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EXHIBIT 10.28
EXECUTION COPY
FIFTH AMENDMENT dated as of
September 30, 1999 (this "Fifth 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, the Second Amendment dated as of
November 13, 1998, the Third Amendment dated
as of March 31, 1999 and the Fourth
Amendment dated as of April 30, 1999 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"), Bank of America,
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 Fifth 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 1.01. Subsection (b) of the
definition of "Applicable Eurodollar Margin" is hereby amended by deleting the
following:
", (ii) for any day during the period commencing the Second
Amendment Effective Date, and ending September 30, 1999, 4.00%
and (iii) on any other day, 3.25%."
and inserting the following in lieu thereof:
"and (ii) on any other day, 4.00%."
SECTION 1.02 Amendment to Section 2.12 (a). Section 2.12(a) of the
Credit Agreement is hereby amended by (a) inserting the following after the
phrase "consisting of 18
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consecutive quarterly installments due on the last day of March, June, September
and December of each year," in Section 2.12(a)(i):
"except with respect to the installment due at the
end of the third quarter, 1999, which shall be due as
set forth below in Section 2.12(a)(ii),"
(b) The chart in Section 2.12(a)(ii) is hereby amended by
deleting "September 30, 1999" and inserting "November 30, 1999" in lieu thereof.
SECTION 1.03. Forebearance. The Lenders have agreed to forebear
exercising their rights and remedies, which rights and remedies may arise as a
result of an Event of 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") (any such prospective Event of Default, a "Financial Covenants
Default"), 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 November 30, 1999 (the period from the Fifth Amendment Effective Date (as
defined below) to November 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 1.03 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 1.03 during the
Forbearance Period. If as of November 30, 1999, each Financial Covenants
Default, if any, has not been waived in accordance with the Credit Agreement 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 1.04. 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 Fifth
Amendment Effective Date (as defined below) with the same effect as if
made on and as of the date hereof or the Fifth 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
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,
other than the Defaults or Events of Default described in Section 1.03
hereof.
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(c) The execution, delivery and performance by the Borrower of
this Fifth Amendment have been duly authorized by the Borrower.
(d) This Fifth 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 Fifth 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 1.05. Effectiveness. This Fifth 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 "Fifth Amendment Effective Date"):
(a) The Agent shall have received duly executed counterparts
of this Fifth 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 1.04 hereof are true and correct on
and as of the Fifth 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 connection with this Fifth 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 1.07.
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SECTION 1.06. APPLICABLE LAW. THIS FIFTH 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 1.07. 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 Fifth
Amendment, including, but not limited to, the reasonable fees and disbursements
of counsel.
SECTION 1.08. 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 1.08 shall imply any waiver or consent to sale of the Borrower or that
Lenders will consent to such sale.
SECTION 1.09. Counterparts. This Fifth 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. Delivery by
facsimile by any of the parties hereto of an executed counterpart of this Fifth
Amendment shall be as effective as an original executed counterpart hereof and
shall be deemed a representation that an original executed counterpart hereof
will be delivered, but the failure to deliver a manually executed counterpart
shall not affect the validity, enforceability or binding effect of this Fifth
Amendment.
SECTION 1.10. 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 Fifth 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:
-----------------------------------------
Name:
Title:
FATS, INC.
as Borrower
By:
-----------------------------------------
Name:
Title:
BANK OF AMERICA, N.A., as Agent, Swingline
Lender and Issuing Bank and individually as
a Lender
By:
-----------------------------------------
Name:
Title:
U.S. BANK NATIONAL ASSOCIATION
By:
-----------------------------------------
Name:
Title:
FIRST SOURCE FINANCIAL LLP, by First Source
Financial, Inc., as Agent/Manager
By:
-----------------------------------------
Name:
Title:
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BHF (USA) CAPITAL CORPORATION
By:
-----------------------------------------
Name:
Title
BANK AUSTRIA CREDITANSTALT
CORPORATE FINANCE, INC. (FKA
CREDITANSTALT CORPORATE
FINANCE, INC.)
By:
-----------------------------------------
Name:
Title:
By:
-----------------------------------------
Name:
Title:
AGREED and CONSENTED,
as of the date first above written:
DART INTERNATIONAL, INC.
By:
-------------------------------
Name:
Title:
FIREARMS TRAINING SYSTEMS, INC.
By:
-------------------------------
Name:
Title:
