EXHIBIT 99.4
SECURITY AGREEMENT
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THIS SECURITY AGREEMENT (this "Agreement") is made as of the 14th day of
January, 1999 by CALCOMP TECHNOLOGY, INC., a Delaware corporation, CalComp Inc.,
a California corporation, and TOPAZ TECHNOLOGIES, INC., a California corporation
(collectively, the "Borrowers"), for the benefit of LOCKHEED XXXXXX CORPORATION,
a Maryland corporation (the "Secured Party").
W I T N E S S E T H
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WHEREAS, the Borrowers and the Secured Party have entered into a Secured
Demand Loan Facility of even date herewith (the "Loan Agreement") pursuant to
which the Secured Party may make Loans (as defined in the Loan Agreement) with a
principal amount of up to $51,000,000; and
WHEREAS, in order to secure the prompt payment and performance of all
indebtedness, liabilities and obligations of the Borrowers arising under the
Loan Agreement and this Agreement (the "Obligations"), the Borrowers have agreed
to provide certain collateral to the Secured Party.
NOW, THEREFORE, in consideration of the foregoing premises, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, for the benefit of the Secured Party, the Borrowers hereby agree
as follows:
SECTION 1. COLLATERAL. The Borrowers hereby grant to the Secured Party a
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security interest in, and lien on, the following property of each of the
Borrowers (and in all cash and non-cash proceeds of such property, including
specifically, but without limitation, (i) cash and non-cash proceeds deposited
in any deposit accounts, (ii) all accounts, chattel paper, instruments,
inventory, equipment, general intangibles or other goods or property purchased
or acquired with cash and/or non-cash proceeds of any of such property, and
(iii) all proceeds of all insurance policies covering all or any part of such
property), all whether now owned or existing or hereafter acquired or arising
(the "Collateral"):
(a) Inventory. All of each Borrower's inventory, wherever located,
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both now owned and hereafter acquired, and as the same may now and hereafter
from time to time be constituted.
(b) Accounts. All of each Borrower's accounts, notes, notes
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receivable, drafts, acceptances and similar instruments and documents, both now
owned and hereafter acquired, together with all returned, rejected or
repossessed goods, the sale or lease of which shall have given or shall give
rise to an account and all cash and non-cash proceeds and products of all such
goods.
(c) Contract Rights. All of each Borrower's contract rights, both now
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owned
and hereafter acquired.
(d) General Intangibles. All of each Borrower's general intangibles
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and all things in action, contractual and contract rights, books,
correspondence, credit files, records, computer programs, computer tapes, cards
and other papers and documents in the possession or control of each Borrower,
all claims for income tax and other tax refunds, judgments, goodwill (including
all goodwill of each Borrower's business symbolized by, and associated with, any
and all trademarks, trademark licenses, copyrights, tradenames, tradestyles,
and/or service marks), literary rights, rights to performance, copyrights,
trademarks, patents, patent licenses, trademark licenses, customer lists, rights
in intellectual property, tradenames, tradestyles, service marks, royalty
payments, rights as lessee, logos, trade secrets, all amounts received as an
award in or settlement of a suit in damages, deposit accounts, interests in
joint ventures or general or limited partnerships, rights in applications for
any of the foregoing and the rights to use any of the foregoing), both now owned
and hereafter acquired.
(e) Chattel Paper. All of each Borrower's chattel paper both now owned
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and hereafter existing, acquired or created, together with (i) all moneys due
and to become due thereunder and (ii) all returned, rejected or repossessed
goods, the sale or lease of which shall have given or shall give rise to chattel
paper and all cash and non-cash proceeds and products of all such goods.
Additionally, each Borrower assigns and grants to the Secured Party a security
interest in all property and goods both now owned and hereafter acquired by the
Borrower which are sold, leased, secured, serve as security for, are the subject
of, or otherwise covered by, the Borrower's chattel paper, together with all
rights incident to such property and goods.
(f) Equipment and Fixtures. All of each Borrower's equipment and
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fixtures, both now owned and hereafter acquired, together with (i) all
additions, parts, fittings, accessories, special tools, attachments and
accessions now and hereafter affixed thereto and/or used in connection therewith
and (ii) all replacements thereof and substitutions therefor.
(g) Instruments. All of each Borrower's right title and interest in
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and to the stock of that Borrower's subsidiaries that are listed on Schedule 1
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attached hereto.
SECTION 2. SECURITY FOR OBLIGATIONS OF BORROWERS. As security for the
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prompt payment and performance of all indebtedness, obligations and liabilities,
now existing or hereafter arising, whether fixed or contingent, of the Borrowers
arising under the Loan Agreement and this Agreement (as the same may be amended,
extended, renewed, supplemented or otherwise modified at any time or from time
to time) (collectively, the "Obligations"), the Borrowers hereby assign and
pledge the Collateral to the Secured Party, and grants to the Secured Party a
security interest in the Collateral, and hereby covenants and agrees that the
Secured Party shall have a continuing first-lien security interest in and lien
on the Collateral until all of the Obligations shall have been paid, performed,
satisfied and discharged in full.
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SECTION 3. PAYMENT AND PERFORMANCE. The Borrowers will pay the Obligations
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to be paid by the Borrowers as and when due and payable and will perform, comply
with, and observe the terms and conditions of the Loan Agreement to be
performed, complied with and observed by the Borrowers.
SECTION 4. TITLE TO COLLATERAL. The Borrowers represent and warrant that (a)
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the Borrowers are the owners of the Collateral and have good and marketable
title to the Collateral free and clear of all liens, security interests and
other encumbrances except for those in favor of the Secured Party, (b) the
Borrowers are currently in possession of all certificates representing shares of
common stock of the Borrower's subsidiaries that constitute part of the
Collateral and (c) the Collateral is not on consignment. Without the prior
written consent of the Secured Party, the Borrowers shall not take by
consignment any goods or property of the same type as the Collateral. Upon
request of the Secured Party, the Borrowers shall deliver to the Secured Party
all stock certificates (together with duly endorsed stock power relating
thereto), all certificates of title, certificates of origin or other evidence of
the Borrower's ownership of the Collateral as may be required by the Secured
Party.
SECTION 5. TRANSFER AND OTHER LIENS. The Borrowers will not sell, assign,
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transfer, convey, exchange or otherwise dispose of the Collateral, or any part
thereof, except pursuant to the Plan, without the prior written consent of the
Secured Party, and will not permit any lien, security interest or other
encumbrance to attach to the Collateral, or any part thereof, other than those
in favor of the Secured Party or those permitted by the Secured Party in
writing.
SECTION 6. FINANCING STATEMENTS; FURTHER ASSURANCES. The Borrowers will
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defend their title to the Collateral against all persons and will, upon request
of the Secured Party: (a) furnish original stock certificates with duly
endorsed stock powers in respect of the stock of subsidiaries of the Borrower
that constitutes part of the Collateral on the request of the Secured Party, (b)
furnish such further assurances of title as may be required by the Secured
Party, and (c) deliver and execute or cause to be delivered and executed, in
form and content satisfactory to the Secured Party, any financing, continuation,
termination, or security interest filing statement, security agreement, or other
document as the Secured Party may request in order to perfect, preserve,
maintain, or continue the perfection of the Secured Party's security interest in
the Collateral and/or its priority. The Borrowers will pay the cost of filing
any financing, continuation, termination, or security interest filing statement
as well as any recordation or transfer tax required by law to be paid in
connection with the filing or recording of any such statement.
SECTION 7. EVENTS OF DEFAULT. The failure of the Borrowers to pay any
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amounts outstanding under the Loan Agreement when due (whether upon the
Termination Date, upon demand by the Lender or otherwise) shall be deemed to be
an event of default under this Agreement (an "Event of Default").
SECTION 8. RIGHTS AND REMEDIES UPON DEFAULT. Upon the occurrence
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of an Event of Default (and in addition to all of its rights, powers and
remedies under this Agreement and the Loan Agreement), the Secured Party may, at
its option, declare the unpaid balance of all or any part of the Obligations to
be immediately due and payable, and the Secured Party shall have all of the
rights and remedies of a secured party under the Maryland Uniform Commercial
Code and other applicable laws. In addition to the foregoing and without
limiting the generality thereof, after the occurrence of an Event of Default,
the Secured Party may at any time and from time to time, in its sole discretion,
(i) request any account debtor obligated on any of the Collateral to make
payments thereon directly to the Secured Party, and to take control of the cash
and non-cash proceeds of any such Collateral; (ii) compromise, extend, renew,
release, discharge or otherwise deal with any of the Collateral as it may deem
advisable; (iii) make exchanges, substitutions, or surrenders of all or any part
of the Collateral; (iv) remove from the Borrower's place of business all books,
records, ledger sheets, correspondence, invoices and documents relating to,
evidencing or securing any of the Collateral, or, without cost or expense to the
Secured Party, make such use of Borrower's place(s) of business as may be
reasonably necessary to administer, control and collect the Collateral, (v) the
Secured Party or its agents may enter upon the Borrower's premises to take
possession of the Collateral, to remove it, to render it unusable or to sell or
otherwise dispose of it, and (vi) sell, pledge or otherwise disburse of any
other Subsidiaries stock that constitutes part of the Collateral.
SECTION 9. ASSEMBLY OF COLLATERAL. Upon the occurrence of an Event of
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Default hereunder (i) the Borrowers shall, upon demand by the Secured Party,
assemble the Collateral and make it available to the Secured Party at a place
designated by the Secured Party; (ii) the Borrowers shall hold in trust for the
benefit of the Secured Party all collections and proceeds of the Collateral in
the form received by the Borrowers, and (iii) the Borrowers shall not commingle
those collections or proceeds with any other assets of the Borrowers, and shall
deliver those collections and proceeds to the Secured Party with any necessary
endorsements thereon.
SECTION 10. EXPENSES. The Borrowers shall pay, as part of the Obligations, on
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demand by the Secured Party, all costs and expenses, including, without
limitation, attorney's fees and expenses, incurred by or on behalf of the
Secured Party (a) in enforcing the Obligations, and (b) in connection with the
taking, holding, preparing for sale or other disposition, selling, assigning,
managing, collecting or otherwise disposing of the Collateral.
SECTION 11. POWER OF ATTORNEY. Each of the Borrowers hereby irrevocably
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appoints the Secured Party as its attorney-in-fact, with full power of
substitution, in the name of the Borrower for the purpose of taking any action
required to be taken by the Borrower hereunder or which the Secured Party shall
determine to be necessary in order to protect, continue, perfect, maintain,
confirm or realize upon the lien and security interest of the Secured Party
hereunder or to exercise any of the rights and remedies of the Secured Party
under this Agreement.
SECTION 12. TAXES. The Borrowers will pay as and when due and payable all
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taxes, levies, license fees, assessments and other impositions levied on the
Collateral or any part thereof or
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for its use and operation.
SECTION 13. SPECIFIC ASSIGNMENTS. Promptly, upon request by the Secured
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Party, the Borrowers will execute and deliver to the Secured Party written
assignments, endorsements and/or schedules, in form and content satisfactory to
the Secured Party, of specific chattel paper and accounts or groups of accounts
or chattel paper, but the security interest of the Secured Party hereunder shall
not be limited in any way by such assignments. Such accounts and chattel paper
are to secure payment of the Obligations and performance of the Loan Agreement
and are not sold to the Secured Party whether or not any assignment thereof
which is separate from this Security Agreement, is in form absolute.
SECTION 14. DELIVERY, ETC. OF CHATTEL PAPER. The Borrowers will promptly
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upon request by the Secured Party, deliver, assign and endorse to the Secured
Party all chattel paper and all other documents held by the Borrowers in
connection therewith.
SECTION 15. GOVERNMENT CONTRACTS. If any account or chattel paper arises
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out of a contract or contracts with the United States of America or any
department, agency, or instrumentality thereof, the Borrowers shall immediately
notify the Secured Party thereof in writing and execute any instruments or take
any steps required by the Secured Party in order that all moneys due or to
become due under such contract or contracts shall be assigned to the Secured
Party and notice thereof given under the Federal Assignment of Claims Act.
SECTION 16. CONCENTRATION ACCOUNT. If all or any part of the Collateral at
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any time consists of inventory, accounts or chattel paper, the Borrowers will
deposit or cause to be deposited to the Concentration Account (as defined in the
Loan Agreement) all checks, drafts, cash and other remittances in payment or on
account of payment of such inventory, accounts or chattel paper and the cash
proceeds of any returned goods, the sale or lease of which gave rise to an
account or chattel paper (all of the foregoing herein collectively referred to
as "items of payment"). The Borrowers shall promptly deposit such items of
payment for credit to the Concentration Account upon receipt thereof, and in
precisely the form received, except for the endorsement of a Borrower where
necessary to permit the collection of such items of payment, which endorsement
the Borrower hereby agrees to make. Pending such deposit, the Borrowers will
not commingle any such items of payment with any of its other funds or property,
but will hold them separate and apart.
SECTION 17. RIGHTS OF SECURED PARTY AND DUTIES OF BORROWER. If all or any
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part of the Collateral at any time consists of inventory, accounts or chattel
paper: (a) the Secured Party may at any time and from time to time, and each
Borrower hereby irrevocably appoints the Secured Party as its attorney-in-fact,
with power of substitution, in the name of the Secured Party or in the name of
the Borrower or otherwise, for the use and benefit of the Secured Party, but at
the cost and expense of the Borrower and without notice to the Borrowers to, (i)
notify the account debtors obligated on any of the Collateral to make payments
thereon directly to the
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Secured Party, and to take control of the cash and non-cash proceeds of any such
Collateral, which right the Secured Party may exercise at any time whether or
not the Borrower is then in default hereunder or was theretofore making
collections thereon; (ii) compromise, extend, or renew any of the Collateral or
deal with the same as it may deem advisable; (iii) release, make exchanges,
substitutions, or surrender, all or any part of the Collateral; (iv) remove from
the Borrower's place of business all books, records, ledger sheets,
correspondence, invoices and documents, relating to or evidencing any of the
Collateral or without cost or expense to the Secured Party, make such use of the
Borrower's place(s) of business as may be reasonably necessary to administer,
control and collect the Collateral; (v) repair, alter or supply goods, if any,
necessary to fulfill in whole or in part the purchase order of any account
debtor; (vi) demand, collect, receipt for and give renewals, extensions,
discharges and releases of any of the Collateral; (vii) institute and prosecute
legal and equitable proceedings to enforce collection of, or realize upon, any
of the Collateral; (viii) settle, renew, extend, compromise, compound, exchange
or adjust claims with respect to any of the Collateral or any legal proceedings
brought with respect thereto; (ix) endorse the name of the Borrower upon any
items of payment relating to the Collateral or upon any Proof of Claim in
Secured Bankruptcy against an account debtor; and (x) receive and open all mail
addressed to the Borrower and, if a default exists hereunder, notify the Post
Office authorities to change the address for the delivery of mail to the
Borrower to such address as the Secured Party may designate; and (b) the
Borrower will (i) make no material change to the terms of the sale or lease of
inventory or of any account or chattel paper without the prior written
permission of the Secured Party; (ii) on demand, make available in form
acceptable to the Secured Party shipping documents and delivery receipts
evidencing the shipment of goods which gave rise to the sale or lease of
inventory, or of an account or chattel paper, completion certificates or other
proof of the satisfactory performance of services which gave rise to the sale or
lease of inventory or of an account or chattel paper, copies of the invoices
arising out of the sale or lease of inventory or for an account, and the
Borrower's copy of any written contract or order from which a sale or lease of
inventory, an account or chattel paper arose; and (iii) when requested,
regularly advise the Secured Party whenever an account debtor returns or refuses
to retain any goods, the sale or lease of which gave rise to an account or
chattel paper, and of any delay in delivery or performance, or claims made, in
regard to any sale or lease of inventory, account or chattel paper, and will
comply with any instructions which the Secured Party may give regarding the sale
or other disposition of such returns.
SECTION 18. DEFICIENCIES. If the sale, assignment or other disposition of the
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Collateral by the Secured Party following an Event of Default hereunder fails to
fully satisfy the Obligations, the Borrowers shall remain fully liable for any
such deficiency.
SECTION 19. REMEDIES CUMULATIVE. Each right, power and remedy of the
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Secured Party set forth in this Agreement or now or hereafter existing at law or
in equity or by statute or otherwise shall be cumulative and concurrent and
shall be in addition to every other right, power and remedy of the Secured
Party, and the exercise by the Secured Party of any one or more of such rights,
powers and remedies shall not preclude the simultaneous or later exercise by the
Secured Party of any or all such other rights, powers or remedies.
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SECTION 20. PLACE OF BUSINESS AND LOCATION OF COLLATERAL. The Borrowers
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represent, warrant and covenant, jointly and severally, with and to the Secured
Party as follows: (i) each Borrower's primary place of business is located at
0000 X. XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000, and substantially all books
and records pertaining to the Collateral are and will be located at such
location; and (ii) the Inventory shall be kept and maintained substantially in
its entirety at 0000 X. XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000, 00000 Xxxxx
00xx Xxxxxx, Xxxxxxxxxx, Xxxxxxx 00000-0000, 000 Xxx Xxx Xxxxxx, 000 Xxxxxxx
Xxxxxx, 000 Xxxxxxx Xxxxxx, 000 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000,
00000 X. Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000, 00000 Xxxx Xxxxxx, Xxxxx Xx
Xxxxxxx, Xxxxxxxxxx 00000, 00000 Xxxx Xxxxxxxx Xxxxxxx, Xxxxxx, Xxxxxxxxxx, 0000
Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, Xxxxxxxxxxxxx 0, X-0000 Xxxxxx,
Xxxxxxx and 0000 XX Xxxxxxxxxx, Xxxxxxxxxxx and the Borrowers agree to
immediately advise the Secured Party in writing of any change in the location of
the Collateral, or any part thereof, or the books and records concerning the
Collateral, or its primary place of business.
SECTION 21. RIGHTS OF INSPECTION. The Secured Party shall have the right to
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enter upon the business premises of the Borrowers from time to time upon
reasonable advance notice for the purpose of examining, auditing and inspecting
the Collateral and the books and records of the Borrowers relating to the
Collateral.
SECTION 22. NO WAIVER. No failure or delay by the Secured Party to insist
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upon the strict performance of any term, condition, covenant or agreement of
this Agreement, or to exercise any right, power or remedy consequent upon a
breach thereof, shall constitute a waiver of any such term, condition, covenant
or agreement or of any such breach, or preclude the Secured Party from
exercising any such right, power or remedy at any later time or times. By
accepting payment after the due date of any amount due under this Agreement, the
Secured Party shall not be deemed to have waived the right either to require
prompt payment when due of all other amounts, or to declare a default for
failure to affect such payment of any such other amount.
SECTION 23. WAIVERS BY BORROWERS. Each of the Borrowers hereby waives
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presentment, notice of dishonor and notice of non-payment with respect to the
Collateral, and waives and releases all claims and defenses against the Secured
Party with respect to the payment or enforcement of the Obligations and the
rights of the Secured Party in the Collateral.
SECTION 24. NOTICES. All notices required or permitted to be given under
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this Agreement shall be effective if given in the manner set forth in Section
5.1 of the Loan Agreement. Any written notice of the sale, disposition or other
intended action by the Secured Party with respect to the Collateral shall be
deemed to be commercially reasonable if given by the Secured Party at least ten
(10) days prior to such sale, disposition or other action.
SECTION 25. MISCELLANEOUS. The paragraph headings of this Agreement are for
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convenience of reference only and shall not limit or otherwise affect any of the
terms of this Agreement. No term, condition, covenant, or agreement hereof may
be modified, amended, changed, waived, discharged, or terminated unless in
writing signed by both the Secured Party and the Borrowers. No course of
delaying, course of performance, or custom of usage shall operate to amend,
modify, supplement or otherwise affect any of the express terms of this
Agreement. This Agreement represents the complete understanding of the Secured
Party and the Borrowers with respect to its subject matter and it supersedes any
and all prior or contemporaneous agreements, whether written or oral, with
respect to its subject matter. This Agreement shall be interpreted and construed
in accordance with, and governed by, the laws of the State of Maryland. This
Agreement shall be binding upon the successors and assigns of the Secured Party
and the Borrowers and shall inure to the benefit of the successors and assigns
of the Secured Party and the Borrowers, provided, however, that the duties and
obligations of the Borrowers hereunder may not be assigned by the Borrowers
without the prior written consent of the Secured Party.
IN WITNESS WHEREOF, the Borrower has caused this Agreement to be duly executed
under seal as of the date first above-written.
ATTEST: CALCOMP TECHNOLOGY, INC.
_____________________ By:______________________________________(SEAL)
Xxxx X. Xxxxxxxxx
Senior Vice President, Chief Financial
Officer and Treasurer
CALCOMP INC.
_____________________ By:______________________________________(SEAL)
Name:
Title:
TOPAZ TECHNOLOGIES, INC.
_____________________ By:______________________________________(SEAL)
Name:
Title:
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SCHEDULE 1
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List of Subsidiaries Stock
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100% of the capital stock of each of the following subsidiaries that are
United States corporations and 65% of the capital stock of each of the following
subsidiaries that are not United States corporations:
CAD Warehouse, Inc.
CalComp A.B.
CalComp A/S
CalComp Asia/Pacific Ltd.
CalComp Australia pty. Limited
CalComp B.V.
CalComp Canada Inc.
CalComp Display Products N.V.
(formerly, Summagraphics Belgium N.V.)
CalComp Espana S.A.
CalComp Europe B.V.
CalComp Europe Ltd.
CalComp European Management Corporation
CalComp Ges.m.b.H
CalComp GmbH
CalComp Graphic Peripherals (China) Limited
CalComp International Inc.
CalComp Japan Procurement KK
CalComp Limited
CalComp Pacific, Inc.
CalComp S.A.
CalComp S.p.A.
CalComp Technology and Procurement, Inc.
CalComp Europe N.V.
California Computer Products, Inc.
NS CalComp Corporation
Xxxxxxx Development Corporation
N.V. CalComp S.A.
Summagraphics Ltd.
Summagraphics GmbH
Summagraphics S.A. (France)
