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                                                                   EXHIBIT 10.23

THIS WARRANT AND THE SHARES OF STOCK PURCHASABLE HEREUNDER HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES
LAWS OF ANY STATE, AND MAY NOT BE SOLD OR TRANSFERRED EXCEPT IN COMPLIANCE WITH,
OR PURSUANT TO AN EXEMPTION FROM, THE REQUIREMENTS OF SUCH ACT OR SUCH LAWS.

Number of Shares of Class A Common Stock: __________

                                    Warrant No. A-____

                                     WARRANT

                       To Purchase Class A Common Stock of

                         FIREARMS TRAINING SYSTEMS, INC.

                  THIS IS TO CERTIFY THAT ____________________, or its
registered assigns, is entitled, at any time prior to the Expiration Date (as
hereinafter defined), to purchase from FIREARMS TRAINING SYSTEMS, INC., a
Delaware corporation (the "Company"), __________ shares of Class A Common Stock
(as hereinafter defined and subject to adjustment as provided herein), in whole
or in part, including fractional parts, at a purchase price of $.25 per share,
all on the terms and conditions hereinafter set forth.

1.       DEFINITIONS

                  As used in this Warrant, the following terms have the
respective meanings set forth below:

                  "Additional Shares of Common Stock" shall mean all shares of
Common Stock issued by Company after the Closing Date, other than Warrant Stock.

                  "Business Day" means each day on which banking institutions in
New York are not required or authorized by law or executive order to close.

                  "Class A Common Stock" shall mean the Class A Voting Common
Stock, $0.000006 par value, of the Company as constituted on the Closing Date.

                  "Closing Date" shall have the meaning set forth in the
Exchange Agreement.

                  "Commission" shall mean the U.S. Securities and Exchange
Commission or any other federal agency then administering the Securities Act and
other federal securities laws.

                  "Common Stock" shall mean (except where the context otherwise
indicates) the Common Stock of the Company as constituted on the Closing Date,
including without limitation, the Company's Class A Common Stock, Class B Common
Stock, and any capital stock into which such Common Stock may thereafter be
changed, and shall also include (i) capital stock of the Company of any other
class (regardless of how denominated) issued to the holders of shares of Common
Stock upon any reclassification thereof which is also not preferred as to
dividends or

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assets over any other class of stock of the Company and which is not subject to
redemption and (ii) shares of common stock of any successor or acquiring
corporation (as defined in Section 4.7) received by or distributed to the
holders of Common Stock of the Company in the circumstances contemplated by
Section 4.7.

                  "Convertible Securities" shall mean evidences of indebtedness,
shares of stock or other securities or rights which are convertible into or
exchangeable, with or without payment of additional consideration in cash or
property, for Additional Shares of Common Stock, either immediately or upon the
occurrence of a specified date or a specified event.

                  "Current Market Price" shall mean, in respect of any share of
Common Stock on any date herein specified, if there shall then be a public
market for the Common Stock, the average of the daily market prices for five (5)
consecutive Business Days commencing seven (7) Business Days before such date
or, if there is no such public market, the fair market value thereof as mutually
determined by the Board of Directors of the Company and the Majority Holders.
The daily market price for each such Business Day shall be (i) the last sale
price on such day on the principal stock exchange or NASDAQ National Market
System ("NASDAQ/NMS") on which such Common Stock is then listed or admitted to
trading, (ii) if no sale takes place on such day on any such exchange or
NASDAQ/NMS, the average of the last reported closing bid and asked prices on
such day as officially quoted on any such exchange or NASDAQ/NMS, (iii) if the
Common Stock is not then listed or admitted to trading on any stock exchange or
NASDAQ/NMS, the average of the last reported closing bid and asked prices on
such day in the over-the-counter market, as furnished by the National
Association of Securities Dealers Automatic Quotation System or the National
Quotation Bureau, Inc., (iv) if neither such corporation at the time is engaged
in the business of reporting such prices, as furnished by any similar firm then
engaged in such business, or (v) if there is no such firm, as furnished by any
member of the NASD selected mutually by the Majority Holders and the Company or,
if they cannot agree upon such selection, the average of the prices as furnished
by two such members of the NASD, one of which shall be selected by the Majority
Holders and one of which shall be selected by the Company.

                  "Current Warrant Price" shall mean, in respect of a share of
Class A Common Stock at any date herein specified, the price at which a share of
Class A Common Stock may be purchased pursuant to this Warrant on such date. The
Current Warrant Price for the date of original issue of this Warrant is $0.25
per share of Class A Common Stock.

                  "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect from time to time.

                  "Exchange Agreement" shall mean the Securities Exchange and
Release Agreement dated as of April 1, 2000 among the Company and the investors
identified therein, as amended, supplemented or otherwise modified and in effect
from time to time.

                  "Exercise Period" shall mean the period during which this
Warrant is exercisable pursuant to Section 2.1.

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                  "Expiration Date" shall mean March 31, 2005.

                  "Fair Market Value" of any consideration other than cash or of
any securities shall mean the amount that a willing buyer would pay to a willing
seller in an arms-length transaction as determined in good faith by the Board of
Directors of the Company and, if required by the Majority Holders, supported by
an opinion from an investment banking firm of recognized national standing
acceptable to the Majority Holders.

                  "GAAP" shall mean generally accepted accounting principles in
the United States of America as from time to time in effect.

                  "Holder" shall mean the Person in whose name this Warrant is
registered on the books of the Company maintained for such purpose.

                  "Majority Holders" shall mean the holders of Warrants
exercisable for in excess of 50% of the aggregate number of shares of Class A
Common Stock then purchasable upon exercise of all outstanding Warrants.

                  "NASD" shall mean the National Association of Securities
Dealers, Inc, or any successor thereto.

                  "Other Property" shall have the meaning set forth in Section
4.7.

                  "Outstanding" shall mean, when used with reference to Common
Stock, at any date as of which the number of shares thereof is to be determined,
all issued shares of Common Stock, except shares then owned or held by or for
the account of the Company or any subsidiary thereof, and shall include all
shares issuable in respect of outstanding scrip or any certificates representing
fractional interests in shares of Common Stock.

                  "Person" shall mean any individual, sole proprietorship,
partnership, joint venture, trust, association, corporation, limited liability
company, institution, entity or government (whether federal, state, county,
city, municipal or otherwise, including, without limitation, any
instrumentality, division, agency, body or department thereof).

                  "Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.

                  "Transfer" shall mean any disposition of any Warrant or of any
interest therein that would constitute a sale thereof within the meaning of the
Securities Act.

                  "Warrant Price" shall mean an amount equal to (i) the number
of shares of Class A Common Stock being purchased upon exercise of this Warrant
pursuant to Section 2.1, multiplied by (ii) the Current Warrant Price as of the
date of such exercise.

                  "Warrants" shall mean, collectively, this Warrant and all of
the other Warrants issued pursuant to the Exchange Agreement and all warrants
issued upon transfer, division or combination of, or in substitution for, any
thereof.

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                  "Warrant Stock" shall mean the shares of Class A Common Stock
purchased by the holders of Warrants upon the exercise thereof.

2.       EXERCISE OF WARRANT

                  2.1      Manner of Exercise. From and after the Closing Date
and until 5:00 P.M., New York time, on the Expiration Date, the Holder may
exercise this Warrant, on any Business Day, for all or any part of the number of
shares of Class A Common Stock purchasable hereunder.

                  In order to exercise this Warrant, in whole or in part, the
Holder shall deliver to the Company at its principal office at 7340 McGinnis
Ferry Road, Suwanee, Georgia 30024 or at the office or agency designated by the
Company pursuant to Section 11, (i) a written notice in substantially the form
of the Subscription Notice attached hereto of the Holder's election to exercise
this Warrant, which notice shall specify the number of shares of Class A Common
Stock to be purchased, and the denominations of the share certificate or
certificates desired, (ii) payment of the Warrant Price as hereinafter provided
and (iii) this Warrant. Upon receipt thereof, the Company shall, as promptly as
practicable, and in any event within five (5) Business Days thereafter, execute
or cause to be executed and deliver or cause to be delivered to the Holder a
certificate or certificates representing the aggregate number of full shares of
Class A Common Stock issuable upon such exercise, together with cash in lieu of
any fraction of a share, as hereinafter provided. The stock certificate or
certificates so delivered shall be in such denomination or denominations as such
Holder shall request in the notice and shall be registered in the name of the
Holder or such other names as shall be designated in the notice. This Warrant
shall be deemed to have been exercised and such certificate or certificates
shall be deemed to have been issued, and the Holder or any other Person so
designated to be named therein shall be deemed to have become a holder of record
of such shares for all purposes, as of the date the notice, together with the
tender of the exercise price and this Warrant, is received by the Company as
described herein and all taxes required to be paid by the Holder, if any,
pursuant to Section 2.2 prior to the issuance of such shares have been paid. If
this Warrant shall have been exercised in part, the Company shall, at the time
of delivery of the certificate or certificates representing Warrant Stock,
deliver to the Holder a new Warrant evidencing the rights of the Holder to
purchase the unpurchased shares of Class A Common Stock called for by this
Warrant, which new Warrant shall in all other respects be identical with this
Warrant, or, at the request of the Holder, appropriate notation may be made on
this Warrant and the same returned to the Holder.

                  Payment of the Warrant Price shall be made in cash by wire
transfer of immediately available funds or other form acceptable to the Company.

                  2.2      Payment of Taxes. All shares of Class A Common Stock
issuable upon the exercise of this Warrant pursuant to the terms hereof shall be
validly issued, fully paid and nonassessable and without any preemptive rights.
The Company shall pay all expenses in connection with, and all taxes and other
governmental charges that may be imposed with respect to, the issuance or
delivery thereof. The Company shall not be required, however, to pay any tax or
other charge imposed in connection with any transfer involved in the issue of
any certificate for shares of Class A Common Stock issuable upon exercise of
this Warrant in any name other

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than that of the Holder, and in such case the Company shall not be required to
issue or deliver any stock certificate until such tax or other charge has been
paid or it has been established to the reasonable satisfaction of Company that
no such tax or other charge is due.

                  2.3      Fractional Shares. The Company shall not be required
to issue a fractional share of Class A Common Stock upon exercise of any
Warrant. As to any fraction of a share which the Holder of one or more Warrants,
the rights under which are exercised in the same transaction, would otherwise be
entitled to purchase upon such exercise, the Company may pay a cash adjustment
in respect of such final fraction in an amount equal to the same fraction of the
Current Market Price per share of Class A Common Stock on the date of exercise.

                  2.4      Share Legend. Each certificate for shares of Class A
Common Stock issued upon exercise of this Warrant shall bear the legends
required pursuant to the Purchase Agreement.

                  2.5      Registration Rights. Pursuant to the Exchange
Agreement, the Warrants and the shares of Warrant Stock issuable upon exercise
thereof are entitled to the benefits of the Registration Rights Agreement, dated
as July 31, 1996, as amended.

3.       TRANSFER, DIVISION AND COMBINATION, AND REPLACEMENT OF WARRANTS

                  3.1      Ownership of Warrant. The Company may deem and treat
the Person in whose name this Warrant is registered as the holder and owner
hereof (notwithstanding any notations of ownership or writing hereon made by any
Person other than the Company) for all purposes and shall not be affected by any
notice to the contrary, until presentation of this Warrant for registration of
transfer as provided in this Section 3.

                  3.2      Division and Combination. This Warrant may be divided
or combined with other Warrants upon presentation hereof at the aforesaid office
or agency of the Company, together with a written notice specifying the names
and denominations in which new Warrants are to be issued, signed by the Holder
or its agent or attorney. As to any transfer which may be involved in such
division or combination, the Company shall execute and deliver a new Warrant or
Warrants in exchange for the Warrant or Warrants to be divided or combined in
accordance with such notice. The Company shall prepare, issue and deliver at its
own expense (other than transfer taxes) the new Warrant or Warrants under this
Section 3.

                  3.3      Maintenance of Books. The Company agrees to maintain,
at its aforesaid office or agency, books for the registration and the
registration of transfer of the Warrants, and, subject to the terms and
conditions of transfer set forth herein, transfer of this Warrant and all rights
hereunder shall be registered, in whole or in part, on such books, upon
surrender of this Warrant at the principal office of the Company referred to in
Section 2.1 or the office or agency designated by the Company pursuant to
Section 11, together with a written assignment of this Warrant substantially in
the form of Annex B hereto, duly executed by the Holder or his duly authorized
agent or attorney, with (unless the Holder is the original Warrantholder or
another institutional investor) signatures guaranteed by a bank or trust company
or a broker or dealer registered with the NASD, and funds sufficient to pay any
transfer taxes payable upon such

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transfer. Upon surrender and compliance with the terms and conditions of
transfer set forth herein, the Company shall execute and deliver a new Warrant
or Warrants in the name of the assignee or assignees and in the denominations
specified in the instrument of assignment, and this Warrant shall promptly be
canceled. Notwithstanding the foregoing, a Warrant may be exercised by a new
holder that receives this Warrant in compliance with the terms and conditions of
transfer set forth herein without having a new Warrant issued.

4.       ADJUSTMENTS

                  The number of shares of Class A Common Stock for which this
Warrant is exercisable, or the price at which such shares may be purchased upon
exercise of this Warrant, shall be subject to adjustment from time to time as
set forth in this Section 4. The Company shall give each Holder notice of any
event described below which requires an adjustment pursuant to this Section 4 at
the time of such event.

                  4.1      Stock Dividends, Subdivisions and Combinations. If at
any time the Company shall:

                           (a)      take a record of the holders of Common Stock
                  for the purpose of entitling them to receive a dividend
                  payable in, or other distribution of, Additional Shares of
                  Common Stock,

                           (b)      subdivide outstanding shares of Common Stock
                  into a larger number of shares of Common Stock, or

                           (c)      combine outstanding shares of Common Stock
                  into a smaller number of shares of Common Stock,

then (i) the number of shares of Common Stock for which this Warrant is
exercisable immediately after the occurrence of any such event shall be adjusted
to equal the number of shares of Common Stock which a record holder of the same
number of shares of Common Stock for which this Warrant is exercisable
immediately prior to the occurrence of such event would own or be entitled to
receive after the happening of such event, and (ii) the Current Warrant Price
shall be adjusted to equal (A) the Current Warrant Price multiplied by the
number of shares of Common Stock for which this Warrant is exercisable
immediately prior to the adjustment divided by (B) the number of shares for
which this Warrant is exercisable immediately after such adjustment.

                  4.2      Certain Other Distributions. If at any time the
Company shall take a record of the holders of Common Stock for the purpose of
entitling them to receive any dividend or other distribution of:

                           (a)      cash,

                           (b)      any evidences of its indebtedness, any
                  shares of its stock (other than Additional Shares of Common
                  Stock) or any other securities or property of any nature
                  whatsoever, or

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                           (c)      any Convertible Securities or any warrants
                  or other rights to subscribe for or purchase any evidences of
                  its indebtedness or other property,

then (i) the number of shares of Common Stock for which this Warrant is
exercisable shall be adjusted to equal the product obtained by multiplying the
number of shares of Common Stock for which this Warrant is exercisable
immediately prior to such adjustment by a fraction (A) the numerator of which
shall be the Current Market Price per share of Common Stock at the date of
taking such record and (B) the denominator of which shall be such Current Market
Price per share of Common Stock minus the amount allocable to one share of
Common Stock of any such cash so distributable and of the Fair Market Value of
any and all such evidences of indebtedness, shares of stock, other securities or
property or warrants or other subscription or purchase rights so distributable,
and (ii) the Current Warrant Price shall be adjusted to equal (A) the Current
Warrant Price multiplied by the number of shares of Common Stock for which this
Warrant is exercisable immediately prior to the adjustment divided by (B) the
number of shares for which this Warrant is exercisable immediately after such
adjustment. A reclassification of Common Stock (other than a change in par
value, or from par value to no par value or from no par value to par value) into
shares of Common Stock and shares of any other class of stock shall be deemed a
distribution by the Company to the holders of Common Stock of such shares of
such other class of stock within the meaning of this Section 4.2 and, if the
outstanding shares of Common Stock shall be changed into a larger or smaller
number of shares of Common Stock as a part of such reclassification, such change
shall be deemed a subdivision or combination, as the case may be, of the
outstanding shares of Common Stock within the meaning of Section 4.1.
Notwithstanding the foregoing, in the event of any payment of dividends on the
Common Stock in the form of cash from current or retained earnings of the
Company, the Company may, in lieu of any adjustment pursuant to this Section
4.2, pay to the Holder cash in an amount equal to the amount of dividends that
would have been payable to such Holder in the event this Warrant had been
exercised immediately prior to the record date for such dividend.

         4.3      Issuance of Additional Shares of Common Stock. If at any time
the Company shall (except as hereinafter provided) issue or sell any Additional
Shares of Common Stock (other than issuances to existing stockholders as a
dividend or other distribution described in Section 4.2, pursuant to the
conversion or exercise of any Convertible Security or pursuant to any employee
or director incentive or benefit plan approved by the Board of Directors of the
Company) for consideration in an amount per Additional Share of Common Stock
less than the Current Market Price, then (i) the number of shares of Common
Stock for which this Warrant is exercisable shall be adjusted to equal the
product obtained by multiplying the number of shares of Common Stock for which
this Warrant is exercisable immediately prior to such issuance or sale by a
fraction (A) the numerator of which shall be the number of shares of Common
Stock Outstanding immediately after such issue or sale, and (B) the denominator
of which shall be the number of shares of Common Stock Outstanding immediately
prior to such issue or sale plus the number of shares which the aggregate
offering price of the total number of such Additional Shares of Common Stock
would purchase at the then Current Market Price; and (ii) the Current Warrant
Price as to the number of shares for which this Warrant is exercisable prior to
such adjustment shall be adjusted by multiplying such Current Warrant Price by a
fraction (X) the numerator of which shall be the number of shares for which this
Warrant is exercisable immediately prior to such issue or sale; and (Y) the
denominator of which shall be the number of shares for which this Warrant is
exercisable immediately after such issue or sale.

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                  4.4      Issuance of Convertible Securities. If at any time
the Company shall in any manner (whether directly or by assumption in a merger
in which the Company is the surviving corporation) issue or sell, any
Convertible Securities, whether or not the rights to exchange or convert
thereunder are immediately exercisable (other than issuances to existing
stockholders as a dividend or other distribution described in Section 4.2 or
pursuant to any employee or director incentive or benefit plan approved by the
Board of Directors of the Company), for a consideration having a Fair Market
Value on the date of such issuance or sale less than the Fair Market Value of
such Convertible Securities on the date of such issuance or sale, then (i) the
number of shares of Common Stock for which this Warrant is exercisable shall be
adjusted to equal the product obtained by multiplying the number of shares of
Common Stock for which this Warrant is exercisable immediately prior to such
adjustment by a fraction (A) the numerator of which shall be the Current Market
Price per share of Common Stock at the date of such issuance and (B) the
denominator of which shall be such Current Market Price per share of Common
Stock so distributable minus the Per Share Deficiency (as defined below) and
(ii) the Current Warrant Price shall be adjusted to equal (A) the Current
Warrant Price multiplied by the number of shares of Common Stock for which this
Warrant is exercisable immediately prior to the adjustment divided by (B) the
number of shares for which this Warrant is exercisable immediately after such
adjustment. The "Per Share Deficiency" shall mean (x) the Fair Market Value of
such Convertible Securities on the date of such issuance or sale minus the Fair
Market Value of the consideration received by the Company in respect of such
issue or sale divided by (y) the number of shares of Common Stock Outstanding on
the date of such issuance or sale.

                  4.5      Pro Rata Repurchases. In case the Company or any
subsidiary thereof shall make a pro rata repurchase of shares of Common Stock,
the Current Warrant Price in effect immediately prior to such action shall be
adjusted (but shall not be increased) by multiplying such price by a fraction,
the numerator of which shall be (i) the product of (x) the number of shares of
Common Stock Outstanding immediately before such Pro Rata Repurchase and (y) the
Current Market Price of the Common Stock as of the close of business on the
Business Day immediately preceding the first public announcement by the Company
of the intent to effect such Pro Rata Repurchase minus (ii) the aggregate
purchase price of the Pro Rata Repurchase and the denominator of which shall be
the product of (i) the number of shares of Common Stock Outstanding immediately
before such Pro Rata Repurchase minus the number of shares of Common Stock
repurchased by the Company or any subsidiary thereof in such Pro Rata Repurchase
and (ii) the Current Market Price of the Common Stock as of the close of
business on the Business Day immediately preceding the first public announcement
by the Company of the intent to effect such Pro Rata Repurchase. Such adjustment
shall become effective immediately after the effective date of such Pro Rata
Repurchase.

                  4.6      Other Provisions Applicable to Adjustments under this
Section. The following provisions shall be applicable to the making of
adjustments of the number of shares of Common Stock for which this Warrant is
exercisable and the Current Warrant Price provided for in this Section 4:

                           (a)      Computation of Consideration. To the extent
                  that any Additional Shares of Common Stock or any Convertible
                  Securities or any warrants or other rights to subscribe for or
                  purchase any Additional Shares of Common Stock or any
                  Convertible Securities shall be issued for cash consideration,
                  the

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                  consideration received by the Company therefor shall be the
                  amount of the cash received by the Company therefor, or, if
                  such Additional Shares of Common Stock or Convertible
                  Securities are offered by the Company for subscription, the
                  subscription price, or, if such Additional Shares of Common
                  Stock or Convertible Securities are sold to underwriters or
                  dealers for public offering without a subscription offering,
                  the initial public offering price (in any such case
                  subtracting any amounts paid or receivable for accrued
                  interest or accrued dividends and without taking into account
                  any compensation, discounts or expenses paid or incurred by
                  the Company for and in the underwriting of, or otherwise in
                  connection with, the issuance thereof). To the extent that
                  such issuance shall be for a consideration other than cash,
                  then, except as herein otherwise expressly provided, the
                  amount of such consideration shall be deemed to be the Fair
                  Market Value of such consideration. In case any Additional
                  Shares of Common Stock or any Convertible Securities or any
                  warrants or other rights to subscribe for or purchase such
                  Additional Shares of Common Stock or Convertible Securities
                  shall be issued in connection with any merger in which the
                  Company issues any securities, the amount of consideration
                  therefor shall be deemed to be the Fair Market Value of such
                  portion of the assets and business of the nonsurviving
                  corporation as the Board of Directors of the Company in good
                  faith shall determine to be attributable to such Additional
                  Shares of Common Stock, Convertible Securities, warrants or
                  other rights, as the case may be. The consideration for any
                  Additional Shares of Common Stock issuable pursuant to any
                  warrants or other rights to subscribe for or purchase the same
                  shall be the consideration received by the Company for issuing
                  such warrants or other rights plus the additional
                  consideration payable to the Company upon exercise of such
                  warrants or other rights. The consideration for any Additional
                  Shares of Common Stock issuable pursuant to the terms of any
                  Convertible Securities shall be the consideration received by
                  the Company for issuing warrants or other rights to subscribe
                  for or purchase such Convertible Securities, plus the
                  consideration paid or payable to the Company in respect of the
                  subscription for or purchase of such Convertible Securities,
                  plus the additional consideration, if any, payable to the
                  Company upon the exercise of the right of conversion or
                  exchange in such Convertible Securities. In case of the
                  issuance at any time of any Additional Shares of Common Stock
                  or Convertible Securities in payment or satisfaction of any
                  dividends upon any class of stock other than Common Stock, the
                  Company shall be deemed to have received for such Additional
                  Shares of Common Stock or Convertible Securities a
                  consideration equal to the amount of such dividend so paid or
                  satisfied.

                           (b)      When Adjustments to Be Made. The adjustments
                  required by this Section 4 shall be made whenever and as often
                  as any specified event requiring an adjustment shall occur,
                  except that any adjustment of the number of shares of Common
                  Stock for which this Warrant is exercisable that would
                  otherwise be required may be postponed (except in the case of
                  a subdivision or combination of shares of Common Stock, as
                  provided for in Section 4.1) up to, but not beyond the date of
                  exercise if such adjustment either by itself or with other
                  adjustments not previously made adds or subtracts less than 1%
                  of the shares of Common Stock

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                  for which this Warrant is exercisable immediately prior to the
                  making of such adjustment. Any adjustment representing a
                  change of less than such minimum amount (except as aforesaid)
                  which is postponed shall be carried forward and made as soon
                  as such adjustment, together with other adjustments required
                  by this Section 4 and not previously made, would result in a
                  minimum adjustment or on the date of exercise. For the purpose
                  of any adjustment, any specified event shall be deemed to have
                  occurred at the close of business on the date of its
                  occurrence.

                           (c)      Fractional Interests. In computing
                  adjustments under this Section 4, fractional interests in
                  Common Stock shall be taken into account to the nearest 1/10th
                  of a share.

                           (d)      When Adjustment Not Required. If the Company
                  shall take a record of the holders of Common Stock for the
                  purpose of entitling them to receive a dividend or
                  distribution or subscription or purchase rights and shall,
                  thereafter and before the distribution to stockholders
                  thereof, legally abandon its plan to pay or deliver such
                  dividend, distribution, subscription or purchase rights, then
                  thereafter no adjustment shall be required by reason of the
                  taking of such record and any such adjustment previously made
                  in respect thereof shall be rescinded and annulled.

                  4.7      Reorganization, Reclassification, Merger,
Consolidation or Disposition of Assets. In case the Company shall reorganize its
capital, reclassify its capital stock, consolidate or merge with or into another
corporation (where the Company is not the surviving corporation or where there
is a change in or distribution with respect to the Common Stock of the Company),
or sell, transfer or otherwise dispose of all or substantially all its property,
assets or business to another corporation and, pursuant to the terms of such
reorganization, reclassification, merger, consolidation or disposition of
assets, shares of common stock of the successor or acquiring corporation, or any
cash, shares of stock or other securities or property of any nature whatsoever
(including warrants or other subscription or purchase rights) in addition to or
in lieu of common stock of the successor or acquiring corporation ("Other
Property"), are to be received by or distributed to the holders of Common Stock
of the Company, then each Holder shall have the right thereafter to receive,
upon exercise of such Warrant, the number of shares of common stock of the
successor or acquiring corporation or of the Company, if it is the surviving
corporation, and Other Property receivable upon or as a result of such
reorganization, reclassification, merger, consolidation or disposition of assets
by a holder of the number of shares of Common Stock for which this warrant is
exercisable immediately prior to such event. In case of any such reorganization,
reclassification, merger, consolidation or disposition of assets, the successor
or acquiring corporation (if other than the Company) shall expressly assume the
due and punctual observance and performance of each and every covenant and
condition of this Warrant to be performed and observed by the Company and all
the obligations and liabilities hereunder, subject to such modifications as may
be deemed appropriate (as determined by resolution of the Board of Directors of
the Company) in order to provide for adjustments of shares of Common Stock for
which this Warrant is exercisable which shall be as nearly equivalent as
practicable to the adjustments provided for in this Section 4. For purposes of
this Section 4.7, "common stock of the successor or acquiring corporation" shall
include stock of such corporation of any class which is not preferred as to
dividends or assets over any other class of stock of such corporation

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and which is not subject to redemption and shall also include any evidences of
indebtedness, shares of stock or other securities which are convertible into or
exchangeable for any such stock, either immediately or upon the arrival of a
specified date or the happening of a specified event and any warrants or other
rights to subscribe for or purchase any such stock. The foregoing provisions of
this Section 4.7 shall similarly apply to successive reorganizations,
reclassifications, mergers, consolidations or disposition of assets.

                  4.8      Other Action Affecting Common Stock. In case at any
time or from time to time the Company shall take any action in respect of its
Common Stock, other than any action described in this Section 4, then, unless
such action will not have a materially adverse effect upon the rights of the
Holders, the number of shares of Common Stock or other stock for which this
Warrant is exercisable and/or the purchase price thereof shall be adjusted in
such manner as may be equitable in the circumstances.

5.       NOTICES TO WARRANT HOLDERS

                  5.1      Notice of Adjustments. Whenever the number of shares
of Class A Common Stock for which this Warrant is exercisable, or whenever the
price at which a share of such Class A Common Stock may be purchased upon
exercise of the Warrants, shall be adjusted pursuant to Section 4, the Company
shall forthwith prepare a certificate to be executed by the chief financial
officer of the Company setting forth, in reasonable detail, the event requiring
the adjustment and the method by which such adjustment was calculated (including
a description of the basis on which the Board of Directors of the Company
determined the fair value of any evidences of indebtedness, shares of stock,
other securities or property or warrants or other subscription or purchase
rights referred to in Section 4), specifying the number of shares of Common
Stock for which this Warrant is exercisable and (if such adjustment was made
pursuant to Section 4.7) describing the number and kind of any other shares of
stock or Other Property for which this Warrant is exercisable, and any change in
the purchase price or prices thereof, after giving effect to such adjustment or
change. The Company shall promptly cause a signed copy of such certificate to be
delivered to each Holder in accordance with Section 13.2. The Company shall keep
at its office or agency designated pursuant to Section 11 copies of all such
certificates and cause the same to be available for inspection at said office
during normal business hours by any Holder or any prospective purchaser of a
Warrant designated by a Holder thereof.

                  5.2      Notice of Corporate Action. If at any time

                           (a)      The Company shall take a record of the
                  holders of Common Stock for the purpose of entitling them to
                  receive a dividend or other distribution, or any right to
                  subscribe for or purchase any evidences of its indebtedness,
                  any shares of stock of any class or any other securities or
                  property, or to receive any other right, or

                           (b)      there shall be any capital reorganization of
                  the Company, any reclassification or recapitalization of the
                  capital stock of the Company or any consolidation or merger of
                  the Company with, or any sale, transfer or other disposition
                  of all or substantially all the property, assets or business
                  of the Company to, another corporation, or

                                       11
<PAGE>   12

                           (c)      there shall be a voluntary or involuntary
                  dissolution, liquidation or winding up of the Company;

then, in any one or more of such cases, the Company shall give to the Holder (i)
at least thirty (30) days' prior written notice of the date on which a record
date shall be selected for such dividend, distribution or right or for
determining rights to vote in respect of any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up, and (ii) in the case of any such
reorganization, reclassification, merger, consolidation, sale, transfer,
disposition, dissolution, liquidation or winding up, at least thirty (30) days'
prior written notice of the date when the same shall take place. Such notice in
accordance with the foregoing clause also shall specify (A) the date on which
any such record is to be taken for the purpose of such dividend, distribution or
right, the date on which the holders of Common Stock shall be entitled to any
such dividend, distribution or right, and the amount and character thereof, and
(B) the date on which any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up is to take place and the time, if any such time is to be fixed, as of which
the holders of Common Stock shall be entitled to exchange their shares of Common
Stock for securities or other property deliverable upon such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up. Each such written notice shall be
sufficiently given if addressed to the Holder at the last address of the Holder
appearing on the books of the Company and delivered in accordance with Section
13.2.

6.       NO IMPAIRMENT

                  The Company shall not by any action, including, without
limitation, amending its certificate of incorporation or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, but shall at all
times in good faith assist in the carrying out of all such terms and in the
taking of all such actions as may be necessary or appropriate to protect the
rights of the Holder against impairment. Without limiting the generality of the
foregoing, the Company shall (a) not increase the par value of any shares of
Common Stock receivable upon the exercise of this Warrant above the amount
payable therefor upon such exercise immediately prior to such increase in par
value, (b) take all such action as may be necessary or appropriate in order that
the Company may validly and legally issue fully paid and nonassessable shares of
Class A Common Stock upon the exercise of this Warrant, and (c) use its best
efforts to obtain all such authorizations, exemptions or consents from any
public regulatory body, stock exchange or the NASD as have jurisdiction therefor
as may be necessary to enable the Company to perform its obligations under this
Warrant.

7.       RESERVATION AND AUTHORIZATION OF CLASS A COMMON STOCK; REGISTRATION
         WITH OR APPROVAL OF ANY GOVERNMENTAL AUTHORITY

                  From and after the Closing Date, the Company shall at all
times reserve and keep available for issue upon the exercise of Warrants such
number of its authorized but unissued shares of Class A Common Stock as will be
sufficient to permit the exercise in full of all outstanding Warrants. All
shares of Class A Common Stock which shall be so issuable, when issued upon
exercise of this Warrant and payment therefor in accordance with the terms of
the

                                       12
<PAGE>   13

Warrant, shall be duly and validly issued and fully paid and nonassessable,
and not subject to preemptive rights.

                  Before taking any action which would cause an adjustment
reducing the Current Warrant Price below the then par value, if any, of the
shares of Class A Common Stock issuable upon exercise of this Warrant, the
Company shall take any corporate action which may be necessary in order that the
Company may validly and legally issue fully paid and nonassessable shares of
such Class A Common Stock at such adjusted Current Warrant Price.

                  Before taking any action which would result in an adjustment
in the number of shares of Class A Common Stock for which this Warrant is
exercisable or in the Current Warrant Price, the Company shall obtain all such
authorizations or exemptions thereof, or consents thereto, as may be necessary
from any public regulatory body or bodies having jurisdiction thereof.

                  If any shares of Class A Common Stock required to be reserved
for issuance upon exercise of this Warrant require registration or qualification
with any governmental authority or other governmental approval or filing under
any federal or state law before such shares may be so issued, the Company will
in good faith and as expeditiously as possible and at its expense endeavor to
cause such shares to be duly registered.

8.       TAKING OF RECORD; STOCK AND WARRANT TRANSFER BOOKS

                  In the case of all dividends or other distributions by the
Company to the holders of its Common Stock with respect to which any provision
of Section 4 refers to the taking of a record of such holders, the Company will
in each such case take such a record as of the close of business on a Business
Day. The Company will not at any time, except upon dissolution, liquidation or
winding up of the Company, close its stock transfer books or Warrant transfer
books so as to result in preventing or delaying the exercise or transfer of any
Warrant.

9.       SUPPLYING INFORMATION

                  The Company shall cooperate with each Holder of a Warrant in
supplying such information as may be reasonably necessary for such holder to
complete and file any information reporting forms presently or hereafter
required by the Commission as a condition to the availability of an exemption
from the Securities Act for the sale of any Warrant.

10.      LOSS OR MUTILATION

                  Upon receipt by the Company from any Holder of evidence
reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of this Warrant and indemnity reasonably satisfactory
to it, and in case of mutilation upon surrender and cancellation hereof, the
Company will execute and deliver in lieu hereof a new Warrant of like tenor to
such Holder; provided that no indemnity, other than pursuant to the writing
agreement of the Holder, shall be required if such Holder is an institutional
investor, nor shall any indemnity be required in the case of mutilation if this
Warrant in identifiable form is surrendered to the Company for cancellation.

                                       13
<PAGE>   14

11.      OFFICE OF THE COMPANY

                  As long as any of the Warrants remain outstanding, the Company
shall maintain an office or agency (which may be the principal executive offices
of the Company) where the Warrants may be presented for exercise, registration
of transfer, division or combination as provided in this Warrant.

12.      LIMITATION OF LIABILITY

                  No provision hereof, in the absence of affirmative action by
the Holder to purchase shares of Class A Common Stock, and no enumeration herein
of the rights or privileges of the Holder hereof, shall give rise to any
liability of such Holder for the purchase price of any Class A Common Stock or
as a stockholder of the Company, whether such liability is asserted by the
Company or by creditors of the Company.

13.      MISCELLANEOUS

                  13.1     Nonwaiver and Expenses. No course of dealing or any
delay or failure to exercise any right hereunder on the part of the Holder shall
operate as a waiver of such right or otherwise prejudice the Holder's rights,
powers or remedies. If the Company fails to make, when due, any payments
provided for hereunder, or fails to comply with any other provision of this
Warrant, the Company shall pay to the Holder such amounts as shall be sufficient
to cover any costs and expenses including, but not limited to, reasonable
attorneys' fees, including those of appellate proceedings, incurred by the
Holder in collecting any amounts due pursuant hereto or in otherwise enforcing
any of its rights, powers or remedies hereunder.

                  13.2     Notices. Any notices or other communications required
or permitted hereunder shall be sufficiently given if in writing and delivered
in person, transmitted by telecopier or sent by registered or certified mail
(return receipt requested) or recognized overnight delivery service, postage
prepaid, addressed as follows, or to such other address as such party may notify
to the other party in writing:

                  if to the Company, to:

                  Firearms Training Systems, Inc.
                  7340 McGinnis Ferry Road
                  Suwanee, Georgia 30024
                  Attn: Chief Financial Officer
                  Facsimile No.: (770) 622-3515

                           - and -

                  if to any Holder or holder of Warrant Stock, at its last known
                  address appearing on the books of the Company maintained for
                  such purpose.

A notice or communication will be effective (i) if delivered in person or by
overnight courier, on the business day it is delivered, (ii) if transmitted by
telecopier, on the business day of actual

                                       14
<PAGE>   15

confirmed receipt by the addressee thereof, and (iii) if sent by registered or
certified mail, three business days after dispatch.

                  13.3     Remedies. Each holder of Warrants, in addition to
being entitled to exercise all rights granted by law, including recovery of
damages, will be entitled to specific performance of its rights under this
Warrant. The Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions
of this Warrant and hereby agrees to waive the defense in any action for
specific performance that a remedy at law would be adequate.

                  13.4     Successors and Assigns. This Warrant and the rights
evidenced hereby shall inure to the benefit of and be binding upon the
successors of the Company and the successors and assigns of the Holder. The
provisions of this Warrant are intended to be for the benefit of all the Holders
from time to time of this Warrant and shall be enforceable by any such Holder.

                  13.5     Amendment. This Warrant and all other Warrants may be
modified or amended or the provisions hereof waived with the written consent of
the Company and the Majority Holders, provided that no such Warrant may be
modified or amended to reduce the number of shares of Class A Common Stock for
which such Warrant is exercisable or to increase the price at which such shares
may be purchased upon exercise of such Warrant (before giving effect to any
adjustment as provided therein) without the prior written consent of the Holder
thereof.

                  13.6     Severability. Whenever possible, each provision of
this Warrant shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Warrant is held to be
prohibited by or invalid under applicable law, such provision will be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of this Warrant.

                  13.7     Headings. The headings used in this Warrant are for
convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant.

                  13.8     CHOICE OF LAW. THIS WARRANT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, APPLICABLE TO
CONTRACTS MADE AND PERFORMED THEREIN.

                  IN WITNESS WHEREOF, the Company has caused this Warrant to be
duly executed and its corporate seal to be impressed hereon and attested by its
Secretary or an Assistant Secretary.

Dated: ___________, 2000

                                       15
<PAGE>   16

                                    FIREARMS TRAINING SYSTEMS, INC.

                                    By:
                                        ---------------------------
                                        Name:  Robert F. Mecredy
                                        Title: CEO and President

Attest:

By:
    ----------------------
    Name:  John A. Morelli
    Title: Secretary

                                       16
<PAGE>   17

                                    EXHIBIT A

                                SUBSCRIPTION FORM

                 [To be executed only upon exercise of Warrant]

                  The undersigned registered owner of this Warrant irrevocably
exercises this Warrant for the purchase of ______ shares of Class A Common Stock
of Firearms Training Systems, Inc. and herewith makes payment therefor, all at
the price and on the terms and conditions specified in this Warrant and requests
that certificates for the shares of Class A Common Stock hereby purchased (and
any securities or other property issuable upon such exercise) be issued in the
name of and delivered to __________ whose address is _________ and, if such
shares of Class A Common Stock shall not include all of the shares of Class A
Common Stock issuable as provided in this Warrant, that a new Warrant of like
tenor and date for the balance of the shares of Class A Common Stock issuable
hereunder be delivered to the undersigned.

                                    -------------------------------
                                    (Name of Registered Owner)

                                    -------------------------------
                                    (Signature of Registered Owner)

                                    -------------------------------
                                    (Street Address)

                                    -------------------------------
                                    (City) (State) (Zip Code)

NOTICE:  The signature on this subscription must correspond with the name as
         written upon the face of the within Warrant in every particular,
         without alteration or enlargement or any change whatsoever.

                                       17
<PAGE>   18

                                    EXHIBIT B

                                 ASSIGNMENT FORM

                  FOR VALUE RECEIVED the undersigned registered owner of this
Warrant hereby sells, assigns and transfers unto the Assignee named below all of
the rights of the undersigned under this Warrant, with respect to the number of
shares of Class A Common Stock set forth below:

Name and Address of Assignee                                   No. of Shares of
                                                            Class A Common Stock

and does hereby irrevocably constitute and appoint ______________________
attorney-in-fact to register such transfer on the books of Firearms Training
Systems, Inc. maintained for the purpose, with full power of substitution in the
premises.

Dated:                                   Print Name:
      -----------------                             ---------------------------

                                         Signature:
                                                    ---------------------------

                                         Witness:
                                                  -----------------------------

NOTICE:  The signature on this assignment must correspond with the name as
         written upon the face of the within Warrant in every particular,
         without alteration or enlargement or any change whatsoever.

                                       18<PAGE>   1

                                                                   EXHIBIT 10.27

                    SECURITIES EXCHANGE AND RELEASE AGREEMENT

                                      among

                           THE INVESTORS NAMED HEREIN

                                       and

                   FIREARMS TRAINING SYSTEMS, INC., as Issuer

                            Dated as of April 1, 2000

<PAGE>   2

                    SECURITIES EXCHANGE AND RELEASE AGREEMENT

                  SECURITIES EXCHANGE AND RELEASE AGREEMENT dated as of April 1,
2000 among FIREARMS TRAINING SYSTEMS, INC., a Delaware corporation (the
"Company"), and each of the parties listed on Schedule 1 annexed hereto (each,
an "Investor," and collectively, the "Investors").

                               W I T N E S S E T H

                  WHEREAS, FATS, Inc., a Delaware Corporation ("FATS") and a
wholly owned Subsidiary of the Company, proposes to issue and exchange with the
Investors (i) an aggregate of $966,248 principal amount of Junior Secured Debt
(the "Junior Secured Debt") pursuant to the Loan Agreement and Exchange
Agreement dated as of April 1, 2000 among the Company, FATS and the Lenders
named therein (the "Loan Agreement"), having the terms and subject to the
security as set forth in the Loan Agreement; and (ii) an aggregate of $504,129
principal amount of Senior Secured Debt issued pursuant to the Loan Agreement
having terms and subject to the security as set forth in the Loan Agreement (the
"Senior Secured Debt", and together with the Junior Secured Debt, the "Debt")

                  WHEREAS the Company proposes to issue (i) an aggregate of
897.397 shares (the "Preferred Shares") of its Series B Preferred Stock having
the rights, powers, privileges and preferences set forth in the Certificate of
Designations thereof (the "Certificate of Designations") attached hereto as
Exhibit A (the "Preferred Stock"); (ii) an aggregate of 8,459,664 shares (the
"Common Shares") of its Class A Common Stock (the "Class A Common Stock"); (iii)
warrants in the form attached hereto as Exhibit B to purchase an aggregate of
2,000,000 shares of the Company's Class A Common Stock (the "New Warrants"); and
(iv) amended warrants in the form attached hereto as Exhibit C (the "Amended
Warrants") to purchase an aggregate of 3,246,164 shares of the Company's Class A
Common Stock (which Preferred Shares, Common Shares, New Warrants, Amended
Warrants together are referred to as the "Securities"); and

                  WHEREAS, the Investors presently hold (i) an aggregate
of 20,289 shares (the "Old Preferred Shares") of Series A Preferred Stock (the
"Series A Preferred Stock"); (ii) warrants (the "Original Warrants") to purchase
an aggregate of 3,246,164 shares of the Company's Class B Non-voting Common
Stock (the "Class B Common Stock"), exercisable only by exchange of Series A
Preferred Stock (which aggregates include all shares of Series A Preferred Stock
and Original Warrants payable as Unit dividends in kind on the Old Preferred
Shares through and including March 31, 2000);

                  WHEREAS, certain Investors (the "Guarantor Investors")
presently hold a Revolving Promissory Note (the "Promissory Note") in the
principal amount of $3,000,000 plus accrued and unpaid interest originally
issued to Deutsche Financial Services Corporation ("DFSC") and acquired by
certain of the Investors in payment of a Guaranty issued by the Guarantor
Investors to DFSC (the "Guaranty"); and

                  WHEREAS, the Investors have severally agreed to exchange the
Old Preferred Shares for a portion of the Common Shares and the Original
Warrants for the Amended Warrants and the Guarantor Investors have severally
agreed to release and cancel all obligations of the Company to them pursuant to
the Guaranty and the Promissory Note in exchange for the Junior Secured Debt,
the Senior Secured Debt, the Series B Preferred Shares, the balance of the
Common Shares, and the New Warrants;

<PAGE>   3

                  NOW, THEREFORE, in consideration of the promises and the
covenants hereinafter contained, the parties hereby agree as follows:

                                   ARTICLE I

                       EXCHANGE OF SECURITIES AND RELEASE

                  SECTION 1.1 THE GUARANTY EXCHANGE. The Company or FATS, as
applicable, by all requisite corporate action, has authorized the issuance and
exchange to the Guarantee Investors of (i) the Junior Secured Debt; (ii) the
Senior Secured Debt; (iii) the Preferred Shares and all additional shares of
Preferred Stock issuable in respect of dividends thereon (the "Additional
Preferred Shares"); (iv) an aggregate of 1,764,452 Common Shares and (v) the New
Warrants and the shares issuable upon exercise of such warrants. In reliance on
the representations and warranties of the Company contained herein and subject
to the terms and conditions hereof, the Guarantee Investors hereby agree to
release the Company and any of its affiliates from all obligations pursuant to
the Promissory Note, the Guarantee and the letter agreement dated as of June 1,
1999 between the Guarantor Investors and the Company (the "Letter Agreement"),
and in reliance on the representations of the Guarantee Investors contained
herein and subject to the terms and conditions hereof, the Company agrees to
issue the Preferred Shares, such number of Common Shares, and the New Warrants
to the Guarantee Investors in the amounts set forth on Schedule 1. Pursuant to
the Loan Agreement, FATS has agreed to issue the Junior Secured Debt and the
Senior Secured Debt. The consideration for such release shall be allocated among
the Junior Secured Debt, the Senior Secured Debt, the Preferred Shares, the
Common Shares, and the New Warrants as set forth on Schedule 2.

                  SECTION 1.2 THE SERIES A PREFERRED STOCK AND AMENDED WARRANT
EXCHANGE. The Company, by all requisite corporate action, has authorized the
issuance and exchange with the Investors of an aggregate of 6,695,212 Common
Shares and the Amended Warrants and the issuance of all shares of Class A Common
Stock of the Company issuable upon exercise of the Amended Warrants. In reliance
on the representations and warranties of the Company contained herein and
subject to the terms and conditions hereof, the Investors agree to exchange the
Old Preferred Shares and the Original Warrants for such number of Common Shares
and the Amended Warrants and in reliance on the representations and warranties
of the Investors contained herein and subject to the terms and conditions
hereof, the Company agrees to issue such Common Shares and Amended Warrants to
the Investors in the amounts set forth on Schedule 1 and such exchange shall be
allocated as set forth on Schedule 2.

                  SECTION 1.3 TERMINATION AND RELEASE OF RESTRICTION ON THE
EXCHANGE OF SECURITIES. The parties hereto hereby agree to terminate, and the
Company hereby agrees to release the Investors, Centre Partners Management LLC
and Centre Partners II, L.P. (collectively, the "Centre Entities"), from, the
restrictions upon conversion of shares of Class B Common Stock into shares of
Class A Common Stock, as set forth in Article IX of the Securities Purchase
Agreement dated as of November 13, 1998 among the Company and the investors
identified therein, and as set forth in any other agreement between the Centre
Entities and the Company. The parties hereto agree that such Securities Purchase
Agreement and such other agreements are hereby amended to give effect to the
foregoing.

                                       2
<PAGE>   4

                                   ARTICLE II

                                     CLOSING

                  SECTION 2.1 CLOSING DATE. The closing (the "Closing") of the
exchange of the Securities, Debt and releases contemplated hereby shall take
place as soon as practicable following such time as all of the conditions set
forth in Article V are satisfied or waived (the date of the Closing is
hereinafter referred to as the "Closing Date"). The Closing shall be held at the
offices of Sidley & Austin, 875 Third Avenue, New York, New York 10022, or at
such other place as agreed to by the Company and the Investors.

                  Delivery of the Securities to be issued to the Investors
pursuant to this Agreement shall be made at the Closing by the Company
delivering to each Investor, against exchange of the consideration therefor,
certificates representing the appropriate number of Preferred Shares, Common
Shares, New Warrants and Amended Warrants (registered in the name of such
Investor or such other person which shall be an affiliate of such Investor or a
nominee of such Investor or such affiliate as such Investor may have designated
in writing to the Company prior to the Closing Date). The consideration
exchanged for the Securities shall be the amounts thereof set forth opposite
each Investor's name on Schedule 1 and shall be paid by delivery to the Company
of certificates representing the Old Preferred Stock and the Original Warrants.
The Closing and delivery of the Debt shall be made in accordance with the Loan
Agreement.

                  SECTION 2.2 FURTHER ASSURANCES. From time to time following
the Closing, upon the request of any Investor, the Company shall execute and
deliver, or cause to be executed and delivered, to such Investor such other
instruments and take such other action as may be reasonably necessary to more
effectively vest in such Investor and put the Investor in possession of the
Preferred Shares, the New Warrants, the Additional Preferred Shares, the Amended
Warrants and all shares of common stock issuable upon exercise of the New
Warrants and the Amended Warrants.

                                  ARTICLE III

                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

                  As an inducement to the Investors to enter into this Agreement
and to consummate the transactions contemplated hereby, the Company represents
and warrants to each of the Investors as follows:

                  SECTION 3.1 ORGANIZATION, STANDING AND POWER OF THE COMPANY
AND ITS SUBSIDIARIES; HOLDINGS OF THE COMPANY. The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware; and each of the subsidiaries of the Company is a corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation. Each of the Company and each subsidiary of the
Company has all requisite corporate power and authority to own, lease and
operate its properties and to carry on its business as now being conducted. The
Company and its subsidiaries are duly qualified to transact business and are in
good standing as foreign corporations in each jurisdiction where the character
of their activities requires such qualification, except where the failure of the
Company or its subsidiaries to be so qualified would not cause a material
adverse effect on the business, results of operations, condition (financial or
otherwise),

                                       3
<PAGE>   5

properties, assets or prospects of the Company and its subsidiaries, taken as a
whole ("Material Adverse Change").

                  The Company owns, directly or indirectly, all of the issued
and outstanding shares of capital stock of each of its subsidiaries free and
clear of any liens, encumbrances, equities and claims (other than liens and
encumbrances pursuant to the Loan Agreement, the Second Amended and Restated
Credit Agreement and Partial Exchange Agreement, dated as of April 1, 2000,
among the Company, FATS, Inc., the lenders named therein, and Bank of America,
N.A., as agent (the "Credit Agreement") and liens and encumbrances securing the
Junior Secured Debt and the Senior Secured Debt). All such shares were duly
authorized, validly issued and are non-assessable and were not issued or
transferred in violation of any preemptive or similar rights.

                  SECTION 3.2 AUTHORITY. The Company has all necessary corporate
power and corporate authority to enter into this Agreement and all documents and
instruments (including, without limitation, the Securities) to be executed by
the Company in furtherance of the transactions contemplated hereby
(collectively, the "Transaction Documents"), and to consummate the transactions
contemplated hereby and thereby.

                  SECTION 3.3 NON-CONTRAVENTION. The execution, delivery, and
performance of the Transaction Documents by the Company and the consummation of
the transactions contemplated thereby by the Company do not and will not (a)
result in a breach of any of the terms and provisions of, or constitute a
default (or an event which with notice or lapse of time, or both, would
constitute a default) under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or any of
its subsidiaries pursuant to any agreement, instrument, franchise, license or
permit to which the Company or any of its subsidiaries is a party or by which
any of such corporations or their respective properties or assets may be bound
or (b) violate any judgment, decree, order, statute, rule or regulation of any
court or any public, governmental or regulatory agency or body applicable to the
Company or any of its subsidiaries or any of their respective properties or
assets, other than such breaches, defaults or violations that are not reasonably
expected to impair the ability of the Company to consummate the transactions
contemplated by the Transaction Documents. The execution, delivery and
performance of the Transaction Documents by the Company and the consummation of
the transactions contemplated thereby do not and will not violate or conflict
with any provision of the certificate of incorporation or by-laws of the Company
or any of its subsidiaries, as currently in effect. Except for such UCC-1
filings and/or mortgage recordation as required by the Credit Agreement or
compliance by the Company with SEC disclosure requirements or filings with the
Secretary of State of the State of Delaware, no consent, approval,
authorization, order, registration, filing, qualification, license or permit of
or with any court or any government agency or body or self regulatory
organization (including, without limitation, the NASD or the NASDAQ Stock
Market) applicable to the Company or any of its subsidiaries or any of their
respective properties or assets is required for the execution, delivery and
performance of the Transaction Documents or the consummation of the transactions
contemplated thereby, including the issuance, sale and delivery of the
Securities to be issued, sold and delivered by the Company hereunder and the
issuance of the Additional Preferred Shares, and the issuance of shares of the
Company's common stock upon exercise of the New Warrants and the Amended
Warrants.

                  SECTION 3.4 ENFORCEABILITY OF AGREEMENT. This Agreement has
been, and the other Transaction Documents to be executed and delivered by the
Company pursuant hereto have been duly and validly authorized by all requisite
corporate action on the part of, and executed and delivered by, the

                                       4
<PAGE>   6

Company, and this Agreement is, and such other Transaction Documents when so
executed and delivered will be, valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally, and subject, as to
enforceability to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity).

                  SECTION 3.5 CAPITALIZATION. The authorized capital stock of
the Company as of (i) immediately prior to the Closing, and (ii) immediately
following the Closing, will be as set forth on Schedule 3 hereto. All of the
outstanding shares of the Company's capital stock are duly and validly
authorized and issued, fully paid and nonassessable, have been issued in
compliance with all federal and state securities laws, and were not issued and
are not now in violation of or subject to any preemptive rights. The Securities,
the Additional Preferred Shares, and all shares of common stock issuable upon
exercise of the New Warrants and Amended Warrants have been duly and validly
authorized by the Company. When issued, sold and delivered in accordance with
this Agreement, the New Warrants and the Amended Warrants, the Preferred Shares,
the Additional Preferred Shares, the Common Shares and all shares of the
Company's common stock issuable upon exercise of the New Warrants and Amended
Warrants, will be duly and validly issued, fully paid and nonassessable. A
sufficient number of shares of Class A Common Stock has been reserved for
issuance upon exercise of the New Warrants and Amended Warrants; a sufficient
number of shares of Class A Common Stock of the Company has been reserved for
issuance upon the conversion of Class B Common Stock; and no further approval or
authority of the stockholders or the Board of Directors of the Company under the
Delaware General Corporation Law or the Securities Exchange Act of 1934 (the
"Exchange Act") will be required for any such issuance. No preemptive rights or
other rights to subscribe for or purchase securities exist with respect to the
issuance and sale of the Securities by the Company pursuant to this Agreement or
the issuance of common stock upon exercise of all New Warrants and Amended
Warrants.

                  SECTION 3.6 REGISTRATION AND QUALIFICATION. Assuming the
accuracy of the representations and warranties made by each of the Investors set
forth in Article IV hereof, it is not necessary in connection with the offer,
sale and delivery of the Securities to the Investors in the manner contemplated
by this Agreement to register under the Securities Act the Securities or the
shares of Class A Common Stock issuable upon exercise of the New Warrants and
the Amended Warrants pursuant to an exemption therefrom.

                                   ARTICLE IV

                 REPRESENTATIONS AND WARRANTIES OF THE INVESTORS

                  As an inducement to the Company to enter into this agreement
and to consummate the transactions contemplated hereby, each of the Investors,
severally and not jointly, hereby represents and warrants to the Company as
follows:

                  SECTION 4.1 INVESTMENT. Investor is acquiring the Securities
for investment for its own account, and not with a view to any distribution
thereof in contravention of applicable securities laws. Investor understands
that the Securities and the shares of common stock issuable upon exercise of the
New Warrants and Amended Warrants (collectively, the "Warrants") have not been
registered under the Securities Act of 1933 as amended (the "Securities Act") by
reason of specific exemptions therefrom

                                       5
<PAGE>   7

which depend upon, among other things, the bona fide nature of the investment
intent and the accuracy of Investor's representations as expressed herein.

                  Investor's financial condition and investments are such that
it is in a position to hold the Securities and the shares of common stock
issuable upon exercise of the Warrants for an indefinite period, bear the
economic risks of the investment and to withstand the complete loss of the
investment. Investor has extensive knowledge and experience in financial and
business matters and has the capability to evaluate the merits and risks of any
Securities and the shares of common stock issuable upon exercise of the
Warrants. Investor qualifies as an "accredited investor" as such term is defined
in Regulation D promulgated under the Securities Act.

                  SECTION 4.2 RULE 144. Investor acknowledges that the
Securities and the shares of common stock issuable upon exercise of the Warrants
must be held indefinitely unless subsequently registered under the Securities
Act or any applicable state securities laws or unless exemptions from such
registrations are available. Investor is aware of the provisions of Rule 144
promulgated under the Securities Act which permit limited resale of securities
purchased in a private placement subject to the satisfaction of certain
conditions.

                  SECTION 4.3 ORGANIZATION OF INVESTOR. Investor is duly
organized and validly existing under the laws of the jurisdiction of its
organization.

                  SECTION 4.4 AUTHORITY OF INVESTOR. Investor has the power and
authority (corporate or similar) to execute and deliver this Agreement, to
consummate the transactions contemplated hereby and to comply with the terms,
conditions and provisions hereof.

                  The execution, delivery and performance of this Agreement by
Investor has been duly authorized and approved by Investor and does not require
any further authorization or consent of Investor or its beneficial owners. This
Agreement is the legal, valid and binding agreement of Investor, enforceable
against Investor in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally, and subject, as to enforceability to general
principles of equity, including principles of commercial reasonableness, good
faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity).

                  SECTION 4.5 NON-CONTRAVENTION. The execution, delivery and
performance of this Agreement by Investor and the consummation of any of the
transactions contemplated hereby by Investor will not (a) conflict with or
result in a breach of any of the terms and provisions of, or constitute a
default (or an event which with notice or lapse of time, or both, would
constitute a default) under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of Investor pursuant to
any agreement, instrument, franchise, license or permit to which Investor is a
party or by which any of its properties or assets may be bound or (b) violate or
conflict with any judgment, decree, order, statute, rule or regulation of any
court or any public, governmental or regulatory agency or body applicable to
Investor or any of its properties or assets, other than such breaches, defaults
or violations that are not reasonably expected to impair the ability of Investor
to consummate the transactions contemplated by this Agreement. The execution,
delivery and performance of this Agreement by Investor and the consummation of
the transactions contemplated hereby by Investor do not and will not violate or
conflict with any provision of the organizational documents of Investor, as
currently in effect.

                                       6
<PAGE>   8

                  SECTION 4.6 CO-INVESTORS' POWER-OF-ATTORNEY. Investor, if
it is a Co-Investor, as defined below, has duly appointed Centre Partners II,
LLC its true and lawful attorney-in-fact with full power and authority in its
name, place and stead to execute and deliver this Agreement and to execute and
deliver such stock powers, agreements, documents and instruments as may be
necessary or appropriate to give effect to the transactions contemplated by this
Agreement.

                                   ARTICLE V

                  CONDITIONS TO THE OBLIGATIONS OF THE PARTIES

                  OBLIGATIONS OF THE INVESTORS

                  SECTION 5.1 GENERAL CONDITIONS TO OBLIGATIONS OF THE
INVESTORS. The obligation of each of the Investors to consummate the
transactions contemplated herein is subject to the accuracy of the
representations and warranties of the Company herein contained, as of the date
hereof and as of the Closing Date, and to the performance in all material
respects by the Company of its obligations hereunder (including the covenants
contained in Article VI of this Agreement).

                  SECTION 5.2 REGISTRATION RIGHTS AGREEMENT. The obligation of
each of the Investors to consummate the transactions contemplated herein is
subject to the (i) Registration Rights Agreement dated as of July 31, 1996 among
the Company, certain of the Investors and affiliates thereof as amended as of
the Closing Date (the "Registration Rights Agreement") continuing to be in full
force and effect and (ii) the Investors' receipt of the Company's agreement, in
form and substance satisfactory to the Investors, that all shares of Class A
Common Stock and Class B Common Stock of the Company currently or hereafter
owned by the Investors or their affiliates, all Common Shares, all shares of
common stock issuable upon exercise of the New Warrants and the Amended
Warrants, and all shares of the Company's Class A Common Stock issued upon
conversion of such shares (and all securities issuable in respect thereof upon a
split, combination or reclassification of such securities or pursuant to a
merger of the Company with another entity), constitute "Registrable Securities"
under and for purposes of the Registration Rights Agreement, except to the
extent such securities constitute Registrable Securities under and for the
purposes of the registration rights agreement dated as of April 1, 2000 among
the Company and the Institutional Holders set forth therein.

                  SECTION 5.3 OFFICERS' CERTIFICATES. The obligation of each of
the Investors to consummate the transactions contemplated herein is subject to
each of the Investors at the Closing Date receiving a certificate of the Chief
Executive Officer and Chief Financial Officer of the Company, dated the Closing
Date, to the effect that (i) as of the date hereof and as of the Closing Date,
the representations and warranties of the Company set forth in Article III
hereof are accurate and (ii) as of the Closing Date, the obligations of the
Company to be performed hereunder on or prior to the Closing Date have been duly
performed in all material respects.

                  SECTION 5.4 OPINION. The obligation of each of the Investors
to consummate the transactions contemplated herein is subject to the Investors'
receiving at the Closing Date the opinion of Sidley & Austin, counsel to the
Company, to the effect of the matters set forth in Exhibit D attached hereto.

                                       7
<PAGE>   9

                  SECTION 5.5 CERTIFICATE OF DESIGNATION. The obligation of each
of the Investors to consummate the transactions contemplated herein is subject
to the Certificate of Designation attached hereto as Exhibit A having been duly
adopted by the Company and filed with the Secretary of State of the State of
Delaware in accordance with the General Corporation Law of that State.

                  SECTION 5.6 LENDER DOCUMENTS. The obligation of each of the
Investors to consummate the transactions contemplated herein is subject to the
execution and delivery by the Company and the required lenders of the Credit
Agreement and associated documents reflecting the terms set forth in the drafts
thereof previously delivered to the Investors and such lender's execution of an
intercreditor agreement in form and substance satisfactory to the Investors
(collectively, the "Lender Documents").

                  OBLIGATIONS OF THE COMPANY

                  SECTION 5.7 GENERAL CONDITIONS TO THE OBLIGATIONS OF THE
COMPANY. The obligation of the Company to issue the Securities to each of the
Investors shall be subject to the accuracy of the representations and warranties
of each of the Investors herein contained except to the extent any inaccuracies
do not materially impair the ability of the Investors to consummate the
transaction contemplated by the Agreement, as of the date hereof and as of the
Closing Date, and to the performance in all material respects by each of the
Investors of its obligations hereunder.

                  SECTION 5.8 LENDER DOCUMENTS. The obligation of the Company to
consummate the transactions contemplated herein is subject to the execution and
delivery by (i) the lenders of the Lender Documents; and (ii) the execution and
delivery by the Guaranty Investors of an intercreditor agreement among the
required lenders and the Guaranty Investors in form satisfactory to all parties
thereto.

                  SECTION 5.9 CERTIFICATE OF CENTRE PARTNERS II, LLC. The
obligation of the Company to consummate the transactions contemplated herein are
subject to the Company receiving a certificate of Centre Partners II, LLC
("Centre Partners") dated the Closing Date, to the effect that as of the date
hereof and as of the Closing Date Centre Partners is the true and lawful
attorney-in-fact of each of NationsBanc Investment Corporation, C.S. Craig
Family Limited Partnership, David T. K. Sarda, The Lazard Freres & Co. LLC
Employees' Savings Plan & Trust f/b/o Paul J. Zepf, Bruce Pollack, David Golub,
Scott Perekslis, Samuel L. Shimer and Gregory Fischer, Mark M. Lee, Dale
Lenzner, 11/24/1987 Trust f/b/o Kerwelyn C. Craig, 12/17/1986 f/b/o Nedenia H.
Craig (each a "Co-Investor") with full power and authority to execute and
deliver this Agreement, and any stock powers as may be necessary or appropriate
to give effect to the transactions contemplated by this Agreement, in the name,
place and stead of each Co-Investor.

                  OBLIGATIONS OF EACH OF THE COMPANY AND THE INVESTORS

                  SECTION 5.10 NO INJUNCTION. The obligations of each of the
Company and the Investors to consummate the transactions contemplated herein are
subject to the condition that no temporary restraining order, preliminary or
permanent injunction or other order issued by any court of competent
jurisdiction prohibiting or preventing consummation of the transactions
contemplated herein shall be in effect.

                                       8
<PAGE>   10

                                   ARTICLE VI

                            COVENANTS OF THE COMPANY

                  As an inducement to the Investors to enter into this Agreement
and to consummate the transactions contemplated hereby, the Company hereby
covenants with each of the Investors as follows:

                  SECTION 6.1 REPORTING. The Company shall, so long as the
Preferred Shares, Additional Preferred Shares, Common Shares or the shares of
common stock issuable upon exercise of the Warrants are outstanding and are
"restricted securities" within the meaning of Rule 144(a)(3) under the
Securities Act, timely file all required reports and other information with the
Commission under Section 13 or 15 (d) of the Exchange Act.

                  SECTION 6.2 PAYMENT OF EXPENSES. Whether or not the
transactions contemplated in this Agreement are consummated or this Agreement is
terminated, the Company hereby agrees to pay (i) all costs and expenses incident
to the performance of the obligations of the Company hereunder, including those
in connection with (a) the issuance, transfer and delivery of the Debt, Common
Shares, Preferred Shares, Additional Preferred Shares, Warrants, and all shares
of common stock issuable upon exercise of the Warrants, including any transfer
or similar taxes payable therein, (b) the qualification of the Common Shares,
Preferred Shares, Additional Preferred Shares and the shares of common stock
issuable upon exercise of the Warrants under state or foreign securities or Blue
Sky laws, (c) the cost of printing certificates for the Common Shares, Preferred
Shares, Additional Preferred Shares and the shares of common stock issuable upon
exercise of the Warrants and (d) the cost and charges of any transfer agent,
registrar, trustee or fiscal paying agent; and (ii) all documented out-of-pocket
costs and expenses, including the fees of one firm of attorneys, incurred by the
Investors in connection with the negotiation and delivery of this Agreement and
consummation of the transactions contemplated hereby.

                  SECTION 6.3 INSPECTION. Prior to and following the Closing,
the Company will permit each of the Investors and their representatives to visit
and inspect any of the Company's properties, to examine its books and records
and to make copies and to take extracts therefrom, and to discuss its business
affairs and finances with its officers and key employees, all at such reasonable
times as the Investors may request.

                  SECTION 6.4 AVAILABILITY OF COMMON STOCK. The Company hereby
covenants and agrees to use its best efforts to take all action necessary,
desirable or appropriate to have, reserve and keep available at all times out of
the Company's authorized but unissued shares of capital stock the full number of
shares of Class A Common Stock issuable upon (i) the exercise of the Amended
Warrants and the New Warrants, and (ii) upon conversion of Class B Common Stock,
for issuance for the purpose of effecting such exercise and conversion.

                  SECTION 6.5 NO GENERAL SOLICITATION. None of the Company, its
affiliates (as defined in Rule 501(b) of the Securities Act) or any person
acting on their behalf will solicit any offer to buy or offer or sell the
Securities, Additional Preferred Shares or any shares of common stock issuable
upon exercise of the Warrants by means of any form or general solicitation or
general advertising (as those terms are used in Regulation D under the
Securities Act) or in any manner involving a public offering within the meaning
of Section 4(2) of the Securities Act that would require the registration of
such securities under the Securities Act.

                                       9
<PAGE>   11

                  SECTION 6.6 EXCHANGE OF STOCK CERTIFICATES. Upon surrender of
any certificate representing the Securities, the Additional Preferred Shares, or
the common stock issuable upon exercise of such Warrants for exchange at the
office of the Company, the Company at its expense will cause to be issued in
exchange therefor new certificates in such denomination or denominations as may
be requested for the same aggregate number of securities represented by the
certificate so surrendered and registered as such holder may request.

                  SECTION 6.7 LOST CERTIFICATES. Upon receipt by the Company of
evidence reasonably satisfactory to it of the loss, theft, destruction or
mutilation of any certificate evidencing any of the Securities, the Additional
Preferred Shares, the Warrants, or the common stock issuable upon exercise of
the Warrants, and (in case of loss, theft or destruction) of indemnity
reasonably satisfactory to it, and upon reimbursement to the Company of all
reasonable expenses incidental thereto, and upon surrender and cancellation of
such certificate, if mutilated, the Company will make and deliver in lieu of
such certificate a new certificate of like tenor and for the number of shares
evidenced by such certificate which remain outstanding. An Investor's agreement
of indemnity shall constitute indemnity satisfactory to the Company for the
purposes of this Section 6.7.

                                  ARTICLE VII

                  RESTRICTIONS ON TRANSFERABILITY OF SECURITIES

                  SECTION 7.1 RESTRICTIVE LEGEND. Each certificate representing
(a) the Preferred Shares, (b) the Common Shares (c) the New Warrants, (d) the
Additional Preferred Shares, (e) the Amended Warrants, (f) the shares of the
common stock issuable upon exercise of the Warrants, and (g) any other
securities issued in respect of such shares upon any stock split, stock
dividend, recapitalization, merger, consolidation or similar event, shall be
stamped or otherwise imprinted with a legend substantially in the following
form:

                  THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
                  REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY APPLICABLE
                  STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD OR
                  TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR EXEMPTIONS
                  THEREFROM UNDER SAID ACT AND LAWS.

The Company will promptly, upon request, remove any such legend when no longer
required by the terms of this Agreement or by applicable law.

                                  ARTICLE VIII

                                 INDEMNIFICATION

                  SECTION 8.1 INDEMNIFICATION. The Company hereby agrees to
indemnify, defend and hold harmless each Investor and its partners,
stockholders, directors, officers and affiliates from and against all demands,
claims, actions or causes of action, assessments, losses, damages, liabilities,
costs and expenses (collectively, "Claims"), including without limitation,
interest, penalties and attorneys' fees

                                       10
<PAGE>   12

and expenses, asserted against, resulting to, or imposed upon or incurred by
such Investor directly or indirectly, in connection with the transactions
contemplated hereby.

                  SECTION 8.2 TERMS OF INDEMNIFICATION. The obligations and
liabilities of the Company with respect to Claims by third parties will be
subject to the following terms and conditions:

                           (a)      an Investor will give the Company prompt
         notice of any Claims asserted against, resulting to, imposed upon or
         incurred by such Investor, directly or indirectly, and the Company will
         undertake the defense thereof by representatives of its own choosing
         which are reasonably satisfactory to such Investor; provided that the
         failure of any Investor to give notice as provided in this Section 8.2
         shall not relieve the Company of its obligations under this Article
         VIII, except to the extent that such failure has materially and
         adversely affected the rights of the Company;

                           (b)      if within a reasonable time after notice of
         any Claim, the Company fails to defend, such Investor will have the
         right to undertake the defense, compromise or settlement of such Claims
         on behalf of and for the account and at the risk of the Company,
         subject to the right of the Company to assume the defense of such Claim
         at any time prior to settlement, compromise or final determination
         thereof;

                           (c)      the Company on one hand and the Investors on
         the other will not, without the prior written consent of the other,
         settle or compromise any Claim or consent to entry of any judgment
         relating to any such Claim;

                           (d)      with respect to any Claims asserted against
         one or more Investors, such Investors will have the right to employ one
         counsel of their choice in each applicable jurisdiction (if more than
         one jurisdiction is involved) to represent such Investors if, in such
         Investors' reasonable judgment, a conflict of interest between such
         Investors and the indemnifying party exists in respect of such Claims,
         and in that event the reasonable fees and expenses of such separate
         counsel shall be paid by such indemnifying party; and

                           (e)      the Company will provide each Investor
         reasonable access to all records and documents of the Company relating
         to any Claim.

                                   ARTICLE IX

                                  MISCELLANEOUS

                  SECTION 9.1 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO THE CONFLICT OF LAWS RULES THEREOF.

                  SECTION 9.2 SURVIVAL. All representations and warranties,
covenants and agreements of the Company and any Investor contained in this
Agreement shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any Investor or any representative or
controlling person thereof or by or on behalf of the Company, any of its
officers and directors or any controlling person thereof; and such
representations and warranties shall survive for a period of one year from the
Closing Date and such covenants and agreements shall survive indefinitely.

                                       11
<PAGE>   13

                  SECTION 9.3 SUCCESSORS AND ASSIGNS. Except as otherwise
provided herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the successors and permitted assigns of the parties hereto. No
assignment of this Agreement may be made by the Company at any time, whether or
not by operation of law, without the Investors' prior written consent. Each
Investor may assign any of its rights hereunder to an affiliate of such Investor
without the Company's consent provided that such affiliate expressly assumes in
writing all of the Investor's obligations hereunder, and provided that such
assignment shall not relieve the assigning Investor of its obligations
hereunder. From and after the Closing Date, all rights of the Investors
hereunder shall inure to subsequent holders of the Securities, the Additional
Preferred Shares, and the shares of common stock issuable upon the exercise of
the Warrants.

                  SECTION 9.4 ENTIRE AGREEMENT: AMENDMENT. This Agreement, the
Transaction Documents and the Registration Rights Agreement constitute the full
and entire understanding and agreement between the parties with regard to the
subjects hereof. Except as expressly provided herein, neither this Agreement nor
any term hereof may be amended, waived, discharged or terminated other than by a
written instrument signed by the party against whom enforcement of any such
amendment, waiver, discharge or termination is sought.

                  SECTION 9.5 NOTICES, ETC. All notices and other communications
provided for or permitted hereunder shall be made in writing by hand delivery,
first-class mail (registered or certified, return receipt requested), telex,
telecopier or courier guaranteeing overnight delivery, addressed (a) if to the
Investors to Centre Partners Management LLC, 30 Rockefeller Plaza, Suite 5050,
New York, New York 10020, Attention: Mr. Scott Perekslis, Facsimile No.: (212)
332-5801 or at such other addresses as shall have been furnished to the Company,
with a copy (which shall not constitute notice) to: Weil, Gotshal & Manges LLP;
767 Fifth Avenue, New York, New York 10153, Attn: Jeffrey Weinberg, Esq.,
Facsimile No.: (212) 310-8007 and (b) if to the Company, at 7340 McGinnis Ferry
Road, Suwanee, Georgia 30174, Attention: Chief Financial Officer, or at such
other address as the Company shall have furnished to the Investors in writing,
with a copy to: Sidley & Austin, 875 Third Avenue, New York, New York 10022,
Attn: James G. Archer, Esq., Facsimile No.: (212) 906-2021. All such notices and
communications shall be deemed to have been duly given: at the time delivered by
hand, if personally delivered; five business days after being deposited in the
mail, postage prepaid, if mailed; when answered back, if telexed; when receipt
is acknowledged, if telecopied; and on the next business day, if timely
delivered to a courier guaranteeing overnight delivery.

                  SECTION 9.6 DELAYS OR OMISSIONS. Except as expressly provided
herein, no delay or omission to exercise any right, power or remedy accruing to
the Company or any of the Investors upon any breach or default of any party
under this Agreement, shall impair any such right, power or remedy of the
Company or any of the Investors nor shall it be construed to be a waiver of any
such breach or default, or an acquiescence therein or of or in any similar
breach or default thereafter occurring; nor shall any waiver of any single
breach or default be deemed a waiver of any other breach or default theretofore
or thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of the Company or any of the Investors of any breach or
default under this Agreement, or any waiver on the part of any such party of any
provisions or conditions of this Agreement, must be in writing and shall be
effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement or by law or otherwise afforded to the
Company or any of the Investors, shall be cumulative and not alternative.

                                       12
<PAGE>   14

                  SECTION 9.7 COUNTERPARTS. This Agreement may be executed in
any number of counterparts, each of which may be executed by only one of the
parties hereto, each of which shall be enforceable against the party actually
executing such counterpart, and all of which together shall constitute one
instrument.

                  SECTION 9.8 SEVERABILITY. In the event that any provision of
this Agreement becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable or void, this Agreement shall continue in full force and
effect without said provisions; provided that no such severability shall be
effective if it materially changes the economic benefit of this Agreement to any
party.

                  SECTION 9.9 TITLES AND SUBTITLES. The titles and subtitles
used in this Agreement are used for convenience only and are not to be
considered in construing or interpreting this Agreement.

                  SECTION 9.10 NO PUBLIC ANNOUNCEMENT. Neither the Company nor
any of the Investors shall make any press release or other public announcement
concerning the transactions contemplated by this Agreement except as and to the
extent that any such party shall be obligated to make any such disclosure by law
or by the rules of NASDAQ and then only after consultation with the other
regarding the basis of such obligation and the content of such press release or
other public announcement or as the parties shall mutually agree.

                  SECTION 9.11 SPECIFIC ENFORCEMENT. Investors, on the one hand,
and the Company, on the other, acknowledge and agree that irreparable damage
would occur in the event that any of the covenants contained in this Agreement
were not performed in accordance with their specific terms or were otherwise
breached, and that money damages are an inadequate remedy for breach thereof
because of the difficulty of ascertaining and quantifying the amount of damage
that will be suffered by the parties hereto in the event that such covenants are
not performed in accordance with their terms or are otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of the covenants referred to in the immediately
preceding sentence and to enforce specifically the terms and provisions hereof
in any court of the United States or any state thereof having jurisdiction, this
being in addition to any other rights and remedies to which they may be entitled
at law or equity.

                  SECTION 9.12 TIME OF THE ESSENCE. Time is of the essence for
purposes of the Company's covenants and agreements contained herein.

                            [signature page follows]

                                       13
<PAGE>   15

                  IN WITNESS WHEREOF, each of the undersigned has caused the
foregoing Agreement to be executed by one of its duly authorized officers as of
the date first above written.

                                     FIREARMS TRAINING SYSTEMS, INC.

                                     By        /s/ Robert Mecredy
                                        ---------------------------------
                                        Name:
                                        Title.

                                     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 Kagan
                                        ---------------------------------
                                        Managing Director

                                     CENTRE PARTNERS COINVESTMENT, L.P.

                                     By: Centre Partners II LLC,
                                         as General Partner

                                     By:      /s/ Jonathan Kagan
                                        ---------------------------------
                                        Managing Director

                                     NATIONSBANC INVESTMENT CORPORATION

                                     By: Centre Partners II, LLC,
                                         as Attorney-in-fact

                                     By:     /s/ Jonathan Kagan
                                        ---------------------------------
                                        Managing Director

                                       14
<PAGE>   16

                                     C.S. CRAIG FAMILY LIMITED PARTNERSHIP

                                     By: Centre Partners II, LLC,
                                         as Attorney-in-fact

                                     By:       /s/ Jonathan Kagan
                                        ---------------------------------
                                        Managing Director

                                     DAVID T. K. SARDA

                                     By: Centre Partners II, LLC,
                                         as Attorney-in-fact

                                     By:       /s/ Jonathan Kagan
                                        ---------------------------------
                                        Managing Director

                                     FRANCIS J. CONROY, AS TRUSTEE OF THE
                                     LAZARD FRERES & CO. LLC EMPLOYEES'
                                     SAVINGS PLAN & TRUST F/B/O PAUL J. ZEPF,
                                     BRUCE POLLACK, SCOTT PEREKSLIS, DAVID
                                     GOLUB, SAMUEL L. SHIMER, AND GREGORY
                                     FISCHER

                                     By: Centre Partners II, LLC,
                                         as Attorney-in-fact

                                     By:       /s/ Jonathan Kagan
                                        ---------------------------------
                                        Managing Director

                                       15
<PAGE>   17

                                      MARK LEE

                                      By: Centre Partners II, LLC,
                                          as Attorney-in-fact

                                     By:       /s/ Jonathan Kagan
                                        ---------------------------------
                                        Managing Director

                                     DALE LENZNER

                                     By: Centre Partners II, LLC,
                                         as Attorney-in-fact

                                     By:       /s/ Jonathan Kagan
                                        ---------------------------------
                                        Managing Director

                                     11/24/1987 TRUST F/B/O KERWELYN C. CRAIG

                                     By: Centre Partners II, LLC,
                                         as Attorney-in-fact

                                     By:       /s/ Jonathan Kagan
                                        ---------------------------------
                                        Managing Director

                                     12/17/1986 TRUST F/B/O NEDENIA H. CRAIG

                                     By: Centre Partners II, LLC,
                                         as Attorney-in-fact

                                     By:       /s/ Jonathan Kagan
                                        ---------------------------------
                                        Managing Director

                                       16
<PAGE>   18

                                   SCHEDULE 1
                                    INVESTORS

<TABLE>
<CAPTION>

                                                                    Preferred       Common         New           Amended
              Investor                                                Shares        Shares       Warrants       Warrants
              --------                                               --------       ------       --------       --------

<S>                                                                 <C>             <C>          <C>            <C>
Centre Capital Investors II, L.P.
Centre Capital Tax-Exempt Investors II, L.P.
Centre Capital Offshore Investors II, L.P.
Centre Partners Coinvestment, L.P.
NationsBanc Investment Corporation
C.S. Craig Family Limited Partnership
David T. K. Sarda
The Lazard Freres & Co. LLC Employees' Savings Plan
& Trust f/b/o Paul J. Zepf, Bruce Pollack, David Golub,
Scott Perekslis, Samuel L. Shimer and Gregory Fischer
Mark.M. Lee
Dale Lenzner
11/24/1987 Trust f/b/o Kerwelyn C. Craig
12/17/1986 Trust f/b/o Nedenia H. Craig
</TABLE>

                                       17
<PAGE>   19

                                   SCHEDULE 2

                                       18
<PAGE>   20

                                   SCHEDULE 3
                                 CAPITALIZATION

                  As of immediately prior to the Closing, the authorized capital
stock of the Company consists of 68,060,000 shares of Class A Common Stock of
which 19,496,897 are issued and outstanding, 6,200,000 shares of Class B Common
Stock of which 1,139,017 are issued and outstanding, 38,000 shares of Series A
Preferred Stock of which 20,289 are issued and outstanding, and 50,000 shares of
Series B Preferred Stock of which none are issued and outstanding. In addition,
6,600,035 shares of Class A Common Stock have been reserved for issuance upon
the exercise of options and warrants or the conversion of the shares of Class B
Common Stock which are issued and outstanding.

                  As of immediately following the Closing, the authorized
capital stock of the Company consists of 1,000,000 shares of Class A Common
Stock of which 68,750,050 are issued and outstanding, 6,200,000 shares of Class
B Common Stock of which 1,139,017 are issued and outstanding, 38,000 shares of
Series A Preferred Stock of which none are issued and outstanding, and 50,000
shares of Series B Preferred Stock of which 21,361.114 are issued and
outstanding. In addition, 8,600,035 shares of Class A Common Stock have been
reserved for issuance upon the exercise of options and warrants or the
conversion of the shares of Class B Common Stock which are issued and
outstanding.

                                       19
<PAGE>   21

                                   EXHIBIT A
                           CERTIFICATE OF DESIGNATIONS

                                       20
<PAGE>   22

                                    EXHIBIT B
                              FORM OF NEW WARRANTS

                                       21
<PAGE>   23

                                    EXHIBIT C
                            FORM OF AMENDED WARRANTS

                                       22
<PAGE>   24

                                    EXHIBIT D
                                 FORM OF OPINION

                                       23

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