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EXHIBIT 10.14
AGREEMENT FOR CREDIT AVAILABILITY
THIS AGREEMENT FOR CREDIT AVAILABILITY ("Agreement") is made and
entered into as of the 20TH day of NOVEMBER, 1996, by and between REFLECTONE,
INC., a corporation organized and existing under the laws of the state of
Florida ("Reflectone"), and BRITISH AEROSPACE PUBLIC LIMITED COMPANY, a public
limited company organized and existing under the laws of England ("BAe").
W I T N E S S E T H:
WHEREAS, BAe currently guarantees or provides certain of Reflectone's
credit facilities;
WHEREAS, the parties believe that it is in their best interests to set
forth their mutual understandings with respect to BAe's continuing guarantee of
these credit facilities.
NOW, THEREFORE, in consideration of the mutual promises and agreements
contained herein, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto, intending to be legally bound thereby, agree as follows:
1. Credit Facilities.
(a) Guaranteed Facilities. Reflectone and BAe hereby
acknowledge that BAe currently guarantees an aggregate of U.S.
$37,000,000 of credit facilities provided to Reflectone by third-party
lenders, which facilities are more fully described on Exhibit A hereto
(the "Guaranteed Facilities"). The Guaranteed Facilities provide
Reflectone with access to an aggregate of U.S. $2,000,000 for working
capital purposes and an aggregate of U.S. $35,000,000 for the
provision of letters of credit, bonds and over-draft facilities.
Subject to the terms and conditions set forth herein, BAe hereby
agrees to continue to guarantee the Guaranteed Facilities throughout
the term of this Agreement.
(b) BAeF Facilities. In addition, Reflectone and BAe
hereby acknowledge that BAe, through its subsidiary British Aerospace
Finance, Inc. ("BAeF"), provides Reflectone with two Borrowing
Facilities totalling U.S. $50,000,000 for working capital purposes
(the
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"BAeF Facilities"). Subject to the terms and conditions set forth
herein and in the related Borrowing Facility Agreements between
Reflectone and BAeF, BAe hereby agrees to continue to provide the BAeF
Facilities throughout the term of this Agreement.
2. Fees.
(a) Facility Fee. As compensation for the provision of
credit facilities described in Section 1 of this Agreement, Reflectone
shall pay to BAe a quarterly fee (the "Facility Fee") equal to one
eighth of one percent of the maximum amount of the Guaranteed and BAeF
Facilities available during the relative quarter to be paid in the
manner set forth in Section 2(c) hereof. This fee will be adjusted
prorata for early termination.
(b) Guaranty Fee. As compensation for the guaranty of
the US$2,000,000. Working Capital Facility described in Exhibit A of
this Agreement, Reflectone shall pay in the manner set forth in
Section 2(c) hereof, to BAe a guarantee fee (the "Guaranty Fee") based
on the drawings made under the Guaranteed Facility equal to 3.5
percent per annum, less the margin charged by Wachovia Bank of
Georgia, N.A. as more fully described in the Agreement establishing
the Working Capital Facility. The Guaranty Fee due in respect of
drawings under the Working Capital Facility shall accrue from day to
day commencing on the date of each drawing and shall be computed on
the basis of the actual days elapsed using a 360-day year.
(c) Payment. The Credit Availability Fee and Guaranty
Fee shall each be paid by Reflectone to BAe quarterly in arrears,
payable on March 31, June 30, September 30, and December 31 of each
year during the term of this Agreement.
3. Financial Reporting Matters.
(a) Monthly Reporting. During the term of this
Agreement, Reflectone shall submit to BAe or British Aerospace
Holdings, Inc. ("BAeI") its monthly financial reports ("Monthly
Report") in accordance with the timetables and formats specified by
Bae from time to time.
(b) Annual Budget and Business (5-year Strategic) Plan.
During the term of this Agreement, on or before the due dates
specified by BAe, Reflectone shall submit to BAe or BAeI its annual
budget ("Annual Budget") and Business (5-year Strategic) Plan
("Business Plan"). Each Annual Budget and Business Plan shall be
prepared in accordance with the format and timetable specified by BAe
from time to time. In addition, Reflectone shall supply annual
supplementary management information in a format and timetable
specified by BAe from time to time.
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(c) Annual Audited Reporting Package. During the term of
this Agreement Reflectone shall submit to BAe or BAeI an audited
reporting package for the previous fiscal year, in a format and
timetable specified by BAe from time to time.
4. Capital Expenditure Review.
During the term of this Agreement Reflectone shall provide for
prior review and approval by BAe or BAeI all capital investment
expenditure in excess of sterling L.50,000. where such expenditure has
been reflected in Reflectone's annual budget. If such capital
investment has not been reflected in Reflectone's annual budget and is
not wholly substitutional, prior review by BAe or BAeI is required for
amounts above sterling L.10,000. All acquisitions and disposals of
businesses, including joint ventures, shall require prior review by
BAe or BAeI. Reflectone undertakes not to proceed with any such
investment without prior approval from BAe or BAeI. All investment
reviews submitted to BAe or BAeI must comply with the form, content
and timetable as specified by BAe from time to time.
5. Other Contractual Agreements.
During the term of this Agreement Reflectone shall not
knowingly or willfully take any action, or omit to take any action, or
enter into any agreement which would cause BAe to be in violation of
any law, regulation or any financial or contractual covenants provided
by BAe in any agreement to which it is a party or which would
otherwise place BAe in default of any such agreement.
6. Term.
This Agreement shall expire on August 7, 1997 provided,
however, that this Agreement may be terminated by either party hereto
upon thirty (30) days' written notice in the event that:
(a) BAe shall at any time cease to have the ability to
hold through the exercise of conversion rights and warrants, a
majority interest in Reflectone, or
(b) credit facilities in the amounts set forth in Section
1 hereof shall become obtainable by Reflectone on terms substantially
the same as the Facilities through third parties, without the
requirement that BAe guarantee or otherwise become obligated for such
other facilities.
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7. Representation and Warranties.
Reflectone represents and warrants as follows as of the date
hereof and as of the date of each utilization of the Facilities.
8.1 Existence. It is a corporation duly organized,
validly existing, and in good standing under the laws of the State of
Florida.
8.2 Authority. It has full corporate power and authority
to execute and deliver this Agreement and to perform and observe the
provisions thereof, all of which have been duly authorized by all
necessary corporate action. By executing and delivering this
Agreement and by performing and observing the provisions thereof, it
will not (a) violate any existing provisions of its Certificate of
Incorporation or By-laws or violate or otherwise become in default
under any contract, law, order, regulation, or other obligation
binding upon it, or (b) cause the creation or imposition of any lien,
charge, or encumbrance of any nature whatsoever, upon any of its
property, except as provided herein. This Agreement has been duly
authorized, and executed and is valid, enforceable, and legally
binding upon it, except as such enforcement may be limited by
bankruptcy, insolvency, and other laws of general application
affecting the rights and remedies of creditors and by equitable
principles which may render certain remedies unavailable. It has all
requisite corporate power and authority to own its properties and to
carry on its business as now or proposed to be conducted.
8.3. Consents or Approvals. No consent, approval, or
authorization of, or filing, registration, or qualification with, any
governmental authority or any other Person is required to be obtained
by it in connection with the execution, delivery, performance, or
enforceability of this Agreement.
8. Miscellaneous.
(a) Notices. Any notices or other communications
required or permitted hereunder shall be given in writing and shall be
delivered or sent by certified or registered mail, postage prepaid,
addressed as follows:
If to Reflectone, to:
Reflectone, Inc.
0000 Xxxxx Xxxx Xxxxxxxxx
X.X. Xxx 00000
Xxxxx, Xxxxxxx 00000
Attn: Vice President Finance
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If to BAe, to:
c/o British Aerospace Holdings, Inc.
Washington Technology Park
00000 Xxxxxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000-0000
Attn: Sr. Vice President and General Manager
or to such other address as shall be furnished in writing by such
party, and any such notice or communication shall be effective and be
deemed to have been given as of two (2) days following the date so
mailed; provided that any notice or communications changing any of the
addresses set forth above shall be effective and deemed given only
upon its receipt.
(b) Assignment. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns, but
neither this Agreement nor any of the rights, interests, or
obligations hereunder shall be assigned by either of the parties
hereto without the prior written consent of the other party.
(c) Entire Agreement. This Agreement, including the
exhibits and other documents referred to herein which form a part
hereof, contains the entire understanding of the parties with respect
to the transactions contemplated hereby and supersedes all prior
arrangements or understandings with respect thereto. There are no
restrictions, agreements, promises, warranties, covenants, or
undertakings other than those expressly set forth herein or therein.
(d) Modifications and Amendments. No change,
modification or termination of any terms, provisions, or conditions of
this Agreement shall be effective unless made in writing and signed or
initialed by all parties hereto, their successor and assigns.
(e) Counterparts. This Agreement may be executed in two
or more counterparts, all of which shall be considered one and the
same Agreement and each of which shall be deemed an original.
(f) Governing Law. This Agreement shall be governed by
the laws of the Commonwealth of Virginia, United States of America
(regardless of the laws that might be applicable under principles of
conflicts of law) as to all matters, including but not limited to,
matters of validity, construction, effect, and performance.
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(g) Headings and Captions. The titles or captions of
sections and subsections contained in this Agreement are provided for
convenience of reference only, and shall not be considered a part
hereof for purposes of interpreting or applying this Agreement, and,
therefore, such titles or captions do not define, limit, extend,
explain, or describe the scope or extent of this Agreement or any of
its terms, provisions, representations, warranties, conditions, etc.,
in any manner or way whatsoever.
IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement individually or by its duly authorized officers, as of the day and
year first above-written.
WITNESSES:
REFLECTONE, INC.
By: /s/X X Xxxxxxxxx
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Name: X X Xxxxxxxxx
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Title: Vice President & CFO
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"Reflectone"
BRITISH AEROSPACE
PUBLIC LIMITED COMPANY
By: /s/ Xxxxx P Loose
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Name: Xxxxx P Loose
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Title: Treasurer - Operations
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"BAe"
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EXHIBIT A
REFLECTONE CREDIT FACILITIES
PROVIDED OR GUARANTEED BY BAE
- a Working Capital Facility consisting of $2 million Revolving
Line of Credit Agreement between Wachovia Bank of Georgia,
X.X., XXx and Reflectone to be used for working capital
purposes;
- a $35 million Letter of Credit Agreement with Lloyds Bank PLC;
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EXHIBIT B
DESCRIPTION OF BRITISH AEROSPACE
FINANCE FACILITY
- a $10 million Borrowing Facility Agreement with BAeF for
working capital purposes
- a $40 million Borrowing Facility Agreement with BAeF to
provide working capital in respect to Reflectone's C130-J
contract with Lockheed Aeronautics Corporation.
