EXECUTION COPY
SECOND AMENDMENT TO
SECURITIES PURCHASE AGREEMENT
THIS SECOND AMENDMENT TO SECURITIES PURCHASE AGREEMENT, dated as of the
17th day of August 2000 (this "Amendment"), is by and between SIMULA, INC., an
Arizona corporation (the "Company"), SIMULA SAFETY SYSTEMS, INC., an Arizona
corporation ("SSSI"), SIMULA TRANSPORTATION EQUIPMENT CORPORATION (formerly
known as Intaero, Inc.), an Arizona corporation ("Simtech"), AI CAPITAL CORP.
(formerly known as Airline Interiors, Inc.), an Arizona corporation ("Airline
Interiors"), SIMULA ARTCRAFT INDUSTRIES INC. (formerly known as Artcraft
Industries Corp.), an Arizona corporation ("Artcraft Industries"), SIMULA
COMPOSITES CORPORATION (formerly known as Viatech, Inc.), a Delaware corporation
("Composites"), SIMULA AUTOMOTIVE SAFETY DEVICES, INC., an Arizona corporation
("SASD"), SIMULA TECHNOLOGIES, INC., an Arizona corporation ("STI"),
INTERNATIONAL CENTER FOR SAFETY EDUCATION, INC., an Arizona corporation
("ICSE"), SIMULA POLYMER SYSTEMS, INC., an Arizona corporation ("Polymer"),
SIMULA AUTOMOTIVE SAFETY DEVICES LIMITED, a company organized and existing under
the laws of the United Kingdom ("Simula Automotive UK"), and CCEC CAPITAL CORP.,
an Arizona corporation ("CCEC"), on the one hand, and XXXXXX XXXXXXXXX CAPITAL
PARTNERS II, L.P., a California limited partnership (the "Purchaser"), on the
other hand. The Company, SSSI, Simtech, Airline Interiors, Artcraft Industries,
Composites, SASD, STI, ICSE, Polymer, Simula Automotive UK and CCEC may be
individually referred to herein as a "Company Party" and collectively referred
to herein as the "Company Parties."
R E C I T A L S
A. The parties have entered into that certain Securities Purchase
Agreement dated as of December 31, 1999, as amended by that certain First
Amendment to Securities Purchase Agreement dated as of May 25, 2000 (as so
amended, the "Securities Purchase Agreement"), pursuant to which, among other
things, the Company Parties jointly and severally issued and sold to the
Purchaser a Secured Senior Note Due 2000 dated December 31, 1999, in the
principal amount of $5,000,000 (the "Term A Note") and a Secured Senior Note Due
2003 dated December 31, 1999, in the principal amount of $15,000,000, and the
Company issued and sold the Warrant to the Purchaser, all on the terms and
subject to the conditions set forth in the Securities Purchase Agreement and the
other Investment Documents. Unless otherwise indicated, capitalized terms used
and not otherwise defined in this Amendment have the meanings set forth in the
Securities Purchase Agreement.
B. The Company has requested that the Purchaser agree to (i) amend the
Securities Purchase Agreement as provided in Section 1 hereof, (ii) amend and
restate the Term A Note to extend the stated maturity date thereof from
September 30, 2000, to October 1, 2001, and to provide for the right of the
Company Parties to voluntarily prepay the
outstanding principal balance of the Term A Note prior to the stated maturity
date thereof, (iii) waive its right to require that the Company repay the Term A
Note in full prior to its prepayment of the outstanding principal balance of,
and accrued interest on, the Remaining Desjardins Note, (iv) waive the Specified
Defaults (as such term is defined herein), (v) consent to the restructuring of
the C&C Notes and (vi) consent to the amendment of certain terms under the Bank
Credit Agreement, and the Purchaser is willing to agree to do so, all on the
terms and subject to the conditions set forth herein.
A G R E E M E N T
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants, conditions and provisions contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
1. Amendment to Securities Purchase Agreement.
(a) AMENDMENT TO SECTION 1.1 (DEFINITIONS). Effective on and as
of the Effective Date (as such term is defined below), the definition of Capital
Expenditures in Section 1.1 (Definitions) of the Securities Purchase Agreement
shall be amended by adding the following proviso at the end of such definition
after the word "GAAP:"
", PROVIDED that the term "Capital Expenditures"
shall not include expenses incurred in connection with financings
that are not related to property, plant, equipment or other fixed
assets, or for improvements thereto, including, without
limitation, any original issue discount."
(b) AMENDMENT TO SECTION 1.1 (DEFINITIONS). Effective on and as
of the Effective Date, Section 1.1 (Definitions) of the Securities Purchase
Agreement shall be amended by adding the following definition in alphabetical
order:
"'DCI IMPROVEMENT TECHNOLOGY' shall mean all improvements
and other modifications to the technology embodied in U.S. Patent
No. 6,062,143, issued May 16, 2000, entitled 'Distributed Charge
Inflator System', which has been developed jointly by one or more
Company Parties and Primex Aerospace Company."
(c) AMENDMENT TO SECTION 1.1 (DEFINITIONS). Effective on and as
of the Effective Date, the definition of EBITDA in Section 1.1 (Definitions) of
the Securities Purchase Agreement shall be amended by deleting clause (i)
thereof in its entirety and replacing it with the following:
"(i) the sum of (A) Net Income (Loss), (B) interest expense
deducted in determining Net Income (Loss) (including, without
limitation, cash interest, payment-in-kind interest and
amortization of original issue discount), (C) the amount of
Taxes, based on or measured by income, deducted in determining
Net Income (Loss), (D) the amount of depreciation and
amortization expense deducted in determining Net Income (Loss),
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(E) any extraordinary or unusual non-cash losses (PROVIDED that
such extraordinary or unusual non-cash losses do not at any time
result in any cash outlay) and (F) operating expenses related to
the purchase and implementation of the DCI Improvement
Technology, but only to the extent that such operating expenses
are included in Net Income (Loss) and only to the extent that
such operating expenses do not exceed the dollar limitations
applicable to the DCI Improvement Technology only set forth in
the last paragraph of SECTION 10.15(e), in each case for such
period; MINUS"
(d) AMENDMENT TO SECTION 1.1 (DEFINITIONS). Effective on and as
of the Effective Date, clause (ii) of the definition of Fixed Charges in Section
1.1 (Definitions) of the Securities Purchase Agreement shall be amended by
deleting such clause in its entirety and replacing it with the following:
"(ii) scheduled payments of principal on any Indebtedness of
the Company and its Subsidiaries, excluding any Indebtedness
under the Term A Note or the payments of $500,000, $250,000 and
$200,000 permitted to be made in accordance with the last
paragraph of SECTION 10.15(e);"
(e) AMENDMENT TO SECTION 1.1 (DEFINITIONS). Effective on and as
of the Effective Date, clause (vi) of the definition of Fixed Charges in Section
1.1 (Definitions) of the Securities Purchase Agreement shall be amended by
deleting such clause in its entirety and replacing it with the following:
"(vi) Capital Expenditures (excluding the payment previously
made by the Company to Primex Aerospace Company in the amount of
$350,000 in connection with the purchase of the DCI Improvement
Technology and any additional Capital Expenditures permitted to
be incurred in the last paragraph of SECTION 10.15(e)),"
(f) AMENDMENT TO SECTION 1.1 (DEFINITIONS). Effective on and as
of the Effective Date, the definition of Leverage Ratio in Section 1.1
(Definitions) of the Securities Purchase Agreement shall be amended by deleting
such definition in its entirety and replacing it with the following:
"'LEVERAGE RATIO' shall mean, with respect to any period,
the ratio of (i) the sum of (A) total Indebtedness of the Company
and its Subsidiaries at the end of such period, excluding the
Indebtedness described in SECTION 10.1(g), PLUS (B) all Capital
Leases existing at the end of such period, LESS $200,000, to (ii)
EBITDA for such period or such other period, as applicable."
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(g) AMENDMENT TO SECTION 9.20. Effective on and as of the
Effective Date, Section 9.20 (Dissolution of Simula Protective UK and Intaero
Ltd.) shall be amended by deleting such Section in its entirety and replacing it
with the following:
"9.20 DISSOLUTION OF SIMULA PROTECTIVE UK AND INTAERO LTD.
(a) As soon as practicable, but not later than November
30, 2000, the Company shall cause the final dissolution of Simula
Protective UK in accordance with Applicable Law. Prior to the
date that Simula Protective UK has been dissolved, no Company
Party shall transfer any assets or properties to Simula
Protective UK, or permit Simula Protective UK to conduct any
business whatsoever, and Simula Protective UK shall remain an
inactive indirect Subsidiary of the Company. The Company shall
provide to the Purchaser written evidence of the final
dissolution of Simula Protective UK within ten (10) Business Days
following the effective date thereof.
(b) As soon as practicable, but not later than August
31, 2000, the Company shall cause the final dissolution of
Intaero Ltd. in accordance with Applicable Law. Prior to the date
that Intaero Ltd. has been dissolved, no Company Party shall
transfer any assets or properties to Intaero Ltd., or permit
Intaero Ltd. to conduct any business whatsoever, and Intaero Ltd.
shall remain an inactive indirect Subsidiary of the Company. The
Company shall provide to the Purchaser written evidence of the
final dissolution of Intaero Ltd. not later than September 5,
2000."
(h) AMENDMENT TO SECTION 10.1. Effective on and as of the
Effective Date, Section 10.1 (Limitations on Indebtedness) shall be amended by
deleting such Section in its entirety and replacing it with the following:
"10.1 LIMITATIONS ON INDEBTEDNESS. The Company Parties
shall not, and shall not permit any of their Subsidiaries to,
directly or indirectly, create, incur, assume, guarantee, suffer
to exist or become or remain liable with respect to any
Indebtedness, except for:
(a) The Obligations;
(b) Indebtedness existing under the Bank Credit
Agreement;
(c) Indebtedness existing on the date hereof and
listed on Schedule 3.11 (excluding any refinancings,
restructurings (whether in the nature of a "work out"
or otherwise), restatements or refundings thereof);
(d) (i) except as provided in clause (ii) below,
trade accounts payable that are more than sixty (60)
days past their due dates incurred in the ordinary
course of business in the aggregate amount of $150,000
at any time outstanding or (ii) trade accounts
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payable under invoices dated from April 23, 2000 to May
31, 2000, issued by two law firms with respect to
outstanding legal fees that are more than sixty (60)
days past their due dates as of August 17, 2000, in an
aggregate amount of not more than $104,313.00;
(e) Indebtedness consisting of the maximum fixed
repurchase price of any mandatory redemption of the
Series A Preferred, PROVIDED that the Company shall not
make any mandatory redemption of the Series A Preferred
prior to the repayment in full of all Obligations under
the Notes;
(f) Indebtedness evidenced by that certain
Promissory Note dated June 13, 2000, issued by the
Company to Rosestone Properties, LLC in the original
principal amount of $800,000, but in an aggregate
amount of not more than $775,960.15; and
(g) Indebtedness (in the form of a deferred
purchase price) in an amount not to exceed $950,000
evidenced by a promissory note issued (or to be issued)
by the Company to Primex Aerospace Company in
connection with the Company's acquisition of the DCI
Improvement Technology, which promissory note (i) may
be ranked PARI PASSU with the Obligations, (ii) may be
secured by a purchase money Lien in favor of the payee
thereof encumbering solely the DCI Improvement
Technology, (iii) may not bear interest at a rate in
excess of the "prime rate" as announced by Suntrust
Bank of Florida from time to time, PLUS 3.50% per
annum, and (iv) shall otherwise be in form and
substance satisfactory to the Purchaser and the Bank."
(i) AMENDMENT TO SECTION 10.2. Effective on and as of the
Effective Date, Section 10.2 (Limitations on Liens) shall be amended
by deleting such Section in its entirety and replacing it with the
following:
"10.2 LIMITATIONS ON LIENS. The Company Parties shall not,
and shall not permit any of their Subsidiaries to, directly or
indirectly, create, incur, assume or suffer to exist any Lien
with respect to any of their assets or properties (whether
tangible or intangible, now existing or hereafter acquired),
except:
(a) Liens in favor of the Purchaser;
(b) Liens in favor of the Bank;
(c) Liens securing the Indebtedness described in
SECTION 10.1(g); and
(d) Permitted Liens."
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(j) AMENDMENT TO SECTION 10.15(c). Effective on and as of the
Effective Date, clause (c) (Minimum Fixed Charge Coverage Ratio) of
Section 10.15 of the Securities Purchase Agreement shall be amended by
deleting such clause in its entirety and replacing it with the
following:
"(c) MINIMUM FIXED CHARGE COVERAGE RATIO. For each of the
periods listed in the table below, the Fixed Charge Coverage
Ratio shall not be less than the ratio set forth opposite such
period:
Fixed Charge
Coverage Ratio
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Fiscal Quarter ending March 31, 2000 .92
Trailing two Fiscal Quarters ending
June 30, 2000 1.18
Trailing three Fiscal Quarters ending September
30, 2000 1.09
TRAILING FOUR FISCAL QUARTERS ENDING:
December 31, 2000 1.20
March 31, 2001 1.24
June 30, 2001 1.27
September 30, 2001 1.32
December 31, 2001 1.34
March 31, 2002 1.40
June 30, 2002 1.47
September 30, 2002 1.54
December 31, 2002 1.64
Thereafter on a Fiscal Quarter basis 1.77"
(k) AMENDMENT TO SECTION 10.15(e). Effective on and as of the
Effective Date, clause (e) (Maximum Annual Capital Expenditures) of
Section 10.15 of the Securities Purchase Agreement shall be amended by
adding the following paragraph to the end of such clause:
"Notwithstanding the foregoing, the Company may accrue
additional non-cash Capital Expenditures in the Fiscal Year
ending December 31, 2000, in the maximum aggregate amount of
$950,000, solely in connection with the purchase and
implementation by the Company of the DCI Improvement Technology,
PROVIDED that the Company may not make payments of such maximum
aggregate amount in excess of $500,000, $250,000 and $200,000 in
the Fiscal Years ending December 31, 2000, December 31, 2001 and
December 31, 2002, respectively. In addition, the Company may
incur
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additional Capital Expenditures in the Fiscal Year ending
December 31, 2001, in the maximum aggregate amount of $600,000,
solely in connection with the construction of tenant improvements
for a new facility contemplated for the Applied Technology
Division of SSSI and located at 0000 Xxxxx 00xx Xxxxxx, Xxxxxxx,
Xxxxxxx, PROVIDED that the Company delivers to the Purchaser a
written detailed summary thereof, in form and substance
satisfactory to the Purchaser, not later than twenty (20) days
prior to the date upon which the Company intends to incur any
such Capital Expenditures."
(l) AMENDMENT TO SECTION 10.4. Effective on and as of the
Effective Date, Section 10.4 (Limitations on Restricted Payments by the Company)
of the Securities Purchase Agreement shall be amended by deleting such Section
in its entirety and replacing it with the following:
"10.4 LIMITATIONS ON RESTRICTED PAYMENTS BY THE COMPANY. The
Company shall not, directly or indirectly, make any Restricted
Payments. Notwithstanding the foregoing sentence, so long as the
Company is Solvent and no Default or Event of Default has
occurred and is continuing or would occur as a result thereof,
the Company may make the following Restricted Payments:
(a) Any dividend or other distribution on account of
any other Capital Stock of the Company now or hereafter
outstanding which is payable solely in shares of the same
class of Capital Stock;
(b) The issuance of Common Stock upon the exercise of
Equity Rights of the Company outstanding as of the date
hereof;
(c) The cancellation or acquisition of any Capital
Stock of the Company as payment to the Company of the
exercise price of any Equity Rights of the Company;
(d) Fees and other payments to professional service
providers who are Affiliates of the Company made on an arm's
length basis and approved in writing in advance by a
majority of the disinterested directors of the Board of
Directors of the Company (which approval shall be confirmed
in writing). Fees and other payments made to such
professional service providers in accordance with this
CLAUSE (d) shall be deemed to have complied with the
provisions of SECTION 10.6; or
(e) The purchase or other acquisition for value,
directly or indirectly, of shares of Capital Stock of the
Company now or hereafter outstanding or of any Subordinated
Indebtedness, PROVIDED, HOWEVER, that such purchase or other
acquisition complies with all Applicable Laws and that the
purchase price paid with respect to such
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purchase or other acquisition under this clause (e) does not
exceed $3,000,000 in the aggregate."
(m) AMENDMENT TO SECTION 13.6. Effective on and as of the
Effective Date, clause (i) of Section 13.6 (Notices) of the Securities Purchase
Agreement shall be amended by deleting the address under "with a copy to" for
notification purposes to the Purchaser and replacing it with the following:
Irell & Xxxxxxx LLP, 0000 Xxxxxx xx xxx Xxxxx, Xxxxx 000, Xxx Xxxxxxx, XX 00000,
Telephone: (000) 000-0000 and Telecopier: (000) 000-0000.
(n) AMENDMENT OF CERTAIN SCHEDULES. Effective on and as of the
Effective Date, Schedules 3.4, 3.5, 3.6, 3.7(a), 3.7(b), 3.11(c), 3.18 and 3.19
to the Securities Purchase Agreement shall be amended by deleting such Schedules
in their entirety and replacing them with the Schedules included in EXHIBIT A
hereto, each of which Schedules has been updated as of the Effective Date.
2. AMENDMENTS TO TERM A NOTE. Effective on and as of the Effective
Date, the Term A Note shall be amended and restated in its entirety on the terms
and conditions set forth in the form of Amended and Restated Secured Senior Note
Due 2001 attached as Exhibit B hereto (the "Amended and Restated Term A Note").
3. PAYMENT OF REMAINING DESJARDINS NOTE. Under Section 4 of the
Remaining Desjardins Note, the Company may not voluntarily prepay the Remaining
Desjardins Note, but the Company is required to prepay the outstanding principal
balance of, and accrued interest on, such Note within two days following the
date upon which the conditions set forth therein have been satisfied, including,
without limitation, that the Term A Note has been repaid in full. The Company
has requested that the Purchaser consent to an amendment to the Remaining
Desjardins Note solely to permit the Company to prepay the Remaining Desjardins
Note and waive the requirement that the Company repay the Term A Note in full
prior to its prepayment of the Remaining Desjardins Note. Effective on and as of
the Effective Date, the Purchaser shall consent solely to such amendment to the
Remaining Desjardins Note and shall waive its right to require the Company to
repay the Term A Note in full prior to the Company's prepayment of the Remaining
Desjardins Note.
4. EFFECTIVE DATE. The effectiveness of the amendments to the
Securities Purchase Agreement provided for in Section 1 of this Amendment, the
amendments to the Term A Note provided for in Section 2 of this Amendment, the
matters provided for in Section 3 of this Amendment with respect to the
Remaining Desjardins Note, the waiver of the Specified Defaults provided for in
Section 7 of this Amendment, the consent to the C&C Notes Restructuring (as such
term is defined below) as described in Section 8 of this Amendment and the
consent to the change of certain terms under the Bank Credit Agreement provided
for in Section 9 of this Amendment is subject to the satisfaction of each of the
following conditions precedent (the first date upon which all such conditions
precedent have been satisfied shall be referred to herein as the "Effective
Date"):
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(a) The Company Parties shall deliver to the Purchaser this
Amendment, duly executed by the Company Parties, together with the exhibits
(including the updated Schedules);
(b) The Company Parties shall deliver to the Purchaser the
Amended and Restated Term A Note, duly executed on behalf of the Company
Parties;
(c) The Company shall deliver to the Purchaser an Amended and
Restated Warrant to Purchase 850,000 Shares of Common Stock, in form and
substance satisfactory to the Purchaser (the "Amended and Restated Warrant"),
duly executed on behalf of the Company;
(d) The Purchaser shall have received from the Company, by wire
transfer in immediately available funds to the bank account designated in the
Term A Note, (i) a non-refundable, non-accountable consent and waiver fee in the
amount of $200,000, and (ii) all unpaid interest on the Term A Note that has
accrued through and including the date immediately preceding the Effective Date;
(e) The Company Parties shall deliver to the Purchaser an
Officers' Certificate, in form and substance satisfactory to the Purchaser, duly
executed by the Executive Vice President and the Chief Financial Officer of the
Company and by the Chief Financial Officer or the Treasurer and the Secretary or
Assistant Secretary of each other Company Party, certifying that (i) after
giving effect to the Schedules specifically included in EXHIBIT A hereto, each
of the representations and warranties made by the Company Parties in the
Securities Purchase Agreement is true and correct in all respects as of the date
hereof, and are true and correct in all respects on and as of the Effective
Date, with the same effect as if made on and as of the Effective Date (it being
understood by the parties hereto that the Company Parties will not be obligated
to certify as to any representations or warranties in the Securities Purchase
Agreement that are expressly qualified by Schedules that have not been updated
pursuant to Section 1(n) of this Amendment), (ii) the representations and
warranties made by the Company Parties in this Amendment are true and correct in
all respects as of the date hereof, and are true and correct on and as of the
Effective Date, with the same effect as if made on and as of the Effective Date,
and (iii) no Default or Event of Default has occurred and is continuing or will
result from the consummation of the transactions contemplated by this Amendment;
and
(f) The Purchaser shall have received an opinion letter from
Xxxxxxx X. Xxxxx, Esq., General Counsel of the Company, dated as of the
Effective Date, in form and substance satisfactory to the Purchaser, with
respect to the enforceability of this Amendment, the Amended and Restated Term A
Note and the Amended and Restated Warrant.
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5. REPRESENTATIONS AND WARRANTIES. The Company Parties hereby jointly
and severally represent and warrant to the Purchaser that:
(a) Each of the Company Parties is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation, and has all requisite power and authority, and all Operating
Licenses, necessary to own or lease and operate its properties and assets and to
carry on its business as now conducted and as proposed to be conducted.
(b) The execution, delivery and performance of this Amendment,
the Amended and Restated Term A Note and the Amended and Restated Warrant (the
"Amendment Documents") and the consummation of the other transactions
contemplated by this Amendment have been duly authorized by all requisite action
on the part of the Company Parties, as applicable. This Amendment has been, and
on the Effective Date the Amended and Restated Term A Note and the Amended and
Restated Warrant will be, duly executed and delivered by the Company Parties
that are parties thereto. This Amendment constitutes, and on the Effective Date
the Amended and Restated Term A Note and the Amended and Restated Warrant will
constitute, the legal, valid and binding obligations of the Company Parties that
are parties thereto, enforceable against such Company Parties in accordance with
their terms, except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or conveyance or similar laws
relating to or limiting creditors' rights generally or by equitable principles
relating to enforceability.
(c) The execution, delivery and performance of this Amendment and
the other Amendment Documents do not and will not violate (i) the charter or
bylaws of any Company Party, (ii) any term of any lease, credit agreement,
indenture, note, mortgage, instrument or other agreement to which any Company
Party is a party or by which any of its or their properties or assets are bound.
(d) No Company Party is required to obtain any Consent from, or
is required to make any declaration or filing with, any Governmental Authority
or any other Person in connection with the execution, delivery or performance of
this Amendment or any other Amendment Document.
6. POST-EFFECTIVE DATE OBLIGATIONS.
(a) As soon as practicable, but not later than thirty (30) days
following the Effective Date, the Company Parties shall cause Xxxxxxxxx Xxxxx
(or such other law firm which shall be acceptable to the Purchaser), special
counsel to the Company Parties, to deliver to the Purchaser an opinion letter,
dated as of the Effective Date, in form and substance satisfactory to the
Purchaser, with respect to the enforceability against the Company Parties of
this Amendment and the Amended and Restated Term A Note, the enforceability
against the Company of the Amended and Restated Warrant and such other matters
as the Purchaser may reasonably request. The Company Parties acknowledge and
agree that the failure of the Company Parties to cause Xxxxxxxxx Xxxxx (or such
other law firm which shall be acceptable to the Purchaser) to deliver timely
such opinion letter shall
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constitute an Event of Default under the Securities Purchase Agreement,
entitling the Purchaser to exercise all rights, powers and remedies against the
Company Parties.
(b) Within two (2) Business Days following notice from the
Purchaser, the Company shall pay to the Purchaser, including, without
limitation, pursuant to Section 8.6 of the Securities Purchase Agreement, all
costs and expenses (including attorneys' fees and disbursements) expended or
incurred by or on behalf of the Purchaser in connection with the Purchaser's
investment in the Company Parties and remaining unpaid, including, without
limitation, all attorneys' fees and disbursements incurred in connection with
the preparation, negotiation and execution of this Amendment and the agreements,
instruments and other documents relating hereto or contemplated hereby.
(c) As soon as practicable, but not later than thirty (30) days
following the Effective Date, each Company Party shall deliver to the Purchaser
a Secretary's Certificate, in form and substance satisfactory to the Purchaser,
duly executed by the Secretary and the President of such Company Party,
certifying as to resolutions duly adopted by the Board of Directors of such
Company Party, approving, affirming and ratifying, as appropriate, (i) this
Amendment, (ii) the issuance, delivery and performance of the Amended and
Restated Term A Note, (iii) the issuance, delivery and performance of the
Amended and Restated Warrant and (iv) the other transactions contemplated by
this Amendment.
7. LIMITED WAIVER OF SPECIFIED DEFAULTS. The following Defaults or
Events of Default may have occurred and may be continuing (collectively, the
"Specified Defaults"):
(a) The Company Parties changed the corporate names of Airline
Interiors and Artcraft Industries, in breach or violation of Section 11 of the
Security Agreement;
(b) In connection with the closing of the sale of Airline
Interiors in February 2000, Composites sold certain of its assets used to
support the business of Airline Interiors, up to a maximum price of $27,000,
without notifying the Purchaser, in breach or violation of Section 4(a) of the
Term A Note;
(c) The Company Parties failed to dissolve and wind up Simula
Protective UK and Intaero Ltd. by certain specified dates, in breach or
violation of Section 9.20 of the Securities Purchase Agreement;
(d) The Company Parties incurred, assumed, guaranteed, suffered
to exist or became liable for trade accounts payable that were more than sixty
(60) days past their due dates incurred in the ordinary course of business in an
aggregate amount in excess of $100,000, in breach or violation of Section 10.1
of the Securities Purchase Agreement; and
(e) The Company issued a Promissory Note dated June 13, 2000, to
Rosestone Properties, LLC ("Rosestone") in the principal amount of $800,000.00,
in connection with the execution and delivery of a Lease Termination Agreement
dated as of June 13, 2000, among Rosestone, Airline Interiors and the Company,
in breach or violation of Section 10.1 of the Securities Purchase Agreement.
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Effective on and as of the Effective Date, the Purchaser shall waive the
Specified Defaults as they exist on and as of the Effective Date.
8. CONSENT TO RESTRUCTURING OF C&C NOTES. The C&C Notes have been
pledged by CCEC to the Purchaser under the Pledge Agreement dated as of December
31, 1999 (the "Pledge Agreement"), among the Pledgors (as such term is defined
therein) and the Purchaser, as secured party, to secure the payment and
performance of all Secured Obligations (as such term is defined therein). The
Company has proposed that the Purchaser consent to the following transactions as
they relate to the C&C Notes (the "C&C Notes Restructuring"): (a) The C&C Notes
would be canceled and, in lieu thereof, Coach & Car Equipment Corp., as the
issuer of the C&C Notes, would pay to CCEC an amount in cash equal to $2,000,000
(the "C&C Cash Proceeds") and would issue to CCEC a replacement promissory note
in the principal amount of $2,000,000, in substantially the form of the C&C
Notes (the "C&C Replacement Note"), (b) the Security Agreement dated October 21,
1999, between Coach & Car Equipment Corp. and CCEC would be amended to
substitute the C&C Replacement Note for the canceled C&C Notes to be held by
CCEC as collateral security thereunder, and (c) CCEC would release the lien
granted in its favor under the Pledge and Proxy Security Agreement dated as of
October 21, 1999, between Xxxxx Xxxxxx and CCEC, solely on the 655,000 shares of
common stock of Coach and Car Equipment Corp. pledged by Xx. Xxxxxx. Effective
on and as of the Effective Date, the Purchaser shall consent to the consummation
of the C&C Notes Restructuring as expressly described above, PROVIDED that (i)
the C&C Cash Proceeds are used by CCEC solely to repay outstanding Indebtedness
under the Bank Credit Agreement, (ii) the C&C Replacement Note is delivered to
the Purchaser immediately after issuance pursuant to Section 4 of the Pledge
Agreement to be held as Pledged Collateral (as such term is defined in the
Pledge Agreement) to secure the payment and performance of all Secured
Obligations under the Pledge Agreement and (iii) the Bank consents in writing
(with a copy to the Purchaser) to the C&C Notes Restructuring.
9. CONSENT TO CHANGE OF DEFINITION OF AVAILABILITY UNDER BANK CREDIT
AGREEMENT. The Company has requested that the Bank amend (a) the definition of
"Revenue in Excess of Xxxxxxxx Advance Percentage" under the Bank Credit
Agreement from 15.0% to 40.0% and amend the definition of "Revenue in Excess of
Billing Loan Cap" under the Bank Credit Agreement from $1,500,000 to $5,000,000
and (b) certain financial covenants set forth in Section 7.10 of the Bank Credit
Agreement. Effective on and as of the Effective Date, the Purchaser shall
consent solely to the amendments to such definitions, not to exceed the
percentage or dollar limitation, as the case may be, set forth in the
immediately preceding sentence. In addition, effective on and as of the
Effective Date, the Purchaser agrees that it will not unreasonably withhold its
consent to any amendments to be made by the Bank to the financial covenants set
forth in Section 7.10 of the Bank Credit Agreement as in effect on the date
hereof so long as such amendments to such financial covenants do not cause such
financial covenants to be more restrictive than those set forth in Section 1 of
this Amendment.
10. CONFIRMATION; FULL FORCE AND EFFECT. Section 1 of this Amendment
shall amend the Securities Purchase Agreement on and as of the Effective Date,
and the Securities Purchase Agreement, as amended thereby, shall remain in full
force and effect from and
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after the Effective Date in accordance with its terms. Each of the Term A Note
and the Warrant shall be amended and restated on and as of the Effective Date,
and each such Investment Document, as amended and restated by the Amended and
Restated Term A Note and the Amended and Restated Warrant, shall remain in full
force and effect from and after the Effective Date in accordance with its terms.
The Securities Purchase Agreement, as amended hereby, and the other Investment
Documents (including, without limitation, the Amended and Restated Term A Note
and the Amended and Restated Warrant) are hereby ratified, approved and affirmed
by the Company Parties in all respects. Except as otherwise expressly provided
in Sections 3 and 7 of this Amendment, nothing herein shall be deemed to be a
waiver of any covenant or agreement contained in, or any breach, violation,
Default or Event of Default under, the Securities Purchase Agreement or any
other Investment Document, or any forbearance, or agreement to forbear with
respect to any such breach, violation, Default or Event of Default. The
execution, delivery and effectiveness of this Amendment shall not (a) limit or
impair any rights of, constitute a waiver by, or otherwise affect any right,
power or remedy of, the Purchaser under the Securities Purchase Agreement or any
other Investment Document, except as otherwise expressly provided in this
Amendment, (b) except as specifically set forth in Section 1 of this Amendment,
alter, modify, amend or in any way affect any of the terms, conditions,
obligations, covenants or agreements contained in the Securities Purchase
Agreement or (c) except as set forth in the Amended and Restated Term A Note and
the Amended and Restated Warrant, alter, modify, amend or in any way affect any
of the terms, conditions, obligations, covenants or agreements contained in any
other Investment Document, all of which are ratified, approved and affirmed by
the Company Parties in all respects and shall continue in full force and effect.
11. COUNTERPARTS. This Amendment may be executed in any number of
counterparts and by facsimile, each of which shall be deemed an original, but
all of which taken together shall constitute one and the same instrument.
12. GOVERNING LAW. IN ALL RESPECTS, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
CALIFORNIA APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE (WITHOUT
REGARD TO THE CHOICE OF LAW OR CONFLICTS OF LAW PROVISIONS THEREOF).
13. FURTHER ASSURANCES. The parties shall, at any time and from time to
time following the execution of this Amendment, execute and deliver all such
further instruments and other documents and take all such further actions as may
be necessary or appropriate to carry out the provisions of this Amendment.
14. AFFIRMATION OF GUARANTY. The Company Parties, in their respective
capacities as Guarantors, hereby consent to this Amendment and the other
Amendment Documents and the transactions contemplated hereby and thereby. Each
Guarantor hereby ratifies and reaffirms the Guaranty and further acknowledges
that the same shall remain in full force and effect in accordance with its
terms.
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IN WITNESS WHEREOF, the parties have caused this Amendment to be
executed and delivered by their duly authorized representatives as of the first
date written above.
COMPANY PARTIES
SIMULA, INC., an Arizona corporation
By: /s/ Xxxxx X. Xxxx
-------------------------------------
Title: Executive Vice President and CFO
By: /s/ Xxxxxx Xxxxxxxx
-------------------------------------
Title: President and CEO
SIMULA SAFETY SYSTEMS, INC., an
Arizona corporation
By: /s/ Xxxxx X. Xxxx
-------------------------------------
Title: Treasurer
By: /s/ Xxxxxxxx X. Xxxxx
-------------------------------------
Title: Assistant Secretary
SIMULA TRANSPORTATION EQUIPMENT
CORPORATION, an Arizona corporation
By: /s/ Xxxxx X. Xxxx
-------------------------------------
Title: Treasurer
By: /s/ Xxxxxxxx X. Xxxxx
-------------------------------------
Title: Assistant Secretary
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AI CAPITAL CORP. (formerly known as
Airline Interiors, Inc.), an Arizona
corporation
By: /s/ Xxxxx X. Xxxx
-------------------------------------
Title: Treasurer
By: /s/ Xxxxxxxx X. Xxxxx
-------------------------------------
Title: Assistant Secretary
SIMULA ARTCRAFT INDUSTRIES INC.
(formerly known as Artcraft Industries
Corp.), an Arizona corporation
By: /s/ Xxxxx X. Xxxx
-------------------------------------
Title: Treasurer
By: /s/ Xxxxxxxx X. Xxxxx
-------------------------------------
Title: Assistant Secretary
SIMULA COMPOSITES CORPORATION, a
Delaware corporation
By: /s/ Xxxxx X. Xxxx
-------------------------------------
Title: Treasurer
By: /s/ Xxxxxxxx X. Xxxxx
-------------------------------------
Title: Assistant Secretary
SIMULA AUTOMOTIVE SAFETY DEVICES, INC.,
an Arizona corporation
By: /s/ Xxxxx X. Xxxx
-------------------------------------
Title: Treasurer
By: /s/ Xxxxxxxx X. Xxxxx
-------------------------------------
Title: Assistant Secretary
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SIMULA TECHNOLOGIES, INC., an Arizona
corporation
By: /s/ Xxxxx X. Xxxx
-------------------------------------
Title: Treasurer
By: /s/ Xxxxxxxx X. Xxxxx
-------------------------------------
Title: Assistant Secretary
INTERNATIONAL CENTER FOR SAFETY
EDUCATION, INC., an Arizona corporation
By: /s/ Xxxxx X. Xxxx
-------------------------------------
Title: Treasurer
By: /s/ Xxxxxxxx X. Xxxxx
-------------------------------------
Title: Assistant Secretary
SIMULA POLYMER SYSTEMS, INC., an Arizona
corporation
By: /s/ Xxxxx X. Xxxx
-------------------------------------
Title: Treasurer
By: /s/ Xxxxxxxx X. Xxxxx
-------------------------------------
Title: Assistant Secretary
SIMULA AUTOMOTIVE SAFETY DEVICES
LIMITED, a company organized and
existing under the laws of the United
Kingdom
By: /s/ Xxxxx X. Xxxx
-------------------------------------
Title: Treasurer
By: /s/ Xxxxxxxx X. Xxxxx
-------------------------------------
Title: Assistant Secretary
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CCEC CAPITAL CORP., an Arizona
corporation
By: /s/ Xxxxx X. Xxxx
-------------------------------------
Title: Treasurer
By: /s/ Xxxxxxxx X. Xxxxx
-------------------------------------
Title: Assistant Secretary
PURCHASER
XXXXXX XXXXXXXXX CAPITAL PARTNERS II,
L.P., a California limited partnership
By: LLCP California Equity Partners II,
L.P., a California limited partnership,
its General Partner
By: Xxxxxx Xxxxxxxxx Capital
Partners, Inc., a California
corporation, its General Partner
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------
Xxxxxx X. Xxxxxx
President
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