-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Imct9pYsMq5vCdGpWimSnCVai+4EXpqqatMCAM+QHJRScyrOMqLWkV58qUzeqNF9 aoRd8exnpZr+oS6DqHCr1A== /in/edgar/work/20000825/0000912057-00-039207/0000912057-00-039207.txt : 20000922 0000912057-00-039207.hdr.sgml : 20000922 ACCESSION NUMBER: 0000912057-00-039207 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20000825 GROUP MEMBERS: ARTHUR E. LEVINE GROUP MEMBERS: LAUREN B. LEICHTMAN GROUP MEMBERS: LEVINE LEICHTMAN CAPITAL PARTNERS II LP GROUP MEMBERS: LEVINE LEICHTMAN CAPITAL PARTNERS, INC. GROUP MEMBERS: LLCP CALIFORNIA EQUITY PARTNERS II, L.P. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: SIMULA INC CENTRAL INDEX KEY: 0000885080 STANDARD INDUSTRIAL CLASSIFICATION: [2531 ] IRS NUMBER: 860320129 STATE OF INCORPORATION: AZ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-42379 FILM NUMBER: 710446 BUSINESS ADDRESS: STREET 1: 2700 NORTH CENTRAL AVE STREET 2: STE 1000 CITY: PHOENIX STATE: AZ ZIP: 85004 BUSINESS PHONE: 6027528918 MAIL ADDRESS: STREET 1: 2700 NORTH CENTRAL AVE STREET 2: STE 1000 CITY: PHOENIX STATE: AZ ZIP: 85004 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: LEVINE LEICHTMAN CAPITAL PARTNERS II LP CENTRAL INDEX KEY: 0001074001 STANDARD INDUSTRIAL CLASSIFICATION: [ ] IRS NUMBER: 114227317 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 335 NORTH MAPLE DR STREET 2: SUITE 240 CITY: BEVERLY HILLS STATE: CA ZIP: 90210 BUSINESS PHONE: 3102755335 MAIL ADDRESS: STREET 1: 335 NORTH MAPLE DRIVE STREET 2: SUITE 240 CITY: BEVERLY HILLS STATE: CA ZIP: 90210 SC 13D/A 1 sc13da.txt SCHEDULE 13D/A SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D/A UNDER THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. 1 )* SIMULA, INC. - ------------------------------------------------------------------------------ (Name of Issuer) Common Stock, $.01 par value per share - ------------------------------------------------------------------------------ (Title of Class of Securities) 829206101 ------------------------------------------------------- (CUSIP Number) Arthur E. Levine with a copy to: President Mitchell S. Cohen, Esq. Levine Leichtman Capital Partners, Inc. Irell & Manella LLP 335 North Maple Drive, Suite 240 1800 Avenue of the Stars, Suite 900 Beverly Hills, California 90025 Los Angeles, California 90067 (310) 275-5335 (310) 277-1010 - ------------------------------------------------------------------------------ (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) August 17, 2000 ------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box / /. NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Section 240.13d-7(b) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). Page 1 of 14 SCHEDULE 13D - -------------------------------------------------------------------------------- CUSIP No. 829206101 Page 2 of 14 Pages - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Levine Leichtman Capital Partners II, L.P. - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE (a) / / INSTRUCTIONS) (b) / / - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (SEE INSTRUCTIONS) 00 (See Item 3) - -------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO / / ITEMS 2(d) or 2(e) - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION California - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES -0- ---------------------------------------------------------------- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 850,000 (See Item 5) ---------------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING -0- ---------------------------------------------------------------- PERSON 10 SHARED DISPOSITIVE POWER WITH 850,000 (See Item 5) - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 850,000 (See Item 5) - -------------------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES / / (SEE INSTRUCTIONS) - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 6.9% (See Item 5) - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) PN - -------------------------------------------------------------------------------- SCHEDULE 13D - -------------------------------------------------------------------------------- CUSIP No. 829206101 Page 3 of 14 Pages - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) LLCP California Equity Partners II, L.P. - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE (a) / / INSTRUCTIONS) (b) / / - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (SEE INSTRUCTIONS) 00 (See Item 3) - -------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO / / ITEMS 2(d) or 2(e) - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION California - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES -0- ---------------------------------------------------------------- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 850,000 (See Item 5) ---------------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING -0- ---------------------------------------------------------------- PERSON 10 SHARED DISPOSITIVE POWER WITH 850,000 (See Item 5) - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 850,000 (See Item 5) - -------------------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES / / (SEE INSTRUCTIONS) - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 6.9% (See Item 5) - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) PN - -------------------------------------------------------------------------------- SCHEDULE 13D - -------------------------------------------------------------------------------- CUSIP No. 829206101 Page 4 of 14 Pages - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Levine Leichtman Capital Partners, Inc. - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE (a) / / INSTRUCTIONS) (b) / / - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (SEE INSTRUCTIONS) 00 (See Item 3) - -------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO / / ITEMS 2(d) or 2(e) - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION California - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES -0- ---------------------------------------------------------------- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 850,000 (See Item 5) ---------------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING -0- ---------------------------------------------------------------- PERSON 10 SHARED DISPOSITIVE POWER WITH 850,000 (See Item 5) - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 850,000 (See Item 5) - -------------------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES / / (SEE INSTRUCTIONS) - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 6.9% (See Item 5) - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) CO - -------------------------------------------------------------------------------- SCHEDULE 13D - -------------------------------------------------------------------------------- CUSIP No. 829206101 Page 5 of 14 Pages - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Arthur E. Levine - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE (a) / / INSTRUCTIONS) (b) / / - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (SEE INSTRUCTIONS) 00 (See Item 3) - -------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO / / ITEMS 2(d) or 2(e) - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States of America - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES -0- ---------------------------------------------------------------- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 850,000 (See Item 5) ---------------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING -0- ---------------------------------------------------------------- PERSON 10 SHARED DISPOSITIVE POWER WITH 850,000 (See Item 5) - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 850,000 (See Item 5) - -------------------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES / / (SEE INSTRUCTIONS) - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 6.9% (See Item 5) - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) IN - -------------------------------------------------------------------------------- SCHEDULE 13D - -------------------------------------------------------------------------------- CUSIP No. 829206101 Page 6 of 14 Pages - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Lauren B. Leichtman - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE (a) / / INSTRUCTIONS) (b) / / - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (SEE INSTRUCTIONS) 00 (See Item 3) - -------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO / / ITEMS 2(d) or 2(e) - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States of America - -------------------------------------------------------------------------------- NUMBER OF 7 SOLE VOTING POWER SHARES -0- ---------------------------------------------------------------- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 850,000 (See Item 5) ---------------------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING -0- ---------------------------------------------------------------- PERSON 10 SHARED DISPOSITIVE POWER WITH 850,000 (See Item 5) - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 850,000 (See Item 5) - -------------------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES / / (SEE INSTRUCTIONS) - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 6.9% (See Item 5) - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS) IN - -------------------------------------------------------------------------------- Amendment No. 1 to Schedule 13D Pursuant to Rule 13d-2(a) promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), Levine Leichtman Capital Partners II, L.P., a California limited partnership (the "Partnership"), LLCP California Equity Partners II, L.P., a California limited partnership (the "General Partner"), Levine Leichtman Capital Partners, Inc., a California corporation ("Capital Corp."), Arthur E. Levine ("Mr. Levine") and Lauren B. Leichtman ("Ms. Leichtman and, together with the Partnership, the General Partner, Capital Corp. and Mr. Levine, the "Reporting Persons"), hereby amend and supplement the Schedule 13D originally filed by the Reporting Persons with the Securities and Exchange Commission on January 10, 2000 (the "Original Schedule 13D"), relating to the Common Stock, par value, $.01 per share, of Simula, Inc. an Arizona corporation (the "Issuer"). All capitalized terms used in this Amendment No.1 to the Original Schedule 13D (this "Amendment") and not otherwise defined herein have the meanings ascribed to such terms in the Original Schedule 13D. All Rule citations used in this Amendment are to the rules and regulations promulgated under the Exchange Act. ITEM 1. SECURITY AND ISSUER. (a) NAME OF ISSUER: Simula, Inc., an Arizona corporation (the "Issuer"). (b) ADDRESS OF PRINCIPAL EXECUTIVE OFFICES OF THE ISSUER: 2700 N. Central Avenue, Suite 1000, Phoenix, AZ 85004. (c) TITLE OF CLASS OF EQUITY SECURITIES: Common Stock, $.01 par value per share ("Common Stock"). ITEM 2. IDENTITY AND BACKGROUND. This Amendment is being filed pursuant to a Joint Reporting Agreement dated January 7, 2000, a copy of which is attached as EXHIBIT 1 to the Original Schedule 13D, among and on behalf of the Reporting Persons. (a) PARTNERSHIP. The Partnership is a limited partnership formed under the laws of the State of California. The address of the principal business or principal office of the Partnership is 335 North Maple Drive, Suite 240, Beverly Hills, California 90210. The principal business of the Partnership is to seek out opportunities to invest in the securities of middle market companies and to acquire, hold, manage and dispose of such securities in connection with growth financings, restructurings, recapitalizations, mergers, acquisitions and buyouts. (b) GENERAL PARTNER. The General Partner is the sole general partner of the Partnership. The address of the principal business or principal office of the General Partner is 335 North Maple Drive, Suite 240, Beverly Hills, California 90210. The principal business of the General Partner is to act as the general partner of the Partnership and to organize and manage the investments made by the Partnership. Page 7 of 14 (c) CAPITAL CORP. Capital Corp. is the sole general partner of the General Partner. The address of the principal business or principal office of Capital Corp. is 335 North Maple Drive, Suite 240, Beverly Hills, California 90210. The principal business of Capital Corp. is to act as the general partner of the General Partner and of LLCP California Equity Partners, L.P., a California limited partnership, the sole general partner of Levine Leichtman Capital Partners, L.P., a California limited partnership. (d) MR. LEVINE. Mr. Levine is a director, the President and a shareholder of Capital Corp. The business address of Mr. Levine is 335 North Maple Drive, Suite 240, Beverly Hills, California 90210. The present principal occupation or employment of Mr. Levine is to serve as a director and the President of Capital Corp. Mr. Levine is a citizen of the United States of America. Mr. Levine, together with Ms. Leichtman, are the sole directors and shareholders of Capital Corp. Mr. Levine is also an executive officer of Capital Corp. (e) MS. LEICHTMAN. Ms. Leichtman is a director, the Chief Executive Officer, Treasurer and Secretary and a shareholder of Capital Corp. The business address of Ms. Leichtman is 335 North Maple Drive, Suite 240, Beverly Hills, California 90210. The present principal occupation or employment of Ms. Leichtman is to serve as a director and the Chief Executive Officer, Treasurer and Secretary of Capital Corp. Ms. Leichtman is a citizen of the United States of America. Ms. Leichtman, together with Mr. Levine, are the sole directors and shareholders of Capital Corp. Ms. Leichtman is also an executive officer of Capital Corp. During the last five years, no Reporting Person has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or was a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. The Reporting Persons may also be members of a "group" within the meaning of Rule 13d-5(b)(1) for the limited purposes described in Items 4 and 6 below. The other members of the group may include Stanley P. Desjardins ("Desjardins"), Donald W. Townsend ("Townsend"), James A. Saunders ("Saunders") and Bradley P. Forst ("Forst" and, together with Desjardins, Townsend and Saunders, the "Principal Shareholders"). Page 8 of 14 To the extent that such a group exists, this Schedule 13D is also being individually filed by the Reporting Persons, as members of such group, pursuant to Rule 13d-1(k)(2) to satisfy such group's filing obligations. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. Pursuant to a Securities Purchase Agreement dated as of December 31, 1999 (the "Securities Purchase Agreement"), among the Issuer, certain subsidiaries of the Issuer and the Partnership, a copy of which is attached as EXHIBIT 2 to the Original Schedule 13D, the Issuer and certain of its subsidiaries jointly and severally issued and sold to the Partnership 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 (the "Term B Note"). In addition, as part of the same transaction, the Issuer issued and sold to the Partnership a warrant to purchase 850,000 shares of Common Stock (the "Warrant" and, together with the Term A Note and the Term B Note, the "Initial Securities"). The Initial Securities were acquired by the Partnership for an aggregate purchase price of $20,000,000. Copies of the Term A Note, the Term B Note and the Warrant are attached as EXHIBIT 3, EXHIBIT 4 and EXHIBIT 5 to the Original Schedule 13D, respectively. The source of funds for the purchase of the Initial Securities was capital contributions made by the partners of the Partnership in the aggregate amount of $20,000,000, in response to a Call to Purchase Portfolio Securities dated December 1, 1999. The parties to the Securities Purchase Agreement entered into a Second Amendment to Securities Purchase Agreement dated as of August 17, 2000 (the "Second Amendment to Securities Purchase Agreement"), a copy of which is attached as EXHIBIT 1 hereto. Under the Second Amendment to Securities Purchase Agreement, at the request of the Issuer, (i) the Securities Purchase Agreement, as amended by a First Amendment to Securities Purchase Agreement dated as of May 25, 2000, was further amended, (ii) the Term A Note was amended and restated pursuant to the terms of an Amended and Restated Secured Senior Note Due 2001 (as so amended and restated, the "Amended and Restated Term A Note"), a copy of which is attached as EXHIBIT 2 hereto, and (iii) the Partnership waived certain of its rights and consented to certain transactions involving the Issuer and/or its subsidiaries. As partial consideration for the agreement of the Partnership to the foregoing matters, the Issuer issued to the Partnership an Amended and Restated Warrant to Purchase 850,000 Shares of Common Stock, a copy of which is attached as EXHIBIT 3 hereto, which amends and restates the Warrant (as so amended and restated, the "Amended and Restated Warrant"). Under the terms of the Amended and Restated Warrant, among other things, the Warrant Purchase Price (as such term is defined in the Amended and Restated Warrant) was reduced from $5.00 to $1.6250 per share. For purposes of this Amendment, the term "Amended Securities" shall mean the Amended and Restated Term A Note and the Amended and Restated Warrant. ITEM 4. PURPOSE OF TRANSACTION. The Partnership acquired the Initial Securities and the Amended Securities for investment purposes only. In connection with the acquisition by the Partnership of the Initial Securities, and pursuant to the terms of an Investor Rights Agreement dated as of December 31, 1999 (the "Investor Rights Agreement"), among the Issuer, the Principal Shareholders and the Partnership, a copy of which is attached as EXHIBIT 6 to the Original Schedule 13D, the Issuer granted certain management, investment monitoring and other rights to the Partnership. Among other rights, the Partnership may require the Issuer, upon the occurrence of an "Event of Default" as defined in the Securities Purchase Agreement, to cause a representative designated by the Partnership (an "LLCP Representative") to be elected or appointed as a member of the Board of Directors of the Issuer until the later to occur of (a) the 180th day after the effective date of such election or appointment and (b) the date that the next annual meeting of the shareholders of the Issuer at which directors are to be elected occurs. In addition, the Principal Shareholders have granted to the Partnership limited voting rights with respect to the shares of Common Stock owned by the Principal Shareholders, respectively. If, upon the occurrence of such an Event of Default, the Partnership exercises its right to require the Issuer to cause an LLCP Representative to be elected or appointed as a member of the Board of Directors of the Issuer, the Principal Page 9 of 14 Shareholders have agreed to vote (or cause to be voted) the shares of Common Stock owned by them in favor of such election or appointment for the requisite period. The Principal Shareholders have also granted to the Partnership certain co-sale rights with respect to the shares of Common Stock owned by them, respectively, as more fully described in the Investor Rights Agreement. While the Partnership did not acquire the Initial Securities or the Amended Securities with the purpose of changing or influencing control of the Issuer, such acquisition, after giving effect to the management, investment monitoring and other rights granted to the Partnership under the Investor Rights Agreement, may have the effect of changing or influencing control of the Issuer within the meaning of Rule 13d-3(d)(1)(i). Other than as described above, none of the Reporting Persons presently has any plans or proposals which relate to or would result in any of the actions described in subparagraphs (a) through (j) of Item 4 of the Special Instructions for Complying with Schedule 13D. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER. (a) AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON AND PERCENT OF CLASS: Each Reporting Person is deemed to be the beneficial owner (within the meaning of Rule 13d-3(a) of the Exchange Act) of 850,000 shares of Common Stock issuable upon the exercise of the Amended and Restated Warrant. In addition, each Reporting Person may be deemed to be the beneficial owner, for the limited purposes described in Items 4 above and 6 below, of an additional 3,336,687 shares of Common Stock owned in the aggregate by the Principal Shareholders as of August 17, 2000, including (i) 3,273,414 shares owned by Desjardins, (ii) 45,649 shares owned by Townsend, (iii) 14,471 shares owned by Saunders and (iv) 3,153 shares owned by Forst. The number of outstanding shares of Common Stock owned by each Principal Shareholder was represented by the Issuer to the Partnership under the Second Amendment to Securities Purchase Agreement. (The Reporting Persons have no pecuniary interest in, and disclaim beneficial ownership of, the shares of Common Stock owned by the Principal Shareholders.) The aggregate number of shares of Common Stock beneficially owned by the Reporting Persons constitutes approximately 6.9% of the outstanding shares of such class as of August 17, 2000. To the extent that a group exists as discussed in Item 2 above, the aggregate number of shares of Common Stock beneficially owned by the Reporting Persons, including the shares of Common Stock owned by the Principal Shareholders, would constitute approximately 34.0% of the outstanding shares of such class as of August 17, 2000. Such percentages are based upon a total of 11,418,200 shares of Common Stock issued and outstanding as of August 17, 2000, as represented by the Issuer to the Partnership under the Second Amendment to Securities Purchase Agreement, and was calculated in accordance with Rule 13d-3(d)(1)(i). Page 10 of 14 The Amended and Restated Warrant may be exercised at any time prior to December 31, 2006, with respect to all or any portion of the total number of shares of Common Stock purchasable thereunder. The exercise price of the shares of Common Stock purchasable under the Amended and Restated Warrant is $1.6250 per share. (b) VOTING AND DISPOSITIVE POWER: The Partnership may be deemed to have (i) sole and dispositive voting power with respect to no shares of Common Stock and (ii) shared voting and dispositive power with all other Reporting Persons with respect to 850,000 shares of Common Stock. In addition, to the extent that a group exists as discussed in Item 2 above, in the limited circumstances described in Items above 4 and 6 below, the Partnership may be deemed to have shared voting power with all other Reporting Persons and the Principal Shareholders with respect to an additional 3,336,687 shares of Common Stock. By virtue of being the sole general partner of the Partnership, the General Partner may be deemed to have (i) sole and dispositive voting power with respect to no shares of Common Stock and (ii) shared voting and dispositive power with all other Reporting Persons with respect to 850,000 shares of Common Stock. In addition, to the extent that a group exists as discussed in Item 2 above, in the limited circumstances described in Items 4 above and 6 below, the General Partner may be deemed to have shared voting power with all other Reporting Persons and the Principal Shareholders with respect to an additional 3,336,687 shares of Common Stock. By virtue of being the sole general partner of the General Partner, Capital Corp. may be deemed to have (i) sole and dispositive voting power with respect to no shares of Common Stock and (ii) shared voting and dispositive power with all other Reporting Persons with respect to 850,000 shares of Common Stock. In addition, to the extent that a group exists as discussed in Item 2 above, in the limited circumstances described in Items 4 above and 6 below, Capital Corp. may be deemed to have shared voting power with all other Reporting Persons and the Principal Shareholders with respect to an additional 3,336,687 shares of Common Stock. By virtue of being the sole directors and shareholders, and executive officers, of Capital Corp., each of Mr. Levine and Ms. Leichtman may be deemed to have (i) sole and dispositive voting power with respect to no shares of Common Stock and (ii) shared voting and dispositive power with all other Reporting Persons with respect to 850,000 shares of Common Stock. In addition, to the extent that a group exists as discussed in Item 2 above, in the limited circumstances described in Items 4 above and 6 below, each of Mr. Levine and Mr. Leichtman may be deemed to have shared voting power with all other Reporting Persons and the Principal Shareholders with respect to an additional 3,336,687 shares of Common Stock. The Reporting Persons have no pecuniary interest in, and disclaim beneficial ownership of, the 3,336,687 shares of Common Stock owned by the Principal Shareholders. See Items 4 above and 6 below. (c) OTHER TRANSACTIONS. Not Applicable. Page 11 of 14 (d) INTERESTS OF OTHER PERSONS: Not Applicable. (e) DATE UPON WHICH THE REPORTING PERSON CEASED TO BE THE BENEFICIAL OWNER OF MORE THAN FIVE PERCENT OF CLASS: Not Applicable. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. The Partnership funded its purchase of the Initial Securities with capital contributions made by the partners of the Partnership in the aggregate amount of $20,000,000, in response to a Call to Purchase Portfolio Securities dated December 1, 1999. No funds were used by the Partnership to acquire the Amended Securities. On December 31, 1999, the Issuer issued and sold the Initial Securities to the Partnership. Copies of the Term A Note, the Term B Note and the Warrant are attached as EXHIBIT 3, EXHIBIT 4 and EXHIBIT 5 to the Original Schedule 13D, respectively, which describes more fully the payment and other terms thereof. Pursuant to the Investor Rights Agreement, a copy of which is attached as EXHIBIT 6 to the Original Schedule 13D, the Issuer granted certain management,investment monitoring and other rights to the Partnership. Among other rights, the Partnership may require the Issuer, upon the occurrence of an "Event of Default" as defined in the Securities Purchase Agreement, to cause a representative designated by the Partnership (an "LLCP Representative") to be elected or appointed as a member of the Board of Directors of the Issuer until the later to occur of (a) the 180th day after the effective date of such election or appointment and (b) the date that the next annual meeting of the shareholders of the Issuer at which directors are to be elected occurs. In addition, the Principal Shareholders have granted to the Partnership limited voting rights with respect to the shares of Common Stock owned by the Principal Shareholders, respectively. If, upon the occurrence of such an Event of Default, the Partnership exercises its right to require the Issuer to cause an LLCP Representative to be elected or appointed as a member of the Board of Directors of the Issuer, the Principal Shareholders have agreed to vote (or cause to be voted) the shares of Common Stock owned by them in favor of such election or appointment for the requisite period. The Principal Shareholders have also granted to the Partnership certain co-sale rights with respect to the shares of Common Stock owned by them, respectively, as more fully described in the Investor Rights Agreement. Pursuant to a Registration Rights Agreement dated as of December 31, 1999 (the "Registration Rights Agreement"), between the Issuer and the Partnership, the Partnership has been granted certain "demand" and "piggyback" registration rights with respect to the Page 12 of 14 shares of Common Stock issuable upon exercise of the Warrant (including, but not limited to, the right to require the Issuer to register resales of such shares on a registration statement on Form S-3). Such registration rights are described more fully in the Registration Rights Agreement, a copy of which is attached as EXHIBIT 7 to the Original Schedule 13D. The Issuer, the Principal Shareholders and the Partnership have entered into a First Amendment to Investor Rights Agreement, in substantially the form of EXHIBIT 8 to the Original Schedule 13D, pursuant to which the parties clarified that the Principal Shareholders have entered into the voting agreements set forth in Section 1.1 of the Investor Rights Agreement in their individual capacities, and not as representatives of the Issuer. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. Exhibit 1. Second Amendment to Securities Purchase Agreement dated as of August 17, 2000, among the Issuer, certain subsidiaries of the Issuer and the Partnership. Exhibit 2. Amended and Restated Secured Senior Note Due 2001, originally dated December 31, 1999, and amended and restated August 17, 2000. Exhibit 3. Amended and Restated Warrant to Purchase 850,000 Shares of Common Stock of Simula, Inc., originally dated December 31, 1999, and amended and restated August 17, 2000. Page 13 of 14 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: August 25, 2000 LEVINE LEICHTMAN 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: Levine Leichtman Capital Partners, Inc., a California corporation, its General Partner By: /s/ Arthur E. Levine ------------------------------------- Arthur E. Levine President LLCP CALIFORNIA EQUITY PARTNERS II, L.P., a California limited partnership By: Levine Leichtman Capital Partners, Inc., a California corporation, its General Partner By: /s/ Arthur E. Levine ------------------------------------- Arthur E. Levine President LEVINE LEICHTMAN CAPITAL PARTNERS, INC., a California corporation By: /s/ Arthur E. Levine ------------------------------------- Arthur E. Levine President /s/ Arthur E. Levine ------------------------------------- ARTHUR E. LEVINE /s/ Lauren B. Leichtman ------------------------------------- LAUREN B. LEICHTMAN Page 14 of 14 EX-1 2 ex-1.txt EXHIBIT 1 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 LEVINE LEICHTMAN 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), -2- (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." -3- (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 -4- 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." -5- (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 -------------- 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 -6- 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 7822 South 46th Street, Phoenix, Arizona, 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 -7- 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 & Manella LLP, 1800 Avenue of the Stars, Suite 900, Los Angeles, CA 90067, Telephone: (310) 203-7579 and Telecopier: (310) 203-7199. (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"): -8- (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 Bradley P. Forst, 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. -9- 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 Fennemore Craig (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 Fennemore Craig (or such other law firm which shall be acceptable to the Purchaser) to deliver timely such opinion letter shall -10- 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. -11- 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 Scott Miller and CCEC, solely on the 655,000 shares of common stock of Coach and Car Equipment Corp. pledged by Mr. Miller. 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 Billings 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 -12- 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. -13- 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/ James C. Dodd ------------------------------------- Title: Executive Vice President and CFO By: /s/ Donald Townsend ------------------------------------- Title: President and CEO SIMULA SAFETY SYSTEMS, INC., an Arizona corporation By: /s/ James C. Dodd ------------------------------------- Title: Treasurer By: /s/ Benjamin G. Clark ------------------------------------- Title: Assistant Secretary SIMULA TRANSPORTATION EQUIPMENT CORPORATION, an Arizona corporation By: /s/ James C. Dodd ------------------------------------- Title: Treasurer By: /s/ Benjamin G. Clark ------------------------------------- Title: Assistant Secretary -14- AI CAPITAL CORP. (formerly known as Airline Interiors, Inc.), an Arizona corporation By: /s/ James C. Dodd ------------------------------------- Title: Treasurer By: /s/ Benjamin G. Clark ------------------------------------- Title: Assistant Secretary SIMULA ARTCRAFT INDUSTRIES INC. (formerly known as Artcraft Industries Corp.), an Arizona corporation By: /s/ James C. Dodd ------------------------------------- Title: Treasurer By: /s/ Benjamin G. Clark ------------------------------------- Title: Assistant Secretary SIMULA COMPOSITES CORPORATION, a Delaware corporation By: /s/ James C. Dodd ------------------------------------- Title: Treasurer By: /s/ Benjamin G. Clark ------------------------------------- Title: Assistant Secretary SIMULA AUTOMOTIVE SAFETY DEVICES, INC., an Arizona corporation By: /s/ James C. Dodd ------------------------------------- Title: Treasurer By: /s/ Benjamin G. Clark ------------------------------------- Title: Assistant Secretary -15- SIMULA TECHNOLOGIES, INC., an Arizona corporation By: /s/ James C. Dodd ------------------------------------- Title: Treasurer By: /s/ Benjamin G. Clark ------------------------------------- Title: Assistant Secretary INTERNATIONAL CENTER FOR SAFETY EDUCATION, INC., an Arizona corporation By: /s/ James C. Dodd ------------------------------------- Title: Treasurer By: /s/ Benjamin G. Clark ------------------------------------- Title: Assistant Secretary SIMULA POLYMER SYSTEMS, INC., an Arizona corporation By: /s/ James C. Dodd ------------------------------------- Title: Treasurer By: /s/ Benjamin G. Clark ------------------------------------- Title: Assistant Secretary SIMULA AUTOMOTIVE SAFETY DEVICES LIMITED, a company organized and existing under the laws of the United Kingdom By: /s/ James C. Dodd ------------------------------------- Title: Treasurer By: /s/ Benjamin G. Clark ------------------------------------- Title: Assistant Secretary -16- CCEC CAPITAL CORP., an Arizona corporation By: /s/ James C. Dodd ------------------------------------- Title: Treasurer By: /s/ Benjamin G. Clark ------------------------------------- Title: Assistant Secretary PURCHASER LEVINE LEICHTMAN 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: Levine Leichtman Capital Partners, Inc., a California corporation, its General Partner By: /s/ Arthur E. Levine ------------------------------- Arthur E. Levine President -17- EX-2 3 ex-2.txt EXHIBIT 2 THE SECURITY REPRESENTED HEREBY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR REGISTERED OR QUALIFIED UNDER ANY APPLICABLE STATE SECURITIES LAW AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE ASSIGNED EXCEPT IN COMPLIANCE WITH THE REGISTRATION REQUIREMENTS OF SUCH ACT AND THE REGISTRATION OR QUALIFICATION REQUIREMENTS OF SUCH STATE SECURITIES LAWS, OR PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION AND QUALIFICATION. PAYMENT OF THE INDEBTEDNESS EVIDENCED BY THIS SECURITY, INCLUDING PRINCIPAL, PREMIUM, IF ANY, AND INTEREST, IS SUBJECT TO THE TERMS AND CONDITIONS OF AN INTERCREDITOR AGREEMENT DATED OF EVEN DATE HEREWITH BETWEEN LEVINE LEICHTMAN CAPITAL PARTNERS II, L.P., AS THE INITIAL HOLDER OF THIS SECURITY, AND THE CIT GROUP/BUSINESS CREDIT, INC. A COPY OF SUCH INTERCREDITOR AGREEMENT MAY BE OBTAINED FROM THE ISSUER UPON REQUEST. THIS SECURITY HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT (OID). PURSUANT TO TREASURY REGULATION SECTION 1.1275-3(b)(1), JAMES C. DODD, A REPRESENTATIVE OF THE ISSUER, WILL, BEGINNING TEN DAYS AFTER THE ISSUE DATE OF THIS SECURITY, PROMPTLY MAKE AVAILABLE TO THE HOLDER UPON REQUEST THE INFORMATION DESCRIBED IN TREASURY REGULATION SECTION 1.1275- 3(b)(1)(i). MR. DODD MAY BE REACHED AT TELEPHONE NUMBER (602) 631-4005. AMENDED AND RESTATED SECURED SENIOR NOTE DUE 2001 $5,000,000.00 Originally Issued December 31, 1999, Amended and Restated as of August 17, 2000 FOR VALUE RECEIVED, 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" and, together with the Company, SSSI, SimTech, Airline Interiors, Artcraft Industries, Composites, SASD, STI, ICSE, Polymer and Simula TERM A NOTE Automotive UK, the "COMPANY PARTIES"), hereby jointly and severally promise to pay to the order of LEVINE LEICHTMAN CAPITAL PARTNERS II, L.P., a California limited partnership (the "PURCHASER"), or any registered assigns (including the Purchaser, the "Holder"), the sum of FIVE MILLION DOLLARS ($5,000,000.00) in immediately available funds and in lawful money of the United States of America, together with interest thereon, all as provided in this Amended and Restated Secured Senior Note Due 2001 (as amended, restated, supplemented, modified, renewed, refinanced or restructured from time to time, this "NOTE"). This Note was originally issued by the Company Parties to the Purchaser on December 31, 1999 (the "ORIGINAL ISSUE DATE"), as a Secured Senior Note Due 2000 in the principal amount of $5,000,000 (the "ORIGINAL TERM A NOTE"), in connection with the consummation of the transactions contemplated by that certain Securities Purchase Agreement dated as of December 31, 1999 (as amended by a First Amendment to Securities Purchase Agreement dated as of May 25, 2000, the "SECURITIES PURCHASE AGREEMENT"), by and between the Company and certain of its Affiliates, on the one hand, and the Purchaser, on the other hand, and has been amended and restated on the terms and conditions stated herein in connection with the execution and delivery of a Second Amendment to Securities Purchase Agreement dated as of August 17, 2000 (the "SECOND AMENDMENT"). The Original Term A Note shall continue in full force and effect as amended and restated by this Note. All references to the Securities Purchase Agreement below shall mean the Securities Purchase Agreement as amended by the Second Amendment, and all capitalized terms used and not otherwise defined in this Note shall have the meanings set forth in the Securities Purchase Agreement. The Indebtedness evidenced by this Note, including the payment of principal of, premium, if any, interest on and all other amounts owing under this Note, shall rank PARI PASSU with all other Senior Indebtedness of the Company Parties. Without limiting the generality of the foregoing, the Indebtedness evidenced by this Note shall constitute "Senior Indebtedness" as such term is defined in the Indenture dated as of April 1, 1997, among the Company, the "Subsidiary Guarantors" (as such term is defined therein) and Bank One, Columbus, NA, as trustee thereunder. 1. PAYMENT OF INTEREST; DEFAULT RATE. So long as no Default or Event of Default shall have occurred and be continuing, the Company Parties jointly and severally agree to pay interest in cash on the unpaid principal balance of this Note from the Original Issue Date until fully paid at a rate per annum equal to fifteen percent (15.0%). Interest on this Note shall be payable monthly in arrears on the last Business Day of each calendar month (or portion thereof), commencing on January 31, 2000 (each an "INTEREST PAYMENT DATE"). Interest shall be computed on the basis of the actual number of days elapsed over a 360-day year, including the first and the last day. If any Default or Event of Default shall occur and be continuing, then, in addition to the rights and remedies available to the Holder under the Securities Purchase Agreement, this Note, the other Investment Documents and Applicable Laws, the Company Parties jointly and severally agree to pay interest in cash on the unpaid principal balance of, premium, if any, accrued and unpaid interest on, and all other amounts owing under this Note at a rate per annum (the "DEFAULT RATE") equal to fifteen percent (15.0%), PLUS two -2- TERM A NOTE percent (2.0%) during the first sixty (60) days that such Default or Event of Default remains uncured or unwaived and, thereafter, such rate shall further increase by one percent (1.0%) per annum over the applicable rate during the first sixty (60) day period or subsequent thirty (30) day period, as the case may be, for each additional thirty (30) days that such Default or Event of Default remains uncured or unwaived. 2. PAYMENT OF PRINCIPAL; MATURITY DATE. The Company Parties jointly and severally agree to pay in full the entire outstanding principal balance of this Note, outstanding premium, if any, accrued and unpaid interest and all other unpaid amounts owing under this Note on October 1, 2001 (the "Maturity Date"). 3. OPTIONAL PREPAYMENTS. (a) The Company Parties may voluntarily prepay this Note, in whole or in part, as follows: (i) at 102.0% of the principal balance being prepaid at any time on or before December 31, 2000; (ii) at 101.333% of the principal balance being prepaid at any time after December 31, 2000 and on or before March 31, 2001; (iii) at 100.667% of the principal balance being prepaid at any time after March 31, 2001 and on or before June 30, 2001; and (iv) at 100.0% of the principal balance being prepaid at any time after June 30, 2001 and on or before October 1, 2001. Each percentage set forth above is referred to herein as the "PREPAYMENT PERCENTAGE" applicable to any prepayment. Any prepayment of this Note made under this Section 3 shall also include premium, if any, and all accrued and unpaid interest on the then outstanding principal balance of this Note through the date of prepayment. No Prepayment Percentage shall be applicable to any optional prepayment pursuant to this SECTION 3 if the Holder requires the Company Parties to prepay this Note prior to the payment of such optional prepayment upon a Change in Control pursuant to SECTION 5. (b) If the Company Parties elect to prepay all or any portion of this Note, the Company shall furnish written notice to the Holder with respect to each voluntary prepayment not less than thirty (30) days prior to the date of prepayment. Such notice shall specify the principal balance of this Note to be prepaid on such date and shall be irrevocable. Notice of prepayment having been given as aforesaid, the Company Parties shall make a prepayment to the Holder on such prepayment date in an aggregate amount equal to (i) (A) the Prepayment Percentage applicable to such prepayment, MULTIPLIED BY (B) the principal amount of this Note specified in such prepayment notice to be prepaid on such prepayment date, PLUS (ii) premium, if any, and all accrued and unpaid interest through the date of prepayment. -3- TERM A NOTE 4. MANDATORY PREPAYMENTS. In addition to the mandatory prepayments required to be made by the Company pursuant to SECTION 5: (a) ASSET SALES. If at any time any Company Party intends to consummate any Asset Sale (including, without limitation, any Asset Sale involving the sale of the Voting Stock, or all or substantially all of the assets, of any of its Subsidiaries) in any Fiscal Year (which Asset Sale, when taken together with any other Asset Sales in the same Fiscal Year, exceeds aggregate proceeds of $25,000), it shall, within ten (10) Business Days prior to the proposed date of consummation of such Asset Sale, notify the Holder in writing of the proposed Asset Sale (including, without limitation, the subject matter and the material terms thereof and the proposed date of consummation) and the proposed use of the proceeds to be derived from such Asset Sale. Within two (2) Business Days following the Holder's receipt of such written notice, the Holder may, by written notice furnished to the Company, direct the applicable Company Party to apply all Net Available Cash derived from such Asset Sale to prepay the outstanding principal balance of, premium, if any, and accrued and unpaid interest on this Note. If the Holder directs such Company Party to make the mandatory prepayment contemplated by this SECTION 4(a), such Company Party shall make such prepayment within one (1) Business Day following the receipt of the Net Available Cash derived from such Asset Sale. In addition, to the extent that any Company Party receives any cash or cash equivalents upon the sale, conversion, collection or other liquidation of any non-cash proceeds from such Asset Sale, the Company shall notify the Holder in writing within two (2) Business Days of such receipt. The Holder may, within five (5) Business Days after receipt of such written notice, direct such Company Party (by written notice furnished to the Company) to make a mandatory prepayment under this SECTION 4(a) with such cash or cash equivalents and, if the Holder so directs such Company Party, such Company Party shall make such mandatory prepayment within one (1) Business Day following its receipt of the Holder's notice. (b) [INTENTIONALLY OMITTED.] The mandatory prepayments provided for in this SECTION 4 shall be paid at 100.0% (I.E., without premium) of the principal amount required to be prepaid, and shall be accompanied by the payment of any accrued and unpaid interest on, and other amounts owing under, this Note through the date of prepayment, all as provided for above. 5. CHANGE IN CONTROL. If a Change in Control shall occur at any time, the Holder may, at its sole election, require the Company Parties to prepay this Note, in whole or in part, at any time during the one hundred and eighty (180) day period following the occurrence of the Change in Control, at 102.0% of the principal balance of this Note, PLUS all accrued and unpaid interest on, and other amounts owing under, this Note through the date of prepayment. The Company shall notify the Holder in writing, if possible, of any Change in Control at least five (5) days prior to the date that such Change in Control is scheduled to occur. The Company shall also notify the Holder of the date on which any Change in Control shall have actually occurred within one (1) Business Day after such date and shall inform the Holder, in such notification, of the Holder's right to require the Company Parties to prepay this Note as provided in this SECTION 5 and of the date on which such right shall -4- TERM A NOTE terminate. If the Holder elects to require the Company Parties to prepay this Note pursuant to this SECTION 5, it shall furnish a written notice to the Company advising the Company of such election and the outstanding principal balance hereof, premium, accrued and unpaid interest and all other amounts to be prepaid. The Company Parties jointly and severally agree to prepay this Note in accordance with this SECTION 5, SECTION 7 and such written notice within one (1) Business Day after its receipt of such written notice. 6. HOLDER ENTITLED TO CERTAIN BENEFITS. This Note is one of the "Notes" referred to in, and the Holder is entitled to the rights and benefits under, the Securities Purchase Agreement, including, without limitation, the right to accelerate the outstanding principal balance of, premium, if any, and accrued and unpaid interest on, and all other amounts owing under this Note upon the occurrence of an Event of Default. In addition, this Note is secured by the "Collateral" referred to in the Collateral Documents and is guaranteed by the Subsidiary Guarantors under the Guaranty. 7. MANNER OF PAYMENT. Payments of principal, interest and other amounts due under this Note shall be made no later than 2:00 p.m. (noon) (Los Angeles time) on the date when due and in lawful money of the United States of America and (by wire transfer in funds immediately available at the place of payment) to such account as the Holder may designate in writing to the Company and, if to the Purchaser, to: Bank of America, Century City, Private Banking, 2049 Century Park East, Los Angeles, California 90067; ABA No. 121000358; Account No. 1154603239; Attention: Cheryl Stewart (or such other place of payment as the Purchaser may designate in writing). All such payments shall be made without any deduction whatsoever, including, without limitation, any deduction for set-off, recoupment, counterclaim or taxes. Any payments received after 2:00 p.m. (noon) (Los Angeles time) shall be deemed to have been received on the next succeeding Business Day. Any payments due hereunder which are due on a day which is not a Business Day shall be payable on the immediately preceding Business Day, together with all accrued and unpaid interest through the actual due date of payment. 8. MAXIMUM LAWFUL RATE OF INTEREST. The rate of interest payable under this Note shall in no event exceed the maximum rate permissible under Applicable Law. If the rate of interest payable on this Note is ever reduced as a result of this SECTION 8 and at any time thereafter the maximum rate permitted under Applicable Law exceeds the rate of interest provided for in this Note, then the rate provided for in this Note shall be increased to the maximum rate provided for under Applicable Law for such period as is required so that the total amount of interest received by the Holder is that which would have been received by the Holder but for the operation of the first sentence of this SECTION 8. 9. WAIVERS. Each Company Party hereby waives presentment for payment, demand, protest, notice of protest and notice of dishonor, and all other notices of any kind whatsoever to which it may be entitled under Applicable Law or otherwise, except for notices to which the Company Parties are expressly entitled under this Note. 10. REGISTRATION OF NOTES. Each Company Party shall maintain at its principal executive office a register in which it shall register this Note, any Assignments of this Note or any other notes issued hereunder and any other notes issued upon surrender hereof and thereof. At the option of the Holder, this Note may be exchanged for one or more new notes -5- TERM A NOTE of like tenor in the principal denominations requested by the Holder, and the Company Parties shall, within three (3) Business Days after the surrender of this Note at the Company's principal executive offices, deliver to the Holder such new note or notes. In addition, each Assignment of this Note, in whole or in part, shall be registered on the register immediately following the surrender of this Note at the Company's principal executive offices. The Company may require the Holder, as a condition to the registration of any Assignment hereunder, to represent and warrant to the Company that the Assignment complies with applicable federal or state securities laws and to deliver an opinion of its legal counsel to such effect. 11. PERSONS DEEMED OWNERS; PARTICIPATIONS. Prior to due presentment for registration of any Assignment, the Company Parties may treat the Person in whose name any Note is registered as the owner and Holder of such Note for all purposes whatsoever, and the Company Parties shall not be affected by notice to the contrary. Subject to the preceding sentence, the Holder may grant to any other Person participations from time to time in all or any part of this Note on such terms and conditions as may be determined by the Holder in its sole and absolute discretion, subject to applicable federal and state securities laws. Notwithstanding anything to the contrary contained herein or otherwise, nothing in this Note, the Securities Purchase Agreement or any other Investment Document or otherwise shall confer upon the participant any rights in the Securities Purchase Agreement or any other Investment Document, and the Holder shall retain all rights with respect to the administration, waiver, amendment, collection and enforcement of, compliance with and consent to the terms and provisions of this Note, the Securities Purchase Agreement and any other Investment Document. In addition, the Holder may, without the consent of the participant, give or withhold its consent or agreement to any amendments to or modifications of this Note, the Securities Purchase Agreement or any other Investment Document, waive any of the provisions hereof or thereof or exercise or refrain from exercising any other rights or remedies which the Holder may have under this Note, the Securities Purchase Agreement, any other Investment Document or otherwise. Notwithstanding the foregoing, the Holder will not agree with the Company Parties, without the prior written consent of the participant (which consent shall be given or affirmatively withheld not later than three (3) Business Days after the Holder's written request therefor): (a) to reduce the principal of or rate of interest on this Note or (b) to postpone the date fixed for payment of principal of or interest on the Indebtedness evidenced by this Note. If the participant does not timely reply to the Holder's request for such consent, the participant shall be deemed to have consented to such agreement and the Holder may take such action in such manner as the Holder determines in the exercise of its independent business judgment. 12. ASSIGNMENT AND TRANSFER. Subject to Applicable Law, the Holder may, at any time and from time to time and without the consent of any Company Party, assign or transfer to one or more Persons all or any portion of this Note or any portion thereof (but not less than $500,000 in principal amount in any single assignment (unless such lesser amount represents the entire outstanding principal balance hereof)). Upon surrender of this Note at the Company's principal executive office for registration of any such assignment or transfer, accompanied by a duly executed instrument of transfer, the Company Parties shall, at their expense and within three (3) Business Days of such surrender, execute and deliver one or -6- TERM A NOTE more new notes of like tenor in the requested principal denominations and in the name of the assignee or assignees and bearing the legend set forth on the face of this Note, and this Note shall promptly be canceled. If the entire outstanding principal balance of this Note is not being assigned, the Company Parties shall issue to the Holder hereof, within three (3) Business Days of the date of surrender hereof, a new note which evidences the portion of such outstanding principal balance not being assigned. If this Note is divided into one or more Notes and is held at any time by more than one Holder, any payments of principal of, premium, if any, and interest or other amounts on this Note which are not sufficient to pay all interest or other amounts due thereunder, shall be made PRO RATA with respect to all such Notes in accordance with the outstanding principal amounts thereof, respectively. 13. LOSS, THEFT, DESTRUCTION OR MUTILATION OF THIS NOTE. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Note and, in the case of any such loss, theft or destruction, upon receipt of an indemnity agreement or other indemnity reasonably satisfactory to the Company or, in the case of any such mutilation, upon surrender and cancellation of such mutilated Note, the Company Parties shall issue and deliver within three (3) Business Days a new Note, of like tenor, in lieu of the lost, stolen, destroyed or mutilated Note. 14. COSTS OF COLLECTION. The Company Parties jointly and severally agree to pay to the Holder all costs and expenses, including the fees and expenses of all attorneys, accountants and other experts retained by the Holder, which are expended or incurred by or on behalf of the Holder in connection with (a) the collection and enforcement of this Note, whether or not any action, suit or other proceeding is commenced; (b) any actions for declaratory relief in any way related to this Note or the Indebtedness evidenced hereby; (c) the protection or preservation of any rights or remedies of the Holder under this Note; (d) any actions taken by the Holder in negotiating any amendment, waiver, consent or release of or under this Note; (e) any actions taken in reviewing the Company's or any of its Subsidiaries' financial affairs if any Default or Event of Default shall have occurred or the Holder shall have determined in good faith that a Default or an Event of Default may likely occur, which actions shall include, but not be limited to, the following: (i) inspect the facilities of the Company and its Subsidiaries or conduct audits or appraisals of the financial condition of the Company and its Subsidiaries; (ii) have an accounting or other firm selected by the Holder review the books and records of the Company and any of its Subsidiaries and perform a thorough and complete examination thereof; (iii) interview the Company's and each of its Subsidiaries' employees, attorneys, accountants, customers and any other Persons related to the Company or such Subsidiaries which the Holder believes may have relevant information concerning the business, condition (financial or otherwise), results of operations or prospects of the Company or any of its Subsidiaries; and (iv) undertake any other action which the Holder believes is necessary to assess accurately the financial condition and prospects of the Company and/or its Subsidiaries; (f) any refinancing, restructuring (whether in the nature of a "work out" or otherwise), bankruptcy or insolvency proceeding involving the Company, any of its Subsidiaries or any other Affiliate of the Company that is guarantying or otherwise securing the payment and performance of this Note; (g) any actions taken to verify, maintain, perfect and protect any Lien granted to the Holder to secure repayment of this Note; or (h) any effort by the Holder to protect, assemble, complete, collect, sell, liquidate or otherwise dispose of any Collateral, including in -7- TERM A NOTE connection with any case under Bankruptcy Law. The Company Parties hereby consent to the taking of the foregoing actions by the Holder. 15. EXTENSION OF TIME. The Holder may, at its sole option, extend the time for payment of this Note, postpone the enforcement hereof, or grant any other indulgence without affecting or diminishing the Holder's right to full recourse against the Company Parties hereunder, which right is expressly reserved. 16. NOTATIONS. Before disposing of this Note or any portion thereof, the Holder may make a notation thereon (or on a schedule attached thereto) of the amount of all principal payments previously made by the Company Parties with respect thereto. 17. GOVERNING LAW. IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS NOTE 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. 18. CAPTIONS; CONSTRUCTION AND INTERPRETATION. The captions contained in this Note are for convenience of reference only, do not constitute a part of this Note and are not to be considered in construing or interpreting this Note. The Company Parties and the Holder have each been represented by counsel in the negotiation and drafting of this Note, and neither the Company Parties nor the Holder nor their respective counsel shall be deemed the drafter of this Note for purposes of construing the provisions of this Note. All provisions of this Note shall be construed in accordance with their fair meaning, and not strictly for or against the Company Parties or the Holder. [REST OF PAGE INTENTIONALLY LEFT BLANK] -8- TERM A NOTE 19. WAIVER OF JURY TRIAL. EACH COMPANY PARTY AND THE HOLDER (BY ACCEPTANCE THEREOF) HEREBY WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION, SUIT OR OTHER PROCEEDING BROUGHT TO RESOLVE ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATING TO THIS NOTE, ANY OTHER INVESTMENT DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, REGARDLESS OF WHICH PARTY INITIATES SUCH ACTION, SUIT OR OTHER PROCEEDING. IN WITNESS WHEREOF, the Company Parties have caused this Note to be executed and delivered by its or their duly authorized representatives on the date first above written. SIMULA, INC., an Arizona corporation By: /s/ Donald Townsend ---------------------------------------- Name: Donald W. Townsend Title: President and CEO By: /s/ James C. Dodd ---------------------------------------- Name: James C. Dodd Title: Executive Vice President and CFO SIMULA SAFETY SYSTEMS, INC., an Arizona corporation By: /s/ James C. Dodd ---------------------------------------- Name: James C. Dodd Title: Treasurer By: /s/ Benjamin G. Clark ---------------------------------------- Name: Benjamin G. Clark Title: Assistant Secretary -9- TERM A NOTE SIMULA TRANSPORTATION EQUIPMENT CORPORATION (formerly known as Intaero, Inc.), an Arizona corporation By: /s/ James C. Dodd ---------------------------------------- Name: James C. Dodd Title: Treasurer By: /s/ Benjamin G. Clark ---------------------------------------- Name: Benjamin G. Clark Title: Assistant Secretary AI CAPITAL CORP. (formerly known as Airline Interiors, an Arizona corporation By: /s/ James C. Dodd ---------------------------------------- Name: James C. Dodd Title: Treasurer By: /s/ Benjamin G. Clark ---------------------------------------- Name: Benjamin G. Clark Title: Assistant Secretary SIMULA ARTCRAFT INDUSTRIES INC. (formerly known as Artcraft Industries Corp.), an Arizona corporation By: /s/ James C. Dodd ---------------------------------------- Name: James C. Dodd Title: Treasurer By: /s/ Benjamin G. Clark ---------------------------------------- Name: Benjamin G. Clark Title: Assistant Secretary -10- TERM A NOTE SIMULA COMPOSITES CORPORATION (formerly known as Viatech, Inc.), a Delaware corporation By: /s/ James C. Dodd ---------------------------------------- Name: James C. Dodd Title: Treasurer By: /s/ Benjamin G. Clark ---------------------------------------- Name: Benjamin G. Clark Title: Assistant Secretary SIMULA AUTOMOTIVE SAFETY DEVICES, INC., an Arizona corporation By: /s/ James C. Dodd ---------------------------------------- Name: James C. Dodd Title: Treasurer By: /s/ Benjamin G. Clark ---------------------------------------- Name: Benjamin G. Clark Title: Assistant Secretary SIMULA TECHNOLOGIES, INC., an Arizona corporation By: /s/ James C. Dodd ---------------------------------------- Name: James C. Dodd Title: Treasurer By: /s/ Benjamin G. Clark ---------------------------------------- Name: Benjamin G. Clark Title: Assistant Secretary -11- TERM A NOTE INTERNATIONAL CENTER FOR SAFETY EDUCATION, an Arizona corporation By: /s/ James C. Dodd ---------------------------------------- Name: James C. Dodd Title: Treasurer By: /s/ Benjamin G. Clark ---------------------------------------- Name: Benjamin G. Clark Title: Assistant Secretary SIMULA POLYMER SYSTEMS, INC., an Arizona corporation By: /s/ James C. Dodd ---------------------------------------- Name: James C. Dodd Title: Treasurer By: /s/ Benjamin G. Clark ---------------------------------------- Name: Benjamin G. Clark Title: Assistant Secretary SIMULA AUTOMOTIVE SAFETY DEVICES LIMITED, a company organized and existing under the laws of the United Kingdom By: /s/ James C. Dodd ---------------------------------------- Name: James C. Dodd Title: Treasurer By: /s/ Benjamin G. Clark ---------------------------------------- Name: Benjamin G. Clark Title: Assistant Secretary -12- TERM A NOTE CCEC CAPITAL CORP., an Arizona corporation By: /s/ James C. Dodd ---------------------------------------- Name: James C. Dodd Title: Treasurer By: /s/ Benjamin G. Clark ---------------------------------------- Name: Benjamin G. Clark Title: Assistant Secretary ACKNOWLEDGED AND AGREED: LEVINE LEICHTMAN 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: Levine Leichtman Capital Partners, Inc., a California corporation, its General Partner By: /s/ Arthur E. Levine --------------------------------- Arthur E. Levine President -13- TERM A NOTE EX-3 4 ex-3.txt EXHIBIT 3 THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR REGISTERED OR QUALIFIED UNDER ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE ASSIGNED EXCEPT IN COMPLIANCE WITH THE REGISTRATION REQUIREMENTS OF SUCH ACT AND THE REGISTRATION OR QUALIFICATION REQUIREMENTS OF SUCH STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION AND QUALIFICATION. WARRANT NO. LL-2 Originally Issued December 31, 1999, Amended and Restated as of August 17, 2000 SIMULA, INC. AMENDED AND RESTATED WARRANT TO PURCHASE 850,000 SHARES OF COMMON STOCK FOR VALUE RECEIVED, SIMULA, INC., an Arizona corporation (the "COMPANY"), hereby certifies that LEVINE LEICHTMAN CAPITAL PARTNERS II, L.P., a California limited partnership, or its successors or assigns (the "HOLDER"), is entitled to purchase, on the terms and subject to the conditions contained herein, 850,000 shares (the "WARRANT SHARES") of the Company's common stock, $.01 par value per share ("COMMON STOCK"), at the exercise price of $1.6250 per Warrant Share (the "WARRANT PURCHASE PRICE") at any time and from time to time during the Exercise Period (as such term is defined below). The number of Warrant Shares and the Warrant Purchase Price are subject to adjustment as provided in SECTION 4. This Warrant was originally issued on December 31, 1999 (the "ORIGINAL ISSUE DATE"), as Warrant (No. LL-1) to Purchase 850,000 Shares of Common Stock, in connection with the consummation of the transactions contemplated by the Securities Purchase Agreement dated as of December 31, 1999 (as amended by a First Amendment to Securities Purchase Agreement dated as of May 25, 2000, and as further amended, supplemented or otherwise modified and in effect from time to time, the "SECURITIES PURCHASE AGREEMENT"), by and between the Company and certain of its Affiliates, on the one hand, and the Holder, on the other hand, and has been amended and restated on the terms and conditions stated herein in connection with the execution and delivery of a Second Amendment to Securities Purchase Agreement dated as of August 17, 2000 (the "SECOND AMENDMENT"). All references below to the Securities Purchase Agreement shall mean the Securities Purchase Agreement as amended by the Second Amendment. This Warrant is subject to the following terms and conditions: 1. DEFINITIONS. Unless otherwise indicated in this Warrant, capitalized terms used and not otherwise defined in this Warrant have the meanings set forth in the Securities Purchase Agreement. In addition, the following capitalized terms have the following meanings: "COMMON STOCK" has the meaning set forth in the preamble. "COMPANY" has the meaning set forth in the preamble. "CONVERTIBLE SECURITIES" means, when used in this Agreement, any securities or other obligations issued or issuable by the Company or any other Person that are exercisable or exchangeable for, or convertible into, any Capital Stock of the Company. "CURRENT MARKET PRICE" per share of Common Stock means, as of any specified date on which the Common Stock is publicly traded, the average of the daily market prices of the Common Stock over the twenty (20) consecutive trading days immediately preceding (and not including) such date. The 'daily market price' for each such trading day shall be (i) the closing sales price on such day on the NYSE or such other principal securities exchange on which the Common Stock is then listed or admitted to trading or on Nasdaq, as applicable, (ii) if no sale takes place on such day on any such securities exchange or system, the average of the closing bid and asked prices, regular way, on such day for the Common Stock as officially quoted on any such securities exchange or system, (iii) if the Common Stock is not then listed or admitted to trading on any securities exchange or system, the last reported sale price, regular way, on such day for the Common Stock, or if no sale takes place on such day, the average of the closing bid and asked prices for the Common Stock on such day, as reported by Nasdaq or the National Quotation Bureau, and (iv) if the Common Stock is not then listed or admitted to trading on any securities exchange and if no such reported sale price or bid and asked prices are available, the average of the reported high bid and low asked prices on such day, as reported by a reputable quotation service, or a newspaper of general circulation in the City of Los Angeles, State of California, customarily published on each Business Day. If the daily market price cannot be determined for the twenty (20) consecutive trading days immediately preceding such date in the manner specified in the foregoing sentence, then the Common Stock shall not be deemed to be publicly traded as of such date. "DESIGNATED OFFICE" has the meaning set forth in Section 2.1. "DOJ" has the meaning set forth in Section 3. "EFFECTIVE DATE" means the Original Issue Date. "EXCLUDED SECURITIES" means, collectively, (i) shares of capital stock issued pursuant to a stock dividend or a stock split or other subdivision of shares; (ii) Common Stock issued upon exercise of this Warrant; (iii) Common Stock issued by the Company in any public offering registered under the Securities Act, which offering results in net proceeds to the Company of at least $10,000,000 and a price per share of Common Stock of not less than the Warrant Purchase Price then in effect; and (iv) shares of Common Stock issued, issuable or reserved for issuance to directors, officers and employees of the Company or any other Company Party in connection with their services as directors, officers or employees pursuant to any Options issued by the Company pursuant to any Company Stock Plan which has been duly adopted and approved by the shareholders of the Company and in existence on the Original Issue Date. - 2 - "EXERCISE NOTICE" has the meaning set forth in Section 2.1. "EXERCISE PERIOD" means the period commencing on the Effective Date and ending on (and including) the Expiration Date. "EXPIRATION DATE" means December 31, 2006. "FAIR MARKET VALUE" with respect to the Warrant Shares means, as of any specified date: (i) if the Common Stock is publicly traded on such date, the Current Market Price per share; or (ii) if the Common Stock is not publicly traded (or deemed not to be publicly traded) on such date, the fair market value per share of Common Stock as determined by an independent valuation of the Company, its Subsidiaries and their respective businesses conducted by an investment banking firm of recognized national standing selected by the mutual written agreement of the Company and the Holder; PROVIDED, HOWEVER, that if the Company and the Holder are unable to mutually agree on any such investment banking firm within ten (10) days after the date upon which the right or obligation to select an investment banking firm arises, each of the Holder and the Company shall, within three (3) Business Days thereafter, select one investment banking firm, and the two (2) selected firms shall, within three (3) Business Days of their selection, select a third investment banking firm which shall make the relevant determination (which determination shall be final and binding) within ten (10) Business Days of the submission of this matter to such third firm; and PROVIDED FURTHER, HOWEVER, that, in determining the fair market value per share of Common Stock, such investment banking firm shall not give effect or take into account any "minority discount" but shall value the Company in its entirety on an enterprise basis. "FTC" has the meaning set forth in SECTION 3. "HOLDER" has the meaning set forth in the preamble. "HSR ACT" has the meaning set forth in SECTION 3. "OPTIONS" means, when used in this Warrant, any warrants, options or similar rights to subscribe for or purchase any Capital Stock of the Company, including, without limitation, any options or similar rights issued or issuable under any employee stock option plan, pension plan or other employee benefit plan of the Company. "OTHER PROPERTY" has the meaning set forth in SECTION 4.5. "SECURITIES ACT" means the Securities Act of 1933, as amended, and the rules and regulations promulgated by the SEC thereunder, all as the same shall be in effect at the time. - 3 - "SECURITIES PURCHASE AGREEMENT" has the meaning set forth in the preamble of this Warrant. "WARRANT PURCHASE PRICE" has the meaning set forth in the preamble of this Warrant (as adjusted in accordance with the terms of this Warrant). "WARRANT" means this Warrant, any amendment, restatement, supplement or other modification of this Warrant, and any warrants issued upon transfer, division or combination of, or in substitution for, this Warrant or any other such warrant. All such Warrants shall at all times be identical as to terms and conditions and date, except as to the number of Warrant Shares for which they may be exercised. "WARRANT SHARES" has the meaning set forth in the preamble. 2. EXERCISE. 2.1. EXERCISE; DELIVERY OF CERTIFICATES. Subject to the provisions of Section 3, this Warrant may be exercised at the option of the Holder, in whole or in part, at any time and from time to time during the Exercise Period, by (a) delivering to the Company at its principal executive office (the "DESIGNATED OFFICE") (i) a notice of exercise, in substantially the form attached hereto (the "EXERCISE NOTICE"), duly completed and signed by the Holder, and (ii) this Warrant, and (b) paying the Warrant Purchase Price pursuant to SECTION 2.2 for the number of Warrant Shares being purchased. The Warrant Shares being purchased under this Warrant will be deemed to have been issued to the Holder, as the record owner of such Warrant Shares, as of the close of business on the date on which payment therefor is made by the Holder pursuant to SECTION 2.2. Stock certificates representing the Warrant Shares so purchased shall be delivered to the Holder within three (3) Business Days after this Warrant has been exercised (or, if applicable, after the conditions set forth in SECTION 3 have been satisfied); PROVIDED, HOWEVER, that in the case of a purchase of less than all of the Warrant Shares issuable upon exercise of this Warrant, the Company shall cancel this Warrant and, within three (3) Business Days after this Warrant has been surrendered, execute and deliver to the Holder a new Warrant of like tenor representing the number of Warrant Shares that have not been exercised. Each stock certificate representing the number of Warrant Shares purchased or purchasable under this Warrant shall be registered in the name of the Holder or, subject to compliance with Applicable Law, such other name as shall be designated by the Holder. 2.2. PAYMENT OF WARRANT PRICE. Payment of the Warrant Purchase Price may be made, at the option of the Holder, by (i) certified or cashier's check, (ii) wire transfer, (iii) instructing the Company to withhold and cancel a number of Warrant Shares then issuable upon exercise of this Warrant with respect to which the excess of the Fair Market Value over the Warrant Purchase Price for such canceled Warrant Shares is at least equal to the Warrant Purchase Price for the shares being purchased, (iv) surrender to the Company of shares of Common Stock previously acquired by the Holder with a Fair Market Value equal to the Warrant Purchase Price for the shares then being purchased or (v) any combination of the foregoing. The Company shall issue fractional shares of Common Stock upon the exercise of this Warrant. - 4 - 3. ANTI-TRUST NOTIFICATION. If the Company or the Holder determines, in its sole judgment upon the advice of counsel, that an exercise of this Warrant pursuant to the terms hereof would be subject to the provisions of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR ACT"), the Company shall, within seven (7) Business Days after (a) receiving a notice from the Holder of the applicability of the HSR Act or (b) after such a determination by the Company, file with the United States Federal Trade Commission (the "FTC") and the United States Department of Justice (the "DOJ") the notification and report form and any supplemental information required to be filed by it pursuant to the HSR Act in connection with the exercise of this Warrant. Any such notification and report form and supplemental information will be in full compliance with the requirements of the HSR Act. The Company will furnish to the Holder promptly (but in no event more than three (3) Business Days) such information and assistance as the Holder may reasonably request in connection with the preparation of any filing or submission required to be filed by the Holder under the HSR Act. The Company shall respond promptly after receiving any inquiries or requests for additional information from the FTC or the DOJ (and in no event more than five (5) Business Days after receipt of such inquiry or request). The Company shall keep the Holder apprised periodically and at the Holder's request of the status of any communications with, and any inquiries or requests for additional information from, the FTC or the DOJ. The Company shall bear all filing or other fees required to be paid by the Company and the Holder (or the "ultimate parent entity" of the Holder, if any) under the HSR Act or any other Applicable Law in connection with such filings and all costs and expenses (including, without limitation, attorneys' fees and expenses) incurred by the Company and the Holder in connection with the preparation of such filings and responses to inquiries or requests. In the event that this SECTION 3 is applicable to any exercise of this Warrant, the purchase by the Holder of the Warrant Shares subject to the Exercise Notice, and the payment by the Holder of the Warrant Purchase Price, shall be subject to the expiration or earlier termination of the waiting period under the HSR Act. 4. ADJUSTMENTS TO THE NUMBER OF WARRANT SHARES AND TO THE WARRANT PURCHASE PRICE. The number of Warrant Shares for which this Warrant is exercisable and the Warrant Purchase Price shall be subject to adjustment from time to time as set forth in this SECTION 4. 4.1. STOCK DIVIDENDS, SUBDIVISIONS AND COMBINATIONS. If at any time the Company: (a) pays a dividend or makes any other distribution with respect to its Common Stock in shares of Common Stock or shares of any other class or series of Capital Stock, (b) subdivides its outstanding shares of Common Stock into a larger number of shares of Common Stock, or (c) combines its outstanding shares of Common Stock into a smaller number of shares of Common Stock, - 5 - then the number of Warrant Shares purchasable upon exercise of this Warrant immediately prior to the record date for such dividend or distribution or the effective date of such subdivision or combination, as the case may be, shall be adjusted so that the Holder shall thereafter be entitled to receive upon exercise of this Warrant the kind and number of shares of Common Stock that the Holder would have owned or have been entitled to receive immediately after such record date or effective date, as the case may be, had this Warrant been exercised immediately prior to such record date or effective date. Any adjustment made pursuant to this SECTION 4.1 shall become effective immediately after the effective date of such event, but be retroactive to the record date, if any, for such event. Upon any adjustment to the number of Warrant Shares purchasable upon the exercise of this Warrant as herein provided, the Warrant Purchase Price per share shall be adjusted by multiplying the Warrant Purchase Price immediately prior to such adjustment by a fraction, the numerator of which shall be the number of Warrant Shares purchasable upon the exercise of this Warrant immediately prior to such adjustment and the denominator of which shall be the number of Warrant Shares so purchasable immediately thereafter. 4.2. ISSUANCE OF OPTIONS. If at any time the Company issues (without payment of any consideration) to all holders of outstanding Common Stock any Options, the Company shall also distribute such Options to the Holder as if this Warrant had been exercised immediately prior to the effective date of such issuance. 4.3. DISTRIBUTION OF ASSETS OR SECURITIES. If at any time the Company makes a distribution to its stockholders (other than in connection with the liquidation, dissolution or winding up of the Company) of any asset or security other than those referred to in SECTIONS 4.1, 4.2 OR 4.5, the Warrant Purchase Price shall be adjusted and shall be equal to the Warrant Purchase Price in effect immediately prior to the close of business on the date fixed for the determination of stockholders entitled to receive such distribution, MULTIPLIED by a fraction (which shall not be less than zero), the numerator of which shall be the Fair Market Value per share of Common Stock on the date fixed for such determination, LESS the then fair market value of the portion of the assets, or the fair market value of the portion of the securities, as the case may be, so distributed applicable to one share of Common Stock, and the denominator of which shall be the Fair Market Value per share of Common Stock. Such adjustment to the Warrant Purchase Price shall become effective immediately prior to the opening of business on the day immediately following the date fixed for the determination of stockholders entitled to receive such distribution. Upon any adjustment in the Warrant Purchase Price as provided in this SECTION 4.3, the number of shares of Common Stock issuable upon the exercise of this Warrant shall also be adjusted and shall be equal to the number of Warrant Shares issuable upon exercise of this Warrant immediately prior to such adjustment MULTIPLIED by a fraction, the numerator of which is the Warrant Purchase Price in effect immediately prior to such adjustment and the denominator of which is the Warrant Purchase Price as so adjusted. - 6 - 4.4. ISSUANCE OF EQUITY SECURITIES AT LESS THAN FAIR MARKET VALUE. (a) If, at any time after the Original Issue Date, the Company shall issue or sell (or, in accordance with SECTION 4.4(B), shall be deemed to have issued or sold) any shares of Common Stock without consideration or for a consideration per share that is less than the Fair Market Value per share of Common Stock determined as of the date of such issuance or sale, then, effective immediately upon such issuance or sale, the Warrant Purchase Price shall be reduced (calculated to the nearest $.001 and without regard to any other provisions hereof) to an amount equal to the product obtained by multiplying (i) the Warrant Purchase Price in effect immediately prior to such issuance or sale, by (ii) a fraction, the numerator of which shall be the sum of (A) the product obtained by multiplying (1) the number of shares of Common Stock outstanding (on a Fully Diluted Basis) immediately prior to such issuance or sale by (2) the Fair Market Value per share of Common Stock as of the date of such issuance or sale, PLUS (B) the cash consideration, if any, received by the Company upon such issuance or sale, and the denominator of which shall be the product obtained by multiplying (C) the number of shares of Common Stock outstanding (on a Fully Diluted Basis) immediately after such sale or issuance, by (D) the Fair Market Value per share of Common Stock as of the date of such issuance or sale. Upon each such adjustment of the Warrant Purchase Price hereunder, the number of Warrant Shares which may be obtained upon exercise of this Warrant shall be increased to the number of shares determined by multiplying (x) the number of Warrant Shares which could be obtained upon exercise of such Warrant immediately prior to such adjustment by (y) a fraction, the numerator of which shall be the Warrant Purchase Price in effect immediately prior to such adjustment and the denominator of which shall be the Warrant Purchase Price in effect immediately after such adjustment. Adjustments shall be made successively whenever such an issuance or sale is made. (b) For the purpose of determining the adjusted Warrant Purchase Price under SECTION 4.4(a), the following shall be applicable: (i) ISSUANCE OF OPTIONS. If the Company in any manner issues or grants any Options or Convertible Securities and the price per share for which Common Stock is issuable upon the exercise of such Options or upon conversion or exchange of such Convertible Securities is less than the Fair Market Value per share of Common Stock determined as of the date of such issuance or grant of such Options, then the total maximum number of shares of Common Stock issuable upon the exercise of such Options (or upon conversion or exchange of the total maximum amount of such Convertible Securities issuable upon the exercise of such Options) shall be deemed to be outstanding and to have been issued and sold by the Company for such lower price per share. For purposes of this paragraph, the price per share for which Common Stock is issuable upon exercise of Options or upon conversion or exchange of Convertible Securities issuable upon exercise of Options shall be determined by dividing (A) the total amount, if any, received or receivable by the Company as consideration for the issuing or granting of such Options, PLUS the minimum aggregate amount of additional consideration payable to the Company upon the exercise of all such Options, PLUS in the case of such Options which relate to Convertible Securities, the minimum aggregate amount of additional - 7 - consideration, if any, payable to the Company upon the issuance or sale of such Convertible Securities and the conversion or exchange thereof, by (B) the total maximum number of shares of Common Stock issuable upon exercise of such Options or upon the conversion or exchange of all such Convertible Securities issuable upon the exercise of such Options. (ii) ISSUANCE OF CONVERTIBLE SECURITIES. If the Company in any manner issues or grants any Convertible Securities having an exercise or conversion or exchange price per share of Common Stock which is less than the Fair Market Value per share of Common Stock determined as of the date of such issuance or sale, then the maximum number of shares of Common Stock issuable upon the conversion or exchange of such Convertible Securities shall be deemed to be outstanding and to have been issued and sold by the Company for such lower price per share. For purposes of this paragraph, the price per share for which Common Stock is issuable upon conversion or exchange of Convertible Securities is determined by dividing (A) the total amount received by the Company as consideration for the issuance or sale of such Convertible Securities, PLUS the minimum aggregate amount of additional consideration, if any, payable to the Company upon the conversion or exchange thereof, by (B) the total maximum number of shares of Common Stock issuable upon the conversion or exchange of all such Convertible Securities. (iii) CHANGE IN EQUITY PRICE OR CONVERSION RATE. If the purchase price provided for in any Options, the additional consideration, if any, payable upon the issuance, conversion or exchange of any Convertible Securities or the rate at which any Convertible Securities are convertible into or exchangeable for Common Stock changes at any time, then the Warrant Purchase Price in effect at the time of such change shall be readjusted to the Warrant Purchase Price which would have been in effect at such time had such Options or Convertible Securities still outstanding provided for such changed purchase price, additional consideration or changed conversion rate, as the case may be, at the time initially granted, issued or sold and the number of Warrant Shares shall be correspondingly readjusted. Notwithstanding the foregoing, no such readjustment shall be made to the Warrant Purchase Price in connection with the following events: (A) the reduction in the Conversion Price (as defined in the Statement Pursuant to Section 10-602 of the Arizona Revised Statutes of the Designations, Preferences, Rights and Privileges of the $7,500,000 Series A Convertible Preferred Stock Par Value $.05 Per Share of Simula, Inc. as in effect on the date hereof) of the Series A Preferred resulting solely and directly from the reduction of the market price of the Common Stock during the period commencing on January 1, 2000, through and including August 17, 2000; (B) any adjustment to the Conversion Rate (as such term is defined in the 1997 Indenture) of the 8% Notes resulting solely and directly from (I) the reduction in the Conversion Price as set forth in clause (A) above, (II) options granted under the Company's 1994 Stock Option Plan and 1999 Incentive Option Plan during the period commencing on January 1, 2000, and ending on August 17, 2000, and (III) the repricing of the Warrant Purchase Price to $1.6250 per Warrant Share pursuant to this Warrant. - 8 - (iv) CALCULATION OF CONSIDERATION RECEIVED. If any Common Stock, Options or Convertible Securities are issued or sold or deemed to have been issued or sold for cash, then the consideration received therefor shall be deemed to be the net amount received by the Company therefor. If any Common Stock, Options or Convertible Securities are issued or sold for consideration other than cash, then the amount of consideration received by the Company shall be the fair value of such consideration determined in good faith by the Board of Directors of the Company, subject to the Holder's rights under SECTION 4.8(E). (v) TREASURY SHARES. The number of shares of Common Stock outstanding at any time does not include shares owned or held by or for the account of the Company or any Subsidiary of the Company, and the disposition of any shares so owned or held shall be considered an issue or sale of Common Stock. (vi) RECORD DATE. If the Company takes a record of the holders of Common Stock for the purpose of entitling them (A) to receive a dividend or other distribution payable in Common Stock, Options or Convertible Securities or (B) to subscribe for or purchase Common Stock, Options or Convertible Securities, then such record date shall be deemed to be the date of the issuance or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such distribution or the date of the granting or such right of subscription or purchase, as the case may be. (c) No adjustment shall be made pursuant to this SECTION 4.4 with respect to the issuance of Excluded Securities. 4.5. REORGANIZATION, RECLASSIFICATION, MERGER, CONSOLIDATION OR DISPOSITION OF ASSETS. If at any time the Company reorganizes its capital, reclassifies its capital stock, consolidates, merges or combines with or into another Person (where the Company is not the surviving corporation or where there is any change whatsoever in, or distribution with respect to, the outstanding Common Stock), or the Company sells, transfers or otherwise disposes of all or substantially all of its property, assets or business to another Person, other than in a transaction provided for in SECTIONS 4.1, 4.2, 4.3, 4.4 OR 4.6, and, pursuant to the terms of such reorganization, reclassification, consolidation, merger, combination, sale, transfer or other disposition of assets, (i) shares of capital stock of the successor or acquiring Person or the Company (if it is the surviving corporation) or (ii) any cash, shares of stock or other securities or property of any nature whatsoever (including warrants or other subscription or purchase rights) in addition to or in lieu of common stock of the successor or acquiring Person or the Company ("OTHER PROPERTY") are to be received by or distributed to the holders of Common Stock who are holders immediately prior to such transaction, then the Holder shall have the right thereafter to receive, upon exercise of this Warrant, the number of shares of Common Stock, common stock of the successor or acquiring Person, and/or Other Property which holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such event would have owned or received immediately after and as a result of such event. In such event, the aggregate Warrant Purchase Price otherwise payable for the Warrant Shares issuable upon exercise of this Warrant shall be allocated among such securities and Other Property in - 9 - proportion to the respective fair market values of such securities and Other Property as determined in good faith by the Board of Directors of the Company, subject to the Holder's rights under SECTION 4.8(E). In case of any such event, the successor or acquiring Person (if other than the Company) shall expressly assume the due and punctual observance and performance of each and every covenant and condition of this Warrant to be performed and observed by the Company and all the obligations and liabilities hereunder, subject to such modifications as the Holder may approve in writing (and memorialized by resolutions of the Board of Directors of the Company) in order to provide for adjustments of any shares of common stock of such successor or acquiring Person for which this Warrant thus becomes exercisable, which modifications shall be as equivalent as practicable to the adjustments provided for in this SECTION 4.5. For purposes of this SECTION 4, "common stock of the successor or acquiring Person" shall include stock or other equity securities, or securities that are exercisable or exchangeable for or convertible into equity securities, of such corporation, or other securities if such Person is not a corporation, of any class that is not preferred as to dividends or assets over any other class of stock of such corporation or Person and that is not subject to redemption and shall also include any evidences of indebtedness, shares of stock or other securities that are convertible into or exchangeable for any such stock, either immediately or upon the arrival of a specified date or the happening of a specified event and any warrants or other rights to subscribe for or purchase any such stock. The foregoing provisions of this SECTION 4.5 shall similarly apply to successive reorganizations, reclassifications, consolidations, mergers, sales, transfers and other dispositions of assets. 4.6. DISSOLUTION, TOTAL LIQUIDATION OR WINDING-UP. If at any time there is a voluntary or involuntary dissolution, total liquidation or winding-up of the Company, other than as contemplated by SECTION 4.5, then the Company shall cause to be mailed (by registered or certified mail, return receipt requested, postage prepaid) to the Holder at the Holder's address as shown on the Warrant register, at the earliest practicable time (and, in any event, not less than thirty (30) calendar days before any date set for definitive action) written notice of the date on which such dissolution, liquidation or winding-up shall take place, as the case may be. Such notice shall also specify the date as of which the record holders of shares of Common Stock shall be entitled to exchange their shares for securities, money or other property deliverable upon such dissolution, liquidation or winding-up, as the case may be. On such date, the Holder shall be entitled to receive upon surrender of this Warrant the cash or other property, LESS the Warrant Purchase Price for this Warrant then in effect, that the Holder would have been entitled to receive had this Warrant been exercised immediately prior to such dissolution, liquidation or winding-up. Upon receipt of the cash or other property, any and all rights of the Holder to exercise this Warrant shall terminate in their entirety. If the cash or other property distributable in the dissolution, liquidation or winding-up has a fair market value which is less than the Warrant Purchase Price for this Warrant then in effect, this Warrant shall terminate and be of no further force or effect upon the dissolution, liquidation or winding-up. - 10 - 4.7. OTHER DILUTIVE EVENTS. If any event occurs as to which the other provisions of this SECTION 4 are not strictly applicable but as to which the failure to make any adjustment would not protect the purchase rights represented by this Warrant in accordance with the intent and principles hereof, then, in each such case, the Holder may appoint on behalf of the Company an investment banking or accounting firm of recognized national standing which shall give its opinion as to the adjustment, if any, on a basis consistent with the intent and principles established herein, necessary to preserve the purchase rights represented by this Warrant. Upon receipt of such opinion, the Company will mail (by registered or certified mail, return receipt requested, postage prepaid) a copy thereof to the Holder within three (3) Business Days and shall make the adjustments described therein. If an adjustment is made pursuant to this SECTION 4.7, the fees and expenses of such investment banking or accounting firm shall be borne by the Company. If, however, no adjustment is made, the Holder shall bear such fees and expenses. 4.8. OTHER PROVISIONS APPLICABLE TO ADJUSTMENTS UNDER THIS SECTION. The following provisions shall be applicable to the adjustments provided for pursuant to this SECTION 4: (a) WHEN ADJUSTMENTS TO BE MADE. The adjustments required by this SECTION 4 shall be made whenever and as often as any specified event requiring such an adjustment shall occur. For the purpose of any such adjustment, any specified event shall be deemed to have occurred at the close of business on the date of its occurrence. (b) RECORD DATE. If the Company fixes a record date of the holders of Common Stock for the purpose of entitling them to (i) receive a dividend or other distribution payable in shares of Common Stock or in shares of any other class or series of capital stock or securities convertible into or exchangeable for Common Stock or shares of any other class or series of capital stock or (ii) subscribe for or purchase shares of Common Stock or such other shares or securities, then all references in this SECTION 4 to the date of the issuance or sale of such shares of Common Stock or such other shares or securities shall be deemed to be references to that record date. (c) WHEN ADJUSTMENT NOT REQUIRED. If the Company fixes a record date of the holders of its Common Stock for the purpose of entitling them to receive a dividend or distribution or subscription or purchase rights to which the provisions of SECTION 4.1 would apply, but shall, thereafter and before the distribution to stockholders, legally abandon its plan to pay or deliver such dividend, distribution, subscription or purchase rights, then thereafter no adjustment shall be required by reason of the taking of such record and any such adjustment previously made in respect thereof shall be rescinded and annulled. (d) NOTICE OF ADJUSTMENTS. Whenever the number of shares of Common Stock for which this Warrant is exercisable or the Warrant Purchase Price shall be adjusted or recalculated pursuant to this SECTION 4, the Company shall, as soon as practicable but in no event more than five (5) Business Days thereafter, prepare a certificate to be executed by the chief financial officer of the Company setting forth, in reasonable detail, the event requiring the adjustment or recalculation and the method by which such adjustment or - 11 - recalculation was calculated, specifying the number of shares of Common Stock for which this Warrant is exercisable and (if such adjustment was made pursuant to SECTION 4.5) describing the number and kind of any other shares of stock or Other Property for which this Warrant is exercisable, and any related change in the Warrant Purchase Price, after giving effect to such adjustment, recalculation or change. The Company shall mail to the Holder (by registered or certified mail, return receipt requested, postage prepaid) a signed copy of such certificate prior to the end of the five (5) Business Day period referenced above. The Company shall keep at the Designated Office copies of all such certificates and cause them to be available for inspection at the Designated Office during normal business hours by the Holder or any prospective transferee of this Warrant designated by the Holder. (e) CHALLENGE TO GOOD FAITH DETERMINATION. Whenever the Board of Directors of the Company is required to make a determination in good faith of the fair market value of this Warrant or the Warrant Shares under this SECTION 4, such determination may be challenged or disputed by the Holder. If the Holder wishes to challenge or dispute any such fair market value determination, it shall furnish written notice to the Company of its intention to challenge the same. If the Company and the Holder cannot resolve the dispute between or among themselves, then such dispute shall be submitted for final determination to an investment banking or accounting firm pursuant to the valuation procedures set forth in clause (ii) under the definition of Fair Market Value. The Company shall bear all fees, costs and expenses incurred by the Company and the Holder in connection with the determination of the Fair Market Value of this Warrant or the Warrant Shares, and any challenge or dispute thereof, including, without limitation, all fees and expenses of any investment banking, valuation or accounting firm(s) engaged by the Company or the Holder and of attorneys in connection with such calculation; PROVIDED, HOWEVER, that the Holder shall bear all such fees, costs and expenses if, after the Holder challenges or disputes any fair market value determination by the Board of Directors of the Company, the difference between (a) the fair market value determined pursuant to the valuation procedures set forth in clause (ii) under the definition of Fair Market Value and (b) the fair market value determined by the Holder, is less than five percent (5.0%) of the fair market value determined by the Board of Directors of the Company. (f) INDEPENDENT APPLICATION. Except as otherwise provided herein, all subsections of this SECTION 4 are intended to operate independently of one another (but without duplication). If an event occurs that requires the application of more than one subsection, all applicable subsections shall be given independent effect without duplication. (g) OTHER ANTI-DILUTION PROVISIONS. To the extent that the initial Holder continues to hold this Warrant, in whole or in part, at any time at which the Company takes any action which would have resulted in an adjustment to the exercise price of, and the number of shares of Common Stock issuable pursuant to, this Warrant (a "DILUTIVE ISSUANCE"), then, to the extent that the initial Holder has exercised all or any portion of this Warrant prior to such time, the Company shall immediately issue to the initial Holder upon such Dilutive Issuance, without the payment of any further consideration of any kind, such number of additional shares of Common Stock as shall equal the difference between (i) the number of shares of Common Stock issuable upon the exercise of this Warrant to the extent held unexercised by the initial Holder at such time after giving effect - 12 - to the adjustment thereto resulting from such Dilutive Issuance and (ii) the number of shares of Common Stock which would have been issuable upon exercise of this Warrant after giving effect to such Dilutive Issuance if this Warrant had not been exercised in any part. 4.9. FIDUCIARY DUTIES OF COMPANY. The Company and its directors shall owe the Holder the same fiduciary duties that the Company and its directors would owe to any holder of Warrant Shares. 5. MISCELLANEOUS. 5.1. RESTRICTIVE LEGEND. This Warrant and, unless registered under the Securities Act, any Warrant Shares issued upon exercise hereof shall be stamped or imprinted with a legend in substantially the following form (in addition to any legends required under applicable state securities laws): THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR REGISTERED OR QUALIFIED UNDER ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE ASSIGNED EXCEPT IN COMPLIANCE WITH THE REGISTRATION REQUIREMENTS OF SUCH ACT AND THE REGISTRATION OR QUALIFICATION REQUIREMENTS OF SUCH STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION AND QUALIFICATION. The legend shall be appropriately modified upon issuance of certificates for shares of Common Stock. Upon request of the holder of a Common Stock certificate, the Company shall issue to that holder a new certificate free of the foregoing legend, if, with such request, such holder provides the Company with an opinion of counsel that is reasonably acceptable to the Company (PROVIDED that Irell & Manella LLP shall be deemed to be acceptable to the Company) to the effect that the securities evidenced by such certificate may be sold without restriction under Rule 144 (or any other rule permitting resales of securities without restriction) promulgated under the Securities Act. 5.2. HOLDER ENTITLED TO BENEFITS UNDER OTHER AGREEMENTS. The Holder of this Warrant is entitled to certain rights, benefits and privileges with respect to this Warrant and the Warrant Shares pursuant to the terms of the Securities Purchase Agreement, the Registration Rights Agreement (it being understood that the Warrant Shares constitute "Registrable Securities" thereunder), the Investor Rights Agreement and certain other Investment Documents. 5.3. OTHER COVENANTS. Without limiting the generality of SECTION 5.2, the Company covenants and agrees that, as long as this Warrant remains outstanding or any Warrant Shares are issuable with respect to this Warrant, the Company will perform all of the following covenants for the express benefit of the Holder: (a) the Warrant Shares shall, - 13 - upon issuance, be duly authorized, validly issued, fully paid and non-assessable shares of Common Stock; (b) each Holder shall, upon the exercise thereof in accordance with the terms hereof, receive good and marketable title to the Warrant Shares, free and clear of all voting and other trust arrangements to which the Company is a party or by which it is bound, preemptive rights of any stockholder, liens, encumbrances, equities and claims whatsoever, including, but not limited to, all Taxes, Liens and other charges with respect to the issuance thereof; (c) at all times prior to the Expiration Date, the Company shall have reserved for issuance a sufficient number of authorized but unissued shares of Common Stock, or other securities or property for which this Warrant may then be exercisable, to permit this Warrant (or if this Warrant has been divided, all outstanding Warrants) to be exercised in full; (d) the Company shall deliver to the initial Holder, and each subsequent private placement Holder who executes a confidentiality agreement in substantially the form of Section 13.10 of the Securities Purchase Agreement, the information and reports described in Section 9.3 of the Securities Purchase Agreement as contemplated therein; (e) the Company shall extend to the Holder the investment monitoring and other rights set forth in the Investor Rights Agreement; and (f) the Company shall provide each Holder with notice of all corporate actions in the same manner and to the same extent as the shareholders of the Company; provided, however, that the information to be provided by the Company under clauses (d) through (f) above is expressly subject to the provisions of Section 13.10 of the Securities Purchase Agreement. 5.4. ISSUE TAX. The issuance of shares of Common Stock upon the exercise of this Warrant shall be made without charge to the Holder for any issue tax in respect thereof. 5.5. CLOSING OF BOOKS. The Company will at no time close its transfer books against the transfer of this Warrant or of any Warrant Shares in any manner which interferes with the timely exercise hereof. 5.6. NO VOTING RIGHTS; LIMITATION OF LIABILITY. Except as expressly set forth in this Warrant, nothing contained in this Warrant shall be construed as conferring upon the Holder (a) the right to vote or consent as a stockholder in respect of meetings of stockholders for the election of directors of the Company or any other matter, (b) the right to receive dividends, except as set forth in SECTION 4, or (c) any other rights as a stockholder of the Company, except as set forth in SECTION 4 and in the Investor Rights Agreement. No provisions hereof, in the absence of affirmative action by the Holder to purchase shares of Common Stock, and no mere enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the Warrant Purchase Price or as a shareholder of the Company, whether such liability is asserted by the Company or by its creditors. 5.7. MODIFICATION AND WAIVER. This Warrant and any provision hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement is sought. - 14 - 5.8. NOTICES. All notices, requests, demands and other communications which are required or may be given under this Warrant 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 seventy-two (72) hours after mailing, if mailed by registered or certified mail, return receipt requested, postage prepaid, addressed as follows: (a) If to the Holder, at: c/o Levine Leichtman Capital Partners, Inc. 335 North Maple Drive, Suite 240 Beverly Hills, CA 90210 Attention: Arthur E. Levine, President Telephone: (310) 275-5335 Facsimile: (310) 275-1441 WITH A COPY TO: Irell & Manella LLP 1800 Avenue of the Stars, Suite 900 Los Angeles, CA 90067 Attention: Mitchell S. Cohen, Esq. Telephone: (310) 277-1010 Telecopier: (310) 203-7199 (b) If to any other Holder, at: such Holder's address as shown on the books of the Company. (c) If to the Company, at: Simula, Inc. 2700 North Central Avenue, Suite 1000 Phoenix, AZ 85004 Attention: Donald W. Townsend Telephone: (602) 631-4005 Telecopier: (602) 631-9005 WITH A COPY TO: Fennemore Craig 3003 North Central Avenue, Suite 2600 Phoenix, AZ 85012-2913 Attention: Robert J. Hackett, Esq. Telephone: (602) 916-5336 Telecopier: (602) 916-5536 - 15 - or at such other address or addresses as the Holder or the Company, as the case may be, may specify by written notice given in accordance with this Section 5.8. 5.9. SUCCESSORS AND ASSIGNS. The Company may not assign any of its rights, or delegate any of its obligations, under this Warrant without the prior written consent of the Holder (which consent may be withheld for any reason or no reason at all). Subject to the requirements of Applicable Laws, the Holder may assign this Warrant, in whole or in part, at any time or from time to time, without the consent of the Company. Each assignment of this Warrant shall be registered on the books of the Company to be maintained for such purpose upon surrender of this Warrant at the Designated Office, together with appropriate instruments of assignment, duly completed and executed. Upon such surrender, the Company shall, within three (3) Business Days of surrender, at its own expense, execute and deliver a new Warrant or Warrants in the name of the assignee or assignees specified in such assignment and in the denominations specified therein and this Warrant shall promptly be canceled. If any portion of this Warrant is not being assigned, the Company shall, at its own expense, within three (3) Business Days issue to the Holder a new Warrant evidencing the portion not so assigned. If the Holder assigns this Warrant to one or more Persons, any decisions that the Holder is entitled to make at any time hereunder shall be made by the Holders holding more than fifty percent (50.0%) of the aggregate number of Warrant Shares issuable upon exercise of all of the then exercisable Warrants. The Company may require the Holder, as a condition to the execution and delivery of any new Warrant in connection with an assignment of this Warrant, to represent and warrant to the Company that such assignment complies with applicable federal or state securities laws and to deliver an opinion of its legal counsel to such effect. This Warrant shall be binding upon and inure to the benefit of the Company, the Holder and their respective successors and permitted assigns, and shall include, with respect to the Company, any Person succeeding the Company by merger, consolidation, combination or acquisition of all or substantially all of the Company's assets, and in such case, except as expressly provided herein and in the Securities Purchase Agreement, all of the obligations of the Company hereunder shall survive such merger, consolidation, combination or acquisition. 5.10. CAPTIONS; CONSTRUCTION AND INTERPRETATION. The captions in this Warrant are for convenience of reference only, do not constitute a part of this Agreement and are not to be considered in construing or interpreting this Warrant. All section, preamble, recital, exhibit, schedule, disclosure schedule, annex, clause and party references are to this Warrant unless otherwise stated. No party, nor its counsel, shall be deemed the drafter of this Warrant for purposes of construing the provisions of this Warrant, and all provisions of this Warrant shall be construed in accordance with their fair meaning, and not strictly for or against any party. 5.11. LOST WARRANT OR CERTIFICATES. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant or of a stock certificate evidencing Warrant Shares and, in the case of any such loss, theft or destruction, upon receipt of an indemnity reasonably satisfactory to the Company or, in the case of any such mutilation, upon surrender and cancellation of this Warrant or stock - 16 - certificate, the Company shall make and deliver to the Holder, within three (3) Business Days of receipt by the Company of such documentation, a new Warrant or stock certificate, of like tenor, in lieu of the lost, stolen, destroyed or mutilated Warrant or stock certificate. 5.12. NO IMPAIRMENT. The Company shall not by any action, including, without limitation, amending its charter documents or regulations or through any reorganization, reclassification, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of the Holder against impairment. Without limiting the generality of the foregoing, the Company will (i) not increase the par value (if any) of any shares of Common Stock receivable upon the exercise of this Warrant above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant, free and clear of all liens, encumbrances, equities and claims, and (iii) use its best efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof as may be necessary to enable the Company to perform its obligations under this Warrant. The Company shall not be required to register the Warrant Shares under the Securities Act except pursuant to the provisions of the Registration Rights Agreement. 5.13. GOVERNING LAW. IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS WARRANT 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. 5.14. REMEDIES. If the Company fails to perform, comply with or observe any covenant or agreement to be performed, complied with or observed by it under this Warrant, the Holder 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 Warrant or for an injunction against the breach of any such term or in aid of the exercise of any power granted in this Warrant or to enforce any other legal or equitable right, or to take any one or more of such actions. The Company hereby agrees that the Holder shall not be required or otherwise obligated to, and hereby waives any right to demand that the Holder, 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 retained by the Holder, and all fees, costs and expenses of appeals, incurred or expended by the Holder in connection with the enforcement of this Warrant or the collection of any sums due hereunder, whether or not suit is commenced. None of the rights, powers or remedies conferred under this Warrant shall be mutually exclusive, and each right, power or remedy shall be cumulative and in addition - 17 - to any other right, power or remedy whether conferred by this Warrant or now or hereafter available at law, in equity, by statute or otherwise. 5.15. WAIVER OF JURY TRIAL. THE COMPANY AND THE HOLDER (BY ACCEPTANCE HEREOF) HEREBY WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY ACTION, SUIT OR OTHER PROCEEDING ARISING OUT OF, CONNECTED WITH OR RELATED TO THIS WARRANT 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 Company has caused this Warrant to be executed and issued by its duly authorized representatives on the date first above written. SIMULA, INC., an Arizona corporation By: /s/ Donald Townsend ---------------------------------------- Name: Donald W. Townsend Title: President and CEO By: /s/ James C. Dodd ---------------------------------------- Name: James C. Dodd Title: Executive Vice President and CFO ACKNOWLEDGED AND AGREED: LEVINE LEICHTMAN 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: Levine Leichtman Capital Partners, Inc., a California corporation, its General Partner By: /s/ Arthur E. Levine ----------------------------- Arthur E. Levine President - 18 - SIMULA, INC. FORM OF EXERCISE SUBSCRIPTION (To be signed only upon exercise of this Warrant) Pursuant to Section 2.1 of that certain Warrant No. LL-2 to Purchase 850,000 Shares of Common Stock (the "Warrant"), the undersigned hereby irrevocably elects to exercise the Warrant to purchase _______________ (_______) shares of Common Stock for an aggregate Warrant Purchase Price of __________________________ Dollars ($______). [If the Holder has determined upon advice of counsel that compliance with the HSR Act is required, include the following sentences: "The undersigned has determined that this exercise is subject to the HSR Act and requests that the Company file the requisite notification and report form with, and pay all requisite filing fees to, the FTC and the DOJ as promptly as possible. The purchase of the shares described above and the payment of the Warrant Purchase Price are subject to the expiration or earlier termination of the waiting period under the HSR Act."] The Warrant Purchase Price to be paid as follows (check as applicable): ___ Certified or official bank check in the amount of $_________; ___ Wire transfer in the amount of $_________; ___ Cancellation of _________________________ Warrant Shares; or ___ Surrender of __________________ shares of Common Stock. The undersigned hereby requests that [if the Holder has determined upon advice of counsel that compliance with the HSR Act is required, include the following phrase: "upon the expiration or earlier termination of the waiting period under the HSR Act"] a certificate(s) for the shares of Common Stock be issued in the name of _________________________, and delivered to, ____________________, whose address is ____________________________________. The undersigned hereby represents that it is acquiring such shares of Common Stock for its own account for investment purposes only and not with a view to or for sale in connection with any distribution thereof. Dated: _______________ ___________________________________________________________ Name of the Holder (must conform precisely to the name specified on the face of the Warrant) ___________________________________________________________ Signature of authorized representative of the Holder ___________________________________________________________ Print or type name of authorized representative Social Security Number or Employer Tax Identification Number of the Holder: ______________________ Address of the Holder: _______________________________ _______________________________ _______________________________
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