EXHIBIT 10.01-01
FIRST AMENDMENT dated as of October 28, 1996 (this
"First Amendment"), to the Credit Agreement dated as of July
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31, 1996 (the "Credit Agreement"), among Firearms Training
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Systems, Inc. (the "Borrower"), the lenders listed on the
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signature pages thereto (the "Lenders") and NationsBank,
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N.A. (South), as agent for the Lenders (in such capacity,
the "Agent") and as issuing bank (in such capacity, the
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"Issuing Bank").
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The parties hereto have agreed, subject to the terms and conditions hereof,
to amend the Credit Agreement as provided herein.
Capitalized terms used and not otherwise defined herein shall have the
meanings assigned to such terms in the Credit Agreement (the Credit Agreement,
as amended by, and together with, this First Amendment, and as hereinafter
amended, modified, extended or restated from time to time, being called the
"Amended Agreement").
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Accordingly, the parties hereto hereby agree as follows:
SECTION 1.01. Amendment to Section 1.01. (a) The following definition is
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hereby added to Section 1.01 immediately following the definition of "Permitted
Investors" therein:
""Permitted IPO" shall mean an IPO that (a) is consummated on or
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before December 31, 1996 and (b) results in Net Cash Proceeds to FATS of at
least $41,300,000, plus the amount of any accrued and unpaid interest on
the Permitted Senior Subordinated Notes."
SECTION 1.02. Amendment to Section 2.11(g). The last sentence of Section
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2.11(g) is hereby deleted and the following sentence shall be substituted in
lieu thereof:
"Notwithstanding the foregoing, in the case of a Refinancing Mandatory
Prepayment Event consisting of a Permitted IPO, the Borrower shall be
required to use the Net Cash Proceeds thereof as follows: (A) first, to
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prepay in full the Permitted Senior Subordinated Notes for $40,000,000
(plus (I) the amount of any accrued and unpaid interest up to the date of
the prepayment of the Permitted Senior Subordinated Notes and (II) the
$1,300,000 fee due to the Bridge Lenders upon such prepayment), (B) second,
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to satisfy its obligations under the Contingent Purchase Price Rights for
$19,300,000, provided that such rights are fully extinguished as a result
of such payment, (C) third, to repurchase Warrants covering 288,434 shares
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of Common Stock from the Bridge Lenders at a per share purchase price equal
to the price paid by the public in the Permitted IPO, net of the per share
underwriting discount paid by FATS in the Permitted IPO, and (D) fourth, to
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prepay Tranche A Term Loans and Tranche B Term Loans on a pro rata basis.
Any Net Cash Proceeds applied to either the Tranche A Term Loans or Tranche
B Term Loans pursuant to the immediately preceding sentence
shall be applied to reduce the remaining scheduled installments of
principal due in respect of such Class of Loans under Section 2.11(a) or
(b), as applicable, on a pro rata basis according to the amount of each
such scheduled payment (except that a portion of such Net Cash Proceeds
may, at the request of the Borrower, be applied in direct order of maturity
so long as after giving effect thereto, no more than the next four
regularly scheduled payments of principal of either the Tranche A Term
Loans or Tranche B Term Loans due under Section 2.11(a) or (b), as
applicable, have been prepaid)."
SECTION 1.03. Amendment to Section 5.09. The number "120" in the first
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line of Section 5.09 is hereby deleted and the number "180" is hereby
substituted in lieu thereof.
SECTION 1.04. Amendment to Section 6.06. (a) Clause (x) of the proviso
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in Section 6.06 is hereby deleted and the following clause is hereby substituted
in lieu thereof:
"(x) FATS may satisfy its obligations under the Contingent Purchase
Price Rights as in effect of the Closing Date by either (A) issuing shares
of Common Stock, so long as all such shares of Common Stock are (unless the
Termination and Release Conditions have been satisfied) pledged to the
Agent on behalf of the Lenders pursuant to the Seller Pledge Agreement (in
the case of any such shares issued to the Seller and its Affiliates) or an
Additional Pledge Agreement (in the case of any such shares issued to any
other person) or (B) making a payment in cash to the Seller of $19,300,000
solely with a portion of the Net Cash Proceeds to FATS of a Permitted IPO,
provided that such rights are fully extinguished as a result of such
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payment in cash; and"
(b) The following paragraph is hereby added immediately following clause
(x) thereof:
"(xi) FATS may repurchase the Warrants from the Bridge Lenders by
making a payment in cash to the Bridge Lenders solely with a portion of the
Net Cash Proceeds to FATS of a Permitted IPO, provided that the per share
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purchase price equals the price paid by the public in the Permitted IPO,
net of the per share underwriting discount paid by FATS in the Permitted
IPO."
SECTION 1.05. Amendment to Section 6.13(a). The following parenthetical
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phrase is hereby added immediately before the comma at the end of clause (a) of
Section 6.13:
"(provided that the reclassification of the Board of Directors of FATS into
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a board with three classes each elected for three year terms and the
amendment of the By-laws of FATS to include the other provisions described
in the preliminary prospectus for the IPO filed with the SEC on September
30, 1996 under "Description of Capital Stock--Certain Provisions of the
Certificate of Incorporation and By-laws and Statutory Provisions" shall
not be deemed adverse in any respect to the Lenders)"
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SECTION 1.06. Amendment to Section 6.14(a). The following sentence is
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hereby added to the end of paragraph (a) of Section 6.14:
"Notwithstanding the foregoing, FATS may issue shares of Common Stock in a
Permitted IPO."
SECTION 1.07. Amendment to Section 2.05 of the Seller Pledge Agreement.
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The following sentence is hereby added to the end of Section 2.05 of the Seller
Pledge Agreement:
"Notwithstanding the foregoing, upon consummation of a Permitted IPO, the
Agent shall release (I) up to 150,000 shares of Common Stock and (II) up to
900,000 shares of Common Stock if the underwriter's over-allotment option
is exercised (in both cases, after giving effect to the proposed 1.66 to 1
stock split) pledged hereunder in accordance with the same procedures
applicable to a release of shares under the provisions of the immediately
preceding sentence."
SECTION 1.08. Representations and Warranties. The Borrower hereby
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represents and warrants to the Agent and the Lenders, as follows:
(a) The representations and warranties set forth in Article III of the
Amended Agreement, and in each other Loan Document, are true and correct in
all material respects on and as of the date hereof and on and as of the
First Amendment Effective Date with the same effect as if made on and as of
the date hereof or the First Amendment Effective Date, as the case may be,
except to the extent such representations and warranties expressly relate
solely to an earlier date.
(b) Each of the Borrower and the other Loan Parties is in compliance
with all the terms and conditions of the Amended Agreement and the other
Loan Documents on its part to be observed or performed and no Default or
Event of Default has occurred or is continuing under the Amended Agreement.
(c) The execution, delivery and performance by the Borrower of this
First Amendment have been duly authorized by the Borrower.
(d) This First Amendment constitutes the legal, valid and binding
obligation of the Borrower, enforceable against it in accordance with its
terms.
(e) The execution, delivery and performance by the Borrower of this
First Amendment (i) do not conflict with or violate (A) any provision of
law, statute, rule or regulation, or of the certificate of incorporation or
by-laws of the Borrower, (B) any order of any Governmental Authority or (C)
any provision of any indenture, agreement or other instrument to which the
Borrower is a party or by which it or any of its property may be bound and
(ii) do not require any consents under, result in a breach of or constitute
(with notice or lapse of time or both) a default under any such indenture,
agreement or instrument.
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SECTION 1.09. Effectiveness. This First Amendment shall become effective
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only upon satisfaction of the following conditions precedent (the first date
upon which each such condition has been satisfied being herein called the "First
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Amendment Effective Date"):
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(a) The Agent shall have received duly executed counterparts of this
First Amendment which, when taken together, bear the authorized signatures
of the Borrower and the Required Lenders.
(b) The Required Lenders shall be satisfied that the representations
and warranties set forth in Section 1.08 are true and correct on and as of
the First Amendment Effective Date and that no Default or Event of Default
has occurred or is continuing.
(c) There shall not be any action pending or any judgment, order or
decree in effect which, in the judgment of the Required Lenders or their
counsel, is likely to restrain, prevent or impose materially adverse
conditions upon performance by the Borrower or any other Loan Party of its
obligations under the Loan Documents.
(d) The Borrower shall have consummated a Permitted IPO.
(e) The Required Lenders shall have received such other documents,
legal opinions, instruments and certificates as they shall reasonably
request and such other documents, legal opinions, instruments and
certificates shall be satisfactory in form and substance to the Required
Lenders and their counsel. All corporate and other proceedings taken or to
be taken in connection with this First Amendment and all documents
incidental thereto, whether or not referred to herein, shall be
satisfactory in form and substance to the Required Lenders and their
counsel.
SECTION 1.10. APPLICABLE LAW. THIS FIRST AMENDMENT SHALL BE GOVERNED BY,
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AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, EXCEPT TO
THE EXTENT THAT THE FEDERAL LAWS OF THE UNITED STATES OF AMERICA MAY APPLY.
SECTION 1.11. Expenses. The Borrower shall pay all reasonable out-of-
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pocket expenses incurred by the Agent and the Required Lenders in connection
with the preparation, negotiation, execution, delivery and enforcement of this
First Amendment, including, but not limited to, the reasonable fees and
disbursements of counsel. The agreement set forth in this Section 1.11 shall
survive the termination of this First Amendment and the Amended Agreement.
SECTION 1.12. Counterparts. This First Amendment may be executed in any
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number of counterparts, each of which shall constitute an original but all of
which when taken together shall constitute but one agreement.
SECTION 1.13. Credit Agreement. Except as expressly set forth herein, the
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amendments provided herein shall not by implication or otherwise limit,
constitute a waiver of, or otherwise affect the rights and remedies of the
Lenders, the Agent or the other Secured Parties under the Amended Agreement or
any other Loan Document, nor shall they constitute
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a waiver of any Default or Event of Default, nor shall they alter, modify, amend
or in any way affect any of the terms, conditions, obligations, covenants or
agreements contained in the Amended Agreement or any other Loan Document. Each
of the amendments provided herein shall apply and be effective only with respect
to the provisions of the Amended Agreement specifically referred to by such
amendment. Except as expressly amended herein, the Amended Agreement shall
continue in full force and effect in accordance with the provisions thereof. As
used in the Amended Agreement, the terms "Agreement", "herein", "hereinafter",
"hereunder", "hereto" and words of similar import shall mean, from and after the
date hereof, the Amended Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to
be duly executed by their duly authorized officers, all as of the date first
above written.
FIREARMS TRAINING SYSTEMS, INC.,
as Borrower
By: /s/ Xxxxxx Xxxxx
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Name: Xxxxxx Xxxxx
Title: Chief Operating Officer
NATIONSBANK, N.A. (SOUTH), as Issuing
Bank, Swingline Lender and individually
as a Lender
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: Vice President
FIRST BANK NATIONAL ASSOCIATION, as a
Lender
By: /s/ Xxxx X. Xxxxx
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Name: Xxxx X. Xxxxx
Title: Vice President
FIRST SOURCE FINANCIAL LLP, as a Lender,
by First Source Financial, Inc., as Agent/Manager
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
BHF-BANK AKTIENGESELLSCHAFT, as a
Lender
By: /s/ Xxxx Xxxxxx
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Name: Xxxx Xxxxxx
Title: Vice President
By: /s/ Xxxxxx X. Leisel
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Name: Xxxxxx X. Leisel
Title: Vice President
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CREDITANSTALT CORPORATE FINANCE,
INC., as a Lender
By: /s/ Xxxx X. Xxxxx
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Name: Xxxx X. Xxxxx
Title: Senior Associate
By: /s/ Xxxxxx X. Xxxxxxxx
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Name: Xxxxxx X. Birginger
Title: Executive Vice President
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