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EXECUTION COPY
EXHIBIT 10.01-04
THIRD AMENDMENT dated as of March
31, 1999 (this "Third Amendment"), to the
Amended and Restated Credit Agreement dated
as of October 15, 1997, (as amended by the
First Amendment dated as of June 26, 1998
and the Second Amendment dated as of
November 13, 1998, and the Amended and
Restated Credit Agreement as so amended
being referred to herein as the "Credit
Agreement"), among Firearms Training
Systems, Inc., as Parent (the "Parent"),
FATS, Inc., as Borrower (the "Borrower"),
the lenders listed on the signature pages
thereto (the "Lenders"), NationsBank, N.A.,
as Agent, (in such capacity, the "Agent"),
Swingline Lender and Issuing Bank.
The parties hereto have agreed, subject to the terms and conditions
hereof, to further 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 Third Amendment, and as hereinafter
amended, modified, extended or restated from time to time, being called the
"Amended Agreement").
Accordingly, the parties hereto hereby agree as follows:
SECTION 1.01. Amendment to Section 2.10(f). Section 2.10(f) of the Credit
Agreement is hereby amended by deleting the following:
"upon the earlier of (x) March 31, 1999 or (y) the collection of
$4,782,810 from the Italian Air Force III "Italian Military Authorities
Purchase Order No. 11/3443-II/4653/2"
and adding the following in lieu thereof:
"on April 30, 1999".
SECTION 1.02. Amendment to Article V. Article V of the Credit Agreement
is hereby amended by inserting the following after the end of Section 5.13:
"SECTION 5.14. Third Amendment Fee. On the earlier of (a) April 15,
1999 and (b) the collection of a receivable from the Italian Air Force
III "Italian Military Authorities Purchase Order No. 11/3443-II/4653/2"
(which receivable is valued at $4,782,810), the Borrower shall pay to the
Agent for the ratable benefit of the Revolving Credit Lenders a fee equal
to 0.25% of the Revolving Credit Commitments as of March 31, 1999, as
consideration for the Lenders' agreements as set forth in the Third
Amendment dated as of March 31, 1999 to this Amended Agreement.
SECTION 5.15 Reduction Fee. Upon the occurrence of a Default or an
Event of Default as a result of the failure by the Borrower to reduce the
Aggregate
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Revolving Credit Exposure (as required by the terms of Section 2.12(c)
hereof) upon the reduction of the Revolving Credit Commitments set forth
in Section 2.10(f) hereof, the Borrower shall pay to the Agent for the
ratable benefit of the Lenders a fee (the "Reduction Fee") equal to 1.00%
of the total Commitments existing as of April 30, 1999 (prior to the
reduction of the Revolving Credit Commitments as set forth in Section
2.10(f) hereof). Acceptance of the Reduction Fee by the Agent or the
Lenders shall not constitute a waiver of such Event of Default, and
nothing in this Section 5.15 shall imply that such Event of Default is or
will be waived."
SECTION 1.03. Amendment to Article VII(c). Article VII(c) of the Credit
Agreement is hereby amended by deleting the word "or" after "5.09" and
inserting in lieu thereof a comma and by inserting a comma after "5.11" and
inserting after such comma "5.14 or 5.15".
SECTION 1.04. Forebearance. The Lenders have agreed to forebear
exercising rights and remedies, which rights and remedies may arise as a result
of an Event of Default (any such prospective Event of Default, a "Financial
Covenants Default") under the provisions of Section 7(c) of the Credit
Agreement with respect to Section 6.15 of the Credit Agreement (the "Financial
Covenants"), against assets of the Borrower and its Subsidiaries that, pursuant
to the terms of the Loan Documents, secure the Obligations of the Borrower to
the Agent and the Lenders under the Credit Agreement and the other Loan
Documents until April 30, 1999 (the period from the Third Amendment Effective
Date (as defined below) to April 30, 1999 is hereafter referred to as the
"Forbearance Period") in order to give the Borrower the opportunity to
negotiate in good faith with the Lenders to achieve a modification of the
Financial Covenants or a waiver of any Financial Covenants Default or other
arrangement, in any case satisfactory to the Lenders in their sole discretion.
It is understood that no Letters of Credit shall be issued under the Credit
Agreement during the Forbearance Period. Nothing in this Section 1.04 shall
imply any waiver or release by the Agent or the Lenders of any rights or
remedies to which they are entitled under the Credit Agreement or other Loan
Documents, or of the benefit of any other terms and conditions of the Credit
Agreement or other Loan Documents other than as expressly set forth in this
Section 1.04 during the Forbearance Period. If as of April 30, 1999, each
Financial Covenants Default, if any, has not been waived or the Financial
Covenants have not been modified to the satisfaction of Lenders in their sole
discretion, the Forbearance Period shall terminate, and the Lenders may
exercise all of their rights and remedies under the Credit Agreement and other
Loan Documents.
SECTION 1.05. Representations and Warranties. The Borrower hereby
represents and warrants to the Agents 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, including any
Schedules thereto, are true and correct in all material respects on and
as of the date hereof and on and as of the Third Amendment Effective Date
(as defined below) with the same effect as if made on and as of the date
hereof or the Third 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
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the terms and conditions of the Amended Agreement and the other Loan
Documents on its part to be observed or performed including, without
limitation, the obligation to pay all principal and interest due on and
prior to the date hereof 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
Third Amendment have been duly authorized by the Borrower.
(d) This Third Amendment constitutes the legal, valid and binding
obligation of the Borrower, enforceable against the Borrower in
accordance with its terms, subject to the effect of bankruptcy,
insolvency, reorganization, arrangement, moratorium, fraudulent
conveyance, voidable preference or similar laws and the application of
equitable principles generally.
(e) The execution, delivery and performance by the Borrower of this
Third Amendment (i) does not conflict with or violate (A) any provision
of law, statute, rule or regulation, or of the articles 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) does not require any consents under, result in a breach
of or constitute (alone or with notice or lapse of time or both) a
default or give rise to increased, additional, accelerated or guaranteed
rights of any person under any such indenture, agreement or instrument.
SECTION 1.06. Effectiveness. This Third Amendment shall become effective
only upon satisfaction of the following conditions precedent (the first date
upon which each such condition has been satisfied being herein called the
"Third Amendment Effective Date"):
(a) The Agent shall have received duly executed counterparts of
this Third Amendment which, when taken together, bear the authorized
signatures of the Parent, the Borrower and all the Lenders.
(b) The Lenders shall be satisfied that the representations and
warranties set forth in Section 1.05 hereof are true and correct on and
as of the Third Amendment Effective Date.
(c) There shall not be any action pending or any judgment, order or
decree in effect which, in the judgment of the 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 Lenders shall have received such other documents, legal
opinions, instruments and certificates as they shall reasonably request
and such other documents, legal opinions, instruments and certificates
shall be satisfactory in form and substance to the Lenders and their
counsel. All corporate and other proceedings taken or to be taken in
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connection with this Third Amendment and all documents incidental
thereto, whether or not referred to herein, shall be satisfactory in form
and substance to the Lenders and their counsel.
(e) The Agent shall have received payment of and all fees and
expenses set forth in Section 1.08.
SECTION 1.07. APPLICABLE LAW. THIS THIRD AMENDMENT SHALL BE GOVERNED BY,
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 1.08. Fees and Expenses. The Borrower shall pay all reasonable
out-of-pocket expenses incurred by the Agent and the Lenders in connection with
the preparation, negotiation, execution, delivery and enforcement of this Third
Amendment, including, but not limited to, the reasonable fees and disbursements
of counsel; provided, however that such expenses shall be excluded from the
calculations of the covenants set forth in Section 6.15 of the Credit Agreement
where applicable.
SECTION 1.09. Reporting Requirements. The Borrower will provide the
Agent, for distribution to the Lenders, with a written bi-weekly status report
on its efforts to sell the company, including a list of potential acquirers,
offers made to date, pending offers and scheduled meetings relating to such
sale, except that to the extent that the Borrower has entered into
confidentiality agreements prohibiting it from disclosing to the Lenders the
name of the potential acquirer such name may be withheld from the Lenders. Any
such confidential information supplied to the Agent and Lenders will be held in
confidence by the Agent and the Lenders, except to the extent that the Agent or
any Lender is required by any law, regulation, legal process, legal duty or
regulatory authority to disclose such confidential information. Nothing in this
Section 1.09 shall imply any waiver or consent to sale of the Borrower or that
Lenders will consent to such sale.
SECTION 1.10. Counterparts. This Third Amendment may be executed in any
number of counterparts, each of which shall constitute an original but all of
which when taken together shall constitute but one agreement.
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SECTION 1.11. Credit Agreement. Except as expressly set forth herein, the
amendments provided herein shall not by implication or otherwise limit,
constitute a waiver of, or otherwise affect the rights and remedies of the
Lenders, the Agent or the other Secured Parties under the Amended Agreement or
any other Loan Document, nor shall they constitute a waiver of any Default or
Event of Default, nor shall they alter, modify, amend or in any way affect any
of the terms, conditions, obligations, covenants or agreements contained in the
Amended Agreement or any other Loan Document. Each of the amendments provided
herein shall apply and be effective only with respect to the provisions of the
Amended Agreement specifically referred to by such amendment. Except as
expressly amended herein, the Amended Agreement shall continue in full force
and effect in accordance with the provisions thereof. As used in the Amended
Agreement, the terms "Agreement", "herein", "hereinafter", "hereunder",
"hereto" and words of similar import shall mean, from and after the date
hereof, the Amended Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Third
Amendment to be duly executed by their duly authorized officers, all as of the
date first above written.
FIREARMS TRAINING SYSTEMS, INC.
as Parent
By:
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Name:
Title:
FATS, INC.
as Borrower
By:
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Name:
Title:
NATIONSBANK, N.A., as Agent, Swingline
Lender
and Issuing Bank and individually as a Lender
By:
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Name:
Title:
U.S. BANK NATIONAL ASSOCIATION
By:
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Name:
Title:
FIRST SOURCE FINANCIAL LLP, by First Source
Financial, Inc., as Agent/Manager
By:
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Name:
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Title:
BHF-BANK AKTIENGESELLSCHAFT
By:
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Name:
Title
BANK AUSTRIA CREDITANSTALT
CORPORATE
FINANCE, INC. (FKA CREDITANSTALT
CORPORATE FINANCE, INC.)
By:
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Name:
Title:
By:
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Name:
Title:
AGREED and CONSENTED,
as of the date first above written:
DART INTERNATIONAL, INC.
By:
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Name:
Title:
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