-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Uj5LLwncG6HnuKl+Qk+M21c4W+CYYFCa7sypd8Ps1UcNMxzSfkS/eKQZapJ0y8/R 3ptlVfs3gBlNxW59zX+zLg== 0001019056-02-000333.txt : 20020502 0001019056-02-000333.hdr.sgml : 20020501 ACCESSION NUMBER: 0001019056-02-000333 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20020502 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: FIREARMS TRAINING SYSTEMS INC CENTRAL INDEX KEY: 0001021770 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MANAGEMENT CONSULTING SERVICES [8742] IRS NUMBER: 570777018 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-49823 FILM NUMBER: 02632346 BUSINESS ADDRESS: STREET 1: 7340 MCGINNIS FERRY RD CITY: SUWANEE STATE: GA ZIP: 30024 BUSINESS PHONE: 7708130180 MAIL ADDRESS: STREET 1: 7340 MCGINNIS FERRY RD CITY: SUWANEE STATE: GA ZIP: 30024 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: CENTRE PARTNERS II LLC CENTRAL INDEX KEY: 0001033304 IRS NUMBER: 133866629 STATE OF INCORPORATION: DE FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 30 ROCKEFELLER PLAZA CITY: NEW YORK STATE: NY ZIP: 10020 BUSINESS PHONE: 2123325800 MAIL ADDRESS: STREET 1: 30 ROCKEFELLER PLAZA CITY: NEW YORK STATE: NY ZIP: 10020 SC 13D 1 centre_13d.txt SCHEDULE 13D SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D (Rule 13d-101) INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a) Firearms Training Systems, Inc. - -------------------------------------------------------------------------------- (Name of Issuer) Class A Common Stock, par value $0.000006 per share - -------------------------------------------------------------------------------- (Title of Class of Securities) 318120-10-2 - -------------------------------------------------------------------------------- (CUSIP Number) Scott Perekslis Mark E. Thierfelder, Esq. Centre Partners Management LLC O'Melveny & Myers LLP 30 Rockefeller Plaza, Suite 5050 153 East 53rd Street, 54th Floor New York, NY 10020 New York, NY 10022 (212) 332-5800 (212) 326-2000 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) April 25, 2002 - -------------------------------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box [ ]. Note. Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent. - ------------------------- ------------------------- CUSIP NO. 318120-10-2 13D Page 2 of 17 Pages - ------------------------- ------------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY): Centre Capital Investors II, L.P. - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* OO - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES 0 BENEFICIALLY ------------------------------------ OWNED BY 8 SHARED VOTING POWER EACH REPORT- 21,468,989 ING PERSON ------------------------------------ WITH 9 SOLE DISPOSITIVE POWER 0 ------------------------------------ 10 SHARED DISPOSITIVE POWER 21,468,989 ------------------------------------ - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 21,468,989 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [X]** - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 28.4% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* PN - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! ** The aggregate amount in Row 11 excludes shares that the Reporting Person may be deemed to beneficially own as a member of those groups as to which the Reporting Person disclaims membership in Item 2 of the text below. Page 2 of 17 - ------------------------- ------------------------- CUSIP NO. 318120-10-2 13D Page 3 of 17 Pages - ------------------------- ------------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY): Centre Capital Tax-Exempt Investors II, L.P. - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* OO - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES 0 BENEFICIALLY ------------------------------------ OWNED BY 8 SHARED VOTING POWER EACH REPORT- 2,399,950 ING PERSON ------------------------------------ WITH 9 SOLE DISPOSITIVE POWER 0 ------------------------------------ 10 SHARED DISPOSITIVE POWER 2,399,950 ------------------------------------ - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,399,950 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [X]** - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 3.2% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* PN - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! ** The aggregate amount in Row 11 excludes shares that the Reporting Person may be deemed to beneficially own as a member of those groups as to which the Reporting Person disclaims membership in Item 2 of the text below. Page 3 of 17 - ------------------------- ------------------------- CUSIP NO. 318120-10-2 13D Page 4 of 17 Pages - ------------------------- ------------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY): Centre Capital Offshore Investors II, L.P. - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* OO - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES 0 BENEFICIALLY ------------------------------------ OWNED BY 8 SHARED VOTING POWER EACH REPORT- 4,254,301 ING PERSON ------------------------------------ WITH 9 SOLE DISPOSITIVE POWER 0 ------------------------------------ 10 SHARED DISPOSITIVE POWER 4,254,301 ------------------------------------ - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 4,254,301 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [X]** - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.6% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* PN - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! ** The aggregate amount in Row 11 excludes shares that the Reporting Person may be deemed to beneficially own as a member of those groups as to which the Reporting Person disclaims membership in Item 2 of the text below. Page 4 of 17 - ------------------------- ------------------------- CUSIP NO. 318120-10-2 13D Page 5 of 17 Pages - ------------------------- ------------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY): Centre Partners Coinvestment L.P. - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* OO - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES 0 BENEFICIALLY ------------------------------------ OWNED BY 8 SHARED VOTING POWER EACH REPORT- 3,102,072 ING PERSON ------------------------------------ WITH 9 SOLE DISPOSITIVE POWER 0 ------------------------------------ 10 SHARED DISPOSITIVE POWER 3,102,072 ------------------------------------ - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,102,072 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [X]** - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 4.1% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* PN - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! ** The aggregate amount in Row 11 excludes shares that the Reporting Person may be deemed to beneficially own as a member of those groups as to which the Reporting Person disclaims membership in Item 2 of the text below. Page 5 of 17 - ------------------------- ------------------------- CUSIP NO. 318120-10-2 13D Page 6 of 17 Pages - ------------------------- ------------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY): Centre Partners II, L.P. - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* OO - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES 0 BENEFICIALLY ------------------------------------ OWNED BY 8 SHARED VOTING POWER EACH REPORT- 28,123,240 ING PERSON ------------------------------------ WITH 9 SOLE DISPOSITIVE POWER 0 ------------------------------------ 10 SHARED DISPOSITIVE POWER 28,123,240 ------------------------------------ - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 28,123,240 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [X]** - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 37.2% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* PN - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! ** The aggregate amount in Row 11 excludes shares that the Reporting Person may be deemed to beneficially own as a member of those groups as to which the Reporting Person disclaims membership in Item 2 of the text below. Page 6 of 17 - ------------------------- ------------------------- CUSIP NO. 318120-10-2 13D Page 7 of 17 Pages - ------------------------- ------------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY): Centre Partners II, L.L.C. - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* OO - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES 0 BENEFICIALLY ------------------------------------ OWNED BY 8 SHARED VOTING POWER EACH REPORT- 31,853,624 ING PERSON ------------------------------------ WITH 9 SOLE DISPOSITIVE POWER 0 ------------------------------------ 10 SHARED DISPOSITIVE POWER 31,853,624 ------------------------------------ - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 31,853,624 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [X]** - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 42.2% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* OO - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! ** The aggregate amount in Row 11 excludes shares that the Reporting Person may be deemed to beneficially own as a member of those groups as to which the Reporting Person disclaims membership in Item 2 of the text below. Page 7 of 17 - ------------------------- ------------------------- CUSIP NO. 318120-10-2 13D Page 8 of 17 Pages - ------------------------- ------------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY): Centre Partners Management LLC - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* OO - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES 106,700 BENEFICIALLY ------------------------------------ OWNED BY 8 SHARED VOTING POWER EACH REPORT- 31,853,624 ING PERSON ------------------------------------ WITH 9 SOLE DISPOSITIVE POWER 106,700 ------------------------------------ 10 SHARED DISPOSITIVE POWER 31,853,624 ------------------------------------ - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 31,960,324 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [X]** - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 42.3% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* OO - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! ** The aggregate amount in Row 11 excludes shares that the Reporting Person may be deemed to beneficially own as a member of those groups as to which the Reporting Person disclaims membership in Item 2 of the text below. Page 8 of 17 Item 1. Security and Issuer. This Statement relates to the Class A common stock, par value $.000006 per share (the "Common Stock"), of Firearms Training Systems, Inc., a Delaware corporation (the "Company"). The principal executive offices of the Company are located at 7340 McGinnis Ferry Road, Suwanee, Georgia 30174. Item 2. Identity and Background. This Statement is filed (i) by Centre Capital Investors II, L.P. ("Centre Capital"), Centre Capital Tax-Exempt Investors II, L.P. ("Centre Tax-Exempt"), Centre Capital Offshore Investors II, L.P. ("Centre Offshore"), and Centre Partners Coinvestment L.P. ("Centre Coninvestment"), as the direct beneficial owners of Common Stock, (ii) by virtue of being the general partner of Centre Capital, Centre Tax-Exempt, and Centre Offshore, by Centre Partners II, L.P. ("Centre Partners LP"), (iii) by virtue of being the general partner of Centre Coinvestment and Centre Partners LP, by Centre Partners II L.L.C. ("Centre Partners LLC"), and (iv) by virtue of a management arrangement among Centre Partners Management LLC ("Centre Management"), Centre Partners LP, and Centre Partners LLC, by Centre Management. Centre Capital, Centre Tax-Exempt, Centre Offshore, Centre Coinvestment, Centre Partners LP, Centre Partners LLC, and Centre Management are collectively referred to herein as the "Reporting Persons." Centre Capital, Centre Tax-Exempt, Centre Offshore, and Centre Coinvestment are referred to herein as the "Centre Holders." The Centre Holders are the direct holders of the Common Stock and Warrants to purchase Common Stock described in Item 5(a). Centre Partners LP is the general partner of Centre Capital, Centre Tax-Exempt, and Centre Offshore and may be deemed to control each of them. Centre Partners LLC is the general partner of Centre Coinvestment and Centre Partners LP. Centre Partners LLC may be deemed to control directly Centre Coinvestment and Centre Partners LP and to control indirectly Centre Capital, Centre Tax-Exempt, and Centre Offshore. Pursuant to the management arrangement referred to in the foregoing paragraph, Centre Management has the power to act on behalf of Centre Partners LP, as general partner of Centre Capital, Centre Tax-Exempt, and Centre Offshore, and Centre Partners LLC, as general partner of Centre Coinvestment and Centre Partners LP, including the power to vote and dispose of the Common Stock held by the Centre Holders. Each of the Reporting Persons may be deemed to be a part of one or more "groups" for purposes of Regulation 13D-G promulgated under the Securities Exchange Act of 1934, but disclaims that status. Each of the Centre Holders and Centre Partners LP is a limited partnership organized under the laws of Delaware. Each of Centre Partners LLC and Centre Management is a limited liability company organized under the laws of Delaware. Each of the Centre Holders is a limited partnership that makes investments for long-term capital appreciation. Centre Partners LP was formed to participate in the management of Centre Capital, Centre Tax-Exempt, and Centre Offshore. Centre Partners LLC was formed to participate in the management of Centre Coinvestment and Centre Partners LP. Centre Management was formed to manage the investments of Centre Partners LP, Centre Partners LLC, the Centre Holders, and certain of their affiliates. The address of the principal business and principal office of each Reporting Person other than Centre Offshore is 30 Rockefeller Plaza, Suite 5050, New York, New York 10020. The address of the principal business and principal office of Centre Offshore is c/o Reid Management Limited, Cedar House, 41 Cedar House, Hamilton, Bermuda HM12. The managing directors of Centre Management are Lester Pollack, Bruce G. Pollack, David B. Golub, Robert A. Bergmann, Scott Perekslis, and David L. Jaffe (collectively, the "Managing Directors"). Mr. Lester Pollack, Mr. Bruce Pollack, Mr. Golub, Mr. Bergmann, and Mr. Perekslis are also the managing directors of Centre Partners LLC. Mr. Perekslis is a member of the Company's Board of Directors. The business address of each Managing Director is c/o Centre Partners Management LLC, 30 Rockefeller Plaza, Suite 5050, New York, New York 10020. The present principal occupation of each Managing Director is to participate in the management of Centre Management. Each Managing Director is a citizen of the United States of America. Page 9 of 17 During the last five years, none of the Reporting Persons and the Managing Directors has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree, or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. Item 3. Source and Amount of Funds or Other Consideration. The total amount of funds to be used by the Centre Holders to acquire Common Stock pursuant to the Purchase Agreement described in Item 5(c) will be approximately $71,000, or approximately $0.01 per share. The source of such funds will be a capital call from the Centre Holders' limited partners. Item 4. Purpose of Transaction. The Centre Holders acquired shares of Common Stock to obtain an equity interest in the Company. The Centre Holders are purchasing additional Common Stock and the Company's Series B preferred stock, par value $0.10 per share (the "Preferred Stock"), senior secured loans, junior secured loans, and new revolving loans pursuant to the Purchase Agreement described in Item 5(c) to increase their respective investments in the Company. The Centre Holders may acquire additional shares of Preferred Stock as stock dividends on the Preferred Stock. Pursuant to the Certificate of Designations of Series B Preferred Stock filed with the Secretary of State of Delaware on August 25, 2000 (the "Certificate of Designations"), the holders of Preferred Stock are entitled to receive cumulative dividends on each share of Preferred Stock at a rate of 10% per annum of such share's liquidation preference, subject to increase upon the occurrence of certain events described in the Certificate of Designations. The "liquidation preference" of each share of Preferred Stock is equal to the sum of (a) $1,000 plus (b) an amount equal to all accrued but unpaid dividends payable with respect to such share. Dividends on the Preferred Stock are payable in kind in additional shares of Preferred Stock valued at the liquidation preference per share. Depending upon their evaluation of the Company's business and prospects, and upon future developments (including, but not limited to, performance of the Common Stock, Preferred Stock, senior secured loans, junior secured loans, and new revolving loans in the market, availability of funds, alternative uses of funds, and money, stock market, and general economic conditions), any of the Reporting Persons or other entities that may be deemed to be affiliated with the Reporting Persons may from time to time acquire Common Stock, Preferred Stock, senior secured loans, junior secured loans, and new revolving loans, and any of the Reporting Persons or other entities that may be deemed to be affiliated with the Reporting Persons may from time to time dispose of all or a portion of the Common Stock, Preferred Stock, senior secured loans, junior secured loans, and new revolving loans held by such person, or cease buying or selling Common Stock, Preferred Stock, senior secured loans, junior secured loans, and new revolving loans. Any such additional purchases or sales of Common Stock, Preferred Stock, senior secured loans, junior secured loans, or new revolving loans may be in open market or privately-negotiated transactions or otherwise. The Reporting Persons have considered, are considering, and may consider in the future certain strategic options, including a sale or recapitalization of the Company and/or any of its Subsidiaries. Except as described in this Item 4, neither any of the Reporting Persons nor, to the best knowledge of any of the Reporting Persons, any of the Managing Directors has formulated any plans or proposals that relate to or would result in any matter required to be disclosed in response to paragraphs (a) through (j) of Item 4 of Schedule 13D. Item 5. Interest in Securities of the Issuer. (a) The percentages of outstanding Common Stock of the Company reported in this Item 5 are based on the assumption that there are 70,153,139 shares of Common Stock outstanding, which reflects the number of outstanding shares of Common Stock reported by the Company in its Quarterly Report on Form 10-Q as filed on February 13, 2002. Page 10 of 17 As of the date hereof and without giving effect to future purchases pursuant to the Purchase Agreement described in Item 5(c), (i) Centre Capital directly beneficially owns an aggregate of 21,468,989 shares of Common Stock, 17,893,756 of which are directly held by Centre Capital, 1,372,619 of which are issuable upon the exercise of New Warrants (as defined in Item 6) directly held by Centre Capital, and 2,202,614 of which are issuable upon the exercise of Amended Warrants (as defined in Item 6) directly held by Centre Capital, (ii) Centre Tax-Exempt directly beneficially owns an aggregate of 2,399,950 shares of Common Stock, 2,000,301 of which are directly held by Centre Tax-Exempt, 153,446 of which are issuable upon the exercise of New Warrants directly held by Centre Tax-Exempt, and 246,203 of which are issuable upon the exercise of Amended Warrants directly held by Centre Tax-Exempt, (iii) Centre Offshore directly beneficially owns an aggregate of 4,254,301 shares of Common Stock, 3,545,788 of which are directly held by Centre Offshore, 271,989 of which are issuable upon the exercise of New Warrants directly held by Centre Offshore, and 436,524 of which are issuable upon the exercise of Amended Warrants directly held by Centre Offshore, and (iv) Centre Coinvestment directly beneficially owns an aggregate of 3,102,072 shares of Common Stock, 2,596,434 of which are directly held by Centre Coinvestment, 201,946 of which are issuable upon the exercise of New Warrants directly held by Centre Coinvestment, and 303,692 of which are issuable upon the exercise of Amended Warrants directly held by Centre Coinvestment. Based on the foregoing, Centre Capital, Centre Tax-Exempt, Centre Offshore, and Centre Coinvestment may be deemed to own directly and beneficially 28.4%, 3.2%, 5.6%, and 4.1% of the outstanding Common Stock (calculated after giving effect to the exercise of the New Warrants, the Amended Warrants, the Centre Partners LLC Warrants (as defined below), and the Centre Management Options (as defined below)), respectively. By virtue of the relationships described under Item 2 of this Statement, (i) Centre Partners LP, Centre Partners LLC, and Centre Management may be deemed to share indirect beneficial ownership of the Common Stock directly beneficially owned by Centre Capital, Centre Tax-Exempt, and Centre Offshore, and (ii) Centre Partners LLC and Centre Management may be deemed to share indirect beneficial ownership of the Common Stock directly beneficially owned by Centre Coinvestment. In addition, (i) pursuant to certain co-investment arrangements, Centre Partners LLC has been delegated voting and dispositive power with respect to an additional 571,181 shares of Common Stock and 57,131 warrants to purchase Common Stock (such warrants, the "Centre Partners LLC Warrants"), and (ii) Centre Management has voting and dispositive power with respect to 106,700 options to purchase Common Stock (the "Centre Management Options"). Accordingly, as of the date hereof and without giving effect to future purchases pursuant to the Purchase Agreement, (i) Centre Partners LP may be deemed to share indirect beneficial ownership of an aggregate of 28,123,240 shares of Common Stock, or 37.2% of the outstanding Common Stock (calculated after giving effect to the exercise of the New Warrants, the Amended Warrants, the Centre Partners LLC Warrants, and the Centre Management Options), (ii) Centre Partners LLC may be deemed to share indirect beneficial ownership of an aggregate of 31,853,624 shares of Common Stock, or 42.2% of the outstanding Common Stock (as so calculated), and (iii) Centre Management may be deemed to share indirect beneficial ownership of an aggregate of 31,960,324 shares of Common Stock, or 42.3% of the outstanding Common Stock (as so calculated). Centre Partners LP, Centre Partners LLC, and Centre Management, however, disclaim all such beneficial ownership. The Reporting Persons understand, based on ownership filings with the Securities and Exchange Commission and upon information provided by the Managing Directors, that no Managing Director personally beneficially owns any Common Stock. (b) By virtue of the relationships described in Item 2, (i) Centre Capital may be deemed to share the power to vote and direct the disposition of 21,468,989 shares of Common Stock, (ii) Centre Tax-Exempt may be deemed to share the power to vote and direct the disposition of 2,399,950 shares of Common Stock, (iii) Centre Offshore may be deemed to share the power to vote and direct the disposition of 4,254,301 shares of Common Stock, (iv) Centre Coinvestment may be deemed to share the power to vote and direct the disposition of 3,102,072 shares of Common Stock, (v) Centre Partners LP may be deemed to share the power to vote and direct the disposition of 28,123,240 shares of Common Stock, (vi) Centre Partners LLC may be deemed to share the power to vote and direct the disposition of 31,853,624 shares of Common Stock, and (vii) Centre Management may be deemed to share the power to vote and direct the disposition of 31,960,324 shares of Common Stock. (c) On April 25, 2002, the Centre Holders and PB Capital Corporation entered into a Loan and Stock Purchase Agreement (the "Purchase Agreement"), pursuant to which each Centre Holder will purchase from PB Capital Corporation a combination of Common Stock, Preferred Stock, and senior secured loans, junior secured loans, and new revolving loans under the Credit Agreement Page 11 of 17 (as defined in Item 6). Each Centre Holder will purchase the number of shares of Common Stock set forth next to its name for the approximate price per share set forth next to its name. The aggregate price to be paid by the Centre Holders for all such shares will be approximately $71,000. The transactions contemplated by the Purchase Agreement are scheduled to close on the later of (i) May 10, 2002 or (ii) two business days after the satisfaction of certain conditions described in the Purchase Agreement, or on such other date as the Centre Holders and PB Capital Corporation may agree. The Purchase Agreement was privately negotiated with PB Capital Corporation. Centre Holder Shares of Common Stock Price Per Share ------------- ---------------------- --------------- Centre Capital 4,870,385 $0.01 Centre Tax-Exempt 544,472 $0.01 Centre Offshore 965,071 $0.01 Centre Coinvestment 720,463 $0.01 Except as described above, neither any of the Reporting Persons nor, to the best knowledge of the Reporting Persons, any of the Managing Directors has engaged in any transaction in the Common Stock during the past 60 days. (d) Each Centre Holder has the right to receive and the power to direct the receipt of dividends from, and the proceeds from the sale of, the Common Stock held by it. (e) Not applicable. Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer. In connection with a restructuring of the Company in 2000 (the "Restructuring"), the Centre Holders entered into a Second Amended and Restated Credit Agreement and Partial Exchange Agreement dated as of April 1, 2000 (the "Credit Agreement") with the Company, FATS, Inc., a subsidiary of the Company (the "Borrower"), the other financial institutions listed on the signature pages thereof (together with the Centre Holders, the "Lenders"), and Bank of America, N.A., as agent (the "Agent"). Pursuant to the Credit Agreement, the Company issued to the Lenders shares of Common Stock and Preferred Stock, and the Borrower issued to the Lenders senior secured loans and junior secured loans, in each case as a credit applied against certain loans held by the Lenders. The shares of Common Stock and Preferred Stock issued to the Lenders pursuant to the Credit Agreement are referred to herein as the "Credit Agreement Common Shares" and the "Credit Agreement Preferred Shares," respectively. The foregoing summary of the Credit Agreement is qualified in its entirety by reference to Exhibit 1, which is hereby incorporated by reference. Also in connection with the Restructuring, the Centre Holders entered into a Voting and Stock Restrictions Agreement dated April 1, 2000 (the "Voting Agreement") with the other Lenders and the Agent, which contains certain provisions relating to the voting and disposition of the Credit Agreement Common Shares and Credit Agreement Preferred Shares. For example, Lenders holding a majority of the new revolving credit commitments under the Credit Agreement ("Required Lenders") may direct the manner in which all Credit Agreement Common Shares are voted. In addition, the Lenders have the right to approve another Lender's sale of Credit Agreement Common Shares or Credit Agreement Preferred Shares and the right to tag-along in any such sale. The approval and tag-along rights do not apply, however, to a sale or transfer by any Lender to any of its affiliates, another Lender or an affiliate of another Lender, provided that it gives the Agent 10 business days' prior notice. The approval and tag-along rights may be modified by the vote of Required Lenders. The foregoing summary of the Voting Agreement is qualified in its entirety by reference to Exhibit 2, which is hereby incorporated by reference. Page 12 of 17 The Centre Holders, the other Lenders, and the Company also entered into a Registration Rights Agreement dated as of April 1, 2000 (the "Registration Rights Agreement") as part of the Restructuring. Under the Registration Rights Agreement, upon the request of one or more Lenders that own in the aggregate a majority of the outstanding Common Stock then held by the Lenders, the Company must register the Common Stock of the requesting Lenders under the Securities Act, subject to certain limitations. In addition, if the Company proposes to register shares of Common Stock in connection with a public offering solely for cash on Forms S-1, S-2, or S-3, it must use its reasonable best efforts to include any Common Stock of a Lender who requests its inclusion, subject to certain limitations. Furthermore, each Lender entitled to have its Common Stock included in a registration statement prepared pursuant to the Registration Rights Agreement, if so requested by the underwriter's representative or the Agent, in connection with an offering covered by a registration statement filed by the Company, cannot effect any public sale or distribution of shares of Common Stock during the 15-day period prior to, and during the 90-day period beginning on, the date such registration statement is declared effective; provided that the 90-day period may be extended for up to 90 additional days if the underwriter's representative or the Agent in good faith advises the Company that such extension is advisable and requests such extension. The foregoing summary of the Registration Rights Agreement is qualified in its entirety by reference to Exhibit 3, which is hereby incorporated by reference. In the Restructuring, the Centre Holders also entered into (a) a Loan and Exchange Agreement dated as of April 1, 2000 (the "Centre Loan Agreement") among the Company, the Borrower, the Centre Holders, as lenders, and Centre Capital, as agent, and (b) a Securities Exchange and Release Agreement dated as of April 1, 2000 (the "Exchange Agreement") among the Company, the Centre Holders and the other investors listed on Schedule 1 thereto. Pursuant to the Centre Loan Agreement and the Exchange Agreement the Company issued Common Stock, Preferred Stock, and warrants to purchase a total of 2,000,000 shares of Common Stock for $0.25 per share (the "New Warrants") to the Centre Holders, and the Borrower issued senior secured loans and junior secured loans to the Centre Holders, in each case as a credit applied against certain reimbursement obligations held by the Centre Holders. Pursuant to the Exchange Agreement, the Company also issued to the Centre Holders and certain other investors a total of 6,695,212 shares of Common Stock and amended warrants to purchase a total of 3,246,164 shares of Common Stock for $1.00 per share (the "Amended Warrants") in exchange for 20,289 shares of the Company's Series A preferred stock and warrants to purchase an aggregate of 3,246,164 shares of the Company's Class B non-voting common stock for $1.03 per share. The Common Stock and Preferred Stock issued to the Centre Holders pursuant to the Centre Loan Agreement and the Exchange Agreement are referred to herein as the "Exchange Agreement Common Shares" and "Exchange Agreement Preferred Shares," respectively. The foregoing summary of the Centre Loan Agreement and the Exchange Agreement are qualified in their entirety by reference to Exhibits 4 and 5, which are incorporated herein by reference. In connection with the Centre Loan Agreement and the Exchange Agreement, (a) the Company entered into a Parent Guarantee Agreement dated as of April 1, 2000 (the "Parent Guarantee") with Centre Capital, as agent for the lenders under the Centre Loan Agreement, and (b) certain subsidiaries of the Borrower entered into a Subsidiaries' Guarantee Agreement dated as of April 1, 2000 (the "Subsidiaries Guarantee") with Centre Capital, as agent for the lenders under the Centre Loan Agreement. Under the Parent Guarantee and the Subsidiaries Guarantee, the Company and such subsidiaries unconditionally guaranteed the due and punctual payment of principal and interest on the loans under the Centre Loan Agreement and all other monetary obligations of the Company, the Borrower and their subsidiaries under the Centre Loan Agreement and the related credit documents. The Company and such subsidiaries also authorized the Agent to take and hold security for payment under the Parent Guarantee and the Subsidiaries Guarantee. The foregoing summary of the Parent Guarantee and the Subsidiaries Guarantee are qualified in their entirety by reference to Exhibits 6 and 7, which are hereby incorporated by reference. Also in connection with the Centre Loan Agreement and the Exchange Agreement, the Company and the Centre Holders entered into a Second Amendment dated as of April 1, 2000 (the "Amendment") to that certain Registration Rights Agreement dated as of July 31, 1996 (as amended prior to the Amendment, the "Centre Registration Rights Agreement") among the Company and the Centre Holders. Pursuant to the Centre Registration Rights Agreement, as amended by the Amendment, the Centre Holders have certain demand and "piggyback" registration rights with respect to the shares of Common Stock and other securities convertible into, exercisable for or exchangeable for shares of Common Stock held by them, including the Exchange Agreement Common Shares, the Exchange Agreement Preferred Shares, and the Common Stock issuable upon exercise of the Page 13 of 17 New Warrants and the Amended Warrants. The foregoing summary of the Amendment and Centre Registration Rights Agreement is qualified in its entirety by reference to Exhibits 8 and 9, which are hereby incorporated by reference. Finally, in connection with the Restructuring, the Agent and the Centre Holders entered into a Letter Agreement dated as of August 25, 2000 (the "Letter Agreement"), which confirmed the understanding of the Agent and the Centre Holders regarding the makeup of the Company's board of directors. Pursuant to the Letter Agreement, as long as the Voting Agreement or any successor agreement is in effect, Required Lenders must cause the Lenders to vote their shares subject to the Voting Agreement or its successor for the election of one person affiliated with the Centre Holders nominated by the Centre Holders such that one such person is serving on the board during such time. The Letter Agreement also required the Centre Holders and the other Lenders to cooperate in good faith to identify and urge the selection of a qualified candidate to serve as active chairman of the board of directors. The foregoing summary of the Letter Agreement is qualified in its entirety by reference to Exhibit 10, which is hereby incorporated by reference. Other than as set forth above, neither any of the Reporting Persons nor, to the best knowledge of the Reporting Persons, any of the Managing Directors has any contract, arrangement, understanding or relationship (legal or otherwise) with any person with respect to securities of the Company, including, but not limited to, transfer or voting of any such securities, finder's fees, joint ventures, loans or option arrangements, puts or calls, guarantees of profits, division of profits or losses, or the giving or withholding of proxies. Reference is made to Item 5(c) for a description of the Purchase Agreement. Item 7. Material to be Filed as Exhibits. Exhibit 1: Second Amended and Restated Credit Agreement and Partial Exchange Agreement dated as of April 1, 2000 among Firearms Training Systems, Inc., FATS, Inc., the financial institutions listed on the signature pages thereof, and Bank of America, N.A., as agent. (Filed as Exhibit 10.07 to the Company's Annual Report on Form 10-K405 for the Fiscal Year ended March 31, 2000) Exhibit 2: Voting and Stock Restrictions Agreement dated as of April 1, 2000 among the financial institutions listed on the signature pages hereof and Bank of America, N.A., as agent. (Filed as Exhibit 9.01 to the Company's Annual Report on Form 10-K405 for the Fiscal Year ended March 31, 2000) Exhibit 3: Registration Rights Agreement dated as of April 1, 2000 among Firearms Training Systems, Inc. and the entities set forth on Schedule I. (Filed as Exhibit 10.16 to the Company's Annual Report on Form 10-K405 for the Fiscal Year ended March 31, 2000) Exhibit 4: Loan and Exchange Agreement dated as of April 1, 2000 among Firearms Training Systems, Inc., FATS, Inc., Centre Capital Tax-Exempt Investors II, L.P., Centre Capital Offshore Investors II, L.P., and Centre Partners Coinvestment L.P., as lenders, and Centre Capital Investors II, L.P., as agent and as a lender. (Filed as Exhibit 10.8 to the Company's Annual Report on Form 10-K405 for the Fiscal Year ended March 31, 2000) Exhibit 5: Securities Exchange and Release Agreement dated as of April 1, 2000 among Firearms Training Systems, Inc. and each of the parties listed on Schedule 1 annexed thereto. (Filed as Exhibit 10.27 to the Company's Annual Report on Form 10-K405 for the Fiscal Year ended March 31, 2000) Exhibit 6: Parent Guarantee Agreement dated as of April 1, 2000 between Firearms Training Systems, Inc. and Centre Capital Investors II, L.P., as agent. Exhibit 7: Subsidiaries' Guarantee Agreement dated as of April 1, 2000 between the guarantors named therein and Centre Capital Investors II, L.P., as agent. Exhibit 8: Second Amendment to Registration Rights Agreement dated as of April 1, 2000 among Firearms Training Systems, Inc. and the person named therein as Holders. Page 14 of 17 Exhibit 9: Registration Rights Agreement dated as of July 31, 1996 among Firearms Training Systems, Inc. and the entities set forth on Schedule I. (Filed as Exhibit 10.17 to the Company's Registration Statement No. 333-13105) Exhibit 10: Letter Agreement dated as of August 25, 2000 among Bank of America, N.A., Centre Capital Investors II, L.P., Centre Partners Coinvestment L.P., Centre Capital Offshore Investors II, L.P., and Centre Capital Tax-Exempt Investors II, L.P. (Filed as Exhibit 9.02 to the Company's Annual Report on Form 10-K405 for the Fiscal Year ended March 31, 2000) Page 15 of 17 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Date: May 2, 2002 CENTRE CAPITAL INVESTORS II, L.P. By: Centre Partners II, L.P., its general partner By: Centre Partners Management LLC, Attorney-in-fact By: /s/ SCOTT PEREKSLIS --------------------------- Name: Scott Perekslis Title: Managing Director CENTRE CAPITAL TAX-EXEMPT INVESTORS II, L.P. By: Centre Partners II, L.P., its general partner By: Centre Partners Management LLC, Attorney-in-fact By: /s/ SCOTT PEREKSLIS --------------------------- Name: Scott Perekslis Title: Managing Director CENTRE CAPITAL OFFSHORE INVESTORS II, L.P. By: Centre Partners II, L.P., its general partner By: Centre Partners Management LLC, Attorney-in-fact By: /s/ SCOTT PEREKSLIS --------------------------- Name: Scott Perekslis Title: Managing Director Page 16 of 17 CENTRE PARTNERS COINVESTMENT L.P. By: Centre Partners II, L.LC., its general partner By: Centre Partners Management LLC, Attorney-in-fact By: /s/ SCOTT PEREKSLIS --------------------------- Name: Scott Perekslis Title: Managing Director CENTRE PARTNERS II, L.P. By: Centre Partners Management LLC, Attorney-in-fact By: /s/ SCOTT PEREKSLIS --------------------------- Name: Scott Perekslis Title: Managing Director CENTRE PARTNERS II, L.L.C. By: Centre Partners Management LLC, Attorney-in-fact By: /s/ SCOTT PEREKSLIS --------------------------- Name: Scott Perekslis Title: Managing Director CENTRE PARTNERS MANAGEMENT LLC By: /s/ SCOTT PEREKSLIS --------------------------- Name: Scott Perekslis Title: Managing Director Page 17 of 17 EX-99.6 3 ex_6.txt EXHIBIT 99.6 EXECUTION COPY - -------------------------------------------------------------------------------- PARENT GUARANTEE AGREEMENT Dated as of April 1, 2000 between FIREARMS TRAINING SYSTEMS, INC., as Guarantor and CENTRE CAPITAL INVESTORS II, L.P., as Agent - -------------------------------------------------------------------------------- TABLE OF CONTENTS Section Page - ------- ---- SECTION 1. Guarantee..........................................................1 SECTION 2. Guarantee Absolute.................................................1 SECTION 3. Waivers............................................................2 SECTION 4. Security for Guarantee.............................................5 SECTION 5. Agreement to Pay; Subordination....................................5 SECTION 6. Representations and Warranties and Covenants.......................5 SECTION 7. Amendments. Etc....................................................6 SECTION 8. Notices. Etc.......................................................6 SECTION 9. No Waiver; Remedies................................................6 SECTION 10. Right of Setoff....................................................6 SECTION 11. Continuing Guarantee...............................................6 SECTION 12. Assignments........................................................7 SECTION 13. Information........................................................7 SECTION 14. Counterparts.......................................................7 SECTION 15. Savings Clause.....................................................7 SECTION 16. Governing Law......................................................7 SECTION 17. Jurisdiction; Consent to Service of Process........................7 SECTION 18. Subordination by Guarantor.........................................8 SECTION 19. Survival of Agreement..............................................8 SECTION 20. Entire Agreement...................................................8 SECTION 21. Headings...........................................................8 i PARENT GUARANTEE AGREEMENT dated as of April 1, 2000, between FIREARMS TRAINING SYSTEMS, INC. (the "Guarantor") and CENTRE CAPITAL INVESTORS II, L.P., as Agent (in such capacity, the "Agent") for the Lenders (as defined herein). Reference is made to the Loan Agreement and Exchange Agreement dated as of April 1, 2000 (as amended, supplemented or otherwise modified from time to time, the "Credit Agreement", among FATS, Inc. (the "Borrower"), the parties thereto as Lenders (the "Lenders") and Centre Capital Investors II, L.P., as Agent. Terms used herein and not otherwise defined herein shall have the meanings assigned to them in the Credit Agreement. The Lenders have agreed to convert the Guarantee Reimbursement Obligation (in satisfaction thereof) into the Senior Secured Loans, the Junior Secured Loans and the Centre New Class A Common pursuant to, and upon the terms and subject to the conditions set forth in, the Credit Agreement. The obligations of the Lenders in connection with such conversion under the Credit Agreement are conditioned on, among other things, the execution and delivery by the Guarantor of a Guarantee Agreement in the form hereof. As consideration therefor and in order to induce the Lenders to make such conversion, the Guarantor is willing to execute and deliver this Guarantee Agreement. Accordingly, the Guarantor, intending to be legally bound, hereby agrees with the Agent, for the ratable benefit of the Secured Parties, as follows: SECTION 1. Guarantee. The Guarantor unconditionally guarantees, as a primary obligor and not merely as a surety, (a) the due and punctual payment of (i) the principal of and premium, if any, and interest (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) on the Loans, when and as due, whether at maturity, by acceleration, upon one or more dates set for prepayment or otherwise and (ii) all other monetary obligations, including indemnities and fees, costs and expenses, whether primary, secondary, direct, contingent, fixed or otherwise (including monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), of the Loan Parties to the Secured Parties under the Credit Agreement and the other Loan Documents and (c) the due and punctual performance of all covenants, agreements, obligations and liabilities of the Loan Parties under or pursuant to the Credit Agreement and the other Loan Documents (all the monetary and other obligations referred to in the preceding clauses (a) and (b) being collectively called the ("Guaranteed Obligations"). The Guarantor further agrees that the Guaranteed Obligations may be extended or renewed, in whole or in part, without notice to or further assent from it, and that it will remain bound upon its guarantee notwithstanding any extension or renewal of any Guaranteed Obligation. SECTION 2. Guarantee Absolute. (a) The Guarantor guarantees that the Guaranteed Obligations will be paid strictly in accordance with the terms of the Loan Documents, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of the Secured Parties with respect thereto. The obligations of the Guarantor under this Guarantee Agreement are independent of the Guaranteed Obligations, and a separate action or actions may be brought and prosecuted against the Guarantor to enforce this Guarantee Agreement, irrespective of whether any action is brought against the Borrower or any other Loan Party or whether the Borrower or any other Loan Party is joined in any such action or actions. This Guarantee Agreement is an absolute and unconditional guaranty of payment when due, and not of collection, by the Guarantor of the Guaranteed Obligations in each and every particular. The obligations of the Guarantor hereunder are several from those of the Borrower and are primary obligations concerning which the Guarantor is the principal obligor. The Secured Parties shall not be required to mitigate damages or take any action to reduce, collect or enforce the Guaranteed Obligations. (b) This Guarantee Agreement shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the Guaranteed Obligations is rescinded or must otherwise be returned by the Agent or any other Secured Party upon the insolvency, bankruptcy or reorganization of the Borrower or otherwise, all as though such payment had not been made. (c) The obligations of the Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, including the existence of any claim, setoff or other right which the Guarantor may have at any time against the Borrower or any other Loan Party, the Agent or other Secured Party or any other person, whether in connection herewith or any unrelated transactions. Without limiting the generality of the foregoing, the Guarantor's liability shall extend to all amounts that constitute part of the Guaranteed Obligations and would be owed by the Borrower or any other Loan Party to any Secured Party under the Loan Documents but for the fact that they are unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving the Borrower. SECTION 3. Waivers. The Guarantor hereby waives presentment to, demand of payment from and protest to the Borrower of any of the Guaranteed Obligations, and also waives promptness, diligence, notice of acceptance of its guarantee, any other notice with respect to any of the Guaranteed Obligations and this Guarantee Agreement and any requirement that the Agent or any other Secured Party protect, secure, perfect or insure any Lien or any property subject thereto. The Guarantor further waives any right to require that resort be had by the Agent or any other Secured Party to any security held for payment of the Guaranteed Obligations or to any balance of any deposit, account or credit on the books of the Agent or any other Secured Party in favor of the Borrower or any other person. The Guarantor hereby consents and agrees to each of the following to the fullest extent permitted by law, and agrees that its obligations under this Guarantee Agreement shall not be released, diminished, impaired, reduced or adversely affected by any of the following, and waives any rights (including rights to notice) which it might otherwise have as a result of or in connection with any of the following: (a) any renewal, extension, modification, increase, decrease, alteration or rearrangement of all or any part of the Guaranteed Obligations or any instrument executed in connection therewith, or any contract or understanding with the Borrower, the Agent, the other Secured Parties, or any of them, or any other person, pertaining to the Guaranteed Obligations; (b) any adjustment, indulgence, forbearance or compromise that might be granted or given by the Agent or any other Secured Party to the Borrower or any other Loan Party or any other person liable on the Guaranteed Obligations; or the failure of the Agent or any other Secured Party to assert any claim or demand or to exercise any right or remedy against the Borrower or any other Loan Party under the provisions of any Loan Document or otherwise; or any rescission, waiver, amendment or modification of, or any release from any of the terms or provisions of, any Loan Document, any Guarantee or any other agreement, including with respect to any Subsidiary under the Subsidiaries Guarantee Agreement; (c) the insolvency, bankruptcy arrangement, adjustment, composition, liquidation, disability, dissolution or lack of power of the Borrower or any other Loan Party or any other person at any time liable for the payment of all or part of the Guaranteed Obligations; or any dissolution of the Borrower or any other Loan Party, or any change, restructuring or termination 2 of the organizational structure or existence of the Borrower or any other Loan Party, or any sale, lease or transfer of any or all of the assets of the Borrower or any other Loan Party, or any change in the shareholders, partners, or members of the Borrower or any other Subsidiary; or any default, failure or delay, willful or otherwise, in the performance of the Guaranteed Obligations; (d) the invalidity, illegality or unenforceability of all or any part of the Guaranteed Obligations, or any document or agreement executed in connection with the Guaranteed Obligations, for any reason whatsoever, including the fact that the Guaranteed Obligations, or any part thereof, exceed the amount permitted by law, the act of creating the Guaranteed Obligations or any part thereof is ultra vires, the officers or representatives executing the documents or otherwise creating the Guaranteed Obligations acted in excess of their authority, the Guaranteed Obligations violate applicable usury laws, the Borrower has valid defenses, claims or offsets (whether at law, in equity or by agreement) which render the Guaranteed Obligations wholly or partially uncollectible from the Borrower, the creation, performance or repayment of the Guaranteed Obligations (or the execution, delivery and performance of any document or instrument representing part of the Guaranteed Obligations or executed in connection with the Guaranteed Obligations or given to secure the repayment of the Guaranteed Obligations) is illegal, uncollectible, legally impossible or unenforceable, or the documents or instruments pertaining to the Guaranteed Obligations have been forged or otherwise are irregular or not genuine or authentic; (e) any full or partial release of the liability of the Borrower on the Guaranteed Obligations or any part thereof, of any other Loan Party or of any other person now or hereafter liable, whether directly or indirectly, jointly, severally, or jointly and severally, to pay, perform, guarantee or assure the payment of the Guaranteed Obligations or any part thereof, it being recognized, acknowledged and agreed by the Guarantor that the Guarantor may be required to pay the Guaranteed Obligations in full without assistance or support of any other person, and the Guarantor has not been induced to enter into this Guarantee Agreement on the basis of a contemplation, belief, understanding or agreement that any parties other than the Borrower will be liable to perform the Guaranteed Obligations, or that the Secured Parties will look to other parties to perform the Guaranteed Obligations; (f) the taking or accepting of any other security, collateral or Guarantee, or other assurance of payment, for all or any part of the Guaranteed Obligations; (g) any release, surrender, exchange, subordination, deterioration, waste, loss or impairment (including negligent, willful, unreasonable or unjustifiable impairment) of any collateral, property or security, at any time existing in connection with, or assuring or securing payment of, all or any part of the Guaranteed Obligations; (h) the failure of the Agent, any other Secured Party or any other person to exercise diligence or reasonable care in the preservation, protection, enforcement, sale or other handling or treatment of all or any part of such collateral, property or security; (i) the fact that any collateral, security, security interest or lien contemplated or intended to be given, created or granted as security for the repayment of the Guaranteed Obligations shall not be properly perfected or created, or shall prove to be unenforceable or subordinate to any other security interest or lien, it being recognized and agreed by the Guarantor that the Guarantor is not entering into this Guarantee Agreement in reliance on, or in 3 contemplation of the benefits of, the validity, enforceability, collectibility or value of any of the Collateral; (j) any payment by the Borrower to the Agent or any other Secured Party being held to constitute a preference under Title 11 of the United States Code or any similar Federal or state law, or for any reason the Agent or any other Secured Party being required to refund such payment or pay such amount to the Borrower or someone else; (k) any other action taken or omitted to be taken with respect to the Guaranteed Obligations, or the security and collateral therefor, whether or not such action or omission prejudices the Guarantor or increases the likelihood that the Guarantor will be required to pay the Guaranteed Obligations pursuant to the terms hereof, it being the unambiguous and unequivocal intention of the Guarantor that the Guarantor shall be obligated to pay the Guaranteed Obligations when due, notwithstanding any occurrence, circumstance, event, action or omission whatsoever, whether or not contemplated, and whether or not otherwise or particularly described herein, except for the full and final payment and satisfaction of the Guaranteed Obligations in cash; (l) the fact that all or any of the Guaranteed Obligations cease to exist by operation of law, including by way of a discharge, limitation or tolling thereof under applicable bankruptcy laws; (m) any other circumstance that might in any manner or to any extent otherwise constitute a defense available to, vary the risk of, or operate as a discharge of, the Borrower or any other Loan Party as a matter of law or equity; or (n) the existence of any claim, setoff or other right which the Guarantor may have at any time against the Borrower or any other Loan Party, the Agent, any other Secured Party or any other corporation or person, whether in connection herewith or any unrelated transactions; provided, that nothing herein shall prevent the assertion of any such claim by separate suit or compulsory counterclaim. All waivers herein contained shall be without prejudice to the Agent at its option to proceed against the Borrower, any other Loan Party or any other person, whether by separate action or by joinder. SECTION 4. Security for Guarantee. The Guarantor authorizes the Banks' Agent, in accordance with the terms and subject to the conditions set forth in the Intercreditor Agreement and the Collateral Documents, (a) to take and hold security for the payment of this Guarantee Agreement and the Guaranteed Obligations and to exchange, enforce, waive and release any such security, (b) to apply such security and direct the order or manner of sale thereof as the Banks' Agent may determine and (c) to release or substitute any one or more endorsees, other guarantors or other obligors. The Banks' Agent may, at its election, in accordance with the terms and subject to the conditions set forth in the Collateral Documents and the Intercreditor Agreement, foreclose on any security held by it by one or more judicial or nonjudicial sales, or exercise any other right or remedy available to it against the Borrower or any other Loan Party, or any security, without affecting or impairing in any way the liability of the Guarantor hereunder, except to the extent the Guaranteed Obligations have been indefeasibly paid in full in cash. SECTION 5. Agreement to Pay; Subordination. Subject to the provisions of the Intercreditor Agreement and in furtherance of the foregoing and not in limitation of any other right that the Agent or any other Secured Party has at law or in equity against the Guarantor by virtue hereof, upon the failure of the Borrower or any other Loan Party to pay any Guaranteed Obligation when and as the same shall 4 become due, whether at maturity, by acceleration, after notice of prepayment or otherwise, the Guarantor hereby promises to and will forthwith pay, or cause to be paid, to the Agent or such other Secured Party as designated thereby in cash the amount of such unpaid Guaranteed Obligations. Upon payment by the Guarantor of any sums to the Agent or any Secured Party as provided above, all rights of the Guarantor against the Borrower arising as a result thereof by way of right of subrogation, contribution, reimbursement, indemnity or otherwise shall in all respects be subordinate and junior in right of payment to the prior indefeasible payment in full of cash of all the Guaranteed Obligations. If any amount shall erroneously be paid to the Guarantor on account of such subrogation, contribution, reimbursement, indemnity or similar right, such amount shall be held in trust for the benefit of the Secured Parties and shall forthwith be turned over to the Banks' Agent in the exact form received by the Guarantor (duly endorsed by the Guarantor to the Banks' Agent, if required) to be credited against the payment of the Guaranteed Obligations, whether matured or unmatured, in accordance with the terms of the Loan Documents and the Intercreditor Agreement. SECTION 6. Representations and Warranties and Covenants. The Guarantor hereby represents, warrants and covenants as follows: (a) All representations and warranties contained in the Credit Agreement that relate to the Guarantor are true and correct. (b) The Guarantor agrees to comply with each of the covenants contained in the Credit Agreement that imposes or purports to impose, through agreements with the Borrower, restrictions or obligations on the Guarantor. (c) The Guarantor acknowledges that any default in the due observance or performance by the Guarantor of any covenant, condition or agreement contained herein may constitute an Event of Default under Article VII of the Credit Agreement. (d) There are no conditions precedent to the effectiveness of this Guarantee Agreement that have not been satisfied or waived. (e) The Guarantor has, independently and without reliance upon the Agent or any other Secured Party and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Guarantee Agreement. The Guarantor has investigated fully the benefits and advantages which will be derived by it from execution of this Guarantee Agreement, and the Board of Directors of the Guarantor has decided that a direct or an indirect benefit will accrue to the Guarantor by reason of the execution of this Guarantee Agreement. (f) (i) This Guarantee Agreement is not given with actual intent to hinder, delay or defraud any person to which the Guarantor is or will become, on or after the date hereof, indebted; (ii) the Guarantor has received at least a reasonably equivalent value in exchange for the giving of this Guarantee Agreement; (iii) the Guarantor is not insolvent on the date hereof and will not become insolvent as a result of the giving of this Guarantee Agreement; (iv) the Guarantor is not engaged in a business or transaction, nor is about to engage in a business or transaction, for which any property remaining with the Guarantor constitutes an unreasonably small amount of capital; and (v) the Guarantor does not intend to incur debts that will be beyond the Guarantor's ability to pay as such debts mature. 5 SECTION 7. Amendments. Etc. No amendment, modification or waiver of any provision of this Guarantee Agreement and no consent to any departure by the Guarantor therefrom shall in any event be effective unless the same shall be in writing and shall be executed and delivered in accordance with Section 9.08 of the Credit Agreement, and then such amendment, modification, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. SECTION 8. Notices. Etc. Unless otherwise specified herein, all notices, requests or other communications to any party hereunder shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy as follows: (a) if to the Guarantor, to it at 7340 McGinnis Ferry Road, Suwanee, Georgia 30174-1247, Attention of John A. Morelli (Telecopy No. (770) 622-3515), with copies to (i) Centre Partners Management LLC, 30 Rockefeller Plaza, New York, NY 10020, Attention of Scott Perekslis (Telecopy No. (212) 332-5801) and (ii) Sidley & Austin, Bank One Plaza, 10 South Dearborn Street, Chicago, IL 60603, Attention of James Clark (Telecopy No. (312) 853-7036); and (b) if to the Agent, to it at Centre Partners Management LLC, 30 Rockefeller Plaza, New York, NY 10020, Attention of Scott Perekslis (Telecopy No. (212) 332-5801), with a copy to Weil, Gotshal & Manges LLP, 767 Fifth Avenue, New York, NY 10153, Attention of Jeffrey J. Weinberg (Telecopy No. (212) 310-8007). All notices and other communications given to any party hereto in accordance with the provisions of this Guarantee Agreement shall be deemed to have been given on the date of receipt if delivered by hand or overnight courier service or sent by telecopy or on the date five Business Days after dispatch by certified or registered mail if mailed, in each case delivered, sent or mailed (properly addressed) to such party as provided in this Section 8 or in accordance with the latest unrevoked direction from such party given in accordance with this Section 8. SECTION 9. No Waiver; Remedies. No failure on the part of the Agent or any other Secured Party to exercise, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy by the Agent or any other Secured Party preclude any other or further exercise thereof or the exercise of any other right, power or remedy. All remedies hereunder and under the other Loan Documents are cumulative and are not exclusive of any other remedies provided by law. SECTION 10. Right of Setoff. If an Event of Default shall have occurred and be continuing, each Secured Party is hereby authorized at any time and from time to time, to the fullest extent permitted by law and by the terms of the Intercreditor Agreement, to set off and apply any and all deposits (general or special, time or demand, provisional or final, except deposits for the payment of payroll taxes) at any time held and other indebtedness at any time owing by such Secured Party to or for the credit or the account of the Guarantor against any and all the obligations of the Guarantor then existing under this Guarantee Agreement and the other Loan Documents, irrespective of whether or not such Secured Party shall have made any demand under this Guarantee Agreement or such other Loan Document and although such obligations may be unmatured. The rights of each Secured Party under this Section 10 are in addition to other rights and remedies (including other rights of setoff) which such Secured Party may have. SECTION 11. Continuing Guarantee. This Guarantee Agreement is a continuing guarantee and shall survive and remain in full force and effect until the Guaranteed Obligations and all other amounts 6 payable under this Guarantee Agreement, the Credit Agreement or any of the other Loan Documents have been indefeasibly paid in full in cash, and shall be reinstated to the extent provided in Section 2(b). SECTION 12. Assignments. This Guarantee Agreement and the terms, covenants and conditions hereof shall be binding upon the Guarantor and its successors and shall inure to the benefit of the Agent, the other Secured Parties and their respective successors and assigns. Subject to Section 9.04 of the Credit Agreement, upon the assignment by any Lender of all or any portion of its rights and obligations under the Credit Agreement (including all or any portion of the Loans owing to it and the Note or Notes held by it) to any other person, such other person shall thereupon become vested with all the benefits in respect thereof granted to such Lender herein or otherwise. The Guarantor shall not be permitted to assign, transfer or delegate any of its rights or obligations under this Guarantee Agreement (and any such purported assignment, transfer or delegation without such consent shall be void). SECTION 13. Information. The Guarantor assumes all responsibility for being and keeping itself informed of the Borrower's financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations and the nature, scope and extent of the risks that the Guarantor assumes and incurs hereunder, and agrees that none of the Agent or the other Secured Parties will have any duty to advise the Guarantor of information known to it or any of them regarding such circumstances or risks. SECTION 14. Counterparts. This Guarantee 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 Guarantee Agreement. Delivery of an executed counterpart of this Guarantee Agreement by telefacsimile shall be equally as effective as delivery of a manually executed counterpart of this Guarantee Agreement. Any party delivering an executed counterpart of this Guarantee Agreement by telefacsimile shall also deliver a manually executed counterpart of this Guarantee Agreement, but the failure to deliver a manually executed counterpart shall not affect the validity, enforceability, and binding effect of this Guarantee Agreement SECTION 15. Savings Clause. In the event any one or more of the provisions contained in this Guarantee Agreement should be held invalid, illegal or unenforceable in any respect with respect to the Guarantor, no party hereto shall be required to comply with such provision with respect to the Guarantor for so long as such provision is held to be invalid, illegal or unenforceable, and the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired. The parties shall endeavor in good-faith negotiations to replace any invalid, illegal or unenforceable provisions with valid provisions, the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions. SECTION 16. Governing Law. THIS GUARANTEE AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. SECTION 17. Jurisdiction; Consent to Service of Process. (a) The Guarantor hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any New York State court or Federal court of the United States of America sitting in New York, New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Guarantee Agreement or the other Loan Documents, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State court or, to the 7 extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Guarantee Agreement shall affect any right that the Agent or any other Secured Party may otherwise have to bring any action or proceeding relating to this Guarantee Agreement or the other Loan Documents against the Guarantor or its properties in the courts of any jurisdiction. (b) The Guarantor hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Guarantee Agreement or the other Loan Documents in any New York State court or Federal court of the United States of America sitting in New York, New York. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court. (c) Each party to this Guarantee Agreement irrevocably consents to service of process in the manner provided for notices in Section 8. Nothing in this Guarantee Agreement will affect the right of any party to this Guarantee Agreement to serve process in any other manner permitted by law. SECTION 18. Subordination by Guarantor. In addition to the terms of subordination provided for under Section 5, the Guarantor hereby subordinates in right of payment all indebtedness of the Borrower and the other Loan Parties owing to it, whether originally contracted with the Guarantor or acquired by the Guarantor by assignment, transfer or otherwise, whether now owed or hereafter arising, whether for principal, interest, fees, expenses or otherwise, together with all renewals, extensions, increases or rearrangements thereof, to the prior indefeasible payment in full in cash of the Guaranteed Obligations, whether now owed or hereafter arising, whether for principal, interest (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), fees, expenses or otherwise, together with all renewals, extensions, increases or rearrangements thereof. SECTION 19. Survival of Agreement. All covenants, agreements, representations and warranties made by the Guarantor herein shall be considered to have been relied upon by the Agent and the other Secured Parties and shall survive the making by the Lenders of the Loans and the execution and delivery to the Lenders of the Notes evidencing such Loans, regardless of any investigation made by the Lenders or the Agents or on their behalf, and shall continue in full force and effect as provided in Section 11. SECTION 20. Entire Agreement. This Guarantee Agreement and the other Loan Documents constitute the entire contract between the parties relative to the subject matter hereof. Any agreement previously entered into among the parties with respect to the subject matter hereof is superseded by this Guarantee Agreement and the other Loan Documents. Nothing in this Guarantee Agreement, expressed or implied, is intended to confer upon any party, other than the parties hereto and the other Secured Parties, any rights, remedies, obligations or liabilities under or by reason of this Guarantee Agreement. SECTION 21. Headings. Section headings used herein are for convenience of reference only, are not part of this Guarantee Agreement and are not to affect the construction of, or to be taken into consideration in interpreting, this Guarantee Agreement. The rules of interpretation specified in Section 1.02 of the Credit Agreement shall be applicable to this Guarantee Agreement. [REMAINDER OF PAGE INTENTIONALLY BLANK.] 8 IN WITNESS WHEREOF, each party hereto has caused this Guarantee Agreement to be duly executed, attested and delivered by its officers thereunto duly authorized as of the date first above written. FIREARMS TRAINING SYSTEMS, INC., as Guarantor By: /s/ ROBERT F. MCCREDY ------------------------------------- Name: Robert F. McCredy Title: CEO CENTRE CAPITAL INVESTORS IL, L.P., as Agent By: Centre Partners II, L.P., as general partner By: Centre Partners Management LLC, attorney-in-fact By: _____________________________________ Name: Title: 9 IN WITNESS WHEREOF, each party hereto has caused this Guarantee Agreement to be duly executed, attested and delivered by its officers thereunto duly authorized as of the date first above written. FIREARMS TRAINING SYSTEMS, INC., as Guarantor By: _____________________________________ Name: Title: CENTRE CAPITAL INVESTORS IL, L.P., as Agent By: Centre Partners II, L.P., as general partner By: Centre Partners Management LLC, attorney-in-fact By: /s/ [illegible] ------------------------------------- Name: Title: 10 EX-99.7 4 ex_7.txt EXHIBIT 99.7 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 2 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 3 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.) 4 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/ ROBERT F. MCCREDY ------------------------------------- Name: Robert F. McCredy Title: DIRECTOR NON CENTRE ENTITIES BANK OF AMERICA, N.A., as Agent and individually as a Lender By: /s/ RICHARD FREIMUTH ------------------------------------- Name: Richard Freimuth 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: 5 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/ MICHAEL J. PORCELLO ------------------------------------- Name: Michael J. Porcello Title: Assistant Vice President 6 FIRST SOURCE FINANCIAL LLP, by First Source Financial, Inc., as Agent/ Manager By: /s/ JEFFREY A. CERNY ------------------------------------- Name: Jeffrey A. Cerny 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 7 FIRST SOURCE FINANCIAL LLP, by First Source Financial, Inc., as Agent/ Manager By:______________________________________ Name: Title: BHF (USA) CAPITAL CORPORATION By: /s/ EVON CONTOS /s/ NINA ZHOU ------------------------------------- Name: Evon Contos Nina Zhou 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 8 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 9 EX-99.8 5 ex_8.txt EXHIBIT 99.8 SECOND AMENDMENT TO REGISTRATION RIGHTS AGREEMENT dated as of April 1, 2000 among FIREARMS TAG SYSTEMS, INC. and THE HOLDERS SET FORTH HEREIN SECOND AMENDMENT TO REGISTRATION RIGHTS AGREEMENT Second Amendment to Registration Rights Agreement dated as of April 1, 2000 (this "Amendment") among Firearms Training Systems, Inc., a Delaware corporation (the "Company"), and the Persons named below as Holders (each a "Holder" and collectively, the "Holders"). RECITALS WHEREAS, the Company and the Holders are parties to the Registration Rights Agreement dated as of July 31, 1996, as amended as of November 13, 1998 (the "Registration Agreement"), pursuant to which the Holders' rights and the Company's obligations to cause the registration of certain of the Holders' shares in the stock of the Company pursuant to the Securities Act are set forth; and WHEREAS, the Company and the Holders are parties to the Securities Exchange and Release Agreement dated as of April 1, 2000 (the "Exchange Agreement"), pursuant to which the Holders exchanged certain shares of the Company's stock, certain warrants and, certain debt of the Company held by the Holders, for shares of the Company's Series B Preferred Stock ("Series B Preferred Stock") shares of the Company's Class A Common Stock, New Warrants and Amended Warrants from the Company; and WHEREAS, the parties hereto hereby desire to amend the Registration Agreement to ensure that the Holders' rights and the Company's obligations to cause the registration of the Series B Preferred Stock; the Class A Common Stock and the shares of the Company's Class A Common Stock issuable upon exercise of the New Warrants and Amended Warrants (as defined in the Exchange Agreement) pursuant to the Securities Act are incorporated as part of the Registration Agreement; NOW, THEREFORE, in consideration of the agreement and covenants set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: Section 1. Definitions. ----------- The terms defined in the Registration Agreement shall have the same meaning herein unless the context clearly indicates otherwise. Section 2. Amendments to the Registration Agreement. ---------------------------------------- The parties hereto agree that the Registration Agreement shall be amended by amending the definition of "Registrable Securities" to read as follows: "Registrable Securities". "Registrable Securities" shall mean: (i) the Shares owned by the Holders on the date hereof, and/or owned by the Holders on the date of determination; (ii) any shares of Common Stock issued as (or issuable upon the conversion or -2- exercise of any warrant, right or other security which is issued as) a dividend or other distribution with respect to, or in exchange by the Company generally for, or in replacement by the Company generally of, such Shares; (iii) all of the Preferred Shares, the Additional Preferred Shares, the Warrants, the Additional Warrants, and all shares of Common Stock issuable upon exercise of the Warrants and the Additional Warrants owned by the Holders on the applicable date of determination (as used in this clause (iii), the terms "Preferred Shares," "Additional Preferred Shares," "Warrants" and "Additional Warrants" have the respective meanings ascribed thereto in the Securities Purchase Agreement dated as of November 13, 1998 among the Company and the Holders); (iv) all of the Preferred Shares, Common Shares, and all shares of Common Stock issuable upon exercise of the New Warrants and, the Amended Warrants owned by the Holders on the applicable date of determination (as used in this clause (iv) the terms "Preferred Shares," "Common Shares," "New Warrants" and "Amended Warrants" have the respective meanings ascribed thereto in the Securities Exchange and Release Agreement dated as of April 1, 2000 among the Company and the Holders set forth therein), and (v) any securities issued in exchange for any of the shares described in the foregoing clauses (i)-(iv) in any stock split, recapitalization, reclassification, merger, reorganization or similar event of the Company; provided, however, that Registrable Securities shall not include any securities which are "Registrable Securities" for the purposes of the registration rights agreement dated as of April 1, 2000 among the Company and the institutional holders set forth therein; provided, further, that Registrable Securities shall not include any securities which have theretofore been registered and sold pursuant to the Securities Act or which have been transferred pursuant to Rule 144 or any similar rule promulgated by the Commission pursuant to the Securities Act; provided further, the Company shall have no obligation under Sections 2 and 3 to register any Registrable Securities of a Holder if the Company shall deliver to the Holder an opinion of counsel reasonably satisfactory to the Holder and its counsel to the effect that the proposed sale or disposition of all of the Registrable Securities for which registration was requested does not require registration under the Securities Act for a sale or disposition in a single public sale in the manner contemplated by the Holder, and offers to remove any and all legends restricting transfer from the certificates evidencing such Registrable Securities." Section 3. Governing Law. ------------- THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING REGARD TO ITS CONFLICT OF LAWS PRINCIPLES. Section 4. Confirmation. ------------ The Company hereby confirms to the Holders that, except as amended hereby, the Registration Agreement is, and shall continue, in full force and effect and enforceable against the Company, in accordance with its terms. Section 5. Counterparts. ------------ This Agreement may be executed in any number of counterparts, each of which shall be an original, and all of which shall together constitute one and the same instrument. All signatures need not be on the same counterpart. -3- IN WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto as of the date first written above. FIREARMS TRAINING SYSTEMS, INC By /s/ ROBERT F. MCCREDY -------------------------------------- Name: Robert F. McCredy Title: CEO HOLDERS: 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 IN WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto as of the date first written above. FIREARMS TRAINING SYSTEMS, INC By__________________________________ Name: Title: HOLDERS: 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 -----END PRIVACY-ENHANCED MESSAGE-----