Exhibit 10.8

 

PLEDGE AGREEMENT

 

THIS PLEDGE AGREEMENT (“Agreement”) is made this 28th day of April, 2006, by and
between EVANS & SUTHERLAND COMPUTER CORPORATION, headquartered at 600 Komas
Drive, Salt Lake City, UT  84108 (“Debtor”), and FIRST KEYSTONE BANK (“Bank”),
at 22 West State Street, Media, Pennsylvania, 19063.

 

WHEREAS, SPITZ, INC., a Delaware corporation, (hereinafter referred to as
“Borrower”) has requested that Bank extend a line of credit facility to Borrower
in the maximum principal sum of up to Three Million Dollars ($3,000,000.00)
(hereinafter the “Loan”); and

 

WHEREAS, the Bank desires to extend credit to Borrower under certain terms and
conditions; and

 

WHEREAS, as a condition of the extension of credit to Borrower, Bank requires
that the obligation of Borrower under the Loan be secured by, inter alia, that
certain guaranty and suretyship agreement of Debtor executed and delivered to
Bank even date herewith (hereinafter referred to as the “Guaranty”); and

 

WHEREAS, as a condition of the extension of credit to Borrower, Bank requires
that the obligations of Debtor under the Guaranty be secured by, inter alia and
all of the issued and outstanding shares of stock in SPITZ, INC.; and

 

WHEREAS, Debtor is the owner of all of the issued and outstanding shares of
stock in SPITZ, INC.; and

 

WHEREAS, the extension of credit from Bank to Borrower is to be evidenced and
secured by, inter alia, (i) Borrower’s Line of Credit Note in the original
principal sum of up to Three Million Dollars ($3,000,000.00) (the “Line of
Credit Note”), (ii) an Open-End Mortgage and Security Agreement in the original
principal sum of up to Three Million Dollars ($3,000,000.00) (the “Mortgage”)
encumbering the premises known as Route 1, Chadds Ford Township, Delaware
County, Pennsylvania,  being Folio No. 04-00-00034-02 ; (iii) a first lien
security interest in personal property of Borrower, including without limitation
all accounts, inventory and equipment of Borrower, to be evidenced by a Security
Agreement of even date herewith, (iv) the Guaranty, and (v) this Agreement.

 

NOW THEREFORE, in consideration of the foregoing and in order to induce Bank to
advance credit to Borrower and in consideration thereof and for other good and
valuable considerations, receipt of which is hereby acknowledged, and intending
to be legally bound hereby the parties hereto agree as follows:

 

 

JONES, STROHM & GUTHRIE

 

10 Beatty Road

A Professional Corporation

 

Media, Pennsylvania 19063

Attorneys At Law

 

Telephone (610) 565-7100

 

 

Fax (610) 565-7180

 

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(1)                                 Definitions. When used herein, the following
terms shall have the following meanings:

 

(A)                               “Note” shall mean the Line of Credit Note and
any promissory note of Borrower evidencing any loan or advance made by the Bank
to Borrower.

 

(B)                               “Liabilities” shall mean: (i) all debts and
obligations of Borrower under any Note, including without limitation new
obligations arising after any original debt is extinguished together with any
renewals, extensions, replacements or modifications thereof; (ii) all debts and
obligations of Debtor hereunder and under the Guaranty, together with any
renewals,  extensions, replacements or modifications thereof; (iii) all other
debts and obligations of Borrower to Bank, its successors and assigns, of every
kind and description, howsoever created, arising or evidenced, whether direct or
indirect, absolute or contingent, or now or hereafter existing, or due or to
become due; (iv) the performance by Debtor of Debtor’s obligations under this
Agreement and all agreements, warranties, representation and covenants set forth
in any loan agreement(s), instrument(s) and document(s) executed and/or
delivered in conjunction herewith; and (v) the cost of curing any default
hereunder that Bank elects to cure on the Debtor’s behalf.

 

(D)                               “Collateral” shall mean and include (i) the
securities listed on Exhibit “A” attached hereto and made a part hereof, and all
rights and privileges of any nature pertaining thereto, including, without
limitation, all securities and additional securities receivable in respect of or
in exchange, replacement or substitution for such securities, all rights to
purchase, acquire or subscribe for securities incident to or arising from
ownership of such securities, all cash, interest, stock and other dividends or
distributions paid or payable on such securities, and all certificates, books
and records pertaining to the foregoing, including, without limitation, all
stock record and transfer books, (ii) any and all other securities hereafter
pledged by Debtor to Bank to secure Debtor’s Obligations, and all rights and
privileges of any nature pertaining thereto, including, without limitation, all
securities and additional securities receivable in respect of or in exchange,
replacement or substitution for such securities, all rights to purchase, acquire
or subscribe for securities incident to or arising from ownership of such
securities, all cash, interest, stock and other dividends or distributions paid
or payable on such securities, and all certificates, books and records
pertaining to the foregoing, including, without limitation, all stock record and
stock transfer books, and (iii) any and all Proceeds of the foregoing.

 

(E)                                 “Proceeds” shall have the meaning given to
that term in the Code and shall include without limitation whatever is received
when Collateral or Proceeds are sold, exchanged, collected or otherwise disposed
of, whether cash or non-cash, and includes without limitation proceeds of
insurance payable by reason of loss of or damage to Collateral and all dividends
or other income from such property, collections thereon or distributions with
respect thereto.

 

(F)                                 “Code” shall mean the Uniform Commercial
Code as in effect on the date of this Agreement and as amended from time to
time, of the state or states having jurisdiction with respect to all or any
portion of the Collateral from time to time.

 

(2)                                 Security Interest. As security for the
payment of all Liabilities, Debtor hereby assigns, grants and conveys to Bank a
continuing first priority security interest and lien in and to all of the
Collateral.

 

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(3)                                 Delivery of Certificates, etc. Upon
execution and delivery of this Agreement, Debtor shall have delivered to and
deposited with Bank in pledge, any and all stock certificates and any other
instruments evidencing the Collateral, together with irrevocable stock powers
executed in blank by Debtor in form and substance acceptable to Bank.

 

(4)                                 Debtor’s Representations. The Debtor
represents and warrants that:

 

(A)                               Debtor is the sole record, legal and
beneficial owner of and has good and marketable title to the Collateral;

 

(B)                               the Collateral was validly issued, fully paid
and nonassessable;

 

(C)                               the Collateral is not encumbered nor subject
to restrictions on transfer or resale or other dispositions in any manner (other
than applicable federal and state securities laws);

 

(D)                               the Debtor has the unqualified right and power
to grant a security interest in the Collateral without the consent of any other
party;

 

(E)                                 this Agreement constitutes a legal, valid
and binding obligation of Debtor, enforceable in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors= rights generally;

 

(F)                                 the execution, delivery and performance of
this Agreement will not violate any provision of any requirement of law or
contractual obligation of Debtor and will not result in the creation or
imposition of any lien on any of the properties or revenues of Debtor pursuant
to any requirement of the law or contractual obligation, except as contemplated
hereby;

 

(G)                               there is no shareholders agreement among the
shareholders of SPITZ, INC., as of the date hereof, and the consent of SPITZ,
INC. is not required in connection with the execution, delivery and performance
of this Agreement;

 

(H)                               no consent or authorization of, filing with,
or other act by or in respect of, any arbitrator or governmental authority and
no consent of any other person (including, without limitation, any creditor of
Debtor), is required in connection with the execution, delivery, performance,
validity or enforceability of this Agreement;

 

(I)                                    no litigation, investigation or
proceeding of or before any arbitrator or governmental authority is pending or,
to the knowledge of Debtor, threatened by or against Debtor or against any of
its properties or revenues, or any of the transactions contemplated hereby;

 

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(J)                                 Debtor is the record and beneficial owner
of, and has good and marketable title to, the Collateral, free of any and all
liens or options in favor of, or claims of, any other person, except the lien
created by this Agreement;

 

(K)                               collectively, the shares pledged as Collateral
hereunder represent one hundred percent (100%) of the capital stock of SPITZ,
INC. issued and outstanding as of the date hereof, and no other right or option
to acquire any shares of capital stock of SPITZ, INC. exists;

 

(L)                                upon delivery of the Collateral to Bank,
together with appropriate stock powers executed in blank, the lien granted
pursuant to this Agreement will constitute a valid, perfected first priority
lien on the Collateral, enforceable as such against all creditors of Debtor and
any persons purporting to purchase any of the Collateral from Debtor; and

 

(M)                             Debtor has the power and authority to execute
and deliver this Agreement and to pledge the Collateral hereunder.

 

(5)                                 Covenants. Debtor covenants and agrees with
Bank that, from and after the date of this Agreement so long as any of the
Liabilities remain outstanding:

 

(A)                               Without the prior written consent of Bank,
Debtor will not (i) vote to enable, or take any other action to permit, any
issuer of the Collateral to issue any stock or other equity securities of any
nature or to issue any other securities convertible into or granting the right
to purchase or exchange for any stock or other equity securities of any nature
of the issuer; (ii) sell, assign, transfer, exchange or otherwise dispose of, or
grant any option with respect to, the Collateral; or (iii) create, incur or
permit to exist any lien or option in favor of, or any interest therein, except
for the lien provided for by this Agreement. Debtor, at its sole expense, will
defend the right, title and interest of Bank in and to the Collateral against
the claims and demands of all persons.

 

(B)                               At any time and from time to time, upon the
written request of Bank, and at the sole expense of Debtor, Debtor will promptly
and duly execute and deliver such further instruments, documents and powers of
attorney and take such further actions as Bank may, in its reasonable
discretion, deem necessary or advisable for the purposes of obtaining or
preserving the full benefits of this Agreement and of the rights and powers
herein granted, including, without limitation, Bank’s first priority perfected
security interest in the Collateral. Bank is hereby irrevocably appointed
attorney-in-fact of Debtor to do all acts and things which Bank, in its sole
discretion, may deem necessary or advisable to obtain and preserve its first
priority perfected security interest in the Collateral.

 

(6)                                 Bank’s Acknowledgment and Duties. The Bank
agrees to hold the Collateral subject to the terms of this Agreement, and,
except as hereinafter provided, the Bank shall not in any way encumber or
otherwise dispose of the Collateral.

 

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(7)                                 Payment of the Liabilities. Upon payment in
full of the Liabilities, and satisfaction of all Notes, the Bank shall deliver
all of the Collateral which it is then holding to the party granting the
security interest in such Collateral, and this Agreement shall terminate upon
such delivery.

 

(8)                                 Transfer Upon Corporate Books. Upon the
occurrence and during the continuance of an Event of Default, the Bank its
successors and/or assigns may cause the Collateral pledged hereunder to be
transferred upon the books of the Corporation or other entity issuing the
Collateral in such manner as the Bank its successors or assigns may determine,
and there shall be full authority in such Corporation or other entity to make
such transfers. To facilitate the Bank’s exercise of its rights hereunder,
Debtor has caused to be executed irrevocable stock powers in favor of the Bank.

 

(9)                                 Stock Dividends, Options, or other
Adjustments. If, during the term of this Agreement, any stock dividends,
reclassifications, adjustments, or other changes are made in the capital
structure of the corporation or other entity issuing the Collateral or any
portion thereof, whether it is a reorganization, recapitalization, share
split-up, combination of shares, merger, transfer, or consolidation, all new,
additional, or substituted shares for securities of whatever class, issued with
respect to the Collateral by reason of such, shall be delivered to the Bank
immediately after issuance. The Bank shall hold the shares or securities so
issued as the Collateral under the terms of this Agreement. If, during the term
of this Agreement, warrants, options, or other rights with respect to the
Collateral are issued to Debtor and if Debtor exercises any such warrant,
option, or right, all new stock securities received upon exercise shall be
delivered to the Bank immediately after they are issued. Such new stock or
securities shall be held by the Bank as Collateral under the terms of this
Agreement.

 

(10)                          Discharge of Debtor’s Obligations. At its option,
the Bank may, without notice to Debtor, (a) discharge any taxes, liens, security
interests, or other encumbrances levied or placed on the Collateral; and (b) pay
for the maintenance and preservation of the Collateral; or (c) pay for insurance
on the Collateral. The amount of such payments, plus any and all fees, costs,
expenses, of whatever kind and nature, which the Bank may incur in connection
therewith, shall, at the Bank’s option, be reimbursed by the Debtor on demand,
with interest thereon at the rate of ten (10%) percent per annum from the date
paid, or added to the Liabilities secured hereby.

 

(11)                          Events of Default. Each of the following shall
constitute an event of default by Debtor (“Event of Default”) hereunder:

 

(A)                               The breach or failure to perform by the Debtor
of any covenant, promise, condition, obligation, or liability contained or
referred to herein, which breach or failure to perform was not the result of the
affirmative action of Debtor and is susceptible to cure, remains uncured for a
period of thirty (30) days from Bank’s notice to Debtor of such breach or
failure to perform;

 

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(B)                               The failure to cure an event of default under
any Note prior to the expiration of any applicable cure period;

 

(C)                               Proof being made that any representation,
statement, or warranty made or furnished in any manner to the Bank by or on
behalf of the Debtor in connection with this Agreement was false in any material
respect when made or furnished;

 

(D)                               Sale of any of the Collateral;

 

(E)                                 Any proceeding under the Bankruptcy Act or
under any law of the United States or of any state relating to insolvency,
receivership, reorganization, or debt adjustment is instituted by Debtor or
Borrower or if such proceeding is instituted against Debtor or Borrower and is
consented to by Debtor or Borrower or remains undismissed for sixty (60) days,
or if Debtor or Borrower is adjudicated a bankrupt, or a trust or receiver is
appointed for any substantial part of Debtor’s or Borrower’s property, or if
Debtor or Borrower makes an assignment for the benefit of creditors, or becomes
insolvent; and

 

(F)                                 The failure to cure any Event of Default
under any obligation of Debtor to Bank or under any agreement between Debtor and
Bank prior to the expiration of any applicable cure period.

 

(12)                          Remedies.

 

(A)                               If an Event of Default shall occur, Bank or
its nominee may: (i) at any time after such default, at its option, declare the
Liabilities to be immediately due and payable; and/or (ii) exercise, in addition
to all other rights and remedies granted in this Agreement and in any other
instrument or agreement securing, evidencing or relating to Debtor’s and/or
Borrower’s Liabilities, all rights and remedies of a secured party under the
Code. Without limiting the generality of the foregoing, Bank, without demand of
performance or other demand, presentment, protest, advertisement or notice of
any kind (except any notice required by law referred to below) to or upon Debtor
or any other person (all and each of which demands, defenses, advertisements and
notices are hereby waived to the fullest extent permitted by law), may in such
circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof and/or may forthwith sell, deliver the
Collateral, or any part thereof (or contract to do any of the foregoing) in one
or more parcels, at public or private sale or sales, in the over-the-counter
market, at any exchange, broker’s board or office of Bank or elsewhere upon such
terms and conditions as it may deem advisable and at such prices as it may deem
best, for cash or on credit or for future deliver without assumption of any
credit risk. Bank shall have the right upon any such public sale or sales, and,
to the extent permitted by law, upon any such private sale or sales, to purchase
the whole or any part of the Collateral so sold, free of any right or equity of
redemption in Debtor, which right or equity is hereby waived or released. Bank
shall apply any Proceeds from time to time held by it and the net proceeds of
any such collection, recover, receipt, appropriation, realization or sale, after
deducting all reasonable costs and expenses of every kind incurred in

 

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respect thereof or incidental to the care or safekeeping of any of the
Collateral, or in any way relating to the foregoing or the rights of Bank
hereunder, including, without limitation, reasonable attorneys’ fees and
disbursements of counsel to Bank, to the payment in whole or in part of Debtor’s
and/or Borrower’s Liabilities, in such order as Bank may elect, and only after
such application and after the payment of Bank of any other amount required by
any provision of law, need Bank account for the surplus, if any, to Debtor. To
the extent permitted by applicable law, Debtor waives all claims, damages and
demands it may acquire against Bank arising out of the exercise by it of any
rights hereunder. If any notice of a proposed sale or other disposition of
Collateral shall be required by law, such notice shall be deemed reasonable and
proper, if given at least 10 days before such sale or other disposition. Debtor
shall remain liable for any deficiency if the proceeds of any sale or other
disposition of Collateral are insufficient to pay the Liabilities and the fees
and disbursements of any attorneys employed by Bank to collect such deficiency.
Debtor further waives, to the fullest extent permitted by law, and agrees not to
assert any rights or privileges which it may acquire under the Code.

 

(B)                               Debtor recognizes that Bank may be unable to
effect a public sale of the Collateral, by reason of certain prohibitions
contained in the Securities Act of 1933, as amended, and applicable state
securities laws or otherwise, and may be compelled to resort to one or more
private sales thereof to a restricted group of purchasers which will be obliged
to agree, among other things, to acquire such securities for their own account
for investment and not with a view to the distribution or resale thereof. Debtor
acknowledges and agrees that any such private sale may result in prices and
other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner. Bank shall not be
under any obligation to delay a sale of any of the Collateral for the period of
time necessary to permit the issuer of such securities to register such
securities for public sale under the federal Securities Act of 1933, as amended,
or under applicable state securities laws, even if the issuer would agree to do
so.

 

(C)                               Debtor further agrees to use its best efforts
to do or cause to be done all such other acts as may be necessary to make such
sale or sales of all or any portion of the Collateral pursuant to this Paragraph
12 valid and binding and in compliance with any and all other applicable
requirements of law. Debtor further agrees that a breach of any of the covenants
contained in this Paragraph 12 will cause irreparable injury to Bank, that Bank
has no adequate remedy at law in respect to such breach and, as a consequence,
that each and every covenant contained in this Paragraph 12 shall be
specifically enforceable against Debtor, and Debtor hereby waives and agrees not
to assert any defenses against an action for specific performance of such
covenants except for a defense that no Event of Default has occurred.

 

(13)                          Voting Rights; Dividends; etc.

 

(A)                               So long as no Event of Default shall have
occurred:

 

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(i)                                    Debtor shall be entitled to exercise any
and all voting and other consensual rights pertaining to the Collateral or any
part thereof for any purpose not inconsistent with the terms of this Agreement;
provided, however, that Debtor shall not exercise and shall refrain from
exercising any right if such action or inaction would reasonably be likely to
have a material adverse effect on the value of the Collateral or any part
thereof; and provided, further, that Debtor shall give Bank at least five (5)
business days written notice of the manner in which it intends to exercise, and
the reasons therefor, or the reasons for refraining from exercising, any such
right;

 

(ii)                                Any and all instruments and other property
(other than cash dividends) received, receivable or otherwise distributed in
respect of, or in exchange for, any of the Collateral, shall be, and shall be
forthwith delivered to Bank to hold as part of the Collateral and shall, if
received by Debtor, be received in trust for the benefit of Bank, be segregated
from the other property or funds of Debtor, and be forthwith delivered to Bank
as Collateral in the same form as so received (with any necessary endorsement);
and

 

(iii)                            Bank shall execute and deliver (or cause to be
executed and delivered) to Debtor all such proxies and other instruments as
Debtor may reasonably request for the purpose of enabling Debtor to exercise the
voting and other rights which it is entitled to exercise pursuant to
subparagraph (i) above.

 

(B)                               Upon the occurrence of an Event of Default
hereunder:

 

(i)                                    All rights of Debtor to exercise the
voting and other consensual rights which it would otherwise be entitled to
exercise pursuant to paragraph 13(A)(i) shall cease, and all such rights shall,
upon notice by Bank to Debtor, become vested in Bank who shall thereupon have
the sole right to exercise such voting and other consensual rights and the sole
right to receive and hold as Collateral such dividends and apply them to payment
of Debtor’s Obligations; and

 

(ii) All dividends which are received by Debtor contrary to the provisions of
subparagraph (i) of this paragraph 13 (B) shall be received in trust for the
benefit of Bank, shall be segregated from other funds of Debtor and shall be
forthwith paid over to Bank as Collateral in the same form as so received (with
any necessary endorsement).

 

(14)                          Additional Security. As additional security for
the Liabilities, the Bank shall have a lien, in the amount of the Liabilities,
on the right, title, and interest of the Debtor in any other property now or
hereafter in the possession of the Bank and also upon the balance of any deposit
account of the Debtor with the Bank at any time existing and the Bank, in its
discretion, may resort to such property subject to this Agreement or to such
deposit account, at such time or in such order as the Bank may determine.

 

(15)                          Waiver.

 

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(A)                               The Bank shall not be liable for failure to
demand or present for payment or otherwise, protest, give notice of protest, or
nonpayment or other notice or for failure to sue for any Collateral secured
hereunder, but the Bank shall give credit only for what it actually collects or
receives on account thereof; and the Bank shall not be required to examine into
the validity of or to exchange or to collect on any Collateral subject to this
Agreement or to take any action necessary to hold any corporation, issuer or
other parties liable on the Collateral; and diligence in looking after,
preserving, or acting with respect to the Collateral or collecting the same is
hereby waived by all parties hereto.

 

(B)                               The Bank shall not be deemed to have waived or
modified any of the Bank’s rights hereunder, or under any other writing signed
by the Debtor unless such waiver or modification be in writing and signed by an
officer of the Bank, and then such waiver or modification shall be effective
only for the period and under the terms and conditions as are specifically set
forth therein. No delay or omission on the part of the Bank in exercising any
right shall operate as a waiver of such right or any other right. No waiver of
any default on one occasion shall operate as a waiver of any other default or of
the same default on a future or different occasion. All of the Bank’s rights and
remedies, whether evidenced hereby or by any other writing, shall be cumulative
and may be exercised from time to time singularly or concurrently.

 

(16)                          Entire Agreement. This Agreement embodies the
entire Agreement and understanding between the parties with respect to the
subject matter hereof.

 

(17)                          Amendment. This Agreement may be changed or
amended only by instrument in writing signed by the party against which
enforcement is sought.

 

(18)                          Severability. This Agreement may be executed in
several counterparts, each of which is an original, but all of which shall
constitute one instrument. In the event any provision of this Agreement shall be
held to be invalid or unenforceable, in full or in part, neither the validity
nor the enforceability of the remainder of this Agreement shall be affected in
any way.

 

(19)                          Miscellaneous.

 

(A)                               When used herein, the male gender shall
include the female, and the singular shall include the plural and vice versa
where appropriate.

 

(B)                               The Debtor and the Bank hereby irrevocably
waive their respective rights to trial by jury in any and all actions in which
the Debtor and Bank are parties arising at any time during the term of this
Agreement.

 

(C)                               This Agreement has been delivered at Media,
Pennsylvania, and shall be governed by the laws of the Commonwealth of
Pennsylvania.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.

 

Witness:

DEBTOR:

 

 

 

EVANS & SUTHERLAND COMPUTER
CORPORATION, a Utah Corporation

 

 

 

/s/ Analisa Marquardt

 

BY:

/s/  David Bateman

 

Witness

 

 

 

 

/s/ Analisa Marquardt

 

ATTEST:

/s/ Lance Sessions

 

Witness

 

 

 

 

 

[Corporate Seal]

 

 

 

 

 

 

 

 

 

BANK:

 

 

FIRST KEYSTONE BANK

 

 

 

 

 

BY:

/s/ Robert Latshaw

 

 

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EXHIBIT “A”

 

ALL THE SHARES AND STOCK IN:

 

SPITZ, INC., a Delaware Corporation.

 

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