Cash Management Agreement Dated July 23, 1996

EXHIBIT 10.3


EXECUTION COPY ================================================================================


CASH MANAGEMENT AGREEMENT


Dated as of July 23, 1996


between


CALCOMP TECHNOLOGY, INC.,
a Delaware corporation


and


LOCKHEED MARTIN CORPORATION,
a Maryland corporation


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CASH MANAGEMENT AGREEMENT
-------------------------


This CASH MANAGEMENT AGREEMENT is dated as of July 23, 1996, between CALCOMP TECHNOLOGY, INC., a Delaware corporation ("CalComp Technology"), and LOCKHEED MARTIN CORPORATION, a Maryland corporation ("Lockheed Martin").


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 Martin, Summagraphics and Lockheed Martin 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 Martin 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 Martin agree as follows:


1. Definitions. (a) Certain capitalized terms used but not defined
----------- 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 Martin 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 Martin 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 Martin 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 Martin. In consideration for the
---------------------------- compensation described in Section 8 below, Lockheed Martin 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 Martin to
-------------------------------- fulfill its obligations described in Section 2, CalComp Technology agrees that it will:


(a) establish and maintain the Concentration Account;


-2-


(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 Martin 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 Martin;


(c) notify Lockheed Martin 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 Martin with projections of cash flow and
any additional related reports reasonably requested by Lockheed Martin;


(e) promptly notify Lockheed Martin 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 Martin.


Nothing in this Agreement is intended to limit the purposes for ...