Execution Copy
SUBSIDIARIES' CONSENT AND AGREEMENT
SUBSIDIARIES' CONSENT AND AGREEMENT dated as of April 1, 2000 among the
Domestic Subsidiaries party hereto (each a "Subsidiary"), the Lenders (as
defined herein) and Bank of America, N.A., successor in interest to NationsBank,
N.A., as Agent (in such capacity, the "Agent") for the Lenders.
Reference is made to (a) the Credit Agreement dated as of July 31, 1996
(the "Original Credit Agreement"), among Firearms Training Systems, Inc. (the
"Parent"), the financial institutions party thereto as lenders (the "Lenders")
and the Agent, (b) the Pledge and Security Agreement dated as of July 31, 1996
(the "Security Agreement") among the Parent, the Subsidiaries named therein as
Grantors and the Agent, (c) the Assignment and Assumption Agreement dated as of
January 1, 1997 (the "Assignment and Assumption") among the Parent, FATS, Inc.
(the "Borrower") and the Agent pursuant to which, in connection with the
Permitted Drop Down Transaction (as defined in the Original Credit Agreement),
the Parent assigned to the Borrower and the Borrower assumed from the Parent all
obligations of the Parent under the Original Credit Agreement, the Security
Agreement and the other Loan Documents, (d) the Supplemental Agreement dated as
of October 1, 1997 (the "First Supplemental Agreement") among the Borrower, the
New Subsidiary (as defined in the First Supplemental Agreement) and the Agent,
pursuant to which such New Subsidiary became a Grantor under the Security
Agreement, (e) the Guarantee Agreement dated as of October __, 1997 (the
"Guarantee Agreement") among the Subsidiaries named therein as Guarantors and
(f) the Indemnity, Subrogation and Contribution Agreement dated as of October
__, 1997 (the "Indemnity, Subrogation and Contribution Agreement") among the
Borrower, the Subsidiaries named therein as Guarantors and the Agent. To induce
the Lenders to enter into the Original Credit Agreement, the Subsidiaries
guaranteed pursuant to the Guarantee Agreement all of the obligations of the
Borrower to such Lenders under the Original Credit Agreement and secured their
obligations under the Guarantee Agreement by granting a security interest in
certain Collateral (as defined in the Security Agreement).
Reference is further made to the Amended and Restated Credit Agreement
dated as of October 15, 1997 (as such agreement may be supplemented, amended or
modified from time to time, the "Amended and Restated Credit Agreement"), the
Subsidiaries Consent and Agreement dated October 15, 1997 executed in connection
therewith, and the Supplemental Agreement dated as of April 1, 1998 (the "Second
Supplemental Agreement") among the Borrower, the New Subsidiary (as defined in
the Second Supplemental Agreement) and the Agent, pursuant to which such New
Subsidiary became a Grantor under the Security Agreement.
The Parent, the Borrower and the Agent desire to modify, amend and
restate the Amended and Restated Credit Agreement pursuant to the terms of that
certain Second Amended and Restated Credit Agreement and Partial Exchange
Agreement dated as of April 1, 2000 (as such agreement may be amended or
modified from time to time, the "Amended Agreement").
The Parent, the Borrower and the Centre Entities desire to enter into that
certain Loan Agreement and Exchange Agreement dated as of April 1, 2000 (as such
Agreement may be amended or modified from time to time, the "Centre Loan
Agreement" and together with the Amended Agreement, the "Agreements"). In
connection with the Centre Loan Agreement, the Centre Entities have required
that the Subsidiaries enter into the Subsidiaries' Guarantee Agreement (the
"Centre Guarantee Agreement") dated as of the date of the Centre Loan Agreement.
Terms used herein and not otherwise defined herein shall have the meanings
assigned to them in the Amended Agreement. To induce the Agent and the Lenders
to enter into the Amended Agreement, and to induce the Centre Entities to enter
into the Centre Loan Agreement, each Subsidiary hereby agrees as follows:
Section 1. Consent and Agreement of Subsidiaries. (a) Each Subsidiary
acknowledges that it is familiar with the contents of the Agreements. Each
Subsidiary consents to the transactions contemplated by the Agreements and
acknowledges and agrees that its obligations under the Guarantee Agreement, the
Indemnity, Subrogation and Contribution Agreement, and the Security Agreement
shall continue in full force and effect, taking into account the amendments
contemplated by the Amended Agreement and this Consent and Agreement and taking
into account the Centre Loan Agreement. In particular, each Subsidiary hereby
agrees that all Obligations (as defined in the Amended Agreement) shall
constitute obligations guaranteed by such Subsidiary pursuant to the Guarantee
Agreement and obligations secured by such Subsidiary pursuant to the Security
Agreement. Accordingly, each Subsidiary acknowledges and agrees that (i) the
definition of "Guaranteed Obligations" in the Guarantee Agreement is hereby
amended to include and consist of all Obligations (as defined in the Amended
Agreement), (ii) the definition of "Secured Obligations" in the Security
Agreement is hereby amended to include and consist of all Obligations of the
Subsidiaries under the Guarantee Agreement and the Centre Guarantee Agreement
(as amended by the foregoing clause (i)), (iii) any reference to the terms
"Letters of Credit", "Letter of Credit Disbursements" and "Obligations" in the
Security Agreement (as amended by the foregoing clauses (i) and (ii)), shall
have the meaning ascribed to such terms in the Amended Agreement and (iv) any
reference to the terms "Loans" and "Notes" in the Guarantee Agreement, the
Centre Guarantee Agreement and the Security Agreement shall have the collective
meanings ascribed to such terms in the Amended Agreement and the Centre Loan
Agreement.
(b) Each Subsidiary acknowledges and agrees that the Centre Entities
have a permitted Lien on the Collateral. Each Subsidiary acknowledges and agrees
that notwithstanding the Lenders' existing Lien on the Collateral, the terms or
provisions of any Loan Document, or the priority of Liens on the Collateral
which the law contained in any statute, code or in the common law would
otherwise dictate, (i) the Lenders' Lien on the Collateral to secure the Junior
Secured Loans, and the Centre Entities' Lien on the Collateral to secure the
Centre Junior Secured Loans, shall be subordinate to and of inferior dignity to
the Lenders' Lien on the Collateral to secure the New Revolving Loans and the
Senior Secured Loans and to the Centre Entities' Lien on the Collateral to
secure the Centre Senior Secured Loans; (ii) the Lenders' and the Centre
Entities' first priority Liens on the Collateral secure the New Revolving Loans,
the Senior Secured Loans and the Centre Senior Secured Loans on a pari passu
basis; (iii) the Lenders' Lien on the Collateral securing the New Revolving
Loans and the Senior Secured Loans and the Centre Entities' Lien on the
Collateral securing the Centre Senior Secured Loans shall be
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considered as having the same priority on a pari passu basis as to any proceeds
realized upon any disposition of the Collateral by either the Lenders or the
Centre Entities, notwithstanding the priority of any financing statement, deed
of trust or other filed or recorded instrument relating thereto, and (iv) the
Lenders' Lien on the Collateral securing the Junior Secured Loans and the Centre
Entities' Lien on the Collateral securing the Centre Junior Secured Loans shall
be considered as having the same priority on a pari passu basis as to any
proceeds realized upon any disposition of the Collateral by either the Lenders
or the Centre Entities, notwithstanding the priority of any financing statement,
deed of trust or other filed or recorded instrument relating thereto. Any Lien
of the Lenders or the Centre Entities securing any obligation other than those
described above shall be subordinate to the Liens described above.
(c) Each Subsidiary ratifies and confirms the Guarantee Agreement,
the Centre Guarantee Agreement and the Security Agreement in all respects and
agrees that the Collateral pledged pursuant to the Security Agreement secures
all of the Obligations.
Section 2. Effectiveness. This Consent and Agreement shall become
effective on the Restructure Effective Date. On and after the Restructure
Effective Date, the rights and obligations of the parties hereto shall be
governed by the Security Agreement, in each case as amended and modified by this
Consent and Agreement, and the other Loan Documents.
Section 3. Integration; Confirmation. On and after the Restructure
Effective Date, each reference in the Guarantee Agreement, the Indemnity,
Subrogation and Contribution Agreement and the Security Agreement to "this
Agreement", "herein", "hereunder" or words of similar import, each reference in
any other document delivered in connection with any of the Loan Documents to the
"Guarantee Agreement", the "Indemnity, Subrogation and Contribution Agreement"
or the "Security Agreement" or words of similar import, shall be deemed to be a
reference to each such agreement as amended and modified by this Consent and
Agreement. All other terms and provisions of the Guarantee Agreement, the
Indemnity, Subrogation and Contribution Agreement and the Security Agreement
shall continue in full force and effect and unchanged and are hereby confirmed
in all respects. On and after the Restructure Effective Date, all references in
the Guarantee Agreement, the Indemnity, Subrogation and Contribution Agreement
and the Security Agreement of any other document delivered in connection
therewith, to the "Credit Agreement" shall be deemed to be a collective
reference to (i) the Original Credit Agreement, as amended by the Amended and
Restated Credit Agreement, and as amended and restated by the Amended Agreement
and (ii) the Centre Loan Agreement.
Section 4. Representations and Warranties. All representations and
warranties contained in the Agreements that relate to the Subsidiaries are true
and correct.
Section 5. Counterparts. This Consent and Agreement may be executed
by the parties hereto in several counterparts and each such counterpart shall be
deemed to be an original, admissible into evidence, but all such counterparts
shall together constitute but one and the same Consent and Agreement. Delivery
of an executed counterpart of this Consent and Agreement by telecopy shall be
equally as effective as delivery of a manually executed counterpart of this
Consent
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and Agreement. Any party delivering an executed counterpart of this Consent and
Agreement by telecopy shall also deliver a manually executed counterpart of this
Consent and Agreement, but the failure to deliver a manually executed
counterpart shall not affect the validity, enforceability and binding effect of
this Consent and Agreement.
Section 6. Governing Law. THIS CONSENT AND AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
(Signature pages to follow.)
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IN WITNESS WHEREOF, each party hereto has caused this Consent and Agreement to
be duly executed and delivered by its officers thereunto duly authorized as of
the date first above written.
DART INTERNATIONAL, INC.
By: /s/ XXXXXX X. XXXXXXX
-------------------------------------
Name: Xxxxxx X. XxXxxxx
Title: DIRECTOR
NON CENTRE ENTITIES
BANK OF AMERICA, N.A., as Agent and
individually as a Lender
By: /s/ XXXXXXX XXXXXXXX
-------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Vice President
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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IN WITNESS WHEREOF, each party hereto has caused this Consent and Agreement to
be duly executed and delivered by its officers thereunto duly authorized as of
the date first above written.
FSS, INC.
By:______________________________________
Name:
Title:
DART INTERNATIONAL, INC.
By:______________________________________
Name:
Title:
NON CENTRE ENTITIES
BANK OF AMERICA, N.A., as Agent and
individually as a Lender
By:______________________________________
Name:
Title:
U.S. BANK NATIONAL ASSOCIATION
By: /s/ XXXXXXX X. XXXXXXXX
-------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Assistant Vice President
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FIRST SOURCE FINANCIAL LLP, by
First Source Financial, Inc., as Agent/
Manager
By: /s/ XXXXXXX X. XXXXX
-------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
BHF (USA) CAPITAL CORPORATION
By:______________________________________
Name:
Title:
CENTRE ENTITIES, individually and as Lenders
CENTRE CAPITAL INVESTORS II, L.P. CENTRE
CAPITAL TAX-EXEMPT INVESTORS II, L.P.
CENTRE CAPITAL OFFSHORE INVESTORS II, L.P.
By: Centre Partners II, L.P., as General
Partner
By: Centre Partners Management LLC, as
Attorney-in-Fact
By: _________________________________________
Managing Director
CENTRE PARTNERS COINVESTMENT, L.P.
By: Centre Partners II LLC, as General
Partner
By: _________________________________________
Managing Director
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FIRST SOURCE FINANCIAL LLP, by
First Source Financial, Inc., as Agent/
Manager
By:______________________________________
Name:
Title:
BHF (USA) CAPITAL CORPORATION
By: /s/ XXXX XXXXXX /s/ XXXX XXXX
-------------------------------------
Name: Xxxx Xxxxxx Xxxx Xxxx
Title: Managing Director Associate
CENTRE ENTITIES, individually and as Lenders
CENTRE CAPITAL INVESTORS II, L.P. CENTRE
CAPITAL TAX-EXEMPT INVESTORS II, L.P.
CENTRE CAPITAL OFFSHORE INVESTORS II, L.P.
By: Centre Partners II, L.P., as General
Partner
By: Centre Partners Management LLC, as
Attorney-in-Fact
By: _________________________________________
Managing Director
CENTRE PARTNERS COINVESTMENT, L.P.
By: Centre Partners II LLC, as General
Partner
By: _________________________________________
Managing Director
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BHF (USA) CAPITAL CORPORATION
By:______________________________________
Name:
Title:
CENTRE ENTITIES, individually and as Lenders
CENTRE CAPITAL INVESTORS II, L.P. CENTRE
CAPITAL TAX-EXEMPT INVESTORS II, L.P.
CENTRE CAPITAL OFFSHORE INVESTORS II, L.P.
By: Centre Partners II, L.P., as General
Partner
By: Centre Partners Management LLC, as
Attorney-in-Fact
By: /s/ [illegible]
-----------------------------------------
Managing Director
CENTRE PARTNERS COINVESTMENT, L.P.
By: Centre Partners II LLC, as General
Partner
By: /s/ [illegible]
-----------------------------------------
Managing Director
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