PROMISSORY NOTE

$9,000,000                                                          May 31, 1995

         FOR VALUE RECEIVED, the undersigned,  Challenger International, Ltd., a
Bermuda  corporation,  Challenger  Industries,  Inc.,  a  Delaware  corporation,
Lakefield Arms Limited, an Ontario,  Canada  corporation,  Passive Bullet Traps,
Ltd., an Isle of Man corporation,  and Passive Bullet Traps, Inc., d/b/a/ Savage
Range Systems, a Texas corporation,  (collectively, "Maker"), do hereby, jointly
and  severally,  promise  to  pay  to  the  order  of O.  F.  Mossberg  &  Sons,
Incorporated and Maverick Arms, Inc. (collectively,  "Lender"), at its office at
7 Grasso Avenue,  North Haven,  Connecticut 06473, or at such other place as the
holder  hereof  (including  Lender,  hereinafter  referred to as  "Holder")  may
designate,  the principal sum of NINE MILLION AND NO/100  DOLLARS  ($9,000,000),
together  with interest on the unpaid  balance of this Note  beginning as of the
date hereof,  before or after  maturity or  judgment,  computed at the per annum
rates  provided in the next paragraph  herein,  which rates shall be computed on
the basis of a Three Hundred  Sixty (360) day year and actual days elapsed,  and
together  with all taxes  levied or assessed on this Note or the debt  evidenced
hereby against the Holder, and together with all costs,  expenses and attorneys'
and other  professional  fees  incurred in any action to collect this Note or to
enforce, defend, protect, preserve, foreclose or realize upon any lien, security
interest  or other  collateral  securing  this  Note or to  enforce,  foreclose,
defend,  preserve,  protect or sustain  any such lien or  security  interest  or
guaranty or other agreement or in any litigation or controversy  arising from or
connected with any of the foregoing.

         The  outstanding  balance of this Note shall  bear  interest  at a rate
equal to:  (i) nine  percentage  points  (9%) per annum,  beginning  on the date
hereof  and  continuing  through  and  including  July  31,  1995;  (ii)  eleven
percentage  points (11%) per annum,  beginning on August 1, 1995 and  continuing
through and including  August 31, 1995; (iii) thirteen  percentage  points (13%)
per annum,  beginning on September 1, 1995 and continuing  through and including
September  31,  1995;  and (iv)  seventeen  percentage  points  (17%) per annum,
beginning on October 1, 1995 and continuing  thereafter  until this Note is paid
in full. Interest shall be compounded, and be payable in arrears, on the Payment
Dates (as hereinafter defined).

         Principal,  all accrued interest and any other sums due under this Note
shall be due and payable on the date of the  Closing,  as defined in a letter of
intent, dated May 23, 1995, between Lender and Challenger International, Ltd. If
the Closing does not occur on or before October 31, 1996,  then  principal,  all
accrued interest and any other sums due under this Note shall be due and payable
as follows: (i) one (l) installment of $4,500,000, plus all accrued


                                      -2-


interest  on October  31,  1995;  and (ii) one (1)  installment  of  $4,500,000,
together  with all accrued  interest and any other sums due under this Note,  on
October 31, 1996.  The Closing Date,  October 31, 1995 and October 31, 1996, are
referred to herein as the "Payment Dates."

         Maker may prepay the  indebtedness  under this Note in whole or in part
at any time and from time to time without the imposition of any prepayment fee.

         Unless applicable law provides otherwise,  all payments and prepayments
received  by Holder  under  this Note  shall,  at the option of the  Holder,  be
applied by the Holder in the following order:

                  (a) to the then outstanding  charges and expenses  incurred by
the Holder in enforcing any security  granted to the Holder in  connection  with
this Note;

                  (b) to any unpaid and accrued interest on this Note; and then

                  (c) to the  outstanding  principal  indebtedness  of the Maker
under this Note in favor of the Holder.

         Any and all  prepayments  of principal  shall be credited to the unpaid
principal of this Note in the inverse  order of  maturity,  and shall not affect
the  obligation to pay the regular  installments  required  hereunder  until the
entire indebtedness has been paid.

         Maker agrees that:  (i) if any  installment of interest or principal or
any other sum due under this Note shall not be paid when it is due and  payable;
or (ii)  upon the  occurrence  of any  Default  Event,  as  defined  in a Letter
Agreement  executed by and among the Maker and the Lender  dated the date hereof
(the "Letter Agreement"),  or (iii) upon the occurrence of any Event of Default,
as defined in a Pledge Agreement,  dated the date hereof, between the Lender and
Challenger International, Ltd., or in a Pledge Agreement, dated the date hereof,
between the Lender and Challenger Industries,  Inc.  (collectively,  the "Pledge
Agreements"),   then,  upon  the  happening  of  any  such  event,   the  entire
indebtedness  with accrued  interest  thereon due under this Note shall,  at the
option of the Holder,  accelerate and become immediately due and payable without
notice.  Failure to exercise  such option  shall not  constitute a waiver of the
right to exercise the same in the event of any subsequent event of default.

         Maker  agrees  that no delay or  failure  on the part of the  holder in
exercising any power, privilege, remedy, option or right hereunder shall operate
as a waiver thereof or of any other power,


                                      -3-


privilege,  remedy or right;  nor shall any  single or partial  exercise  of any
power, privilege, remedy, option or right hereunder preclude any other or future
exercise thereof or the exercise of any other power,  privilege,  remedy, option
or right. The rights and remedies  expressed  herein are cumulative,  and may be
enforced successively,  alternatively,  or concurrently and are not exclusive of
any  rights or  remedies  which  holder  may or would  otherwise  have under the
provisions of all  applicable  laws,  and under the provisions of all agreements
between  Maker and the Lender or  between  any  endorser  or  guarantor  and the
Lender.

         Notwithstanding  any  provisions of this Note, it is the  understanding
and  agreement  of  the  Maker  and  Holder  (and  any   guarantors  of  Maker's
liabilities,  if any) that the maximum  rate of interest to be paid by the Maker
(or  guarantors  of  Maker's  liabilities)  to the  Holder  shall not exceed the
highest  or  the  maximum  rate  of  interest  permissible  to be  charged  by a
commercial  lender such as Lender to a commercial  borrower  such as Maker under
the laws of the State of  Connecticut  or any other  applicable  law. Any amount
paid in  excess of such  rate  shall be  considered  to have  been  payments  in
reduction of principal.

         THE  MAKER  ACKNOWLEDGES  THAT THE  LOAN  EVIDENCED  BY THIS  NOTE IS A
COMMERCIAL TRANSACTION AND WAIVES ITS RIGHTS TO NOTICE AND HEARING UNDER CHAPTER
903a OF THE CONNECTICUT  GENERAL STATUTES,  OR AS OTHERWISE ALLOWED BY ANY STATE
OR FEDERAL LAW WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH HOLDER MAY DESIRE TO
USE, AND FURTHER  WAIVES ITS RIGHTS TO REQUEST THAT HOLDER POST A BOND,  WITH OR
WITHOUT SURETY, TO PROTECT THE MAKER OR ANY ENDORSERS, GUARANTORS OR SURETIES OF
THE MAKER'S  INDEBTEDNESS  HEREUNDER  AGAINST  DAMAGES THAT MAY BE CAUSED BY ANY
PREJUDGMENT  REMEDY  SOUGHT OR OBTAINED  BY HOLDER.  The Maker  further,  waives
diligence,  demand,  presentment for payment, notice of nonpayment,  protest and
notice of protest,  and notice of any renewals or extensions  of this Note,  and
all rights  under any statute of  limitations.  THE MAKER  ACKNOWLEDGES  THAT IT
MAKES  THIS  WAIVER  KNOWINGLY,  VOLUNTARILY,  WITHOUT  DURESS  AND  ONLY  AFTER
CONSIDERATION OF THE RAMIFICATIONS OF THIS WAIVER WITH ITS ATTORNEYS.  THE MAKER
FURTHER  ACKNOWLEDGES  THAT LENDER HAS NOT AGREED WITH OR  REPRESENTED  TO MAKER
THAT  THE  PROVISIONS  OF THIS  PARAGRAPH  WILL  NOT BE  FULLY  ENFORCED  IN ALL
INSTANCES.

         This Note and all  covenants,  agreements  and  provisions set forth in
this Note shall inure to the benefit of Holder and its  successors  and assigns,
including,   without  limitation,   Mossberg   Corporation  or  Bank  of  Boston
Connecticut and any subsequent senior lender of Lender.


                                       -4-


         This Note  shall be  governed  by the laws of the State of  Connecticut
(but not its conflicts of law provisions).

                                                  CHALLENGER INTERNATIONAL, LTD.
                                                  
                                                  By /s/ Peter G. Leighton
                                                    ---------------------------
                                                    Peter G. Leighton
                                                    Its President and Managing
                                                        Director
                                                  

                                                  CHALLENGER INDUSTRIES, INC.
                                                  
                                                  By /s/ Peter G. Leighton
                                                    ---------------------------
                                                    Peter G. Leighton
                                                    Its President 
                                                        
                                                  
                                                  LAKEFIELD ARMS LIMITED
                                                  
                                                  By /s/ Peter G. Leighton
                                                    ---------------------------
                                                    Peter G. Leighton
                                                    Its President 
                                                  

                                                  PASSIVE BULLET TRAPS, LTD.
                                                  
                                                  By /s/ Peter G. Leighton
                                                    ---------------------------
                                                    Peter G. Leighton
                                                    Its Director 
                                                  

                                                  PASSIVE BULLET TRAPS, INC.
                                                  d/b/a SAVAGE RANGE SYSTEMS
                                                  
                                                  By /s/ Herman Frietsch
                                                    ---------------------------
                                                    Herman Frietsch
                                                    Its Chairman
                                      






         The undersigned, O. F. Mossberg & Sons, Incorporated and Maverick Arms,
Inc., do hereby endorse that certain  $9,000,000.00  promissory  note payable to
the undersigned by Challenger International,  Ltd; Challenger Industries,  Inc.,
Lakefield  Arms Limited,  Passive  Bullet Traps,  Ltd. and Passive Bullet Traps,
Inc. d/b/a Savage Range Systems as of this 31st day of May, 1995 as follows:

         Pay to the order of Bank of Boston Connecticut.

         O. F. MOSSBERG & SONS, INCORPORATED


         By: /s/ William H. Schoner
            -----------------------------
            William H. Schoner
            Its Vice President
         
         MAVERICK ARMS, INC.

         By: /s/ William H. Schoner
            -----------------------------
            William H. Schoner
            Its Vice President