EXHIBIT 10.41 B
THE CIT GROUP/ BUSINESS CREDIT, INC.
000 Xxxxx Xxxxx Xxxxxx, Xxxxx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Dated as of
June 30, 2002
Re: Amendment Number Five and Waiver re Financing Agreement
SIMULA, INC. AND SUBSIDIARIES
0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Gentlemen:
Reference is made to the Financing Agreement between The CIT Group/Business
Credit, Inc. as lender thereunder (CITBC), and Simula, Inc. and its
subsidiaries, as borrowers thereunder (collectively, the "Companies"), dated as
of December 31, 1999, as the same may be amended from time to time (the
"Financing Agreement"). Initially capitalized terms used herein and not
otherwise defined herein shall have the meanings ascribed to such terms in the
Financing Agreement.
The Companies have requested that CITBC waive compliance with and amend certain
provisions of the Financing Agreement and CITBC has agreed to do so subject to
the terms hereof.
Therefore, pursuant to mutual agreement, it is hereby agreed as follows:
I. WAIVER OF COMPLIANCE WITH FINANCIAL COVENANTS. With respect only to
compliance as of the Fiscal Quarter ended June 30, 2002, CITBC hereby waives
compliance with the financial covenants in Section 7, Paragraph 10,
subparagraphs (b), (c), (e) and (f), as set forth below, but only to the
extent of the breach of such covenants as set forth below.
(b)The required minimum consolidated Fixed Charge Coverage Ratio of the
Companies for the four consecutive Fiscal Quarter period ended June 30,
2002, of not less than 1.25:1.00, as compared to the actual realized
ratio of 1.20:1.00.
(c)On a cumulative basis, at the end of the Fiscal Quarter ended June 30,
2002, for the prior four Fiscal Quarter period then ended, the required
minimum consolidated EBITDA of at least $14,500,000, as compared to the
actual realized amount of $14,063,418.
(e)At the end of the Fiscal Quarter ended June 30k, 2002, for the prior
four Fiscal Quarter period then ended, the required minimum ratio of
Indebtedness to EBITDA, on a consolidated basis, of not more than
4.80:1.00, as compared to the actual realized ratio of 5.22:1.00.
(f)Maintain, at the end of the Fiscal Quarter ended June 30, 2002, for
the prior four Fiscal Quarter period then ended, the required minimum
Interest Coverage Ratio of at least 2.05:1.00, as compared to the
actual realized ratio of 1.91:1.00.
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II. AMENDMENT TO ADD DEFINITION OF ASD CAPITAL EXPENDITURES. Section 1 of the
Financing Agreement is hereby amended to add the following:
ASD CAPITAL EXPENDITURES shall mean Capital Expenditures made by the
Companies in connection with the operation of Simula Automotive Safety
Devices, Inc. and/or Simula Automotive Safety Devices, Ltd.
III. AMENDMENT TO ADD DEFINITION OF ASD CAPITAL LEASE OBLIGATIONS. Section 1 of
the Financing Agreement is hereby amended to add the following:
ASD CAPITALIZED LEASE OBLIGATIONS shall mean capitalized lease obligations
incurred by the Companies in connection with the operation of Simula
Automotive Safety Devices, Inc. and/or Simula Automotive Safety Devices,
Ltd.
IV. AMENDMENT TO DEFINITION OF EBITDA. THE DEFINITION OF EBITDA SET FORTH IN
SECTION 1 OF THE FINANCING AGREEMENT IS HEREBY AMENDED AND REPLACED IN ITS
ENTIRETY BY THE FOLLOWING:
EBITDA shall mean, for the period in question, the sum of (a) the
after-tax net income (or loss) of the Companies on a consolidated
basis for such period determined in accordance with GAAP, plus (b)
to the extent deducted in determining such after-tax net income, the
sum of (i) Interest Expense during such period, plus (ii) all
provisions for any federal, state, local and/or foreign income taxes
made by the Companies during such period (whether paid or deferred),
plus (iii) all depreciation and amortization expenses of the
Companies during such period, plus (iv) any extraordinary losses
during such period, plus (v) any losses incurred in connection with
the repayment in full on or about the date hereof of the Companies'
obligations owing to LLCP, including accrued interest, fees and
costs in connection therewith, plus (vi) any losses from the sale or
other disposition of property other than in the ordinary course of
business during such period, plus (vii) all non-cash expenses during
such period arising from the use of capital stock of Parent to pay
compensation minus (c) to the extent added in determining such
after-tax net income, the sum of (i) any extraordinary gains during
such period, plus (ii) any gains from the sale or other disposition
of property other than in the ordinary course of business during
such period, plus (iii) any revenue realized by the Companies in
respect of settlement payments received pursuant to that certain
Settlement Agreement dated as of September 27, 2000 among certain
Companies and Autoliv AB, Autoliv GmbH, Autoliv France SNC, Autoliv
ASP, Inc., Autoliv North America, Inc. and Autoliv, Inc., plus (iv)
any sale price adjustments made by any Company in respect of
components sold pursuant to such Settlement Agreement, all
determined in accordance with GAAP; provided, however, that
notwithstanding the foregoing, for the fiscal quarters ending March
31, 2001 and June 30, 2001, EBITDA for such fiscal quarters shall be
deemed to be $3,802,000 and $4,382,000, respectively.
Notwithstanding anything set forth in the Financing Agreement to the
contrary, the Companies shall be permitted to add back, in the
calculation of EBITDA, any GAAP-recognized restructuring costs
associated with the cost reduction plan previously delivered by the
Companies to Allied (the "Restructuring Costs"), provided, however,
that (i) the Companies shall only be permitted to add back
Restructuring Costs to the extent they are incurred during the third
quarter of fiscal year 2002, and (ii) the amount of Restructuring
Costs that the Companies shall be permitted to add back in the
calculation of EBITDA shall be limited to $900,000, in the
aggregate.
V. AMENDMENT TO FINANCIAL COVENANTS. Paragraph 10 of Section 7 of the
Financing Agreement is hereby amended and replace in its entirety by the
following:
10. Until termination of the Financing Agreement and payment and
satisfaction in full of all Obligations hereunder, the Companies
shall:
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(a)not have net income (determined in accordance with GAAP but excluding
from the calculation thereof any extraordinary losses resulting from
the refinancing by Allied of Indebtedness owing to LLCP) for any Fiscal
Quarter of less than zero, provided, however that for the Fiscal
Quarter ending September 30, 2002, the Companies shall be permitted to
add back Restructuring Costs in the calculation of net income, to the
extent such costs are incurred during the third quarter of fiscal year
2002, in an amount not to exceed $900,000, in the aggregate.
(b)maintain at the end of each Fiscal Quarter a consolidated Fixed Charge
Coverage Ratio of the Companies for the four consecutive Fiscal Quarter
period then ended of not less than the following:
Fiscal Quarter ended 9/30/02 - 1.025:1.00
Fiscal Quarter ended 12/31/02 - 1.125:1.00
Fiscal Quarter ended 3/31/03 - 1.15:1.00
Fiscal Quarter ended 6/30/03 and thereafter - 1.20:1.00
(c)maintain, on a cumulative basis, at the end of each Fiscal Quarter for
the prior four Fiscal Quarter period then ended, EBITDA on a
consolidated basis of at least the following amounts:
Fiscal Quarter ended 9/30/02 - $12,000,000
Fiscal Quarter ended 12/31/02 - $13,250,000
Fiscal Quarter ended 3/31/03 - $13,750,000
Fiscal Quarter ended 6/30/03 and thereafter - $14,000,000
(d) maintain at the end of each month EBITDA on a consolidated basis of at
least $500,000.
(e)maintain, at the end of each Fiscal Quarter for the prior four Fiscal
Quarter period then ended, a ratio of Indebtedness to EBITDA, on a
consolidated basis, of not more than the following amounts.
Fiscal Quarter ended 9/30/02 - 6.10:1.00
Fiscal Quarter ended 12/31/02 - 5.60:1.00
Fiscal Quarter ended 3/31/03 - 5.40:1.00
Fiscal Quarter ended 6/30/03 and thereafter - 4.00:1.00
(f)maintain, at the end of each Fiscal Quarter for the prior four Fiscal
Quarter period then ended, an Interest Coverage Ratio of at least the
following amounts.
Fiscal Quarter ended 9/30/02 - 1.65:1.00
Fiscal Quarter ended 12/31/02 - 1.90:1.00
Fiscal Quarter ended 3/31/03 - 1.95:1.00
Fiscal Quarter ended 6/30/03 and thereafter - 2.00:1.00
VI. AMENDMENT TO PARAGRAPH 11 (CAPITAL EXPENDITURES) TO SECTION 7. Paragraph 11
of Section 7 of the Financing Agreement is hereby amended and replaced by
the following:
Without the prior written consent of CITBC, the Companies will not and
will not permit any of their subsidiaries to:
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(a) enter into any Operating Lease (other than with respect to real
property) if after giving effect thereto the aggregate obligations with
respect to Operating Leases of the Companies during any Fiscal Year
would exceed $800,000;
(b)make any ASD Capital Expenditure or enter into any ASD Capitalized
Lease Obligation, if the sum of (i) the aggregate amount of all ASD
Capital Expenditures (including the ASD Capital Expenditure in
question) made by the Companies and their Subsidiaries during such
fiscal quarter period of the Companies ending as of the dates set forth
below, plus (ii) the aggregate amount of all ASD Capitalized Lease
Obligations (including the ASD Capitalized Lease Obligation in
question) made or required to be made by the Companies and their
Subsidiaries during such fiscal quarter period of the Companies ending
as of the dates set forth below, would exceed the amount set forth
below opposite each such date:
Fiscal Quarter ended 9/30/02 - $300,000
Fiscal Quarter ended 12/31/02 - $300,000
Fiscal Quarter ended 3/31/03 - $300,000
Fiscal Quarter ended 6/30/03 and thereafter - $150,000;
(c)make any Capital Expenditure or enter into any capitalized lease, if
the sum of (i) the aggregate amount of all Capital Expenditures
(including the Capital Expenditure in question) made by the Companies
and their Subsidiaries during each four (4) consecutive fiscal quarter
period of the Companies ending as of the dates set forth below, other
than ASD Capital Expenditures, plus (ii) the aggregate amount of all
capitalized lease obligations (including the capitalized lease in
question) made or required to be made by the Companies and their
Subsidiaries during each such four (4) consecutive fiscal quarter
period of the Companies ending as of the dates set forth below, other
than ASD Capitalized Lease Obligations, would exceed the amount set
forth below opposite each such date:
Fiscal Quarter ended 9/30/02 - $3,000,000
Fiscal Quarter ended 12/31/02 - $3,500,000
Fiscal Quarter ended 3/31/03 - $3,750,000
Fiscal Quarter ended 6/30/03 and thereafter - $3,850,000;
(d) make any DCI Capital Expenditures; or
(e) incur any DCI Capitalized Lease Obligations.
VII. CONFIRMATION OF GUARANTY. The Companies, as Guarantors, hereby confirm that
the Guaranty, dated December 30, 1999, executed by the Guarantors in favor
of CITBC guarantying the repayment of the Obligations remains in full force
and effect notwithstanding this Amendment and Waiver.
VIII. GENERAL TERMS.
1. To the extent any of the terms and provision of the Financing Agreement
and/or the Loan Documents conflict or are inconsistent with the terms
hereof, the terms of this Amendment and Waiver shall govern.
2. The effectiveness of this Amendment and Waiver is conditioned upon
receipt by CITBC of:
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(a) an executed counterpart of this Amendment and Waiver executed by the
Companies.
(b) an executed counterpart of an amendment and waiver substantively
identical to this Amendment and Waiver executed by the Companies and
Allied Capital Corporation with respect to the loan documents between such
parties.
(c) payment of a non-refundable fee of $45,000 which shall be paid as a loan
advance under the Financing Agreement.
(d) payment in full of all fees and expenses of CITBC incurred in connection
with this Amendment and Waiver.
3. This Amendment and Waiver may be executed in two (2) or more counterparts,
each of which shall constitute an original but all of which when taken
together shall constitute but one (1) agreement, and shall become
effective when copies hereof which, when taken together, bear the original
signatures of each of the parties hereto are delivered to CITBC.
Except as set forth herein no other waiver, consent or change in the terms or
provisions of the Financing Agreement or any other Loan Document is intended or
implied. By execution hereof, the Companies represent and warrant to CITBC that
no material adverse change has occurred in the financial condition, business,
prospects, profits, operations or assets of the Companies since June 30, 2002.
If the foregoing is in accordance with your understanding, please so indicate by
signing and returning the enclosed copy of this Waiver.
Very truly yours,
THE CIT GROUP/BUSINESS CREDIT, INC.
By: /s/ Xxxxx Xxxxxxxxx
------------------------------
Title: Vice President
------------------------------
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AGREED:
SIMULA, INC.,
an Arizona corporation
By: /s/ Xxxxxxx X. Xxxxx
----------------------------
Title: President and CEO
-------------------------
SAI CAPITAL CORP., f/k/a
SIMULA ARTCRAFT INDUSTRIES, INC.,
an Arizona corporation
By: /s/ Xxxxxxxx X. Xxxxx
----------------------------
Title: President
-------------------------
AI CAPITAL CORP. ,
an Arizona corporation
By: /s/ Xxxxxxxx X. Xxxxx
----------------------------
Title: President
-------------------------
SIMULA TRANSPORTATION EQUIPMENT CORPORATION,
an Arizona corporation
By: /s/ Xxxxxxxx X. Xxxxx
----------------------------
Title: President
-------------------------
INTERNATIONAL CENTER FOR
SAFETY EDUCATION, INC.,
an Arizona corporation
By: /s/ Xxxxxxxx X. Xxxxx
----------------------------
Title: Secretary
-------------------------
SIMULA AUTOMOTIVE SAFETY
DEVICES, INC.,
an Arizona corporation
By: /s/ Xxxxxxxx X. Xxxxx
----------------------------
Title: Secretary
-------------------------
SIMULA COMPOSITES
CORPORATION,
an Arizona corporation
By: /s/ Xxxxxxxx X. Xxxxx
----------------------------
Title: President
-------------------------
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SIMULA POLYMER SYSTEMS, INC.,
an Arizona corporation
By: /s/ Xxxxxxxx X. Xxxxx
----------------------------
Title: Secretary
-------------------------
SIMULA SAFETY SYSTEMS, INC.,
an Arizona corporation
By: /s/ Xxxxxxxx X. Xxxxx
----------------------------
Title: Assistant Secretary
-------------------------
SIMULA TECHNOLOGIES, INC..
an Arizona corporation
By: /s/ Xxxxxxxx X. Xxxxx
----------------------------
Title: Secretary
-------------------------
SIMULA AUTOMOTIVE SAFETY
DEVICES, LIMITED,
an Arizona corporation
By: /s/ Xxxxxxxx X. Xxxxx
----------------------------
Title: Secretary
-------------------------
CCEC CAPITAL CORP.,
an Arizona corporation
By: /s/ Xxxxxxxx X. Xxxxx
----------------------------
Title: President
-------------------------
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