Exhibit 10.13
AGREEMENT FOR CREDIT AVAILABILITY
THIS AGREEMENT FOR CREDIT AVAILABILITY ("Agreement") is made and
entered into as of the 7th day of August, 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.
$22,000,000 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.
$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.
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(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. $65,000,000 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 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.
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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.
(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 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 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.
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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.
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
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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.
4908 Tampa West Boulevard
P.O. Box 15000
Tampa, Florida 33684
Attn: Vice President Finance
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If to BAe, to:
c/o British Aerospace Holdings, Inc.
Washington Technology Park
15000 Conference Center Drive, Suite 200
Chantilly, Virginia 20151-3819
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.
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(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/R W Welshhans
Name:R W Welshhans
Title:Chief Financial Officer
"Reflectone"
BRITISH AEROSPACE
PUBLIC LIMITED COMPANY
By:/s/David P. Loose
Name:David P. Loose
Title:
"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, N.A., BAe and
Reflectone to be used for working capital purposes;
a $20 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 $55 million Borrowing Facility Agreement with BAeF to
provide working capital in respect to Reflectone's C130-J
contract with Lockheed Aeronautics Corporation.
reflagr
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