assets in accordance with generally accepted accounting principles,
         not including, however, (i) any deferred assets, (ii) common stock of
         any publicly traded corporation if the Borrower and its Subsidiaries
         own in the aggregate more than 5% of such corporation's issued
         and outstanding shares of common stock, (iii) any prepaid items such
         as insurance, taxes, interest, commissions, rents, royalties and
         similar items, and (iv) any amounts owed to such entity by officers,
         directors, employees, stockholders or subsidiaries or other
         affiliates of such entity. "Current liabilities" shall mean all
         indebtedness of an entity payable on demand or within a period of one
         year from the date of the creation thereof (excluding any
         indebtedness renewable or extendible at the option of the debtor,
         absolutely or conditionally, for a period or periods extending to
         more than one year after such date, whether or not actually so
         renewed or extended) plus current maturities of long term debt
         (excluding debt described on Schedule 4.09 attached hereto).

                  (d) The Borrower and the Subsidiaries shall not allow the
         ratio of Total Liabilities to Tangible Net Worth for the Borrower and
         its Subsidiaries to exceed 1.0 to 1. For purposes of this Agreement,
         the terms "Tangible Net Worth" and "Total Liabilities" shall have the
         following meanings:


                                    18

<PAGE>


                                    (i) "Tangible Net Worth" shall mean the
                  aggregate of the following for the Borrower and the
                  Subsidiaries on a consolidated basis:   

                                            (aa) The gross book value as shown
                           by the books of the Borrower and its Subsidiaries
                           of all real and personal property excluding: (1)
                           all intangible personal property including, without
                           limitation, licenses, patents, patent applications,
                           copyrights, trademarks, trade names, goodwill,
                           going concern value, experimental or organizational
                           expense, treasury stock and unamortized discount;
                           and (2) all investments in, loans to or amounts due
                           from any Subsidiary, shareholder, officer,
                           director, employee or other affiliate;

                           less the sum, without duplication, of the following
                           items (bb), (cc) and (dd);

                                            (bb) all reserves for depletion,
                           depreciation and amortization of properties as
                           shown by the books of the Borrower and its
                           Subsidiaries and all other proper reserves which in
                           accordance with generally accepted accounting
                           principles should be set aside in connection with
                           the businesses of the Borrower and its
                           Subsidiaries;

                                            (cc) all obligations which under
                           generally accepted accounting principles are shown
                           or should be shown on the balance sheet as
                           liabilities (excluding, however, obligations that
                           have been subordinated to the Indebtedness and, if
                           required by the Bank, to any applicable guaranty
                           thereof); and

                                            (dd) all increases in book value
                           of any real estate or tangible personal property of
                           the Borrower or its Subsidiaries attributable to a
                           reappraisal or other write-up of assets (other than
                           reappraisals or write-ups made in connection with
                           Permitted Acquisitions or otherwise required by
                           generally accepted accounting principles).

                               (ii) "Total Liabilities" shall mean: (aa) any
                  indebtedness or liability for borrowed money and any other
                  indebtedness or liability evidenced by notes, debentures,
                  bonds or similar obligations; and (bb) all other obligations
                  which under generally accepted accounting principles are
                  shown or should be shown on the balance sheet as
                  liabilities. Total Liabilities shall not, however, include
                  obligations that have been



                                       19

<PAGE>



                  subordinated to the Indebtedness and, if required by the 
                  Bank, to any applicable guaranty thereof.

         4.10 Subordinated Debt. The Borrower represents that it has delivered
to the Bank a true and correct copy of that certain Convertible Subordinated 
Note Purchase Agreement (as amended or restated from time to time, the "Note
Agreement") dated April 30, 1996, together with any and all amendments thereto.
The Borrower agrees that it shall not: (a) make any payment under the Note
Purchase Agreement in violation of the subordination provisions of Section 5
thereof; or (b) modify the Note Agreement without the Bank's prior written
consent. The Borrower agrees that the Indebtedness shall constitute Senior
Indebtedness within the meaning of the Note Agreement.

                                   ARTICLE V
                         REPRESENTATIONS AND WARRANTIES

         The Borrower represents and warrants, and so long as this Agreement
is in effect or any part of the Indebtedness remains unpaid, shall continue to
represent and warrant at all times, that:

         5.01 The Borrower and Subsidiaries. The Borrower and the Subsidiaries
are corporations duly incorporated and validly existing under and by virtue of
their respective states of incorporation. Each is duly licensed and qualified
in all other states and jurisdictions wherein the nature of the business
transacted by it or the ownership of its properties makes such licensing or
qualification as a foreign corporation necessary, if any except where the
failure to be so qualified would not have a material adverse effect on the
Borrower and its Subsidiaries taken as a whole. Each of the Borrower and its
Subsidiaries holds in full force and effect all material permits, licenses and
franchises necessary for it to carry out its operations in conformity with all
applicable laws and regulations.

         5.02 Authorization, Conflicts and Validity. The execution and
delivery of this Agreement and each of the other Loan Documents to which the
Borrower is or will be a party and the performance by the Borrower of all of
its obligations thereunder: (a) have been duly authorized by all requisite
corporate action; (b) will not violate or be in conflict with (i) any material
provision of applicable law (including, without limitation, any applicable
usury or similar law); (ii) any material order, rule or regulation of any
court or other governmental authority; (iii) any material provision of its
certificate of incorporation or bylaws, including any amendments thereto, or
any resolution with continuing effect adopted by its Board of Directors or
shareholders; or (iv) any material provision of any shareholders'
agreement or trust respecting securities of its issue or related rights; (c)
will not violate, be in conflict with, result in a breach of or constitute a
default (with or without the giving of notice or the passage of 

             
                                       20

<PAGE>



time or both) under any material instrument, indenture, agreement or other
obligation to which it is a party or by which it or any of its assets and
properties is or may be bound or subject; and (d) except as specifically
contemplated by this Agreement or any other Loan Documents, will not result in
the creation or imposition ofany lien, charge or encumbrance of any nature upon
any of its assets and properties. The Loan Documents to which the Borrower is
or will be a party when executed and delivered will be legal, valid and binding
obligations of the Borrower, enforceable in accordance with their respective
terms and provisions.

         5.03 Consents. Except as otherwise disclosed on Schedule 5.03
attached hereto, no consent, approval or authorization of, or registration,
declaration or filing with, any governmental authority or other person
(including, without limitation, the shareholders of the Borrower) is required
as a condition precedent, concurrent or subsequent to or in connection with
the due and valid execution, delivery and performance by the Borrower of this
Agreement or any other Loan Document to which it is or will be a party, or the
legality, validity, binding effect or enforceability of any of the respective
representations, warranties, covenants and other terms and provisions thereof.
Each franchise, license, certificate, authorization, approval or consent from
any governmental authority material to the present conduct of the business and
operations of the Borrower or its Subsidiaries, or required for the
acquisition, ownership, improvement, operation or maintenance by it of any
material portion of the assets and properties it now owns, operates or
maintains, has been obtained and validly granted, is in full force and effect
and constitutes valid and sufficient authorization therefor.

         5.04 Financial Statements. The Borrower has heretofore made available
to the Bank financial statements as of and for the fiscal year ending December
31, 1995, and for the period ending September 28, 1996. Those financial
statements fairly present the financial condition of the Borrower and the
Subsidiaries taken as a whole and the results of their operations as of the
dates thereof. Those financial statements have been prepared in accordance
with generally accepted accounting principles consistently applied throughout
the periods involved, except for changes, if any, stated in the related
accountants' reports.

         5.05 Changes in Financial Condition. Since September 28, 1996, there
has been no material adverse change in the assets or the financial condition
of the Borrower or its Subsidiaries taken as a whole from that set forth or
reflected in the financial statements as of that date. The Borrower and its
Subsidiaries are current in the payment of all of their debts and performance
of all of their material obligations.

         5.06 Legal or Administrative Proceedings. Except as otherwise
disclosed on Schedule 5.06 attached hereto, there are no



                                       21


<PAGE>


material actions, suits, investigations or proceedings by any person or entity
pending or to the best knowledge of the Borrower threatened against the
Borrower or any Subsidiary or to which they are a party involving the
possibility of any judgment or liability not fully covered by insurance or by
adequate reserves set up onthe books of the Borrower or the Subsidiaries.

         5.07 Assets. Except as otherwise disclosed on Schedule 5.07 attached
hereto, the Borrower and the Subsidiaries have good, marketable title to all
of their assets reflected in the financial statements dated September 28,
1996, and such assets are free and clear of all liens, charges and
encumbrances except as shown on those financial statements.

         5.08 Losses. Since September 28, 1996, no material loss, damage,
destruction or taking of any of the physical properties of the Borrower or any
of its Subsidiaries has occurred which has not been fully restored or
replaced, or which is not fully covered by insurance, and neither the property
nor business of the Borrower and its Subsidiaries, taken as a whole, has been
adversely affected in any substantial way as the result of any accident,
strike, lockout, combination of workmen, embargo, riot, war, act of God or
public enemy. Neither the Borrower, any Subsidiary nor any of their officers
are aware of any material adverse fact concerning the conditions or future
prospects of the Borrower or any Subsidiary which has not been fully disclosed
in writing to the Bank.

         5.09 Corporate Restrictions. Except as otherwise disclosed on
Schedule 5.09 attached hereto, neither the Borrower nor any Subsidiary is a
party to any contract or subject to any charter or other corporate restriction
which would materially and adversely affect its property or business, or its
ability to perform its obligations under the Loan Documents.

         5.10 Taxes. The Borrower and the Subsidiaries have filed all federal
and state tax returns which are required to be filed, and have paid all taxes
as shown on the returns and on all assessments received by them to the extent
that the taxes have become due. Proper and accurate amounts have been withheld
by the Borrower and its Subsidiaries from their respective employees for all
periods in full and complete compliance with the tax, social security and
unemployment withholding provisions of applicable federal, state, local and
foreign law and such withholdings have been timely paid to the respective
governmental agencies.

         5.11 Default. There exists as of the date hereof no Default or Event 
of Default.

         5.12 Other Representations.  All warranties and representations of 
the Borrower or any of the Subsidiaries contained in any



                                       22


<PAGE>



of the Loan Documents are true and accurate in all material respects.

         5.13 Subsidiaries. As of the date hereof, the Borrower owns no 
Subsidiaries other than NIK Public Safety, Inc., Defense Technology Corporation
of America and Armor Holdings Properties, Inc. The Borrower owns 100% of the
outstanding common stock of its Subsidiaries. The only persons or entities in
which the Borrower owns an equity interest are the Subsidiaries. No person or
entity holds or is entitled to obtain any other equity interest in the
Subsidiaries.

         5.14 ERISA. No Plan has incurred any material accumulated funding
deficiency within the meaning of the Employee Retirement Income Security Act
of 1974, and neither the Borrower nor any Subsidiary has incurred any material
liability to the Pension Benefit Guaranty Corporation (or any successor) in
connection with any Plan.

         5.15 Purpose of the Borrower. The Borrower does not own any "margin
security" within the meaning of Regulation U (12 CFR Part 221) of the Board of
Governors of the Federal Reserve System. None of the proceeds of the loan by
the Bank to the Borrower will be used for the purpose of purchasing or
carrying any margin security or for the purpose of reducing or retiring any
indebtedness which was originally incurred to purchase or carry a margin
security or for any other purpose which might constitute this transaction a
"purpose credit" within the meaning of Regulation U, as now in effect or as it
may hereafter be amended. Neither the Borrower nor any agent acting on its
behalf has taken or will take any action which might cause this Agreement or
any Loan Document to violate Regulation U or any other regulation of the Board
of Governors of the Federal Reserve System or to violate the Securities
Exchange Act of 1934, in each case as in effect now or as the same may
hereafter be amended.

         5.16 Payment of Loan Proceeds. The Bank is authorized to disburse all
proceeds of any loan to the Borrower hereunder directly to or upon the order
of the president, vice president--finance, vice president--corporate
development or controller of the Borrower without looking into the use of
those proceeds. The president of the Borrower as of the date hereof is
Jonathan Spiller, the vice president--finance of the Borrower as of the date
hereof is Carol Burke, the vice president--corporate development of the
Borrower as of the date hereof is Robert Schiller and the controller of the
Borrower as of the date hereof is _____________________. The Bank may rely on
the fact that each continues to serve in that capacity until the Bank receives
written notice to the contrary.

         5.17 Solvency. After giving effect to the full funding of the loans
contemplated herein, the Borrower and each Subsidiary 


                                       23


<PAGE>



will be solvent. "Solvent" shall mean, when used with respect to any person or
entity, that: (a) such person or entity does not intend to incur, and does not
believe and has no reason to believe that it will incur, debts beyond its
ability to pay as they become due; (b) the sum of such person's or entity's
assets is greater than all of such person's or entity's liabilities at a fair
valuation; (c) such person or entity has sufficient cash flow to enable it to
pay its debts as they become due; and (d) such person or entity does not have
unreasonably small capital to carry on such person or entity's business as
theretofore operated and all businesses in which such person or entity is about
to engage. "Fair valuation" is intended to mean that value which can be
obtained if the assets are sold within a reasonable time in arm's-length
transactions in an existing and not theoretical market.

         5.18 Investment Company Act.  Neither the Borrower nor any of
its Subsidiaries is an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.

                                   ARTICLE VI
                               EVENTS OF DEFAULT

         6.01 Events of Default.  Each of the following events shall
constitute an "Event of Default" hereunder:

                  (a) if the Borrower defaults in the payment of any
         principal, interest or other amount under the Note or the Acceptance
         Agreement when the same shall become due, either by the terms thereof
         or otherwise as provided herein and such default continues for a
         period of ten days thereafter; or

                  (b) if the Borrower or any Subsidiary defaults: (i) in any
         payment of principal of or interest on any other obligation beyond
         any period of grace provided with respect thereto and such default
         results in the acceleration of the obligation in question or (ii) in
         the performance or observance of any other agreement, term, or
         condition contained in any agreement under which any such obligation
         is created if the effect of such default is to cause, or permit the
         holder or holders of such obligation (or trustee on behalf of such
         holder or holders) to cause, such obligation to become due prior to
         its stated maturity, except for obligations disputed in good faith if
         the Bank is promptly notified thereof and, if required by generally
         accepted accounting principles, funded reserves are established or

                  (c) if any statement, representation or warranty made by the
         Borrower or any Subsidiary herein or in any writing now or hereafter
         furnished in connection with or pursuant to the Loan Documents or in
         connection with any audit shall be false in any material respect; or
         if the Borrower or any Subsidiary 


                                       24

<PAGE>


         omits or fails to disclose within 10 days any substantial contingent 
         or liquidated liabilities, or any material adverse change in facts 
         previously disclosed by any statement, representation, certificate 
         or warranty to the Bank; or

                  (d) if the Borrower or any Subsidiary defaults in the
         performance or observance of any covenants contained in Section 4.09 
         hereof; or

                  (e) (i) if any Event of Default occurs under any Loan
         Document; or (ii) if the Borrower or any Subsidiary defaults in the
         performance or observance of any other agreement, covenant, term or
         condition contained herein or in any other Loan Document and such
         default shall not have been remedied within 30 days after written
         notice thereof is sent by the Bank to the Borrower except, however,
         that an Event of Default shall not be deemed to have occurred if the
         Borrower or the Subsidiary, as the case may be, commences to cure
         such default within such 30-day period and the Borrower or such
         Subsidiary, as the case may be, completes such cure within 60 days
         after such notice; or

                  (f) if any Included Subsidiary disputes, attempts to
         avoid or indicates its intent to seek to avoid its obligations
         under any Guaranty; or

                  (g) if the Borrower or any Subsidiary makes an
         assignment for the benefit of creditors or is generally not
         paying its debts as they become due; or

                  (h) if any order, judgment or decree is entered under the
         bankruptcy, reorganization, compromise, arrangement, insolvency,
         readjustment of debt, dissolution or liquidation or similar law of
         any jurisdiction adjudicating the Borrower or any Subsidiary,
         bankrupt or insolvent; or

                  (i) if the Borrower or any Subsidiary petitions or applies
         to any tribunal for, or consents to, the appointment of a trustee,
         receiver, custodian, liquidator, or similar official, of the Borrower
         or any Subsidiary or of any substantial part of the assets of the
         Borrower or any Subsidiary, or commences a voluntary case under the
         Bankruptcy Code of the United States or any proceedings relating to
         the Borrower or any Subsidiary, under the bankruptcy, insolvency, or
         moratorium law of any other jurisdiction, whether now or hereafter in
         effect; or

                  (j) if any such petition or application is filed, or any
         such proceedings are commenced, against the Borrower or any
         Subsidiary and if the Borrower or the Subsidiary by any act indicates
         its or his approval thereof, consent thereto, or acquiescence
         therein, or an order is entered in an involuntary 


                                       25

<PAGE>


         case under the Bankruptcy Code of the United States, or an order, 
         judgment or decree is entered appointing any such trustee, receiver, 
         custodian, liquidator, or similar official, or approving the petition
         in any proceedings, and such order remains unstayed and in effect for 
         more than 60 days; or

                  (k) if any order is entered in any proceedings against
         the Borrower or any Subsidiary decreeing the dissolution or
         split-up of the Borrower or any Subsidiary; or

                  (l) if any Event of Default occurs under the Note
         Agreement.

         6.02 Default. A "Default" shall be deemed to have occurred hereunder
if any event or condition occurs which would constitute an Event of Default
hereunder upon the satisfaction of any requirement for notice or passage of
time in connection with such event or condition.

         6.03 Remedies. If any Default shall occur, any obligation of the Bank
to make advances hereunder or under any Loan Document, or to create
Acceptances, shall be terminated without notice to the Borrower. In addition,
if any Event of Default shall occur, the Bank may by notice to the Borrower,
effective upon dispatch, declare the entire unpaid principal amount then
outstanding under the Loan Documents, all interest accrued and unpaid under
the Loan Documents and all other Indebtedness of the Borrower to the Bank
under this Agreement or any of the other Loan Documents to be forthwith due
and payable. Thereupon, the then outstanding principal amount under the Loan
Documents, all such accrued interest and all such other Indebtedness shall
become and be forthwith due and payable, without presentment, demand, protest
or further notice of any kind, all of which are hereby expressly waived by the
Borrower, and the Bank may immediately enforce payment of all such amounts and
exercise any or all of the rights and remedies of the Bank under this
Agreement and other Loan Documents, including without limitation the right to
resort to any or all collateral securing any obligations under the Loan
Documents and exercise any or all of the rights of a secured party pursuant to
the Uniform Commercial Code of Florida and other applicable similar statutes
in other jurisdictions.

         6.04 Termination of Rights to Advances; Automatic Acceleration.
Notwithstanding anything herein to the contrary, (a) the Borrower's right,
if any, to obtain any additional advances under the Loan Documents shall
automatically terminate upon the initiation against the Borrower or any
Subsidiary of any proceeding under the Federal Bankruptcy Code, or upon the
occurrence of any Event of Default described in subparagraphs (g), (h), (i),
(j), or (k) of Section 6.01, and (b) all Indebtedness shall automatically be
and become immediately due and payable upon the occurrence of


                                       26

<PAGE>


any Event of Default described in subparagraphs (h), (i), or (j) of Section
6.01.
                                  ARTICLE VII
                                 MISCELLANEOUS

         7.01 Expenses.  The Borrower agrees to pay, and save the Bank
harmless against liability for the payment of, all reasonable out-of-pocket
expenses arising in connection with this transaction (including any renewals or
modifications relating hereto), including any state documentary stamp taxes or
other taxes (including interest and penalties, if any) which may be determined
to be payable in respect to the execution and delivery of any Loan Documents
executed in connection with this Agreement or any such renewal or modification,
and the reasonable fees and expenses of the Bank's counsel. The Borrower
acknowledges that it has participated with the Bank in establishing the
structure of this transaction and that it has independently determined the
amount of documentary stamp and other taxes due in connection herewith. The
Borrower has not relied upon representations of the Bank or its counsel in
calculating the amount of such taxes, and the Borrower shall be liable for any
additional taxes (including interest and penalties) which may be due in
connection with this transaction or any renewals hereof. If an Event of Default
shall occur, the Borrower shall also pay all of the Bank's costs of collection
including reasonable Bank employee travel expenses, court costs and reasonable
fees of attorneys and legal assistants (whether incurred in connection with
trial or appellate proceedings). The Borrower authorizes the Bank to make
advances under the Note and to debit its deposit accounts to pay all expenses.

         7.02 Survival of Representations and Warranties. All representations
and warranties contained herein or made in writing by the Borrower in
connection herewith shall survive the execution and delivery of the Loan
Documents.

         7.03 Successors and Assigns. All covenants and agreements in this
Agreement contained by or on behalf of any of the parties hereto shall bind and
inure to the benefit of the respective successors and assigns of the parties
hereto whether so expressed or not. The Borrower shall not be entitled to
assign its rights hereunder. The Bank may, with the Borrower's consent, which
shall not be unreasonably withheld or delayed, assign all or part of its rights
hereunder or grant participations herein. The Bank may disclose to any such
assignee or participant (or any prospective assignee or participant) such
information concerning the Borrower and its affiliates as the Bank deems
appropriate.

         7.04 No Third Party Beneficiaries. The Included Subsidiaries are not
third party beneficiaries to this Loan Agreement and, in addition to the
rights of the Bank set forth in the Guaranties, the Bank, with the concurrence
of the Borrower, shall have the right

                                       27


<PAGE>


without impairing the liability of the Included Subsidiaries to alter and amend
this Loan Agreement without notice to or consent by the Included Subsidiaries.

        7.05 Notices. All communications, notices or demands provided for 
hereunder or under any other Loan Document to which the Borrower is a party
shall be sent by first class mail, by courier, by hand or by certified mail as
follows or to such other address with respect to any party as such party shall
notify the others in writing:

         To the Bank:          Barnett Bank, N.A.
                               50 North Laura Street
                               Jacksonville, Florida 32202
                               Attn:  Corporate Banking Group

         To the Borrower:      Armor Holdings, Inc.
                               191 Nassau Place Road
                               Yulee, Florida 32097
                               Attn:  Robert Schiller

                               With a copy to:

                               Kane Kessler, P.C.
                               1350 Avenue of the Americas
                               New York, New York 10019
                               Attn: Robert L. Lawrence, Esq.

Each such communication, notice or demand shall be deemed given: (i) when
deposited in the mail with proper postage affixed if sent by mail; or (ii)
when actually delivered to the appropriate address if sent by courier or by
hand.

         7.06 Applicable Law.  This Agreement shall be construed and
enforced in accordance with the laws of the State of Florida.

         7.07 Headings. The descriptive section headings herein have been
inserted for convenience only and shall not be deemed to limit or otherwise
affect the construction of any provisions hereof.

         7.08 Counterparts.   This Agreement may be executed simul-
taneously in several counterparts.  Each counterpart shall be
deemed an original.

         7.09 Remedies Cumulative. All rights and remedies of the Bank
hereunder are cumulative and in addition to any rights and remedies which the
Bank may have under the laws of Florida. The Bank's exercise of any one
right or remedy against one party hereto will not deprive the Bank of any
right or remedy against that party or any other parties hereto. No right,
power or remedy conferred upon or reserved to the Bank under this Agreement or
any other of the Loan Documents is exclusive of any other right, power or
remedy 

                                       28

<PAGE>



in any of the Loan Documents, but each and every such right, power and
remedy shall be cumulative and concurrent and shall be in addition to any
other right, power and remedy given hereunder or under any other Loan
Documents, or now or hereafter existing at law, in equity or by statute.

         7.10 Delay or Omission.  No delay or omission of the Bank to
exercise any right, power or remedy under any of the Loan Documents or
accruing upon any Event of Default shall exhaust or impair any such right,
power or remedy or shall be construed to waive any such Event of Default or to
constitute acquiescence therein. Every right, power and remedy given to the
Bank under any of the Loan Documents may be exercised from time to time and as
often as may be deemed expedient by the Bank.

         7.11 No Waiver of One Default to Affect Another. No waiver of any
Default or Event of Default hereunder shall extend to or affect any subsequent
Default or Event of Default or any other Default or Event of Default then
existing, or impair any rights, powers or remedies consequent thereon.

         7.12 Changes. No term of any Loan Document may be changed, waived,
discharged or terminated orally, or by any action or inaction, but only by an
instrument in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought.

         7.13 Severability. If any portion of any Loan Document is declared
void by any court as illegal or against public policy, the remainder of the
Loan Documents in question shall continue in full effect.

         7.14 Lost or Damaged Note. Upon receipt by the Borrower of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of
the Note (the "Lost Note") and of an indemnity agreement reasonably
satisfactory to the Borrower, the Borrower will make and deliver to the Bank a
new Note of like tenor, date and principal amount in lieu of the Lost Note.

         7.15 Merger.  This Agreement supersedes and replaces any
commitment letter relating to the Indebtedness.

         IN WITNESS WHEREOF, the parties hereto have signed and sealed this
Agreement on the day and year first above written.

                                        ARMOR HOLDINGS, INC.


                                        By___________________________________

                                          Its________________________________


                                       29

<PAGE>






                                         BARNETT BANK, N.A.


                                         By___________________________________

                                           Its________________________________




STATE OF GEORGIA
COUNTY OF CAMDEN

         The foregoing instrument was executed, acknowledged and delivered
before me this _______ day of _______________, 1996, by _______________________,
the _________________________ of Armor Holdings, Inc., on behalf of the 
corporation, in Camden County, Georgia.



                                 ------------------------------------
                                  Notary Public, State and County
                                    Aforesaid
                                  My Commission Expires:

                                                (Notary Seal)


STATE OF GEORGIA
COUNTY OF CAMDEN

         The foregoing instrument was executed, acknowledged and delivered
before me this _______ day of _______________, 1996, by _____________________, 
the _________________________ of Barnett Bank, N.A., on behalf of the bank, in 
Camden County, Georgia.



                                   ------------------------------------
                                   Notary Public, State and County
                                     Aforesaid
                                   My Commission Expires:

                                                  (Notary Seal)
  

                                        30