EXHIBIT 10.3
EXECUTION COPY
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CASH MANAGEMENT AGREEMENT
Dated as of July 23, 1996
between
CALCOMP TECHNOLOGY, INC.,
a Delaware corporation
and
LOCKHEED XXXXXX CORPORATION,
a Maryland corporation
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CASH MANAGEMENT AGREEMENT
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This CASH MANAGEMENT AGREEMENT is dated as of July 23, 1996, between
CALCOMP TECHNOLOGY, INC., a Delaware corporation ("CalComp Technology"), and
LOCKHEED XXXXXX CORPORATION, a Maryland corporation ("Lockheed Xxxxxx").
WHEREAS, pursuant to Sections 5.2(b) and 6.2 of the Plan of
Reorganization and Agreement for the Exchange of Stock of CalComp Inc. for Stock
of Summagraphics Corporation dated as of the 19th day of March, 1996, as amended
(the "Reorganization Agreement"), by and among Summagraphics Corporation
("Summagraphics"), CalComp Inc., a California corporation ("CalComp"), and
Lockheed Xxxxxx, Summagraphics and Lockheed Xxxxxx agreed to execute and deliver
this Agreement at the closing (the "Closing") of the transactions contemplated
by the Reorganization Agreement;
WHEREAS, pursuant to the Reorganization Agreement, Summagraphics
agreed to issue and deliver to Lockheed Xxxxxx shares representing 89.7% of
Summagraphics' outstanding Common Stock, par value $.01 per share (the "Common
Stock") on a Fully Diluted Basis, in exchange for the transfer and delivery of
all the issued and outstanding capital stock of CalComp to Summagraphics, all
pursuant to and in accordance with the terms of the Reorganization Agreement;
and
WHEREAS, simultaneously with the execution and delivery of this
Agreement, the Closing has occurred and the parties have executed and delivered
a Revolving Credit Agreement of even date herewith.
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration the receipt and sufficiency of which are hereby
acknowledged, CalComp Technology and Lockheed Xxxxxx agree as follows:
1. Definitions. (a) Certain capitalized terms used but not defined
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herein shall have the meaning given those terms in the Revolving Credit
Agreement.
(b) The following terms, as used herein, shall have the following
respective meanings:
"Advance" means any amount advanced by Lockheed Xxxxxx to CalComp
Technology pursuant to Section 5(a) hereof.
"Bankruptcy Event" means, with respect to either party hereto, such
party or any Subsidiary thereof (i) shall commence a voluntary case or other
proceeding or an involuntary case or other proceeding shall be commenced against
it seeking liquidation, reorganization or other relief with respect to it or its
debt under any bankruptcy, insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or, in the case of an involuntary case or
other proceeding commenced against it, it shall consent to any such relief or to
the appointment of or taking possession by any such official, or it shall make a
general assignment for the benefit of creditors, or it shall fail generally to
pay its debts as they become due, or it shall take any corporate action to
authorize any of the foregoing, or an order for relief shall be entered against
it under the federal bankruptcy laws as now or hereafter in effect; provided,
however, that, any such involuntary case or proceeding shall not be a Bankruptcy
Event unless it shall remain undismissed and unstayed for a period of 60 days.
"Concentration Account" means the account established and maintained
by CalComp Technology in accordance with Section 3(a) hereof at such bank that
Lockheed Xxxxxx in its sole discretion may from time to time designate.
"Federal Funds Rate" means, for any day, the interest rate per annum
equal for such day to the weighted average of the rates on overnight federal
funds transactions with members of the Federal Reserve System arranged by
federal funds brokers, as published in the Federal Reserve System statistical
release H-15.
"Investment" means any amount held by Lockheed Xxxxxx for the benefit
of CalComp Technology pursuant to Section 4(a) hereof.
"Revolving Credit Agreement" means the Revolving Credit Agreement of
even date herewith between the parties hereto as the same may be amended from
time to time.
"Subsidiary" means, as to any Person, any corporation, association,
partnership, joint venture or other business entity of which more than 50% of
the voting capital stock or other voting ownership interests is owned or
controlled directly or indirectly by such Person or by one or more of the
Subsidiaries of such Person or by a combination thereof, and, as to CalComp
Technology, "Subsidiary" shall also mean CalComp.
2. Agreement of Lockheed Xxxxxx. In consideration for the
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compensation described in Section 8 below, Lockheed Xxxxxx agrees that it will,
in accordance with Sections 4 and 5 below, cause cash to be transferred to or
from the Concentration Account in amounts sufficient to cause the Concentration
Account balance to be zero at the end of each banking day.
3. Agreements of CalComp Technology. In order for Lockheed Xxxxxx to
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fulfill its obligations described in Section 2, CalComp Technology agrees that
it will:
(a) establish and maintain the Concentration Account;
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(b) collect all domestic cash receipts of any nature payable to
CalComp Technology or its Subsidiaries through lockbox services or other
collection services provided by banks approved by Lockheed Xxxxxx and cause
all such cash receipts and all other amounts collected by CalComp
Technology to be transferred each banking day to the Concentration Account
by means of a banking settlement system approved by Lockheed Xxxxxx;
(c) notify Lockheed Xxxxxx of the estimated amount of the sum of
electronic payments as of the date of transfer not later than 1:00 p.m.
Eastern Standard Time on the date of such transfers;
(d) provide Lockheed Xxxxxx with projections of cash flow and
any additional related reports reasonably requested by Lockheed Xxxxxx;
(e) promptly notify Lockheed Xxxxxx of the occurrence of any
default or of any event that with notice or passage of time would
constitute a default by CalComp Technology under any financial or credit
agreement or arrangement; and
(f) disburse funds from the Concentration Account to banks and
accounts approved by Lockheed Xxxxxx.
Nothing in this Agreement is intended to limit the purposes for which
CalComp Technology may make payments or restrict its ability to make
investments.
4. Investments. (a) In the event that CalComp Technology's net
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cash balance in the Concentration Account on any banking day is greater than
zero, Lockheed Xxxxxx will cause the cash balance to be transferred from the
Concentration Account to an account of Lockheed Xxxxxx. That amount will,
first, be deemed a repayment of principal of Base Rate Loans outstanding under
the Revolving Credit Agreement, second, to the extent not applied to repay Base
Rate Loans, be deemed a repayment of principal of LIBOR Rate Loans outstanding
under the Revolving Credit Agreement, and, third, to the extent not applied to
repay Base Rate Loans and LIBOR Rate Loans, be deemed a repayment of outstanding
Advances and, fourth, to the extent not applied to repay loans or Advances, be
deemed an Investment held by Lockheed Xxxxxx for the benefit of CalComp
Technology.
(b) Lockheed Xxxxxx will pay CalComp Technology interest on the
aggregate principal amount of Investments at a rate per annum equal to the
Federal Funds Rate and will make available to CalComp Technology the aggregate
principal amount of such Investments plus interest accrued not later than the
next business day. The aggregate amount of Investments plus interest accrued
thereon at any time shall be available to off-set any negative cash balances in
the Concentration Account on any day.
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5. Advances. (a) In the event that CalComp Technology's net cash
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balance in the Concentration Account on any banking day is negative, Lockheed
Xxxxxx will, subject to Section 5(c) hereof, advance by a deposit of funds into
the Concentration Account the amount necessary to cause the balance in the
Concentration Account to be zero. The amount so advanced will, first, be deemed
a repayment of any Investments plus any interest accrued thereon outstanding on
the date thereof and, second, to the extent not applied to repay Investments, be
deemed an Advance by Lockheed Xxxxxx to CalComp Technology.
(b) CalComp Technology will pay Lockheed Xxxxxx interest on Advances
at a per annum rate equal to the Federal Funds Rate.
(c) The maximum principal amount of Advances to be made by Lockheed
Xxxxxx hereunder shall be $2,000,000 outstanding at any time.
6. Interest. All interest to be paid with respect to Investments
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or Advances will be calculated on the basis of a 365/366 day year and the actual
number of days elapsed. Interest will be calculated on each banking day and
will be payable monthly in arrears. Lockheed Xxxxxx will notify CalComp
Technology, not later than ten days after the end of each month, of the net
interest amount payable by or to CalComp Technology hereunder with respect to
Investments and Advances, which amount will be payable by the applicable party
within five banking days of the date of such notice.
7. Additional Accounts. CalComp Technology may establish xxxxx
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cash accounts and local depository accounts at local banks to ensure that funds
are available to cover minor operating expenses. Such accounts, however, shall
be subject to a limit on the maximum balances therein reasonably approved by
Lockheed Xxxxxx and shall be replenished only to the extent vouchers and
receipts are available. CalComp Technology may further establish bank accounts
in international locations as are required to collect and disburse funds of
foreign operations. Such foreign bank accounts shall be established and banks
approved by Lockheed Xxxxxx.
8. Compensation. Lockheed Xxxxxx shall be compensated for
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providing services hereunder in accordance with the Intercompany Services
Agreement, dated the date hereof (the "Services Agreement"), between the parties
hereto. No additional compensation shall be due hereunder to Lockheed Xxxxxx.
9. Limitation of Liability. Except as may be provided in Sections
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10 and 11 below, Lockheed Xxxxxx, its affiliates, directors, officers,
employees, agents or permitted assigns (each a "Lockheed Xxxxxx Party") shall
not be liable to CalComp Technology or any of CalComp Technology's affiliates,
directors, officers, employees, agents or permitted assigns (each a "CalComp
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Technology Party") for, and each CalComp Technology Party shall not be liable to
any Lockheed Xxxxxx Party for, any liabilities, claims, damages, losses or
expenses, including, but not limited to, any special, indirect, incidental or
consequential damages arising in connection with this Agreement.
10. Lockheed Xxxxxx Indemnification. Lockheed Xxxxxx shall
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indemnify, defend and save harmless the CalComp Technology Parties from and
against all liabilities, claims, damages, losses and expenses, including, but
not limited to, court costs and reasonable attorneys' fees, of any kind or
nature, caused by or arising in connection with the gross negligence or willful
misconduct of Lockheed Xxxxxx hereunder, unless such gross negligence or willful
misconduct is caused by the acts or omissions of any CalComp Technology Party.
Notwithstanding the foregoing, Lockheed Xxxxxx shall not be liable for any
special, indirect, incidental or consequential damages relating to third party
claims.
11. CalComp Technology Indemnification. CalComp Technology shall
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indemnify, defend and save harmless the Lockheed Xxxxxx Parties from and against
all liabilities, claims, damages, losses and expenses, including, but not
limited to, court costs and reasonable attorneys' fees, of any kind or nature,
caused by or arising in connection with CalComp Technology's failure to fulfill
CalComp Technology's obligations hereunder; unless such failure is caused by the
acts or omissions of any Lockheed Xxxxxx Party. Notwithstanding the foregoing,
CalComp Technology shall not be liable for any special, indirect, incidental or
consequential damages relating to such claims.
12. Term of Agreement; Change of Control. This Agreement is
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effective from the date hereof and shall continue in full force and effect until
June 1, 1998, unless sooner terminated by either party. Either party may
terminate this Agreement (a) at any time after the first anniversary of the
date this Agreement is effective by giving not less than 90 days' prior written
notice to the other party of its election to terminate (which notice may be
given up to 90 days prior to the first anniversary), or (b) at any time by
giving written notice to the other party of its election to terminate if (i)
such other party has failed to make any payments hereunder within five days of
when due or (ii) a Bankruptcy Event has occurred with respect to such other
party. In the event of a change of control of CalComp Technology, whether by
merger, acquisition or sale of stock, disposition of assets or otherwise, this
Agreement shall automatically terminate.
13. Representations and Warranties. Each of the representations
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and warranties contained in the Revolving Credit Agreement of even date herewith
by and between CalComp Technology and Lockheed Xxxxxx are hereby incorporated by
reference as if set forth herein in full and may be relied upon by the parties
hereto as if set forth herein.
14. Right of Set-Off. In addition to any rights and
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remedies of Lockheed Xxxxxx provided by law, Lockheed Xxxxxx shall have the
right, without prior notice to CalComp Technology, any such notice being
expressly waived by CalComp Technology to the extent permitted by applicable
law, upon any amount becoming due and payable by CalComp Technology hereunder
and remaining unpaid, to set-off and appropriate and apply against any and all
Investments, and any other credits, Indebtedness (as defined in the Revolving
Credit Agreement) or claims at any time held by or owing by Lockheed Xxxxxx to
or for the credit or the account of CalComp Technology. Lockheed Xxxxxx agrees
promptly to notify CalComp Technology after any such set-off and application
made by Lockheed Xxxxxx, provided that the failure to give such notice shall not
affect the validity of such set-off and application.
15. Information. Each of Lockheed Xxxxxx and CalComp Technology
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hereby covenants and agrees to provide the other with all information regarding
itself and other assistance necessary for the other to comply with all
applicable, federal, state, county and local laws, ordinances, regulations and
codes, including, but not limited to, securities laws and regulations.
16. Assignment. Neither party may assign or transfer any of its
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rights or duties under this Agreement to any person or entity without the prior
written consent of the other party; provided, however, that Lockheed Xxxxxx may
make any such assignment or transfer to an affiliate of Lockheed Xxxxxx without
the prior written consent of CalComp Technology.
17. Notices. Any notice, instruction, direction or demand under
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the terms of this Agreement required to be in writing will be duly given upon
delivery, if delivered by hand, intercompany mail or by facsimile (with receipt
confirmed), or five days after posting if sent by certified mail, return receipt
requested to the following addresses:
Lockheed Xxxxxx:
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Lockheed Xxxxxx Corporation
0000 Xxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Treasurer
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
With a copy to:
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Lockheed Xxxxxx Information & Technology Services
0000 Xxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Director, Finance
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
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CalComp Technology:
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CalComp Technology, Inc.
0000 X. XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Treasurer
Telephone:
Telecopy:
or to such other address as either party may have furnished to the other in
writing in accordance with this Section 17.
18. Governing Law. This Agreement shall be construed in accordance
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with and governed by the laws of the State of Maryland.
19. Suspension. The obligations of any party to perform any acts
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hereunder may be suspended if such performance is prevented by fires, strikes,
embargoes, riot, invasion, governmental interference, inability to secure goods
or materials, or other circumstances outside the control of the parties.
20. Severability. If any provision of this Agreement shall be
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invalid or unenforceable, such invalidity or unenforceability shall not render
the entire Agreement invalid. Rather, the Agreement shall be construed as if
not containing the particular invalid or unenforceable provision, and the rights
and obligations of each party shall be construed and enforced accordingly.
21. Rights Upon Orderly Termination. Upon termination or
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expiration of this Agreement or any portion of the services described herein,
each party shall, upon request, forthwith return to the other party all reports,
paper, material and other information required to be provided to the other party
by this Agreement. In addition, each party will assist the other in the orderly
termination of this Agreement or any portion of the services described herein.
22. Amendment. This Agreement may only be amended by a written
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agreement executed by all of the parties hereto.
23. Entire Agreement. This Agreement, including any exhibits,
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together with the Revolving Credit Agreement and the Services Agreement,
constitutes the entire agreement between the parties, and supersedes all prior
agreements, representations, negotiations, statements or proposals related to
the subject matter thereof.
24. Counterparts. This Agreement may be executed in separate
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counterparts, each of which shall be deemed to be an original and all of which,
when taken together, shall constitute one agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by
their duly authorized representatives.
LOCKHEED XXXXXX CORPORATION
By:/s/ XXXXXX X. XXXXXXXXXX
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Xxxxxx X. Xxxxxxxxxx
Treasurer
CALCOMP TECHNOLOGY, INC.
By:/s/ XXXXXXX X. XXXXXXX
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Xxxxxxx X. Xxxxxxx
President and Chief Executive
Officer
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