REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT is entered into as of the 31st
day of December 1999 (this "AGREEMENT"), by and between SIMULA, INC., an
Arizona corporation (the "COMPANY"), and XXXXXX XXXXXXXXX CAPITAL PARTNERS
II, L.P., a California limited partnership ("LLCP").
R E C I T A L S
A. The Company, the other Company Parties and LLCP are parties to
the Securities Purchase Agreement dated of even date herewith (as amended
from time to time, the "SECURITIES PURCHASE AGREEMENT") pursuant to which,
among other things, on the date hereof, the Company is issuing to LLCP, and
LLCP is purchasing from the Company, a Warrant No. LL-1 to Purchase 850,000
Shares of Common Stock dated of even date herewith (as amended, augmented,
supplemented or otherwise modified from time to time, the "WARRANT"), all on
the terms and subject to the conditions set forth therein.
B. The execution and delivery of this Agreement by the Company is a
condition precedent to the obligations of LLCP to purchase the Securities and
to consummate the other transactions contemplated by the Securities Purchase
Agreement.
A G R E E M E N T
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereby agree as follows:
1. DEFINITIONS. Unless otherwise indicated, all capitalized terms not
otherwise defined herein shall have the meaning set forth in the Securities
Purchase Agreement. In addition, the following terms shall have the following
meanings:
"COMMISSION" shall mean the Securities and Exchange Commission, or
any successor federal agency.
"COMMON STOCK" shall mean the Common Stock, $.01 par value per
share, of the Company.
"COMPANY" shall have the meaning set forth in the preamble.
"DEMANDING HOLDERS" shall mean LLCP only or, if LLCP does not hold a
majority of the Registrable Securities at any time, the holders of greater
than fifty percent (50.0%) of the outstanding Registrable Securities.
"DEMAND REGISTRATION" shall have the meaning specified in SECTION
2.1(a).
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder, all as
the same shall be in effect at the time.
"INDEMNIFIED PARTY" shall have the meaning specified in SECTION 4.3.
"INDEMNIFYING PARTY" shall have the meaning specified in SECTION 4.3.
"INSPECTORS" shall have the meaning specified in SECTION 3.1(h).
"LLCP" shall have the meaning set forth in the preamble.
"LLCP INDEMNIFIED PARTY" shall have the meaning specified in SECTION
4.1.
"MAXIMUM NUMBER OF SHARES" shall have the meaning specified in
SECTION 2.1(d).
"PIGGY-BACK REGISTRATION" shall have the meaning specified in
SECTION 2.2(a).
"REGISTER," "REGISTERED" and "REGISTRATION" shall mean a
registration effected by preparing and filing a registration statement or
similar document in compliance with the requirements of the Securities Act,
and the applicable rules and regulations promulgated thereunder, and such
registration statement becoming effective.
"REGISTRABLE SECURITIES" shall mean (i) the Warrant Shares, (ii) any
warrants, shares of Capital Stock or other securities of the Company issued
as a dividend or other distribution with respect to or in exchange for or in
replacement of the Warrant Shares and (iii) any other shares of Common Stock
acquired by LLCP after the date hereof. A security shall cease to be a
Registrable Security when (a) a Registration Statement covering such
Registrable Security shall have been declared effective under the Securities
Act and such Registrable Security shall have been sold in accordance with
such Registration Statement; (b) such Registrable Security shall have been
distributed and sold to the public pursuant to Rule 144 (or any successor
rule or regulation) promulgated under the Securities Act; (c) a new
certificate representing such Registrable Security has been delivered (to the
LLCP or any subsequent transferee) by the Company free from any restrictive
legend and without issuance of stop transfer or other instructions to the
Company's transfer agent and the Holder of such Registrable Security shall
have been advised by counsel acceptable to it that subsequent disposition of
such security will
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not require registration or qualification under the Securities Act or any
state securities or "blue sky" laws then in effect; or (d) such Registrable
Security shall have ceased to be outstanding.
"REGISTRATION STATEMENT" means a registration statement filed by the
Company with the Commission in compliance with the Securities Act and the
rules and regulations promulgated thereunder for a public offering and sale
of its Common Stock (other than a registration statement on Form S-8 or Form
S-4, or their successors, or any other form for a limited purpose, or any
registration statement covering only securities proposed to be issued in
exchange for securities or assets of another entity).
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended,
and the rules and regulations of the Commission thereunder, all as the same
shall be in effect at the time.
"SECURITIES PURCHASE AGREEMENT" shall have the meaning set forth in
the recitals.
"UNDERWRITER" shall mean a securities dealer who purchases any
Registrable Securities as principal in an underwritten offering and not as
part of such dealer's market-making activities.
"WARRANT" shall have the meaning set forth in the recitals and, in
addition, shall include (i) any new warrant or warrants issued upon the
transfer of all or any portion of the warrant issued pursuant to the
Securities Purchase Agreement and (ii) any warrant or warrants issued upon
the further transfer, division or combination of any such new warrant or
warrants.
"WARRANT SHARES" shall mean the shares of Common Stock issued or
issuable upon the exercise of the Warrant, and the holder of the Warrant or
any portion thereof shall be deemed to be the holder of the Warrant Shares
issuable upon the exercise thereof.
2. REGISTRATION RIGHTS.
2.1 DEMAND REGISTRATION.
(a) REQUEST FOR REGISTRATION. At any time on or after the
date of this Agreement, the Demanding Holders may request in writing that the
Company effect the registration under the Securities Act of all or any
portion of Registrable Securities (a "DEMAND REGISTRATION"). Any request for
a Demand Registration shall specify the number of shares of Registrable
Securities proposed to be sold and the intended method(s) of distribution
thereof. Upon any such request, the Demanding Holders shall be entitled to
have Registrable Securities included in the Demand Registration, subject to
SECTION 2.1(d) and the provisos set forth in SECTION 3.1(a), PROVIDED that
the Demanding Holders reasonably cooperate with the Company in respect of the
preparation of the Registration Statement, including, for example, furnishing
such information to the Company as may be required pursuant to the rules and
regulations promulgated under the Securities Act. The Company shall not be
obligated to effect more than
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one (1) Demand Registration under this SECTION 2.1(a). The right of any
Demanding Holder to make Demand Registrations under this SECTION 2.1(a) shall
be suspended on the second anniversary of the date upon which such Demanding
Holder is first permitted to sell all of its Registrable Securities under
Rule 144(k) promulgated under the Securities Act; PROVIDED, HOWEVER, that at
any time thereafter such Demanding Holder becomes ineligible to sell any
Registrable Securities under Rule 144(k), such Demanding Holder may make
Demand Registrations under this SECTION 2.1(a) until it becomes eligible
again to sell its Registrable Securities under Rule 144(k), at which time the
right of such Demanding Holder to make Demand Registrations shall be
suspended again.
(b) EFFECTIVE REGISTRATION. Except in the case of a
withdrawal governed by the last sentence of SECTION 2.1(e), a registration
will not count as a Demand Registration until the Registration Statement
filed with the Commission with respect to such Demand Registration has been
declared effective and the Company has complied with all of its obligations
under this Agreement with respect thereto; PROVIDED, HOWEVER, that, after
such Registration Statement has been declared effective, if the offering of
Registrable Securities pursuant to a Demand Registration is interfered with
by any stop order, injunction or other order or requirement of the Commission
or any other Governmental Authority, such Demand Registration shall not be
deemed to have been made for purposes of this SECTION 2.1.
(c) UNDERWRITTEN OFFERING. If the Demanding Holders wish to
distribute Registrable Securities covered by its request by means of an
underwritten offering, it shall so advise the Company as a part of its
request made pursuant to SECTION 2.1(a). The Demanding Holders shall have the
right, but not the obligation, to select one or more firms of investment
bankers to act as the managing Underwriter or Underwriters in connection with
such offering and may select any additional managers to be used in connection
with such offering. If the Demanding Holders decide to select such managing
Underwriter or Underwriters, they will consult with the Company prior to the
final selection.
(d) REDUCTION OF OFFERING. If the managing Underwriter or
Underwriters for a Demand Registration that is to be an underwritten offering
advises the Company and the Demanding Holders in writing that the dollar
amount or number of shares of Registrable Securities which the Demanding
Holders desire to sell, taken together with all other shares of Common Stock
or other securities which the Company desires to sell and the shares of
Common Stock, if any, as to which registration has been requested pursuant to
the piggy-back registration rights, if any, which other shareholders of the
Company desire to sell, exceeds the maximum dollar amount or maximum number
of shares that can be sold in such offering without adversely affecting the
proposed offering price, the timing, the distribution method or the
probability of success of such offering (the "MAXIMUM NUMBER OF SHARES"),
then the Company shall include in such registration:
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(i) first, the Registrable Securities as to which
Demand Registration has been requested by the Demanding Holders (PRO
RATA in accordance with the number of shares of Registrable Securities
held by each Demanding Holder, regardless of the number of shares of
Registrable Securities which such Demanding Holder has requested be
included in such registration) that can be sold without exceeding the
Maximum Number of Shares;
(ii) second, to the extent the Maximum Number of
Shares has not been reached under the foregoing clause (i), the shares
of Common Stock or other securities that the Company desires to sell
that can be sold without exceeding the Maximum Number of Shares;
(iii) third, to the extent the Maximum Number of
Shares has not been reached under the foregoing clauses (i) and (ii)
above, the shares of Common Stock for the account of other Shareholders
of the Company that the Company is obligated to register (to be
allocated among the Persons requesting inclusion in such registration
pursuant to such agreements PRO RATA in accordance with the number of
shares of Common Stock with respect to which such Persons has the right
to request such inclusion under such agreements, regardless of the
number of shares which such Person has actually requested be included
in such registration) that can be sold without exceeding the Maximum
Number of Shares, to the extent that the Company is contractually
permitted as of the date hereof to "cutback" such shares; and
(iv) fourth, to the extent the Maximum Number of
Shares has not been reached under the foregoing clauses (i), (ii) and
(iii) above, the shares of Common Stock that other shareholders desire
to sell that can be sold without exceeding the Maximum Number of
Shares.
(e) WITHDRAWAL. At any time prior to the effectiveness of a
Registration Statement with the Commission, the Demanding Holders or any one
of them may withdraw their Registrable Securities from any proposed offering
being effected pursuant to a Demand Registration by giving written notice to
the Company of their election to withdraw prior to the filing of the
Registration Statement. If the Demanding Holders so withdraw their
Registrable Securities from such proposed offering, the withdrawing Demanding
Holders shall not be obligated to pay any of the expenses incurred in
connection with such Registration Statement and no Demand Registration shall
be deemed to have been made for purposes of SECTION 2.1(a).
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2.2 PIGGY-BACK REGISTRATION.
(a) PIGGY-BACK RIGHTS. If at any time or from time to time
the Company proposes to file a Registration Statement under the Securities
Act with respect to an offering of Common Stock by the Company for its own
account or by shareholders of the Company for their own account (or by the
Company and by shareholders of the Company) (other than a Registration
Statement (i) on Form S-4 or S-8 (or any substitute or successor form that
may be adopted by the Commission), (ii) filed in connection with any employee
stock option or other benefit plan, (iii) for an exchange offer or offering
of securities solely to the Company's existing shareholders or (iv) for a
dividend reinvestment plan), the Company shall (x) give written notice of
such proposed filing to the holders of Registrable Securities as soon as
practicable but in no event less than thirty (30) days before the anticipated
filing date, which notice shall describe the amount and type of securities to
be included in such offering, the intended method(s) of distribution, and the
name of the proposed managing Underwriter or Underwriters, if any, of the
offering; and (y) offer to the holders of Registrable Securities in such
notice the opportunity to register such number of shares of Registrable
Securities as such holders may request in writing within fifteen (15) days
following receipt of such notice (a "PIGGY-BACK REGISTRATION"). The Company
shall cause such Registrable Securities to be included in such registration
and shall use its best efforts to cause the managing Underwriter or
Underwriters of a proposed underwritten offering to permit the Registrable
Securities requested to be included in a Piggy-Back Registration to be
included on the same terms and conditions as any similar securities of the
Company and to permit the sale or other disposition of such Registrable
Securities in accordance with the intended method(s) of distribution thereof.
(b) REDUCTION OF OFFERING. If the managing Underwriter or
Underwriters for a Piggy-Back Registration that is to be an underwritten
offering of shares for the Company's account advises the Company and the
holders of Registrable Securities in writing that the dollar amount or number
of shares of Common Stock which the Company desires to sell, taken together
with the Registrable Securities as to which registration has been requested
hereunder and the shares of Common Stock, if any, as to which registration
has been requested pursuant to the piggy-back registration rights which other
shareholders of the Company desire to sell, exceeds the Maximum Number of
Shares, then the Company shall include in such registration:
(i) first, the shares of Common Stock or other
securities that the Company desires to sell that can be sold without
exceeding the Maximum Number of Shares;
(ii) second, to the extent the Maximum Number of
Shares has not been reached under the foregoing clause (i) above, the
Registrable Securities as to which registration has been or may be
requested under this SECTION 2.2; and
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(iii) third, to the extent the Maximum Number of
Shares has not been reached under the foregoing clauses (i) and (ii)
above, the shares of Common Stock, if any, as to which registration has
been requested pursuant to the piggy-back registration rights which
such other shareholders desire to sell that can be sold without
exceeding the Maximum Number of Shares.
(c) WITHDRAWAL. At any time prior to the effectiveness of a
Registration Statement with the Commission, any holder of Registrable Securities
may withdraw such holder's request for inclusion of Registrable Securities in
any Piggy-Back Registration by giving written notice to the Company of its
election to withdraw prior to the effectiveness of the Registration Statement.
The Company may also elect to withdraw a Registration Statement at any time
prior to the effectiveness of the Registration Statement. Notwithstanding any
such withdrawal, the Company shall pay all expenses incurred by the holders of
Registrable Securities in connection with such Piggy-Back Registration as
provided in SECTION 3.3.
2.3 REGISTRATIONS ON FORM S-3. If the registration of Registrable
Securities is permitted to be made on a Registration Statement on Form S-3
(or any similar short-form registration which may be available at such time)
(a "FORM S-3"), the holders of Registrable Securities may at any time request
in writing that the Company register the resale of any or all of its or their
Registrable Securities on a Form S-3 (PROVIDED, HOWEVER, that if the Company
does not have a Form S-3 then on file with the Commission pursuant to this
SECTION 2.3, the Company may postpone for not more than ninety (90) days, on
one occasion only with respect to any requested registration under this
SECTION 2.3, the filing of a Form S-3 if the Company advises the holders in
writing that it is engaged in a major corporate transaction that would be
adversely affected by such filing). Upon receipt of a written request for
registration of Registrable Securities on Form S-3 (a "FORM S-3 NOTICE"), the
Company will promptly (but not later than three (3) Business Days after
receipt of such Form S-3 Notice) furnish written notice of the proposed
registration to all other holders of Registrable Securities, if any. The
Company shall cause to be filed with the Commission, as soon as practicable
after receipt of a Form S-3 Notice but not later than sixty (60) days
thereafter, a Form S-3 covering all of such holder's or holders' Registrable
Securities as specified in the Form S-3 Notice and all of the Registrable
Securities of any other holders who join in such request as specified in a
written request given within fifteen (15) days after receipt of such written
notice from the Company. In addition, the Company shall use its best efforts
to cause each such Form S-3 to become effective as soon as practicable but
not later than ninety (90) days after the date of receipt by the Company of
the relevant Form S-3 Notice. The Company shall use its best efforts to
maintain each Form S-3 continuously effective, supplemented and amended until
the Registrable Securities covered thereby have been sold. No registration
effected pursuant to this SECTION 2.3 shall be counted as a Demand
Registration effected pursuant to SECTION 2.1. The registration rights
provided to the holders of Registrable Securities hereunder shall survive
until the third anniversary of the date upon which the first Form S-3 filed
with the Commission hereunder is declared effective by the Commission.
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2.4 PURCHASE (AND EXERCISE) OF THE WARRANT BY THE UNDERWRITERS.
Notwithstanding any other provision of this Agreement to the contrary, in
connection with any Demand Registration or Piggy-Back Registration which is to
be an underwritten offering, to the extent all or any portion of the
Registrable Securities to be included in such registration consist of Warrant
Shares, the holders of such Registrable Securities may request that the
Underwriter or Underwriters purchase (and exercise) the Warrant or any portion
thereof rather than require the holders of the Registrable Securities to
exercise the Warrant or portion thereof in connection with such registration,
unless the Underwriters inform such holders that such a purchase and exercise
of the Warrant will materially and adversely affect the proposed offering. The
Company shall take all such action and provide all such assistance as may be
reasonably requested by the holders of Registrable Securities to facilitate any
such purchase (and exercise) of the Warrant agreed to by the Underwriter or
Underwriters, including, without limitation, issuing the Warrant Shares or any
portion thereof to be issued within such time period as will permit the
Underwriters to make and complete the distribution contemplated by the
underwriting.
3. REGISTRATION PROCEDURES.
3.1 FILINGS; INFORMATION. Whenever the Company is required to
effect the registration of any Registrable Securities pursuant to SECTION 2,
the Company shall use its best efforts to effect the registration and sale of
such Registrable Securities in accordance with the intended method(s) of
distribution thereof as expeditiously as practicable, and in connection with
any such request:
(a) FILING REGISTRATION STATEMENT. The Company shall, as
expeditiously as possible, prepare and file with the Commission, within sixty
(60) days after receipt of a request for a Demand Registration pursuant to
SECTION 2.1, a Registration Statement on any form for which the Company then
qualifies or which counsel for the Company shall deem appropriate and which
form shall be available for the sale of all Registrable Securities to be
registered thereunder in accordance with the intended method(s) of distribution
thereof, and shall use its best efforts to cause such Registration Statement to
become and remain effective for the period required by SECTION 3.1(c);
PROVIDED, HOWEVER, that the Company shall have the right to defer such
registration for up to ninety (90) days if the Company shall furnish to the
holders a certificate signed by the President and Chief Executive Officer of
the Company stating that, in the good faith judgment of the Board of Directors
of the Company, it would be materially detrimental to the Company and its
shareholders for such Registration Statement to be effected at such time;
PROVIDED FURTHER, HOWEVER, that in the event the Company elects to exercise
such right with respect to any registration, it shall not have the right to
exercise such right again prior to the date which is twelve (12) months after
the date on which the Registration Statement relating to such deferred
registration is declared effective.
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(b) COPIES. The Company shall, prior to filing a
Registration Statement or prospectus, or any amendment or supplement thereto,
furnish without charge to the holders of Registrable Securities included in
such registration, and such holders' legal counsel, copies of such Registration
Statement as proposed to be filed, each amendment and supplement to such
Registration Statement (in each case including all exhibits thereto and
documents incorporated by reference therein), the prospectus included in such
Registration Statement (including each preliminary prospectus), and such other
documents as the holders of Registrable Securities included in such
registration or legal counsel for any such holders may request in order to
facilitate the disposition of the Registrable Securities owned by such holders.
(c) AMENDMENTS AND SUPPLEMENTS. The Company shall
prepare and file with the Commission such amendments, including post-effective
amendments, and supplements to such Registration Statement and the prospectus
used in connection therewith as may be necessary to keep such Registration
Statement effective and in compliance with the provisions of the Securities Act
until all Registrable Securities and other securities covered by such
Registration Statement have been disposed of in accordance with the intended
method(s) of distribution set forth in such Registration Statement (which
period shall not exceed, in each case other than a Form S-3, the sum of one
hundred twenty (120) days PLUS any period during which any such disposition is
interfered with by any stop order, injunction or other order or requirement of
the Commission or any governmental agency or court) or such securities have
been withdrawn.
(d) NOTIFICATION. After the filing of a Registration
Statement, the Company shall promptly, and in no event more than two (2)
Business Days, notify the holders of Registrable Securities included in such
registration statement, and confirm such advice in writing: (i) when such
Registration Statement has been filed or amended or supplemented and becomes
effective, (ii) when any post-effective amendment to such Registration
Statement becomes effective, (iii) of any stop order issued or threatened by
the Commission (and the Company shall use its best efforts to prevent the entry
of such stop order or to remove it if entered) and (iv) of any request by the
Commission for any amendment or supplement to such Registration Statement or
any prospectus relating thereto or for additional information or of the
occurrence of an event requiring the preparation of a supplement or amendment
to such prospectus so that, as thereafter delivered to the purchasers of the
securities covered by such Registration Statement, such prospectus will not
contain an untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading, and promptly make available to the holders of Registrable
Securities included in such Registration Statement any such supplement or
amendment; except that before filing with the Commission a Registration
Statement or prospectus or any amendment or supplement thereto, including
documents incorporated by reference, the Company shall furnish to the holders
of Registrable Securities included in such Registration Statement and to the
legal counsel for any such holders, copies of all such documents proposed to be
filed sufficiently in advance of filing (and in no event less than three (3)
Business Days prior to filing) to provide such holders and legal counsel with a
reasonable opportunity to
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review such documents and comment thereon, and the Company shall not file any
Registration Statement or prospectus or amendment or supplement thereto,
including documents incorporated by reference, to which such holders or their
legal counsel shall reasonably object.
(e) STATE SECURITIES LAWS COMPLIANCE. The Company shall
use its best efforts to (i) register or qualify the Registrable Securities
covered by the Registration Statement under such securities or "blue sky" laws
of such jurisdictions in the United States as the holders of Registrable
Securities included in such Registration Statement (in light of their intended
plan of distribution) may request and (ii) cause such Registrable Securities
covered by the Registration Statement to be registered with or approved by such
other Governmental Authorities as may be necessary by virtue of the business
and operations of the Company and do any and all other acts and things that may
be necessary or advisable to enable the holders of Registrable Securities
included in such Registration Statement to consummate the disposition of such
Registrable Securities in such jurisdictions; PROVIDED, HOWEVER, that the
Company shall not be required to qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
SECTION 3.1(e), or subject itself to taxation in any such jurisdiction.
(f) AGREEMENTS FOR DISPOSITION. The Company shall enter
into customary agreements (including, if applicable, an underwriting agreement
in customary form) and take such other actions as are reasonably required in
order to expedite or facilitate the disposition of such Registrable Securities.
The representations, warranties and covenants of the Company in any
underwriting agreement which are made to or for the benefit of any Underwriters
shall also be made to and for the benefit of the holders of Registrable
Securities included in such registration statement. No holder of Registrable
Securities included in such registration statement shall be required to make
any representations or warranties in the underwriting agreement except, if
applicable, with respect to such holder's organization, good standing,
authority, title to Registrable Securities, lack of conflict of such sale with
such holder's material agreements and organizational documents, and with
respect to written information relating to such holder that such holder has
furnished in writing expressly for inclusion in such registration statement.
(g) COOPERATION. The Company shall cause the President
and Chief Executive Officer of the Company, the Chief Financial Officer of the
Company, any vice president of the Company and any other members of the
management of the Company to cooperate fully in any offering of Registrable
Securities hereunder, which cooperation shall include, without limitation, the
preparation of the Registration Statement with respect to such offering and all
other offering materials and related documents, and participation in meetings
with Underwriters, attorneys, accountants and potential investors.
(h) RECORDS. The Company shall make available for
inspection by the holders of Registrable Securities included in such
Registration Statement, any Underwriter participating in any disposition
pursuant to such registration statement and any attorney,
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accountant or other professional retained by any holder of Registrable
Securities included in such Registration Statement or any Underwriter, all
financial and other records, pertinent corporate documents and properties of the
Company, as shall be necessary to enable them to exercise their due diligence
responsibility, and cause the Company's officers, directors and employees to
supply all information reasonably requested by any of them in connection with
such registration statement.
(i) OPINIONS AND COMFORT LETTERS. The Company shall
furnish to each holder of Registrable Securities included in any Registration
Statement a signed counterpart, addressed to such holder, of (i) any opinion of
counsel to the Company delivered to any Underwriter and (ii) any comfort letter
from the Company's independent public accountants delivered to any Underwriter.
In the event no legal opinion is delivered to any Underwriter, the Company
shall furnish to each holder of Registrable Securities included in such
Registration Statement, at any time that such holder elects to use a
prospectus, an opinion of counsel to the Company to the effect that the
Registration Statement containing such prospectus has been declared effective
and that no stop order is in effect.
(j) EARNINGS STATEMENT. The Company shall comply with
all applicable rules and regulations of the Commission and the Securities Act,
and make available to its shareholders, as soon as practicable, an earnings
statement covering a period of twelve (12) months, beginning within three (3)
months after the effective date of the registration statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the Securities Act
and Rule 158 thereunder.
(k) LISTING. The Company shall use its best efforts to
cause all Registrable Securities included in any registration to be listed on
such national securities exchange or otherwise designated for trading in the
same manner as similar securities issued by the Company are then listed or
designated or, if no such similar securities are then listed or designated, in
a manner satisfactory to the holders of a majority of the Registrable
Securities included in such registration.
3.2 OBLIGATION TO SUSPEND DISTRIBUTION. Upon receipt of any
notice from the Company of the happening of any event of the kind described in
SECTION 3.1(d)(iv), each holder of Registrable Securities included in any
registration shall immediately discontinue disposition of such Registrable
Securities pursuant to the registration statement covering such Registrable
Securities until such holder receives the supplemented or amended prospectus
contemplated by SECTION 3.1(d)(iv), and, if so directed by the Company, each
such holder will deliver to the Company all copies, other than permanent file
copies then in such holder's possession, of the most recent prospectus covering
such Registrable Securities at the time of receipt of such notice.
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3.3 REGISTRATION EXPENSES. The Company shall bear all costs and
expenses incurred in connection with any Demand Registration pursuant to
SECTION 2.1, any Piggy-Back Registration pursuant to SECTION 2.2 and any
registration on Form S-3 pursuant to SECTION 2.3 and all expenses incurred in
performing or complying with its other obligations under this Agreement,
whether or not the Registration Statement becomes effective, including, without
limitation, (i) all registration and filing fees; (ii) fees and expenses of
compliance with state securities or "blue sky" laws (including fees and
disbursements of counsel in connection with blue sky qualifications of the
Registrable Securities); (iii) printing expenses; (iv) the Company's internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees); (v) the fees and expenses incurred in connection with
the listing of the Registrable Securities as required by SECTION 3.1(k); (vi)
National Association of Securities Dealers, Inc. fees, if any; (vii) fees and
disbursements of counsel for the Company and fees and expenses for independent
certified public accountants retained by the Company (including the expenses or
costs associated with the delivery of any opinions or comfort letters requested
pursuant to SECTION 3.1(i)); (viii) the fees and expenses of any special
experts retained by the Company in connection with such registration; (ix) the
purchase of selling stockholder errors and omissions insurance for the benefit
of LLCP in any amount equivalent to the gross proceeds to be received by LLCP
in connection with any registration under this Agreement, on terms and
conditions satisfactory to LLCP, provided, however, that the Company shall not
be obligated to pay any premium for such insurance in excess of $50,000, and
(x) all fees and expenses incurred by LLCP in connection with its participation
in such registration, including, without limitation, the fees and expenses of
LLCP's legal counsel, accountants and other experts selected by LLCP. The
Company shall have no obligation to pay any underwriting fees, discounts or
selling commissions attributable to the Registrable Securities being sold by
LLCP, which expenses shall be borne by LLCP.
3.4 INFORMATION. The holders of Registrable Securities shall
provide such information as reasonably requested by the Company in connection
with the preparation of any registration statement, including amendments and
supplements thereto, in order to effect the registration of any Registrable
Securities under the Securities Act pursuant to SECTIONS 2.
4. INDEMNIFICATION AND CONTRIBUTION.
4.1 INDEMNIFICATION BY THE COMPANY. The Company agrees to
indemnify and hold harmless LLCP and each other holder of Registrable
Securities, and each of their respective officers, employees, Affiliates
(including, without limitation, Xxxxxx Xxxxxxxxx Capital Partners, Inc.),
directors, partners, members, attorneys and agents, and each Person, if any,
who controls LLCP and each other holder of Registrable Securities (within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act)
(each, an "LLCP INDEMNIFIED PARTY"), from and against any expenses, losses,
judgments, claims, damages or liabilities, whether joint or several, arising
out of or based upon any untrue statement (or alleged untrue statement) of a
material fact contained in any Registration Statement under which such
Registrable Securities were registered under the Securities Act, any preliminary
12
prospectus, final prospectus or summary prospectus contained in the Registration
Statement, or any amendment or supplement to such Registration Statement, or
arising out of or based upon any omission (or alleged omission) to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or any violation by the Company of the Securities Act or
any rule or regulation promulgated thereunder applicable to the Company and
relating to action or inaction required of the Company in connection with any
such registration; and the Company shall promptly, but in no event more than
five (5) Business Days after request for payment, pay directly or reimburse each
LLCP Indemnified Party for any legal and any other expenses reasonably incurred
by such LLCP Indemnified Party in connection with investigating and defending
any such expense, loss, judgment, claim, damage, liability or action; PROVIDED,
HOWEVER, that the Company will not be liable in any such case to the extent that
any such expense, loss, claim, damage or liability arises out of or is based
upon any untrue statement or omission made in such Registration Statement,
preliminary prospectus, final prospectus, or summary prospectus, or any such
amendment or supplement, in reliance upon and in conformity with information
furnished to the Company, in writing, by such selling holder and stated to be
specifically for use therein. The Company also shall indemnify any Underwriter
of the Registrable Securities, their officers, affiliates, directors, partners,
members and agents and each Person who controls such Underwriters on
substantially the same basis as that of the indemnification provided above in
this SECTION 4.1.
4.2 INDEMNIFICATION BY HOLDERS OF REGISTRABLE SECURITIES. Each
selling holder of Registrable Securities will, in the event that any
Registrable Securities held by such selling holder as to which any registration
is being effected under the Securities Act pursuant to this Agreement,
indemnify and hold harmless (severally and not jointly) the Company, each of
its directors and officers and each Underwriter (if any), and each other
Person, if any, who controls such selling holder or such Underwriter within the
meaning of the Securities Act, against any losses, claims, judgments, damages
or liabilities, whether joint or several, insofar as such losses, claims,
judgments, damages or liabilities (or actions in respect thereof) arise out of
or are based upon any untrue statement of a material fact contained in any
Registration Statement under which such Registrable Securities were registered
under the Securities Act, any preliminary prospectus, final prospectus or
summary prospectus contained in the Registration Statement, or any amendment or
supplement to the Registration Statement, or arise out of or are based upon any
omission to state a material fact required to be stated therein or necessary to
make the statement therein not misleading, if the statement or omission was
made in reliance upon and in conformity with information furnished in writing
to the Company by such selling holder and stated to be specifically for use
therein, and shall, within five (5) Business Days after a request therefor,
reimburse the Company, its directors and officers, and each such controlling
Person for any legal or other expenses reasonably incurred by any of them in
connection with investigation or defending any such loss, claim, damage,
liability or action. Notwithstanding anything to the contrary, in no event
shall any holder of Registrable Securities be liable or responsible for any
amount in excess of the net proceeds actually received by such holder after
Taxes from the sale of Registrable Securities.
13
4.3 CONDUCT OF INDEMNIFICATION PROCEEDINGS. Promptly after
receipt by any Person of any written notice of any loss, claim, damage or
liability or any action in respect of which indemnity may be sought pursuant to
SECTION 4.1 or 4.2, such Person (the "INDEMNIFIED PARTY") shall, if a claim in
respect thereof is to be made against any other Person for indemnification
hereunder, notify such other Person (the "INDEMNIFYING PARTY") in writing of
the loss, claim, judgment, damage, liability or action; PROVIDED, HOWEVER, that
the failure by the Indemnified Party to notify the Indemnifying Party shall not
relieve the Indemnifying Party from any liability which the Indemnifying Party
may have to such Indemnified Party hereunder, except to the extent the
Indemnifying Party is actually prejudiced by such failure. If the Indemnified
Party is seeking indemnification with respect to any claim or action brought
against the Indemnified Party, then the Indemnifying Party shall be entitled to
participate in such claim or action, and, to the extent that it wishes, jointly
with all other Indemnifying Parties, to assume the defense thereof with counsel
satisfactory to the Indemnified Party. After notice from the Indemnifying Party
to the Indemnified Party of its election to assume the defense of such claim or
action, the Indemnifying Party shall not be liable to the Indemnified Party for
any legal or other expenses subsequently incurred by the Indemnified Party in
connection with the defense thereof other than reasonable costs of
investigation; PROVIDED, HOWEVER, that in any action in which both the
Indemnified Party and the Indemnifying Party are named as defendants, the
Indemnified Party shall have the right to employ separate counsel (but no more
than one such separate counsel) to represent the Indemnified Party and its
controlling Persons who may be subject to liability arising out of any claim in
respect of which indemnity may be sought by the Indemnified Party against the
Indemnifying Party, with the fees and expenses of such counsel to be paid by
such Indemnifying Party if, based upon the written opinion of counsel of such
Indemnified Party, representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. No
Indemnifying Party shall, without the prior written consent of the Indemnified
Party (which consent shall not be unreasonably withheld), consent to entry of
judgment or effect any settlement of any claim or pending or threatened
proceeding in respect of which the Indemnified Party is or could have been a
party and indemnity could have been sought hereunder by such Indemnified Party,
unless such judgment or settlement includes an unconditional release of such
Indemnified Party from all liability arising out of such claim or proceeding.
4.4 CONTRIBUTION. If the indemnification provided for in the
foregoing SECTIONS 4.1, 4.2 and 4.3 is unavailable to any Indemnified Party in
respect of any loss, claim, damage, liability or action referred to herein,
then each such Indemnifying Party, in lieu of indemnifying such Indemnified
Party, shall contribute to the amount paid or payable by such Indemnified Party
as a result of such loss, claim, damage, liability or action in such proportion
as is appropriate to reflect the relative fault of the Indemnified Parties and
the Indemnifying Parties in connection with the actions or omissions which
resulted in such loss, claim, damage, liability or action, as well as any other
relevant equitable considerations. The relative fault of any Indemnified Party
and any Indemnifying Party shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to
information supplied by such Indemnified
14
Party or such Indemnifying Party and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The parties agree that it would not be just and equitable if
contribution pursuant to this SECTION 4.4 were determined by pro rata allocation
or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an Indemnified Party as a result of any loss, claim,
damage, liability or action referred to in the immediately preceding paragraph
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses incurred by such Indemnified Party in connection with
investigating or defending any such action or claim. Notwithstanding anything to
the contrary, in no event shall any holder of Registrable Securities be required
to contribute any amount in excess of the net proceeds actually received by such
holder after Taxes from the sale of Registrable Securities which gave rise to
such contribution obligation. No Person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation.
5. UNDERWRITING AND DISTRIBUTION.
5.1 RULE 144. The Company covenants that it shall file any
reports required to be filed by it under the Securities Act and the Exchange
Act and shall take such further action as the holders of Registrable Securities
may reasonably request, all to the extent required from time to time to enable
such holders to sell Registrable Securities without registration under the
Securities Act within the limitation of the exemptions provided by Rule 144
under the Securities Act, as such Rules may be amended from time to time, or
any similar Rule or regulation hereafter adopted by the Commission.
5.2 RESTRICTIONS ON SALE BY THE COMPANY AND OTHERS. The Company
agrees that (a) it will not effect any public sale or distribution of any
securities similar to those being registered in accordance with SECTION 2.1, or
any securities convertible into or exchangeable or exercisable for such
securities, during the ninety (90) days prior to, and during the one hundred
eighty (180) day period commencing on, the effective date of any Demand
Registration (except as part of such Demand Registration to the extent
permitted by SECTION 2.1(d)); and (b) any agreement entered into after the date
hereof pursuant to which the Company issues or agrees to issue any privately
placed securities shall contain a provision under which holders of such
securities agree not to effect any sale or distribution of any such securities
during the periods described in (a) above, in each case including a sale
pursuant to Rule 144 under the Securities Act (except as part of any such
registration, if permitted); PROVIDED, HOWEVER, that the provisions of this
SECTION 5.2 shall not prevent the conversion or exchange of any securities
pursuant to their terms into or for other securities and shall not prevent the
issuance of securities by the Company under any employee benefit, stock option
or stock subscription plans.
15
6. MISCELLANEOUS.
6.1 OTHER REGISTRATION RIGHTS.
(a) The Company hereby represents and warrants to LLCP
that no Person has any right to require the Company to register any shares of
the Capital Stock of the Company for sale or to include any shares of the
Capital Stock of the Company in any registration filed by the Company for the
sale of shares of Capital Stock for its own account or for the account of any
other Person.
(b) From and after the date of this Agreement, the
Company shall not, without the prior written consent of LLCP, (i) enter into
any agreement granting any demand registration right (I.E., the right to
require the Company to register the sale of any shares of the Company's capital
stock), (ii) enter into any agreement granting any piggy-back registration
right (I.E., the right to require the Company to register the sale of any
shares of the Company's capital stock in any registration filed by the Company
for the sale of shares of capital stock for its own account or for the account
of any other Person) which is inconsistent with, equal to or superior to any
registration rights granted hereunder or (iii) enter into any agreement that
adversely affects the rights granted to the holders of Registrable Securities
hereunder.
6.2 SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of, and be binding upon, the parties and their respective successors
and permitted assigns. The rights and obligations of LLCP under this Agreement
shall be freely assignable in whole or in part. Each such assignee, by
accepting such assignment of the rights of the assignor hereunder, shall be
deemed to have agreed to and be bound by the obligations of the assignor
hereunder. The rights and obligations of the Company hereunder may not be
assigned or delegated.
6.3 NOTICES. All notices, requests, demands and other
communications which are required or may be given under this Agreement shall be
in writing and shall be deemed to have been duly given if transmitted by
telecopier with receipt acknowledged, or upon delivery, if delivered personally
or by recognized commercial courier with receipt acknowledged, or upon the
expiration of 72 hours after mailing, if mailed by registered or certified
mail, return receipt requested, postage prepaid, addressed as follows:
(i) If to LLCP, to: Xxxxxx Xxxxxxxxx Capital Partners II, L.P.
c/o Levine Xxxxxxxxx Capital Partners, Inc.
000 Xxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, President
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
16
WITH A COPY TO:
Xxxxxxx & XxXxxxxx
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxx, Esq.
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
(ii) If to the Company, at:
Simula, Inc.
0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
WITH A COPY TO:
Xxxxxxxxx Xxxxx
0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
or at such other address or addresses as the Purchaser or the Company, as the
case may be, may specify by written notice given in accordance with this SECTION
6.3.
6.4 SEVERABILITY. In case any provision of this Agreement shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
6.5 COUNTERPARTS. This Agreement may be executed in two or more
counterparts and by facsimile, each of which shall be an original, but all of
which together shall constitute one and the same instrument.
6.6 DESCRIPTIVE HEADINGS, CONSTRUCTION AND INTERPRETATION. The
descriptive headings of the several paragraphs of this Agreement are for
convenience of reference only and do not constitute a part of this Agreement
and are not to be considered in construing or interpreting this Agreement. All
section, preamble, recital, clause and party references are to this Agreement
unless otherwise stated. No party, nor its counsel, shall be deemed the drafter
of this Agreement for purposes of construing the provisions of this Agreement,
and all
17
provisions of this Agreement shall be construed in accordance with their fair
meaning, and not strictly for or against any party.
6.7 WAIVERS AND AMENDMENTS. Neither this Agreement nor any
provision hereof may be changed, waived, discharged or terminated orally or by
course of dealing, except by a statement in writing signed by the party against
which enforcement of the change, waiver, discharge or termination is sought.
6.8 REMEDIES. In the event that the Company fails to observe or
perform any covenant or agreement to be observed or performed under this
Agreement, LLCP or any other holder of Registrable Securities may proceed to
protect and enforce its rights by suit in equity or action at law, whether for
specific performance of any term contained in this Agreement or for an
injunction against the breach of any such term or in aid of the exercise of any
power granted in this Agreement or to enforce any other legal or equitable
right, or to take any one or more of such actions. The Company hereby agrees
that LLCP shall not be required or otherwise obligated to, and hereby waives
any right to demand that LLCP, post any performance or other bond in connection
with the enforcement of its rights and remedies hereunder. The Company agrees
to pay all fees, costs, and expenses, including without limitation, fees and
expenses of attorneys, accountants and other experts, and all fees, costs and
expenses of appeals, incurred by LLCP or any other holder of Registrable
Securities in connection with the enforcement of this Agreement or the
collection or any sums due hereunder, whether or not suit is commenced. None of
the rights, powers or remedies conferred under this Agreement shall be mutually
exclusive, and each such right, power or remedy shall be cumulative and in
addition to any other right, power or remedy whether conferred by this
Agreement or now or hereafter available at law, in equity, by statute or
otherwise.
6.9 GOVERNING LAW. IN ALL RESPECTS, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT 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) AND ANY
APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.
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6.10 WAIVER OF JURY TRIAL. EACH OF THE COMPANY AND LLCP HEREBY
WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION, SUIT OR OTHER PROCEEDING
ARISING OUT OF, CONNECTED WITH OR RELATED TO THIS AGREEMENT OR ANY OTHER
INVESTMENT DOCUMENT, OR ANY CLAIM, CONTROVERSY OR DISPUTE ARISING OUT OF OR
RELATED TO THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, REGARDLESS OF WHICH
PARTY INITIATES SUCH ACTION OR ACTIONS.
IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be executed and delivered by their duly authorized representatives
as of the date first written above.
COMPANY
SIMULA, INC., an Arizona corporation
By: /s/ Xxxxx X. Xxxx
-----------------------------------
Xxxxx X. Xxxx
Executive Vice President and Chief
Financial Officer
By: /s/ Xxxx X. Xxxxxx
-----------------------------------
Xxxx X. Xxxxxx
Assistant Secretary
LLCP
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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