Exhibit 10.15
June 28, 1996
Mr. Richard W. Welshhans
Vice President
Chief Financial Officer
Reflectone, Inc.
5125 Tampa West Boulevard
Tampa, FL 33634
Re: $2,000,000 Revolving Line of Credit Agreement (the "Agreement")
Dear Richard:
Wachovia Bank of Georgia. N.A. (the "Lender") agrees to open a
revolving line of credit (the "Line of Credit") in favor of
Reflectone, lnc., a Florida corporation (the "Borrower"), so that
Borrower may borrow, repay and reborrow from time to time, subject to
the terms and conditions of this Agreement, up to a maximum aggregate
principal amount outstanding of $2,000,000 (the "Committed Amount").
The obligation of Borrower to repay any Advances under the Line of
Credit shall be evidenced by a master note (the "Note") substantially
in the form of Exhibit "A" attached hereto. The terms and conditions
of the Agreement are incorporated in the Note by reference as though
the same were written therein. This Line of Credit shall terminate on
the Termination Date, and on the Termination Date Lender's obligation
to extend further credit under the Line of Credit shall cease and the
principal amount of and all interest on all Advances under the Line of
Credit shall be due and payable in full automatically and without
demand. All payments of principal and interest due on the Note shall
be made in immediately available funds in Atlanta, Georgia. The
Borrower's obligations under this Agreement and the Note are
unconditionally guaranteed by British Aerospace Public Limited Company
(the "Guarantor") pursuant to a Guaranty Agreement substantially in
the form of Exhibit "B" attached hereto.
This Line of Credit replaces the $10,000,000 Line of Credit provided
under a $10,000,000 Revolving Line of Credit Agreement between the
Borrower, the Lender and the Guarantor dated June 30, 1995.
l. Lender's obligation to make Advances under the Line of Credit is
subject to the following conditions precedent: (i) Borrower shall
have paid to Lender on or before the fifth Business Day following
the execution of this agreement a one-time facility fee of
$7,500.; (ii) the Lender shall have received, on or before the
date of the first Advance (a) a copy of the Resolutions of the
Board of Directors of the Borrower, certified on such date,
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authorizing the execution and delivery of the Agreement, and the
borrowing hereunder and the execution and delivery of the Note, (b) a
copy of documentation satisfactory to the Lender from the Banking
Committee of the Guarantor's Board of Directors authorizing the
Guarantor's execution and delivery of the Guaranty Agreement, and (c)
such additional documents as the Lender may reasonably request; (iii)
on the date of any Advance, each of the representations and warranties
made by the Borrower in Paragraph 4 hereof shall be true on and as of
the date of the making of such Advance with the same force and effect
as if made on and as of such date; and (iv) at the time of each
Advance, the Borrower, and each of its Subsidiaries, shall be in
compliance with all of the terms and provisions set forth herein on
their part to be observed and performed, and no event of default as
specified in Paragraph 8 hereof, nor any event which upon notice or
lapse of time, or both, would constitute such an event of default,
shall have occurred at the time of such Advance
2. For purposes of this Agreement the following terms shall have the
following definitions:
"Adjusted LlBOR Rate" shall mean a rate per annum (adjusted to
the nearest 1/100 of 1% or, if there is no nearest 1/100 of 1%,
to the next highest 1/100 of 1 %) determined by the Lender as the
rate per annum equal to the sum of:
LIBOR + Applicable LIBOR Margin.
100%. Eurodollar Reserve Percentage
"Advance" shall mean any borrowing by the Borrower hereunder.
"Applicable LIB0R Margin" means .25 of 1 percent (.25%);
"Base Rate" shall mean for any day, the rate per annum equal to
the higher as of such day of (i) the Prime Rate and (ii) one-half
of one percent above the Federal Funds Rate for such day. For
purposes of determining the Base Rate changes in the Prime Rate
will be effective on the date of each such change.
"Business Day" means any other day other than Saturday, Sunday,
or other day on which commercial banks in Georgia are authorized
or required to close under the laws of the State of Georgia. In
addition, where such day relates to an Advance, bearing interest
at the Adjusted LIBOR Rate, "Business Day" means only a day on
which dealings in United States dollar time deposits are carried
out in the Eurodollar interbank market and which is also a
Business Day in accordance with the immediately preceding
sentence.
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"Eurodollar Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as
prescribed by the board of Governors of the Federal Reserve
System (or any successor) for determining the maximum reserve
requirement for a member bank of the Federal Reserve System in
respect of "Eurocurrency liabilities" (or in respect of any other
category of liabilities which includes deposits by reference to
which the interest rate on Eurodollar Loans is determined or any
category of extensions of credit or other assets which includes
loans by a non-United States office of any Bank to United States
residents). The Eurodollar Reserve Percentage shall be adjusted
automatically on and as of the effective date of any change in
the Eurodollar Reserve Percentage.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upward, if necessary, to the next higher 1/100 of 1 %)
equal to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the business Day next
succeeding such day, provided that (i) if the day for which such
rate is to be determined is not a Business Day the Federal Funds
Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next
succeeding business Day, and (ii) if such rate is not so
published for any day, the Federal Funds Rate for such day shall
be the average rate charged to the Bank on such day on such
transactions as determined by the Bank.
"Interest Payment Date" shall mean the last day of each Interest
Period and, if such Interest Period is longer than 3 months, at
intervals of 3 months from the first day thereof.
"Interest Period" shall mean for any Advance the period
commencing on the date such Advance is made and ending:
(i) In the case of an Advance bearing interest at the Adjusted
LIBOR Rate, on that day which is the numerically
corresponding day in the first, second, third or sixth
calendar month thereafter, as the Borrower may select
hereunder except that each such Interest Period which
commences on the last Business Day of a calendar month (or
on any day for which there is no numerically corresponding
day in the appropriate subsequent calendar month) shall end
on the last Business Day of such appropriate subsequent
calendar month;
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(ii) In the case of an Advance bearing interest at the Base Rate,
on that day which is thirty (30) days thereafter.
Notwithstanding the foregoing, (i) each Interest Period
which would otherwise end on a day which is not a Business
Day shall end on the next succeeding Business Day (or, in
the case of an Advance bearing interest at the Adjusted
LIBOR Rate, if such next succeeding Business Day falls in
the next succeeding calendar month, on the next preceding
Business Day), (ii) if any Interest Period would otherwise
commence before and end after the Termination Date, such
Interest Period shall end on such date, and (iii)
notwithstanding clause (ii) above, no Interest Rate Period
for any Advance bearing interest at the Adjusted LIBOR date
shall have a duration of less than one month if the Interest
Period for any such Advance would otherwise be a shorter
period, such Advance shall bear interest at the Base Rate.
"Interest Rate" shall mean the Adjusted LIBOR Rate or the Base
Rate, as the context requires.
"LIBOR" means the rate per annum determined on the basis of the
offered rate for deposits in dollars of amounts equal or
comparable to the principal amount of such Advance offered for a
term comparable to such Interest Period, which rates appear on
the Reuters Screen LIBO page as of 11:00 a.m., London time, two
(2) Eurodollar Business Days prior to the first day of such
Interest Period, provided that (i) if more than one such offered
rate appears on the Reuters Screen LlB0 page, the "London
Interbank Offered Rate" will be the arithmetic mean of such
offered rates; (ii) if no such offered rates appear on such page,
the London Interbank Offered Rate" for such Interest Period will
be the arithmetic mean of rates quoted by not less than two major
banks in New York City, selected by the Lender, at approximately
10:00 a.m., New York City time, two (2) Eurodollar Business Days
prior to the first day of such Interest Period, for deposits in
dollars offered to leading European banks for a period comparable
to such Interest Period in an amount comparable to the Advance.
"Maturity" shall mean the last day of any Interest Period with
respect to an Advance or the Termination Date with respect to the
Line of Credit, as the context requires.
"Person" shall mean an individual, corporation, a partnership, an
association, a trust, or any other entity or organization,
including a government or political subdivision or an agency or
instrumentality thereof.
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"Prime Rate" refers to that interest rate so denominated and set
by the Lender from time to time as an interest rate basis for
borrowings. The Prime Rate is but one of several interest rate
bases used by the Lender. The Lender lends at rates above and
below the Prime Rate.
"Subsidiary" and "Subsidiaries" means any corporation of which
fifty percent (50%) or more of the voting stock at any time is
owned or controlled directly or indirectly by the Borrower.
"Termination Date" means the earliest of (i) August 7, 1997, or
(ii) that Business Day on which Lender receives a notice of
termination, by registered mail, addressed to the office of the
Lender extending credit under this Line of Credit from the
Guarantor.
Words importing the singular include the plural and vice versa
unless the context otherwise requires.
3. Each Advance under the Line of Credit shall bear interest for
each applicable Interest Period at one of the following rates per
annum as selected by the Borrower: (i) the Adjusted LIBOR Rate or
(ii) the Base Rate. interest on each Advance shall be due and
payable on each Interest Payment Date.
After Maturity, interest on any unpaid Advance balance is payable
at the rate per annum equal to the Base Rate plus 1.00%, and
shall be due and payable on demand.
In all cases, interest shall be calculated on the outstanding
principal amount of each outstanding Advance on the basis of a
360-day year and the actual days during which such Advance is
outstanding.
In borrowing hereunder, the Borrower shall have the option to
select the Interest Rate and Maturity of each Advance as provided
hereunder. The Borrower shall notify the Lender of the amount of
such Advance, the Maturity of such Advance, and the Interest Rate
applicable to such Advance. Each Advance under this Line of
Credit shall be in a principal amount of $1,000.000 or any larger
multiple of $100,000 in the case of an Advance at the Adjusted
LIBOR Rate and $100,000 in the case of an Advance at the Base
Rate. Upon Maturity of an Advance, the Borrower shall either
repay the Advance in full or renew the Advance, any such renewal
constituting a new Advance hereunder.
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If an Advance is renewed, such Advance may be renewed in whole or
in part, and an amount equal to the difference between the
principal of the Advance to be renewed and the principal of the
Advance to be repaid shall be made available by the Lender to the
Borrower or the Borrower to the Lender, as the case may be.
Prepayment of Advances prior to the Maturity thereof shall not be
permitted except in the case of Advances bearing interest at the
Base Rate.
Notices by the Borrower to the Lender specifying the amount,
Maturity and Interest Rate applicable to each Advance shall be
made by giving to the Lender written or telephonic notice (which
telephonic notice shall be promptly confirmed in writing). Such
notices shall be irrevocable and shall be effective only if
received by the Lender not later than 2:00 p.m. Atlanta, Georgia
time, the first Business Day of the Interest Period of any
Advance except in the case of an Advance bearing interest at the
Adjusted LIBOR Rate for which notice must be received by the
Lender not later than 2:00 pm Atlanta, Georgia time, two (2)
Business Days prior to the first day of the applicable Interest
Period. If, (i) after its receipt of any notice of Borrower's
election of the Adjusted LIBOR Rate, Lender determines in its
reasonable judgment prior to the disbursement of the Advance to
which such notice relates that it is not possible to determine
LIBOR or LIBOR shall no longer cover the effective cost to Lender
of obtaining United States dollar deposits in the Eurodollar
interbank market or (ii) in the event that, as a result of any
change in applicable law, rules, regulations, treaties directives
or in the interpretation or administration thereof or by reason
of Lender's compliance therewith, the effective cost to Lender of
making maintaining or funding the indebtedness represented by the
Note at the Adjusted LIBOR Rate is increased, then Lender shall
notify Borrower of such determination and Advances under the Line
of Credit shall bear interest at the Base Rate.
The Lender or other holder shall be and is hereby authorized by
the Borrower to set forth on the reverse side of the Note, or on
an attachment thereto: (1) the amount and date of each Advance
made hereunder; (2) the Maturity date of each such Advance; (3)
the Interest Rate for each such Advance; (4) the Interest Payment
Dates for each such Advance, and (5) each payment of principal
received thereon and the date of such payment. All such notations
shall be conclusive absent manifest error but failure to make any
such notation shall not limit or otherwise affect the obligation
of the Borrower with respect to the payment of all Advances
actually made hereunder and the interest thereon.
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4. Borrower represents and warrants to the Lender that (i) it is a
corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation; (ii) the
making and performance by Borrower of this Agreement and the Note
are within Borrower's corporate powers and will not contravene
any provisions of law or its charter or by-laws or of any
indenture or other agreement or instrument to which it is now or
by which it or any of its properties may be bound or affected;
(iii) it has the corporate authority to execute, deliver and
perform this Agreement and to borrow in accordance with the terms
of this Agreement and it has taken all necessary and appropriate
corporate action to authorize the borrowing under and the
execution, delivery and performance of this Agreement and the
Note; (iv) this Agreement is and the Note, when executed and
delivered, will be valid obligations of the Borrower, legally
binding and enforceable against it in accordance with their
respective terms; (v) there are no pending or threatened
proceedings before any court or administrative body which might
materially and adversely affect the financial condition or
operations of Borrower which has not been previously disclosed;
and (vi) the annual audit reports and financial statements of
Borrower and Consolidated Subsidiaries for the fiscal year most
recently ended previously furnished to Lender have been prepared
in accordance with generally accepted accounting principles and
fairly present the financial condition of Borrower and
Consolidated Subsidiaries as of such date and since such date
there has been no material adverse change in such condition.
5. Financial Statement: So long as the Lender's obligation to extend
credit under this Line of Credit exists or any amount payable on
the Note remains unpaid, the Borrower agrees to furnish the
Lender consolidated financial statements of the Borrower and its
Subsidiaries for each fiscal year, prepared in conformity with
generally accepted accounting principles and audited by an
independent certified public accountant. Additionally, the
Borrower agrees to provide consolidated financial statements for
each quarter, signed by an officer of the Borrower.
The annual and quarterly financial statements shall be delivered
to the Lender within 90 days and 60 days, respectively, after the
close of the fiscal period. The Borrower also shall provide the
Lender, with reasonable promptness, such further information
regarding the Borrower's business affairs and financial condition
as the Lender may reasonably request.
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6. Covenants Of The Borrower: So long as the Lender's obligation to
extend credit under this Line of Credit exists or any amount
payable on the Note remains unpaid, the Borrower agrees that the
Borrower will and will require its Subsidiaries to adhere to the
following Covenants:
a. Maintain insurance in such amounts and against such risks as
are usually insured against by companies engaged in the same
or similar business.
b. Maintain its corporate existence and comply with all valid
and applicable statutes, rules and regulations, and maintain
its properties in good operating condition.
7. The occurrence or existence of any one or more of the following
events or conditions will constitute an event of default by the
Borrower under this Agreement, whereupon the Lender's obligation
to make Advances under the Line of Credit will immediately
terminate and the Note and all indebtedness of the Borrower to
the Lender will, at the option of the Lender, immediately become
due and payable without presentation, demand, protest, or notice
of any kind, all of which are hereby expressly waived by the
Borrower, and the Lender will, at the option of the Lender, call
upon the Guaranty Agreement.
a. Nonpayment within seven Business Days after notification
that such payment has become due and remains unpaid, whether
by acceleration or otherwise, of any payment of principal or
interest on the Note; or
b. Nonpayment within seven Business Days after notification
that such payment has become due and remains unpaid of any
payment of a fee or other charge under this Agreement; or
c. A breach or failure of performance by the Borrower or any
Subsidiary of any covenant or other provision of this
Agreement which is not remedied within 30 days after written
notice by the Lender; or
d. A representation or warranty by the Borrower shall prove to
have been false or erroneous when made or when deemed made
or any certificate or financial statement provided to the
Lender proves to be inaccurate in any material respect when
delivered or when deemed to have been delivered; or
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e. The Borrower, or any Subsidiary: (i) files a petition or has
a petition filed against it under the Bankruptcy Code (as it
now exists or may be amended) or an admission seeking the
relief therein provided, (ii) is unable, or admits in
writing its inability, to pay its debts as they become due,
(iii) makes an assignment for the benefit of creditors, (iv)
has a receiver appointed, voluntarily or otherwise, for its
property, (v) is adjudicated a bankrupt, (vi) suspends
business, (vii) becomes insolvent however otherwise
evidenced, or (viii) has any final judgement for money
damages in excess of $5,000,000.00 entered against it in a
court of competent jurisdiction which remains unsatisfied
for a period of thirty (30) days or more; or
f. An Event of Default under the Agreement dated the 19th day
of May, 1995 between British Aerospace Finance, Inc.,
British Aerospace Public Limited Company, British Aerospace
Operations Limited and Wachovia Bank of Georgia, N.A. shall
have occurred and be continuing.
8. If the Lender shall have determined that after the date hereof
the adoption of any applicable law, rule or regulation regarding
capital adequacy, or any change therein, or any change in the
interpretation or administration thereof, or compliance by the
Lender with any request or directive regarding capital adequacy
(whether or not having the force of law) of any authority, has or
would have the effect of reducing the rate of return on the
Lender's capital as a consequence of its obligations hereunder to
a level below that which the Lender could have achieved but for
such adoption, change or compliance (taking into consideration
the Lender's policies with respect to capital adequacy) by an
amount deemed by the Lender to be material, then the Lender shall
notify the Borrower of such determination and then from time to
time, within fifteen days after demand by the Lender, the
Borrower shall pay to the Lender such additional amount or
amounts as will compensate the Lender for such reduction.
9. No amendment or waiver of any provision of this Agreement or
consent to any departure by the Borrower therefore shall in any
event be effective unless the same shall be in writing and signed
by the Lender. Any such amendment, waiver or consent shall be
effective only in the specific instance and for the specific
purpose for which given.
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10. The provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective
successors and assigns. The Borrower may, with the prior written
consent of the Lender, assign or otherwise transfer any of its
rights under this Agreement provided that: (i) such assignee is a
corporation that is incorporated within the United States of
America and (ii) such assignment or transfer is accompanied by a
Guaranty Agreement in substantially the form of Exhibit B hereto
from the Guarantor providing for the Guarantor's unconditional
guarantee of such assignees' obligations.
11. This Agreement and the Note issued and all other documents
furnished hereunder shall be governed by and be construed
according to the laws of the State of Georgia.
12. The Borrower will pay the reasonable attorney's fees incurred by
the Lender in connection with the enforcement of this Agreement.
If the foregoing terms and conditions are acceptable to the Borrower,
please indicate the Borrower's agreement to such terms and conditions
by executing this Agreement in the appropriate space provided below,
by executing the Note and the Guaranty Agreement and by returning this
Agreement, the Note, and the Guaranty Agreement to the Lender.
Very truly yours.
WACHOVIA BANK OF GEORGlA, N.A.
By:/s/James C. Ratcliff, Jr.
Its:Vice President
Accepted and agreed to this 9th day of August, 1996 .
Borrower: Reflectone, Inc.
By:/s/R W Welshhans
Its: Chief Financial Officer
Accepted and agreed to this 9th day of August, 1996 .
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Exhibit A
MASTER NOTE
June 28, 1996 $2,000,000
FOR VALUE RECEIVED the undersigned, Reflectone, Inc, a Florida
corporation ("Borrower"), hereby promises to pay to the order of
Wachovia Bank of Georgia, N.A., a national banking association
("Lender") at its office located at Atlanta, Georgia, in lawful money of
the United States of America in immediately available funds, the
principal sum of Two Million Dollars ($2,000,000) or if less, the
aggregate unpaid principal amount of all Advances outstanding made by
the Lender pursuant to the Revolving Line of Credit Agreement dated June
28, 1996 ("Agreement") between the Borrower and the Lender, and to pay
interest on the unpaid principal hereof, at said office, in like money
and funds, during the period commencing on the date hereof until paid at
the rates per annum and at the times provided in the Agreement.
Capitalized terms used in this Note, unless otherwise defined herein,
shall have the respective meanings assigned to them in the Agreement.
The amount and date of each Advance made by the Lender to the Borrower
hereunder, the Maturity date of each such Advance, the Interest Rate for
each such Advance, the Interest Payment Dates for each such Advance and
each payment of principal received thereon and the date of such payment
shall be recorded by the Lender and endorsed on the schedule attached
hereto which is made a part of this Note. All such endorsements shall be
conclusive absent manifest error but failure to make any such
endorsement shall not affect the Borrower's obligations hereunder or
under the Agreement in respect of such Advances and the interest
thereon.
All parties to this Note, including the makers, endorsers, sureties and
guarantors, whether bound by this or by separate instrument or
agreement, hereby (1) waive presentment for payment, demand, protest,
notice of nonpayment or dishonor and of protest and any and all other
notices and demands whatsoever; (2) consent that at any time or from
time to time, payment of any sum payable under this Note may be extended
without notice, whether for a definite or indefinite time; and (3) agree
to remain liable until the indebtedness evidenced hereby is paid in full
irrespective of any extension, modification or renewal.
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Should the indebtedness represented by this Note or any part hereof be
collected at law or in equity or in bankruptcy, receivership or other
court proceedings or this Note be placed in the hands of attorneys for
collection on default, the Borrower agrees to pay in addition to the
principal and interest due and payable hereon reasonable attorneys' fees
and legal expenses, together with all other reasonable costs of
collection.
The terms and conditions contained in the Agreement shall be considered
a part hereof to the same extent as if written herein.
This Note shall be construed in accordance with and be governed by the
laws of the State of Georgia. This note is intended to be effective as
an instrument executed under seal, as of the date first above written.
IN WITNESS WHEREOF, the Borrower has caused this instrument to be
executed as of the date first above written
Borrower: Reflectone, Inc.
By: /s/R W Welshhans
ATTEST:
Its:
Secretary
(CORPORATE SEAL)
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SCHEDULE FOR MASTER NOTE
Interest
Date of Amount of Maturity Payment Interest Principal Balance
Advance Advance Date Date Rate Payment Outstanding
WTS-188.RGP
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