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EXHIBIT 7(2)
VOTING AND STOCK RESTRICTION AGREEMENT
This Voting and Stock Restriction Agreement dated as of April 1, 2000
is made by and among the financial institutions listed on the signature pages
hereof and BANK OF AMERICA, N.A., successor in interest to NationsBank, N.A., as
Agent.
RECITALS
This Voting and Stock Restriction Agreement (this "Voting Agreement")
is entered into pursuant to the terms of the Second Amended and Restated Credit
Agreement and Partial Exchange Agreement (the "Amended Agreement") dated as of
April 1, 2000 among Firearms Training Systems, Inc. (the "Parent"), FATS, Inc.,
the financial institutions listed on the signature pages thereof and the Agent.
Capitalized terms used in this Voting Agreement and not defined herein shall
have the same meanings as in the Amended Agreement.
Pursuant to the Amended Agreement the Lenders agreed to accept the
Lender Preferred Stock and the Lender Common Stock in partial satisfaction of
the Existing Loans. The Lenders and the Agent wish to set forth certain
agreements with respect to voting of the Lender Common Stock and the sale or
other transfer of the Lender Common Stock and the Lender Preferred Stock.
AGREEMENT
1. VOTING
(a) The Lenders agree that the Required Lenders may direct that all of
the Lender Common Stock be voted on any matter put to a vote of the holders of
the Class A Common Stock of the Parent (the "Shareholders") as the Required
Lenders direct, and each of the Lenders will vote its shares of Lender Common
Stock individually as directed by the Required Lenders. If no such direction is
given, each Lender may vote its shares as it may determine.
(b) Whenever any matter is to be put to a vote of the Shareholders, in
connection with any annual or special meeting of the Shareholders, the Agent
will, no later than 30 Business Days before the date of such vote, request that
each Lender advise the Agent how it wishes the Lender Common Stock to be voted.
Each Lender will advise the Agent how it wishes the Lender Common Stock to be
voted, in writing, no later than 21 Business Days before the date of the vote.
If the Agent receives direction from Lenders constituting the Required Lenders,
the Agent shall notify each of the Lenders of such direction within 7 Business
Days of such vote and the Lenders agree to timely vote the Lender Common Stock
as so directed. No Lender shall vote its Lender Common Stock prior to 7 Business
Days before such vote.
(c) In order to insure that voting of the Lender Common Stock is
carried out in accordance with the terms of this Voting Agreement, each of the
Lenders may execute and deliver an irrevocable proxy in the form of Exhibit A
attached hereto granting to the Agent the right to vote the Lender Common Stock,
either by voting at a meeting of Shareholders or by executing and delivering
shareholder written consents.
(d) The Lenders will retain individually all other rights of a
shareholder under the General Corporation Law of Delaware, including the right
to receive dividends directly.
2. RESTRICTIONS ON SALE OF STOCK
(a) No Lender will sell, assign, pledge or otherwise transfer any
shares of its Lender Common Stock or Lender Preferred Stock except in accordance
with the terms of this Voting Agreement.
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(b) A Lender may sell or transfer all or a portion of its Lender Common
Stock or Lender Preferred Stock at any time to an Affiliate of such Lender,
another Lender or an Affiliate of another Lender subject to the terms of this
Voting Agreement provided that the Agent is notified of such sale or transfer 10
Business Day before such transfer is consummated..
(c) A Lender (or its tranferee subject to the foregoing subsection (b))
that otherwise desires to sell (a "Selling Lender") any shares of its Lender
Common Stock or Lender Preferred Stock (the "Offered Shares") shall deliver
notice (the "Seller's Notice") to the Agent at least 60 Business Days before the
date of such proposed sale (the "Sale"), specifying the proposed purchaser and
the terms of the Sale, including price, and whether such Sale is subject to the
terms of this Voting Agreement. The Selling Lender will provide the Agent with
such additional information concerning the Sale as the Agent may reasonably
request. The Agent will deliver notice (the "Agent's Notice") of the Sale to the
other Lenders, specifying the terms of the Sale, within 5 Business Days after
receipt of the Seller's Notice. Within 30 Business Days after receipt of the
Agent's Notice, each other Lender will advise the Agent whether it approves the
Sale, provided that each Lender may condition its approval of the Sale upon such
Lender's selling in the Sale a percentage of the Offered Shares equal to its
Applicable Percentage. If Lenders which hold a majority of the Lender Common
Stock and the Lender Preferred Stock, after subtracting the Selling Lender's
Lender Common Stock and Lender Preferred Stock, approve the Sale, the Selling
Lender may sell the Offered Shares, subject to the rights of any other Lender to
sell a pro rata share of the Offered Shares as described above.
(d) The certificates representing the Lender Common Stock and the
Lender Preferred Stock will bear the following legend:
THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO A VOTING AND
STOCK RESTRICTION AGREEMENT DATED AS OF APRIL 1, 2000, AMONG BANK OF AMERICA,
N.A., AS AGENT, AND THE FINANCIAL INSTITUTIONS PARTY TO THE SECOND AMENDED AND
RESTATED CREDIT AGREEMENT DATED AS OF APRIL 1, 2000 AMONG FIREARMS TRAINING
SYSTEMS, INC., FATS, INC., THE AGENT AND SUCH FINANCIAL INSTITUTIONS. BY
ACCEPTING ANY INTEREST IN THE SHARES REPRESENTED BY THIS CERTIFICATE, THE PERSON
ACCEPTING SUCH INTEREST SHALL BE DEEMED TO AGREE TO AND SHALL BECOME BOUND BY
THE PROVISIONS OF SUCH VOTING AND STOCK RESTRICTION AGREEMENT.
(e) After the first anniversary of the date of execution of this Voting
Agreement, the restrictions contained in this Section 2 may be modified by the
affirmative vote of the Required Lenders.
(f) NO RESTRICTION WITH RESPECT TO OTHER STOCK. Nothing in this
Agreement or any other Loan Document shall affect or redirect the rights which
any Lender may have as the holder of any shares of any class of capital stock
(or in respect of any interests therein) of the Parent which is not Lender
Common Stock or Lender Preferred Stock ("Other Stock"). No Lender shall be
required by this Agreement or the other Loan Documents to take any action, or
refrain from taking any action in respect of any Other Stock owned by it or in
which it has an interest.
3. MISCELLANEOUS
(a) This Voting Agreement shall be binding upon and inure to the
benefit of permitted successors and assigns. This Voting Agreement constitutes
the final and entire agreement among the parties with respect to the subject
matter hereof, and may not be amended except in a writing signed by the parties
(except as provided in Section 2(e) above. If any provision of this Voting
Agreement is held to be unenforceable, the enforceability of the remaining
provisions shall not be affected. This Agreement may be executed in
counterparts, all of which taken together constitute this Voting Agreement. Any
notices delivered pursuant to this Voting Agreement shall be delivered in
accordance with the terms of the Amended Agreement.
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(b) This Voting Agreement shall be construed in accordance with and
governed by the laws of the State of Delaware.
(c) This Voting Agreement shall terminate on April 1, 2004.
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IN WITNESS WHEREOF, the parties hereto have caused this Voting
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
NON CENTRE ENTITIES
BANK OF AMERICA, N.A., as Agent, and
individually as a Lender
By: /s/ Reinhard Freimuth
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Name: Reinhard Freimuth
Title: Vice-President
U.S. BANK NATIONAL ASSOCIATION
By: /s/ Michael J. Porcello
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Name: Michael J. Porcello
Title: Assistant Vice-President
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: /s/ Evon Contos
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Name: Evon Contos
Title: Managing Director
By: /s/ Nina Zhau
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Name: Nina Zhau
Title: Associate
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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/ Jonathan H. Kagan
-------------------------------------
Managing Director
CENTRE PARTNERS COINVESTMENT, L.P.
By: Centre Partners II LLC, as General Partner
By: /s/ Jonathan H. Kagan
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Managing Director
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EXHIBIT A
FIREARMS TRAINING SYSTEMS, INC. IRREVOCABLE PROXY
The undersigned agrees to, and hereby grants to Bank of America, N.A.,
as Agent, an irrevocable proxy pursuant to the provisions of Section 212 of the
Delaware General Corporation Law to vote, or to execute and deliver written
consents or otherwise to act with respect to, all shares of Class A Common Stock
of Firearms Training Systems, Inc. (the "Parent") now owned or hereafter
acquired by the undersigned as fully, to the same extent and with the same
effect as the undersigned could do under any applicable law or regulations
governing the rights and powers of shareholders of a Delaware corporation, as
provided in a Voting and Stock Restriction Agreement dated as of April 1, 2000
among the undersigned, the Agent and certain other shareholders of the Parent
(the "Voting Agreement"). The undersigned hereby affirms that this proxy is
given as a condition of the Voting Agreement and as such is coupled with an
interest and irrevocable.
THIS PROXY SHALL REMAIN IN EFFECT AND BE ENFORCEABLE AGAINST ANY
TRANSFEREE OF THE STOCK OF THE UNDERSIGNED.
Date:
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Shareholder
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