EXHIBIT 10.28-01
SECOND AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT
AGREEMENT AND PARTIAL EXCHANGE AGREEMENT
This Second Amendment to Second Amended and Restated Credit Agreement
and Partial Exchange Agreement (this "Second Amendment") is made as of March 29,
2002 among FIREARMS TRAINING SYSTEMS, INC., a Delaware corporation (the
"Parent"), FATS, INC., a Delaware corporation (the "Borrower"), the financial
institutions listed on the signature pages hereof (the "Lenders") and BANK OF
AMERICA, N.A., as Agent and Issuing Bank (the "Agent").
RECITALS
A. The Parent, the Borrower, the Lenders and the Agent are
parties to a Second Amended and Restated Credit Agreement and Partial Exchange
Agreement dated as of April 1, 2000 and a First Amendment to Second Amended and
Restated Credit Agreement and Partial Exchange dated as of December 31, 2001 (as
amended, the "Original Agreement").
B. The Parent and the Borrower have requested that the Lenders
amend certain provisions of the Original Agreement to (i) provide for a new
$2,200,000 letter of credit facility, (ii) allow for the continued use of
payable in kind interest payments by the Borrower on the Junior Secured Notes
and (iii) extend the New Revolving Credit Maturity Date, the Senior Secured
Loans Maturity Date and the Junior Secured Loans Maturity Date from March 31,
2003 to September 30, 2003.
C. The Lenders have agreed to the requested amendment on the
terms and conditions of this Second Amendment.
AGREEMENT
The parties hereto agree as follows:
Section 1. Definitions. Capitalized terms used herein and not
defined herein shall have the same meanings as in the Amended Agreement
(the Original Agreement, as amended by, and together with, this Second
Amendment, and as hereinafter amended, modified, extended or restated
from time to time, being called the "Amended Agreement").
Section 2. Additional Defined Terms. The following defined terms
shall be added to Article I of the Amended Agreement:
"Applicable Support Percentage" of any Support Lender shall
mean a fraction (expressed as a percentage), the numerator of which is
such Support Lender's Support Letter of Credit Facility Commitment and
the denominator of which is the aggregate of all Support Lenders'
Support Letter of Credit Facility Commitments.
"Cash Collateral Account" shall have the meaning assigned to
such term in Section 2.23(l).
"Second Amendment Effective Date" shall mean the effective
date of the Second Amendment to Second Amended and Restated Credit
Agreement and Partial Exchange Agreement by and among the Parent, the
Borrower, the Lenders, the Agent and the Issuing Bank.
"Support Lender" shall mean Bank of America, N.A. and the
Centre Entities, each person which hereafter becomes an assignee of
Bank of America, N.A. or the Centre Entities pursuant to Section
9.04(b), and their respective successors.
"Support Letter of Credit" shall mean any letter of credit
issued by the Issuing Bank pursuant to Section 2.23(a) denominated in
currency of the United States of America. "Support Letters of Credit"
shall mean the collective reference to each Support Letter of Credit.
"Support Letter of Credit Availability Period" shall mean the
period from and including the Second Amendment Effective Date to but
excluding the earlier of (a) the date five Business Days prior to the
New Revolving Credit Maturity Date and (b) the termination of the New
Revolving Credit Commitments of the Lenders in accordance with the
terms hereof.
"Support Letter of Credit Disbursement" shall mean a payment
or disbursement made by the Issuing Bank pursuant to a Support Letter
of Credit.
"Support Letter of Credit Exposure" shall mean at any time the
sum of (a) the aggregate undrawn Dollar Amount of all outstanding
Support Letters of Credit at such time plus (b) the aggregate amount of
all Support Letter of Credit Disbursements not yet reimbursed by the
Borrower as provided in Section 2.23. The Support Letter of Credit
Exposure of any Support Lender at any time shall mean its Applicable
Support Percentage of the aggregate Support Letter of Credit Exposure
at such time.
"Support Letter of Credit Facility" shall mean the $2,200,000
letter of credit facility described in Section 2.23 hereof.
"Support Letter of Credit Facility Commitment" shall mean,
with respect to each Support Lender, the Dollar Amount commitment of
such Support Lender to participate in the funding of Support Letters of
Credit hereunder as provided in Section 2.23(a) hereof or in the
Assignment and Acceptance pursuant to which such Support Lender assumed
its Support Letter of Credit Facility Commitment, as applicable, as the
same may be reduced or increased from time to time pursuant to
assignments by or to such Support Lender pursuant to Section 9.04;
"Support Letter of Credit Facility Commitments" shall mean the
aggregate Dollar Amount of the Support Lenders' Support Letter of
Credit Facility Commitments.
Section 3. Amended Definitions. The following defined terms in
Article I of the Amended Agreement are amended to read in their
entirety as follows:
"Facilities" shall mean the Senior Secured Loans, the
Junior Secured Loans, the New Revolving Loans, the New Letters of
Credit and the Support Letters of Credit provided or participated in by
the Lenders or the Support Lenders, as the case may be, to the Borrower
pursuant to this Amended Agreement and the other Loan Documents.
"Junior Secured Loans Maturity Date" shall mean
September 30, 2003, or if the Borrower has exercised the Junior Secured
Loans Extension Option, March 31, 2004.
"Letter of Credit Disbursement" shall mean a payment
or disbursement made by the Issuing Bank pursuant to an Existing Letter
of Credit, a New Letter of Credit or a Support Letter of Credit.
"Letter of Credit Fees" shall mean the fees payable
to the Issuing Bank, the Lenders and the Support Lenders, as
applicable, pursuant to Sections 2.22(g) and 2.23(g).
"Letters of Credit" shall mean any New Letters of
Credit, Support Letters of Credit and the Existing Letters of Credit,
individually a "Letter of Credit".
"New Revolving Credit Maturity Date" shall mean
September 30, 2003.
"Senior Secured Loans Maturity Date" shall mean
September 30, 2003, or if the Borrower has exercised the Senior Secured
Loans Extension Option, March 31, 2004.
Section 4. Interest and Fees on New Revolving Loans.
(a) The final phrase of the second provision of the first sentence
of Section 2.07(a), which reads "plus one percent (1%)" in the Original
Agreement, is hereby deleted and the phrase "plus two percent (2%)" is
inserted in lieu thereof.
(b) The following sentences shall be added as the third, fourth
and fifth sentences of Section 2.07(a):
"In addition, the Borrower shall pay to the Agent, for the account of
the Lenders, a nonrefundable unused commitment fee with respect to the
unused portion of the New Revolving Credit Commitment of each Lender,
computed for the preceding calendar quarter in an amount equal to the
average daily aggregate Dollar Amount of the unused portion of the New
Revolving Credit Commitment of each Lender during such period
multiplied by a percentage per annum (based on a 360-day year for the
actual days elapsed) equal to 0.50%. Such fee shall be payable to the
Lenders to be shared ratably among them in accordance with their
respective Applicable Percentages. Such fee shall be payable quarterly
in arrears on the last day of March, June, September and December in
each year, and on the date on which the New Revolving Credit Commitment
terminates."
Section 5. Junior Note Payable In Kind Interest. The fifth
sentence of Section 2.07(b) is hereby amended to read in its entirety
as follows:
"With respect to (i) any Interest Period ending before March
31, 2001, for any Interest Period in which the EBITDA of the Parent, on
a consolidated basis, is more than 120% of the interest payments on the
Senior Secured Notes, the Centre Senior Secured Notes and the New
Revolving Credit Notes for such Interest Period, such interest shall be
payable in cash to the extent of the Lenders' Applicable Percentage of
such excess, and the remainder, if any, shall be payable in kind by the
delivery to each of the Lenders of an additional Junior Secured Note,
substantially in the form of Exhibit A-2 hereto dated the last day of
such Interest Period and in the amount of the balance of the interest
owed to each such Lender for such Interest Period, (ii) any Interest
Period ending between and including March 31, 2001 and March 31, 2002,
interest due on the Junior Secured Loans for the Interest Periods
ending on March 31, 2001, June 30, 2001, September 30, 2001, December
31, 2001 and March 31, 2002 shall be payable in kind in the manner set
forth in (i) above, (iii) the Interest Periods ending on June 30, 2002,
September 30, 2002, December 31, 2002 and March 31, 2003, if the EBITDA
of the Parent, on a consolidated basis, is greater than the sum of (A)
120% of the interest payments on the Senior Secured Notes, the Centre
Senior Secured Notes and the New Revolving Credit Notes for such
Interest Period and (B) $500,000, interest on the Junior Secured Notes
shall be payable in cash to the extent of the Lenders' Applicable
Percentage of such excess, and the remainder, if any, shall be payable
in kind in the manner set forth in (i) above, (iv) the Interest Period
ending on June 30, 2003, if the EBITDA of the Parent, on a consolidated
basis, is greater than the sum of (A) 120% of the interest payments on
the Senior Secured Notes, the Centre Senior Secured Notes and the New
Revolving Credit Notes for such Interest Period and (B) $310,000,
interest on the Junior Secured Notes shall be payable in cash to the
extent of the Lenders' Applicable Percentage of such excess, and the
remainder, if any, shall be payable in kind in the manner set forth in
(i) above and (v) for each subsequent Interest Period in which the
EBITDA of the Parent, on a consolidated basis, is more than 120% of the
interest payments on the Senior Secured Notes, the Centre Senior
Secured Notes and the New Revolving Credit Notes for such Interest
Period, such interest shall be payable in cash to the extent of the
Lenders' Applicable Percentage of such excess, and the remainder, if
any, shall be payable in kind in the manner set forth in (i) above."
Section 6. New Letter of Credit Fees. Section 2.22(g) is hereby
amended to read in its entirety as follows:
"(g) The Borrower shall pay to the Agent, for the account of
the Issuing Bank, a nonrefundable fronting fee with respect to each New
Letter of Credit (including Existing Letters of Credit) issued for the
account of the Borrower or any Subsidiary in an amount equal to the
Dollar Amount of the face amount of such New Letter of Credit,
multiplied by a percentage per annum equal to 0.25%. Such fee shall be
payable solely to Issuing Bank in advance on the date of issuance of
each New Letter of Credit. In addition, the Borrower shall pay to the
Agent, for the account of the Lenders, (i) an annual nonrefundable
letter of credit commission with respect to each Standby Letter of
Credit issued for the account of the Borrower or any Subsidiary,
computed for the preceding calendar month in an amount equal to the
average daily aggregate Dollar Amount of all Standby Letters of Credit
during such period, multiplied by a percentage per annum (based on a
360-day year for the actual days elapsed) equal to 2.50% and (ii) an
annual nonrefundable letter of credit commission with respect to each
Trade Letter of Credit issued for the account of the Borrower or any
Subsidiary, computed for the preceding calendar month in an amount
equal to the average daily aggregate Dollar Amount of all Trade Letters
of Credit during such period, multiplied by a percentage per annum
(based on a 360-day year for the actual days elapsed) equal to 1.25%.
Such fees shall be payable to the Lenders to be shared ratably among
them in accordance with their respective Applicable Percentages and
shall be payable in arrears on the last day of each month, and on the
date on which the New Revolving Credit Commitments shall terminate as
provided herein. Such fees shall accrue from and including the
Restructure Effective Date to but excluding the last day of the New
Letter of Credit Availability Period. In addition to the foregoing fees
and commissions, the Borrower shall pay or reimburse the Issuing Bank
for such normal and customary costs and expenses, including, without
limitation, administrative, issuance, amendment, payment and
negotiation charges, as are incurred or charged by the Issuing Bank in
issuing, effecting payment under, amending or otherwise administering
any Letter of Credit (including any Letter of Credit issued for the
account of a Subsidiary)."
Section 7. Schedule 2.23(a). The schedule attached hereto as
Schedule 2.23(a) shall be added as Schedule 2.23(a) of the Amended
Agreement.
Section 8. Support Letter of Credit Amendment. The following
shall be added as Section 2.23 of the Amended Agreement:
"SECTION 2.23 Support Letters of Credit. (a) Subject to the
terms and conditions in this Section 2.23 and relying upon the
representations and warranties set forth herein, (i) the Issuing Bank
agrees to issue Support Letters of Credit in dollars for the account of
the Borrower, at any time and from time to time during the Support
Letter of Credit Availability Period, in an aggregate principal amount
at any one time outstanding not to exceed the Support Letter of Credit
Facility Commitments as set forth on Schedule 2.23(a) and (ii) each
Support Lender agrees, severally and not jointly, to participate in the
funding of such Support Letters of Credit in an aggregate principal
amount at any one time outstanding not to exceed the Support Letter of
Credit Facility Commitment for such Support Lender as set forth on
Schedule 2.23(a). The Borrower shall pay to the Agent, for the account
of the Support Lenders, an annual nonrefundable unused commitment fee
with respect to the unused portion of the Support Letter of Credit
Facility Commitments, computed for the preceding calendar month in an
amount equal to the average daily aggregate Dollar Amount of the unused
portion of the Support Letter of Credit Facility Commitments during
such period multiplied by a percentage per annum (based on a 360-day
year for the actual days elapsed) equal to 0.50%. Such fee shall be
shared ratably among the Support Lenders in accordance with their
respective Applicable Support Percentages and shall be payable by the
Borrower in arrears on the last day of each month, and on the date on
which the Support Letter of Credit Facility Commitments shall terminate
as provided herein.
(b) The Borrower may request the issuance of a Support
Letter of Credit in dollars, in form and substance reasonably
acceptable to the Agent and the Issuing Bank, for the account of the
Borrower or any Subsidiary, at any time and from time to time during
the Support Letter of Credit Availability Period. The obligation of the
Issuing Bank to issue Support Letters of Credit hereunder is subject to
the satisfaction of the conditions that (i) such Support Letter of
Credit is used to support pre-approved contracts entered into between
the Borrower and customers of the Borrower, (ii) all of the Support
Lenders consent to and approve the issuance of such Support Letter of
Credit, which consent and approval shall be in each Support Lender's
sole discretion, (iii) immediately following the issuance of such
Support Letter of Credit, the aggregate Dollar Amount of the Support
Letter of Credit Exposure shall not exceed $2,200,000, (iv) the
representations and warranties set forth in Article III of this Amended
Agreement and the representations and warranties of the Borrower and
the other Loan Parties set forth in the other Loan Documents shall be
true and correct in all material respects on and as of the date of the
issuance of such Support Letter of Credit with the same effect as
though made on and as of such date, except to the extent such
representations
and warranties expressly relate to an earlier date (in which case such
representations and warranties shall be true and correct in all
material respects on and as of such earlier date), (v) at the time of
and immediately after the issuance of such Support Letter of Credit, no
Default or Event of Default shall have occurred and be continuing and
(vi) no amounts have been taken from the Cash Collateral Account to pay
the reimbursement obligations of the Borrower hereunder. Each request
by the Borrower for the issuance of any Support Letter of Credit shall
be deemed a representation and warranty of the Borrower that the
aggregate Dollar Amount of the Support Letter of Credit Exposure shall
not exceed $2,200,000. For purposes hereof, the "issuance" of a Support
Letter of Credit includes the amendment, renewal or extension of a
Support Letter of Credit.
(c) Each Support Letter of Credit shall expire at 5:00
p.m., Charlotte time, on the earlier of (i) the last day of the Support
Letter of Credit Availability Period unless a Support Letter of Credit
issued prior to the expiration of the Support Letter of Credit
Availability Period has an expiration date after the last day of the
Support Letter of Credit Availability Period and a written agreement
was entered into prior to the issuance of such Support Letter of Credit
by the Issuing Bank, the Support Lenders and the Borrower pursuant to
which the Borrower has agreed to secure its Obligations under such
Support Letter of Credit by providing funds to the Cash Collateral
Account prior to the expiration of the Support Letter of Credit
Availability Period in an amount equal to 105% of the Dollar Amount
issued under such Support Letter of Credit, in which case such Support
Letter of Credit shall not expire until the expiration date of such
Support Letter of Credit, and (ii) (A) in the case of Standby Letters
of Credit, one year after the date of issuance of such Support Letter
of Credit, subject to extension (including pursuant to an automatic
renewal provision in customary form), and (B) in the case of Trade
Letters of Credit, 180 days after the date of issuance of such Support
Letter of Credit, unless, in each case, such Support Letter of Credit
expires by its terms on an earlier date.
(d) Each issuance of any Support Letter of Credit shall
be made on at least three Business Days' prior irrevocable written or
telecopy notice (such notice to be delivered by 10:00 a.m., Charlotte
time) from the Borrower (or such shorter notice as shall be acceptable
to the Issuing Bank) to the Agent and the Issuing Bank, specifying the
date of issuance, the date on which such Support Letter of Credit is to
expire, the amount of such Support Letter of Credit (which shall be not
less than $5,000 or such lesser amount as is acceptable to the Agent),
the name and address of the beneficiary of such Support Letter of
Credit and such other information as may be necessary or desirable to
complete such Support Letter of Credit. The Issuing Bank will give the
Agent prompt notice of the issuance and amount of such Support Letter
of Credit and the expiration date of such Support Letter of Credit (and
the Agent shall give prompt notice thereof to each Support Lender).
During the Support Letter of Credit Availability Period, the Issuing
Bank also will give the Agent (i) daily notice of the amount available
to be drawn under each outstanding Support Letter of Credit and (ii) a
quarterly summary indicating, on a daily basis during such quarter, the
issuance of any Support Letter of Credit and the amount thereof, the
expiration of any Support Letter of Credit and the amount thereof and
the payment on any draft presented under any Support Letter of Credit.
Each Support Letter of Credit issued hereunder will be subject to the
Uniform Customs and Practices for Documentary Credits, as in effect
from time to time.
(e) By the issuance of a Support Letter of Credit and
without any further action on the part of the Issuing Bank, the Agent
or the Support Lenders in respect thereof, the Issuing Bank hereby
grants to each Support Lender, and each Support Lender hereby acquires
from the Issuing Bank, a participation in such Support Letter of Credit
equal to such Support Lender's Applicable Support Percentage of the
aggregate amount available to be drawn under such Support Letter of
Credit, effective upon the issuance of such Support Letter of Credit.
(f) Each Support Lender acknowledges and agrees that its
obligation to acquire participations pursuant to Section 2.23(e) in
respect of Support Letters of Credit is absolute and unconditional and
shall not be affected by any circumstance whatsoever, including the
occurrence and continuance of a Default or Event of Default, and that
each such payment shall be made without any offset, abatement,
withholding or reduction whatsoever. The Issuing Bank shall provide
written notice of any draw on any Support Letter of Credit to each
Support Lender, and within twelve (12) days of such notice
each Support Lender shall pay its ratable share of such draw to the
Issuing Bank, plus interest on the amount so paid or disbursed by the
Issuing Bank at the Prime Rate plus 2.00%.
(g) The Borrower shall pay to the Agent, for the account
of the Support Lenders, a nonrefundable fronting fee with respect to
each Support Letter of Credit issued for the account of the Borrower or
any Subsidiary in an amount equal to the Dollar Amount of the face
amount of such Support Letter of Credit, multiplied by a percentage
equal to 0.25%. Such fee shall be shared ratably among the Support
Lenders in accordance with their respective Applicable Support
Percentages and shall be payable by the Borrower in advance on the date
of issuance of each Support Letter of Credit. In addition, the Borrower
shall pay to the Agent, for the account of the Support Lenders or the
Lenders, as hereinafter provided, an annual nonrefundable letter of
credit commission with respect to each Support Letter of Credit issued
for the account of the Borrower or any Subsidiary, computed for the
preceding calendar month in an amount equal to the average daily
aggregate Dollar Amount of all Support Letters of Credit during such
period, multiplied by a percentage per annum (based on a 360-day year
for the actual days elapsed) equal to 4.0%. Such fee shall be payable
to the Agent for the benefit of the Support Lenders or the Lenders, as
hereinafter provided, to be shared ratably among them in accordance
with their respective Applicable Support Percentages or Applicable
Percentages, as the case may be, and shall be payable in arrears on the
last day of each month, and on the date on which the Support Letter of
Credit Facility Commitments shall terminate as provided herein. Such
fee shall be shared among the Support Lenders until the earlier of (i)
March 31, 2004, or (ii) the month after the funding of the Cash
Collateral Account in the total amount of $2,310,000 as hereinafter
provided in Section 2.23 (l), and thereafter such fee shall be shared
among the Lenders. In addition, the Borrower shall pay to the Agent,
for the account of the Support Lenders, a nonrefundable draw fee with
respect to any draw on any Support Letter of Credit in an amount equal
to the greater of $75,000 or 10% of the amount of such draw. Such draw
fee shall be payable to the Support Lenders to be shared ratably among
them in accordance with their respective Applicable Support Percentages
and shall be payable five (5) days after any draw on any Support Letter
of Credit. In addition to the foregoing fees and commissions, the
Borrower shall pay or reimburse the Issuing Bank for such normal and
customary costs and expenses, including, without limitation,
administrative, issuance, amendment, payment and negotiation charges,
as are incurred or charged by the Issuing Bank in issuing, effecting
payment under, amending or otherwise administering any Support Letter
of Credit (including any Support Letter of Credit issued for the
account of a Subsidiary).
(h) The Borrower hereby agrees to reimburse the Issuing
Bank for any Support Letter of Credit Disbursements made by the Issuing
Bank by making payment in immediately available funds to the Agent
within one Business Day after receipt of notice of such payment or
disbursement, in an amount equal to the Dollar Amount of such payment
or disbursement, plus interest on the amount so paid or disbursed by
the Issuing Bank at the Prime Rate plus 2.00%. The Agent shall promptly
pay any such amounts received by it to the Issuing Bank. If the
Borrower fails to reimburse the Issuing Bank for any Support Letter of
Credit Disbursements made by the Issuing Bank, the Agent shall
immediately pay to the Issuing Bank from the Cash Collateral Account
the lesser of (i) the amount of such disbursement or (ii) the balance
in the Cash Collateral Account, and the obligation of the Borrower to
reimburse the Issuing Bank for such disbursement shall be discharged
only to the extent of funds paid to the Issuing Bank from the Cash
Collateral Account hereunder. The Borrower hereby agrees to indemnify
and hold harmless the Agent, the Issuing Bank, and each Support Lender
(in any capacity hereunder) from and against any and all loss,
liability, cost, and expense arising at any time or times from the
exchange of one or more currencies for one or more other currencies
hereunder.
(i) The Borrower's obligation to reimburse Support Letter
of Credit Disbursements as provided in Section 2.23(h) shall be
absolute, unconditional and irrevocable and shall be performed strictly
in accordance with the terms of this Amended Agreement under any and
all circumstances whatsoever, and irrespective of:
(i) any lack of validity or enforceability of any Support
Letter of Credit or any other Loan Document or any term or
provision therein;
(ii) the existence of any claim, setoff, defense or other
right which the Borrower, any Subsidiary or any other person
may at any time have against the beneficiary under any Support
Letter of Credit, the Issuing Bank, the Agent, any Support
Lender or any other person, whether in connection with this
Amended Agreement, any other Loan Document or any other
related or unrelated agreement or transaction;
(iii) any draft or other document presented under a Support
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or failing to comply with the
Uniform Customs and Practices for Documentary Credits, as in
effect from time to time, or any statement therein being
untrue or inaccurate in any respect;
(iv) payment by the Issuing Bank under a Support Letter of
Credit against presentation of a draft or other document which
does not comply with the terms of such Support Letter of
Credit, subject to the provisions of Section 2.23(j);
(v) any amendment, waiver or consent in respect of this
Amended Agreement or any other Loan Document; and
(vi) any other act or omission or delay of any kind or any
other circumstance or event whatsoever, whether or not similar
to any of the foregoing and whether or not foreseeable, that
might, but for the provisions of this Section 2.23(i),
constitute a legal or equitable discharge of the Borrower's
obligations hereunder.
(j) Without limiting the generality of the provisions of
the foregoing paragraph (i), it is expressly understood and agreed that
the absolute and unconditional obligation of the Borrower hereunder to
reimburse Support Letter of Credit Disbursements will not be excused by
the gross negligence or willful misconduct of the Issuing Bank.
However, the preceding sentence and the provisions of Section 2.23(i)
shall not be construed to excuse the Issuing Bank from liability to the
Borrower to the extent of any direct damages (as opposed to
consequential damages, claims in respect of which are hereby waived by
the Borrower to the extent permitted by applicable law) suffered by the
Borrower that are caused by the Issuing Bank's bad faith, gross
negligence or willful misconduct in determining whether drafts and
other documents presented under a Support Letter of Credit comply with
the terms thereof; it is understood that the Issuing Bank may accept
documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary and, in making any payment under any
Support Letter of Credit (i) the Issuing Bank's exclusive reliance in
good faith on the documents presented to it under such Support Letter
of Credit as to any and all matters set forth therein, including
reliance on the amount of any draft presented under such Support Letter
of Credit, if such document on its face appears to be in order, and
whether or not any other statement or any other document presented
pursuant to such Support Letter of Credit proves to be forged or
invalid or any statement therein proves to be inaccurate or untrue in
any respect whatsoever and (ii) any noncompliance in any immaterial
respect of the documents presented under such Support Letter of Credit
with the terms thereof shall, in each case, be deemed not to constitute
bad faith, gross negligence or willful misconduct of the Issuing Bank.
(k) The Issuing Bank shall, promptly following its
receipt thereof, examine all documents purporting to represent a demand
for payment under a Support Letter of Credit. The Issuing Bank shall as
promptly as possible give telephonic notification, confirmed by telex
or telecopy, to the Agent and the Borrower of such demand for payment
and whether the Issuing Bank has made or will make a Support Letter of
Credit Disbursement thereunder; provided that the failure to give such
notice shall not relieve the Borrower of its obligation to reimburse
any such Support Letter of Credit Disbursement in accordance with this
Section 2.23. The Agent shall promptly give each Support Lender notice
thereof.
(l) On the final day of each of the first four Interest
Periods ending after March 31, 2002 the Borrower shall deposit $500,000
into an account established with the Agent (the "Cash Collateral
Account") and on the final day of the fifth Interest Period ending
after March 31, 2002 the Borrower shall deposit $310,000 into the Cash
Collateral Account. All funds in the Cash Collateral Account shall be
applied first for the benefit of the Issuing Bank and the Support
Lenders and thereafter for the benefit of the
Lenders. The Agent shall have exclusive dominion and control, including
the exclusive right of withdrawal, over such account. Other than any
interest earned on the investment of such deposits in Cash Equivalents,
which investments shall be made as directed by the Borrower (unless
such investments shall be contrary to applicable law or regulation or a
Default or Event of Default shall have occurred and be continuing, in
which case the Agent shall determine in its sole discretion the Cash
Equivalents to be selected), such deposits shall not bear interest.
Interest or profits, if any, on such investments shall accumulate in
such account. If the Borrower is required to provide an amount of cash
collateral hereunder as a result of an Event of Default, such amount
(to the extent not applied as aforesaid) shall be returned to the
Borrower within three Business Days after all Events of Default have
been cured or waived."
Section 9. Negative Pledge. Section 6.02(h) is hereby amended to
read in its entirety as follows:
"(h) (i) deposits into a cash collateral account to secure
the Support Letters of Credit, as provided in Section 2.23(l), of up to
$2,310,000 in the aggregate or (ii) deposits of up to $500,000 in the
aggregate outstanding at any time to secure any obligations permitted
by Section 6.01(g);"
Section 10. Events of Default.
(a) Part (a) of Article VII is hereby amended to read in its
entirety as follows:
"(a) default shall be made in the payment of any principal
of any Loan or any reimbursement obligation in respect of a Letter of
Credit when and as the same shall become due and payable, whether at
the due date thereof or at a date fixed for prepayment thereof or by
acceleration thereof or otherwise;"
(b) Provision (i) of the final paragraph of Article VII
is hereby amended to read in its entirety as follows:
"(i) by notice to the Borrower terminate the New Revolving
Credit Commitments and any obligations to issue Letters of Credit, if
any, and they shall immediately terminate;"
(c) Provision (iii) of the final paragraph of Article VII is
hereby amended to read in its entirety as follows:
"(iii) require cash collateral as contemplated by Sections
2.22(l) and 2.23(l), as applicable, in an amount not exceeding the
aggregate undrawn amount of all outstanding Letters of Credit plus
unreimbursed Letter of Credit Disbursements;"
Section 11. Intercreditor Agreement. The Borrower, the Parent,
the Agent, the Issuing Bank, the Lenders and the Support Lenders agree
that (i) after an Event of Default has occurred and so long as such
event is continuing, to the extent that Borrower has failed to
reimburse the Issuing Bank for Support Letter of Credit Disbursements
pursuant to Section 2.23 (h) hereof, and if there are insufficient
funds in the Cash Collateral Account to repay all Obligations of the
Borrowers to the Issuing Bank for the reimbursement of any such Support
Letter of Credit Disbursements, any unpaid Obligations of the Borrowers
constituting unpaid reimbursement obligations in connection with
Support Letter of Credit Disbursements shall be paid to the Issuing
Bank and/or the Support Lenders before any other payments may be made
or accepted on Obligations other than those related to unpaid
reimbursement for Support Letter of Credit Disbursements, and (ii) all
amounts deposited in the Cash Collateral Account shall be held by the
Agent first for the benefit of the Issuing Bank and the Support Lenders
to secure the Obligations of the Borrower under the Support Letters of
Credit and second for the benefit of the Agent, the Issuing Bank and
the Lenders to secure the Obligations of the Borrower not arising under
the Support Letters of Credit. Amounts placed in the Cash Collateral
Account, up to $2,310,000, shall remain in the Cash Collateral Account
until the expiration of the Support Letter of Credit Availability
Period to secure Support Letters of Credit regardless of whether
Support Letters of Credit in such amount have yet been issued. After
the expiration of the Support Letter of Credit Availability Period, an
amount of cash will remain in the Cash Collateral Account equal to 105%
of the aggregate amount of each outstanding Support Letter of Credit.
Section 12. Amendment Fees. The Borrower shall pay to the Agent,
for the account of the Lenders, a nonrefundable amendment fee with
respect to each Senior Secured Note and Junior Secured Note issued for
the account of the Borrower or any Subsidiary in an amount equal to the
Dollar Amount of the face amount of such Senior Secured Notes or Junior
Secured Notes multiplied by a percentage equal to 0.50%. Such fee shall
be payable to the Lenders to be shared ratably among them in accordance
with their respective Applicable Percentages. In addition, the Borrower
shall pay to the Agent, for the account of the Lenders, a nonrefundable
amendment fee with respect to the New Revolving Loans in an amount
equal to the Dollar Amount of the New Revolving Credit Commitment of
each Lender multiplied by a percentage equal to 1%. Such fee shall be
payable to the Lenders to be shared ratably among them in accordance
with their respective Applicable Percentages. In addition, the Borrower
shall pay to the Agent, for the account of the Support Lenders, a
nonrefundable amendment fee with respect to the Support Letter of
Credit Facility in an amount equal to $50,000. Such fee shall be
payable to the Support Lenders to be shared ratably among them in
accordance with their respective Applicable Support Percentages. Such
amendment fees shall be payable as of the date hereof.
Section 13. Representations and Warranties. The Parent
and the Borrower hereby represent and warrant to the Lenders and the
Agent, as follows:
(a) The representations and warranties set forth
in Article III of the Original 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
Second Amendment Effective Date (as defined below) with the same effect
as if made on and as of the date hereof or the Second 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 Parent, the Borrower and the
other Loan Parties is in compliance with all the terms and conditions
of the Original 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 Original Agreement.
(c) The execution, delivery and performance by
the Parent and the Borrower of this Second Amendment have been duly
authorized by the Parent and the Borrower.
(d) This Second Amendment constitutes the legal,
valid and binding obligation of the Parent and the Borrower,
enforceable against them 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 Parent and the Borrower of this Second Amendment (i) do 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
Parent or the Borrower, (B) any order of any Governmental Authority or
(C) any provision of any indenture, agreement or other instrument to
which the Parent or the Borrower is a party or by which either of them
or any of their 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 14. Effectiveness. This Second Amendment shall
become effective as of March 15, 2002 (the "Second Amendment Effective
Date") upon satisfaction of the following conditions precedent:
(a) The Agent shall have received duly executed
counterparts of this Second 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 13 hereof are true
and correct on and as of the Second 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 Parent, 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, including an amended Centre Intercreditor Agreement
and Centre Loan Agreement, 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 Second
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 all
fees and expenses set forth in Section 16.
Section 15. Governing Law. This Second Amendment shall
be construed in accordance with and governed by the laws of the State
of New York.
Section 16. 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 Second Amendment, including, but not
limited to, the reasonable fees and disbursements of counsel.
Section 17. Counterparts. This Second 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 Second 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
Second Amendment.
Section 18. 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.
[END OF PAGE]
[SIGNATURE PAGES TO FOLLOW]
IN WITNESS WHEREOF, the parties hereto have caused this Second
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:
NON CENTRE ENTITIES
BANK OF AMERICA, N.A., as Agent, and Issuing
Bank and individually as a Lender
By:
------------------------------------------
Name:
Title:
U.S. BANK NATIONAL ASSOCIATION
By:
------------------------------------------
Name:
Title:
Attention:
Xxxxxxx Xxxxxxxx
Special Assets
MPFP2516
000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000-0000
Fax (000) 000-0000
FIRST SOURCE LOAN OBLIGATIONS
INSURED TRUST, by First Source
Financial, Inc., as Agent/Manager
By:
------------------------------------------
Name:
Title:
Attention:
Xxxx Xxxxx
0000 Xxxx Xxxx Xxxx
0xx Xxxxx
Xxxxxxx Xxxxxxx, XX 00000
Fax (000) 000-0000
PB CAPITAL CORPORATION
By:
------------------------------------------
Name:
Title:
Attention:
Mr. Xxxxx Xxxxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Fax (000) 000-0000
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
Schedule 2.23(a)
Allocation of Support Letter of Credit Facility Commitments
SUPPORT LENDER COMMITMENT
-------------- ----------
Bank of America $1,395,116
Centre Entities 804,884
----------
TOTAL $2,200,000
