Exhibit 4 to Amendment No. 5
AGREEMENT FOR CREDIT AVAILABILITY
THIS AGREEMENT FOR CREDIT AVAILABILITY ("Agreement") is made and
entered into as of the 7th day of August, 1995, 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").
WITNESSETH
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.
$30,000,000 of credit facilities provided to Reflectone by third-party
lenders, which facilities are more fully described in Exhibit A hereto
(the "Guaranteed Facilities"). The Guaranteed Facilities provide
Reflectone with access to an aggregate of U.S. $10,000,000 for working
capital purposes and an aggregate of U.S. $20,000,000 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
totaling U.S. $60,000,000 for working capital purposes (the "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
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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
$10,000,000 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. CREDIT AVAILABILITY SHARE OPTIONS.
PROVISION OF COMMON SHARE WARRANTS. As compensation for the
provision of the Facilities (drawn and undrawn) described in Section of
this Agreement, Reflectone shall issue to BAE within 30 days of the
date of this Agreement, Common Share options granting BAe the right to
purchase common stock of Reflectone at the lower of the current market
value at 1700 GTM on the day the option is exercised or at the current
market value at 1700 GMT on the date of this Agreement. The number of
Common Share options to be issued will be determined by taking l per
cent of the total amount of the Facilities (i.e., $90,000,000) and
dividing this by the current market value of Reflectone's Common Stock
at 1700 GMT on the date of this Agreement. BAe may exercise the options
at any time and from time to time provided, however, that the options
shall expire ten years from the day the option is issued.
4. 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 (pound)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 (pound)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.
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.
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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
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 communication changing any of the
addresses set forth above shall be effective and deemed given only upon
its receipt.
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(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.
(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
--------------------------- -------------------------------
Name: X. X. XXXXXXXXX
--------------------------- -----------------------------
Title: Vice President and Chief
Financial Officer
----------------------------
"Reflectone"
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BRITISH AEROSPACE PUBLIC
LIMITED COMPANY
By: /S/ XXXXX X. LOOSE
-------------------------- ---------------------------
Name: XXXXX X. LOOSE
-------------------------- -------------------------
Title: ATTORNEY-IN-FACT
-------------------------
"Bae"
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EXHIBIT A
Reflectone Credit Facilities
Provided or Guaranteed by BAe
/bullet/ a Working Capital Facility consisting of $10 million Revolving Line
of Credit Agreement between Wachovia Bank of Georgia, X.X., XXx and
Reflectone to be used for working capital purposes;
/bullet/ a $20 million Letter of Credit Agreement with Lloyds Bank PLC;
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EXHIBIT B
Description of British Aerospace
Finance Facility
/bullet/ a $20 million Borrowing Facility Agreement with BAeF for working
capital purposes
/bullet/ a $40 million Borrowing Facility Agreement with BAeF to provide
working capital in respect to Reflectone's C130-J contract with
Lockheed Aeronautics Corporation.
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