Exhibit
10.28


 


ASSET
PURCHASE AGREEMENT



BETWEEN



EVANS & SUTHERLAND COMPUTER CORP.



AND



VIDEO DISPLAY CORPORATION


 


 


October 12, 2004


 





















 


TABLE OF
CONTENTS


 


	
  Section 1 - Definitions

  
	
   

  
	
  Section 2 – Basic Transaction

  	
   

  	
   

  
	
   

  	
  (a)

  	
  Purchase and Sale of
  Assets

  	
   

  	
   

  
	
   

  	
  (b)

  	
  No Assumption of
  Liabilities

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Purchase Price

  	
   

  	
   

  
	
   

  	
  (d)

  	
  The
  Closing

  	
   

  	
   

  
	
   

  	
  (e)

  	
  Deliveries at the Closing

  	
   

  	
   

  
	
   

  	
  (f)

  	
  Allocation

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 3
  – Representations and Warranties of the Seller

  
	
   

  	
  (a)

  	
  Organization of the
  Seller

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Authorization of
  Transaction

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Noncontravention

  	
   

  	
   

  
	
   

  	
  (d)

  	
  Brokers’
  Fees

  	
   

  	
   

  
	
   

  	
  (e)

  	
  Title to Assets

  	
   

  	
   

  
	
   

  	
  (f)

  	
  Tangible Assets

  	
   

  	
   

  
	
   

  	
  (g)

  	
  Product Liability

  	
   

  	
   

  
	
   

  	
  (h)

  	
  Litigation

  	
   

  	
   

  
	
   

  	
  (i)

  	
  Product Warranty

  	
   

  	
   

  
	
   

  	
  (j)

  	
  Material Contracts

  	
   

  	
   

  
	
   

  	
  (k)

  	
  Inventory

  	
   

  	
   

  
	
   

  	
  (l)

  	
  Intellectual Property

  	
   

  	
   

  
	
   

  	
  (m)

  	
  Legal Compliance

  	
   

  	
   

  
	
   

  	
  (n)

  	
  Reformatted
  Financial Information

  	
   

  	
   

  
	
   

  	
  (o)

  	
  Disclosure

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4
  – Representations and Warranties of the Buyer

  
	
   

  	
  (a)

  	
  Organization of the Buyer

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Authorization of
  Transaction

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Noncontravention

  	
   

  	
   

  
	
   

  	
  (d)

  	
  Brokers’
  Fees

  	
   

  	
   

  
	
   

  	
  (e)

  	
  Risk of Business

  	
   

  	
   

  
	
   

  	
  (f)

  	
  Disclosure

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5 – Pre-Closing
  Covenants

  
	
   

  	
  (a)

  	
  General

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Notices and Consents

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Operation of Business

  	
   

  	
   

  
	
   

  	
  (d)

  	
  Preservation of Business

  	
   

  	
   

  
	
   

  	
  (e)

  	
  Full
  Access

  	
   

  	
   

  
	
   

  	
  (f)

  	
  Publicity

  	
   

  	
   

  
	
   

  	
  (g)

  	
  Confidentiality

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6 –
  Conditions to Obligation to Close

  
	
   

  	
  (a)

  	
  Conditions to
  Obligation of the Buyer

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Conditions
  to Obligation of the Seller

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 7 – Termination

  



 


i





















 


	
  Section 8 – Post Closing
  Covenants

  
	
   

  	
  (a)

  	
  General

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Litigation Support

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Transition

  	
   

  	
   

  
	
   

  	
  (d)

  	
  Covenant Not to Compete

  	
   

  	
   

  
	
   

  	
  (e)

  	
  Agreement Not to
  Solicit Customers

  	
   

  	
   

  
	
   

  	
  (f)

  	
  Agreement Not to
  Solicit Employees

  	
   

  	
   

  
	
   

  	
  (g)

  	
  Premises
  Use

  	
   

  	
   

  
	
   

  	
  (h)

  	
  Warranty Service

  	
   

  	
   

  
	
   

  	
  (i)

  	
  Spares Pricing

  	
   

  	
   

  
	
   

  	
  (j)

  	
  Transition Support

  	
   

  	
   

  
	
   

  	
  (k)

  	
  Employees

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9
  – Remedies for Breach of this Agreement

  
	
   

  	
  (a)

  	
  Survival
  of Representations and Warranties

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Indemnification
  Provisions

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 10 – Disputes
  and Arbitration

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 11 – Miscellaneous

  
	
   

  	
  (a)

  	
  Survival
  of Representations and Warranties

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Entire Agreement

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Succession and Assignment

  	
   

  	
   

  
	
   

  	
  (d)

  	
  Counterparts

  	
   

  	
   

  
	
   

  	
  (e)

  	
  Headings

  	
   

  	
   

  
	
   

  	
  (f)

  	
  Notices

  	
   

  	
   

  
	
   

  	
  (g)

  	
  Amendments and Waivers

  	
   

  	
   

  
	
   

  	
  (h)

  	
  Severability

  	
   

  	
   

  
	
   

  	
  (i)

  	
  Expenses

  	
   

  	
   

  
	
   

  	
  (j)

  	
  Incorporation
  of Exhibits and Schedules

  	
   

  	
   

  
	
   

  	
  (k)

  	
  Bulk Transfer Laws

  	
   

  	
   

  
	
   

  	
  (l)

  	
  Governing Law

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibits

  	
   

  	
   

  
	
   

  	
  Supply
  Agreement

  	
   

  	
   

  
	
   

  	
  Assignment of
  Intellectual Property Transfers Agreement

  	
   

  	
   

  
	
   

  	
  Assumption
  Agreement

  	
   

  	
   

  
	
   

  	
  Allocation
  Schedule

  	
   

  	
   

  
	
   

  	
  Transition
  Plan

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedules

  	
   

  	
   

  
	
   

  	
  Acquired
  Assets

  	
   

  	
   

  
	
   

  	
  Excluded
  Assets

  	
   

  	
   

  
	
   

  	
  Disclosure Schedule

  	
   

  	
   

  
	
   

  	
  Intellectual Property –
  CR- Based Projector (Trademarks, Service Marks, Trade Dress, Logos, Trade
  Names)

  	
   

  	
   

  
	
   

  	
  Intellectual Property –
  CR- Based Projector (Copyrightable Works, All Copyrights, All Applications,
  Registrations, Renewals

  	
   

  	
   

  
	
   

  	
  Computer Software – CR-
  Based Projector

  	
   

  	
   

  
	
   

  	
  Exceptions to
  Proprietary Rights – CRT- Based Projector

  	
   

  	
   

  



 


ii





















 


ASSET
PURCHASE AGREEMENT


 


THIS ASSET PURCHASE AGREEMENT (the “Agreement”) is made and entered into as
of October 11, 2004 by and between VIDEO
DISPLAY CORPORATION, a Georgia corporation (the “Buyer”), and EVANS & SUTHERLAND
COMPUTER CORP., a Utah corporation (the “Seller”).  The Buyer and the Seller are referred to
collectively herein as the “Parties.”


 


This Agreement contemplates
a transaction in which the Buyer will purchase Seller’s cathode ray tube
(“CRT”) based projector business and certain of the assets (and assume none of
the liabilities) of the Seller used in that business in return for cash and a
Supply Agreement as per attached Exhibit A.


 


Now, therefore, in
consideration of the premises and the mutual promises herein made, and in
consideration of the representations, warranties, and covenants herein
contained, the Parties agree as follows.


 


1.              Definitions.


 


“Acquired
Assets” means all right, title, and interest in and to the
following assets of the Seller: (a) all the tangible personal property such as
all CRT projector machinery, equipment, inventories of raw materials and
supplies, manufactured and purchased parts, goods in process and finished
goods, furniture, tools, jigs, and dies used exclusively or primarily by the
Seller in its CRT- based projector business including, but not limited to such
personal property which is specifically enumerated on Schedule 1
attached hereto (b) Intellectual Property, (c) files, documents,
correspondence, lists, plats, drawings, and specifications, creative materials,
advertising and promotional materials, studies, reports, and other printed or
written materials used exclusively in the Seller’s CRT- based projector
business, and (d) parts and service customer lists, history and contact
information used exclusively in the Seller’s CRT- based projector business;
provided, however, anything to the contrary in the foregoing notwithstanding,
that the Acquired Assets shall not include (i) the corporate charter,
qualifications to conduct business as a foreign corporation, arrangements with
registered agents relating to foreign qualifications, taxpayer and other
identification numbers, seals, minute books, stock transfer books, blank stock
certificates, and other documents relating to the organization, maintenance,
and existence of the Seller as a corporation, (ii) any of the rights of the
Seller under this Agreement or (iii) any asset of the Seller primarily used in
its other businesses, including any asset not specifically set forth above or
that is specifically set forth on Schedule 2 attached hereto.


 


“Affiliate”
has the meaning set forth in Rule 12b-2 of the regulations promulgated under
the Securities Exchange Act.


 


“Adverse
Consequences” means all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs, amounts paid
in settlement, Liabilities, obligations, Taxes, liens, losses, expenses, and
fees, including court costs and all reasonable fees and expenses of attorneys
and experts.


 


“Buyer”
has the meaning set forth in the preface above.


 


“Closing”
has the meaning set forth in Section 2(d) below.


 





















 


“Closing Date”
has the meaning set forth in Section 2(d) below.


 


“COBRA”
means the requirements of Part 6 of Subtitle B of Title I of ERISA and Code Section 4980B
and of any similar state law.


 


“Code”
means the Internal Revenue Code of 1986, as amended.


 


“Disclosure
Schedule” means a schedule or listing of exceptions to the
representations made by Seller in Section 3 below or by the Buyer in Section 4
below, and in each case reasonably satisfactory to the party to which such
representations and warranties are made.


 


“Employee
Benefit Plan” means any “employee benefit plan” (as such term is
defined in ERISA Section 3(3)) and any other material employee benefit
plan, program or arrangement of any kind.


 


“Employee
Pension Benefit Plan” has the meaning set forth in ERISA Section 3(2).


 


“Employee
Welfare Benefit Plan” has the meaning set forth in ERISA Section 3(1).


 


“Environmental,
Health, and Safety Requirements” shall mean all federal, state,
local and foreign statutes, regulations, ordinances and other provisions having
the force or effect of law, all judicial and administrative orders and
determinations, all contractual obligations and all common law concerning
public health and safety, worker health and safety, and pollution or protection
of the environment, including without limitation all those relating to the
presence, use, production, generation, handling, transportation, treatment,
storage, disposal, distribution, labeling, testing, processing, discharge,
release, threatened release, control, or cleanup of any hazardous materials,
substances or wastes, chemical substances or mixtures, pesticides, pollutants,
contaminants, toxic chemicals, petroleum products or byproducts, asbestos,
polychlorinated biphenyls, noise or radiation, each as amended and as now or
hereafter in effect.


 


“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended.


 


“ERISA Affiliate”
means each entity that is treated as a single employer with the Seller for
purposes of Code Section 414.


 


“Estoppel
Certificates” has the meaning set forth in Section 6(a)
below.


 


“Export Control”
means the U. S. Government Export Control Laws, including the Office of Defense
Trade Controls (ODTC) and the International Traffic in Arms Regulations (ITAR)


 


“Financial
Statement” has the meaning set forth in Section 3(g) below.


 


“GAAP”
means United States Generally Accepted Accounting Principles as in effect from
time to time.


 


“Independent Requests For Spares
And/Or Repairs”
means any customer request received by Seller for ESCP or TargetView spare
parts, and/or related repairs, independent of and not involving a Seller’s
System or Warranty Obligations thereunder, or a Seller’s Service Agreement.


 





















 


“Intellectual
Property” means the following, (a) the trademarks, service
marks, trade dress, logos, trade names, and together with all translations,
adaptations, derivations, and combinations thereof used exclusively in the
Seller’s CRT- based projector operations and which are specifically set forth
on Schedule 3 attached hereto, (b) all copyrightable works, all
copyrights, and all applications, registrations, and renewals in connection
therewith used exclusively in the Seller’s CRT- based projector operations and
which are specifically set forth on Schedule 4 attached hereto, (c)
all mask works and all applications, registrations, and renewals in connection
therewith used exclusively in the Seller’s CRT- based projector operations, (d)
all trade secrets and confidential business information (including ideas,
research and development, know-how, formulas, compositions, manufacturing and
production processes and techniques, technical data, designs, drawings, specifications,
customer and supplier lists, pricing and cost information, and business and
marketing plans and proposals) used exclusively in the Seller’s CRT- based
projector operations, (e) all computer software (including data and related
documentation) used exclusively in the Seller’s CRT- based projector operations
and which are specifically set forth on Schedule 5 attached hereto,
(f) all other proprietary rights of the Seller used exclusively in the Seller’s
CRT- based projector operations, except as specifically set forth on Schedule 6
attached hereto, and (g) all copies and tangible embodiments thereof (in
whatever form or medium).


 


“Knowledge”
means actual knowledge after reasonable investigation.


 


“Liability”
means any liability (whether known or unknown, whether asserted or unasserted,
whether absolute or contingent, whether accrued or unaccrued, whether
liquidated or unliquidated, and whether due or to become due), including any
liability for Taxes.


 


“Ordinary
Course of Business” means the ordinary course of business
consistent with past custom and practice (including with respect to quantity
and frequency).


 


“Party”
has the meaning set forth in the preface above.


 


“Person”
means an individual, a partnership, a corporation, an association, a joint
stock company, a trust, a joint venture, an unincorporated organization, or a
governmental entity (or any department, agency, or political subdivision
thereof).


 


“Purchase Price”
has the meaning set forth in Section 2(c) below.


 


“Securities Act”
means the Securities Act of 1933, as amended.


 


“Securities
Exchange Act” means the Securities Exchange Act of 1934, as
amended.


 


“Security
Interest” means any mortgage, pledge, lien, encumbrance, charge,
or other security interest, other than (a) mechanic’s, materialmen’s,
and similar liens, (b) liens for Taxes not yet due and payable, (c) purchase
money liens and liens securing rental payments under capital lease
arrangements, and (d) other liens arising in the Ordinary Course of Business
and not incurred in connection with the borrowing of money.


 


“Service Agreement” means a contractual
agreement between Seller and a customer of Seller for the installation or
maintenance of Seller’s systems, software or equipment over a specified period
of time.  A Service Agreement may require
Seller to provide installation, training, examination, parts, repairs,
alignment, calibration, testing, updates, software, or any


 





















 


other goods or services associated with ensuring the operational capability
of a supplied product.


 


“Subsidiary”
means any corporation with respect to which a specified Person (or a Subsidiary
thereof) owns a majority of the common stock or has the power to vote or direct
the voting of sufficient securities to elect a majority of the directors.


 


“Seller”
has the meaning set forth in the preface above.


 


“System” means an image generator and other components
designed to create images and/or simulations desired by the end user.


 


“Tax”
means any federal, state, local, or foreign income, gross receipts, license,
payroll, employment, excise, severance, stamp, occupation, premium, windfall
profits, environmental (including taxes under Code Section 59A), customs
duties, capital stock, franchise, profits, withholding, social security (or
similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, including any interest,
penalty, or addition thereto, whether disputed or not.


 


“Tax Return”
means any return, declaration, report, claim for refund, or information return
or statement relating to Taxes, including any schedule or attachment
thereto, and including any amendment thereof.


 


“Warranty
Obligations” means a contractual agreement or obligation whereby
Seller undertakes to repair or replace defective parts or workmanship in any
Seller-supplied System.


 


2.              Basic Transaction.


 


(a)          Purchase and Sale of Assets.  On and subject to the terms and conditions of
this Agreement, the Buyer agrees to purchase and to accept from the Seller, and
the Seller agrees to sell, transfer, convey, and deliver to the Buyer, the
Acquired Assets at the Closing for the consideration specified below in this Section 2.


 


(b)         No Assumption of Liabilities.  On and subject to the terms and
conditions of this Agreement, the Buyer neither agrees to assume nor become
responsible for any of the Seller’s Liabilities at the Closing.


 


(c)          Purchase Price.  The
Buyer agrees to pay to the Seller, at the Closing, the Purchase Price by
delivering payment by bank wire transfer to an account designated by the Seller
in immediately available funds in the amount of Five Million Two Hundred Fifty
Thousand Dollars ($5,250,000) and delivery of an executed Supply Agreement in
the form as attached as Exhibit A.


 


(d)         The Closing.  The
closing of the transactions contemplated by this Agreement (the “Closing”) shall
take place on or before October 11,
2004 at the offices of Gambrell & Stolz, L.L.P., 3414 Peachtree
Road, Suite 1600, Atlanta, Georgia, 30326, commencing at 9:00 a.m. local time
or at such other place and at such other date and time as the Parties may
mutually agree upon (the “Closing Date”);


 





















 


(e)          Deliveries at the Closing.  At the Closing, (i) the Seller will deliver
to the Buyer the various certificates, instruments, agreements and documents
referred to in Section 6(a) below; (ii) the Buyer will deliver to the
Seller the various certificates, instruments, agreements and documents referred
to in Section 6(b) below; (iii) the Seller will execute, acknowledge (if
appropriate), and deliver to the Buyer (A) assignments (including Intellectual
Property transfer and license documents) in the forms attached hereto as Exhibit
B (B) such other instruments of sale, transfer, conveyance, and assignment
as the Buyer and its counsel reasonably may request; (iv) the Buyer will
execute, acknowledge (if appropriate), and deliver to the Seller (A) an
assumption in the form attached hereto as Exhibit C; (B) such other
instruments of assumption as the Seller and its counsel reasonably may request;
and (v) the Buyer will deliver to the Seller the consideration specified in Section 2(c)
above.


 


(f)            Allocation.  The
Parties agree to allocate the Purchase Price (and all other capitalizable
costs) among the Acquired Assets for all purposes (including financial
accounting and tax purposes) in accordance with the allocation schedule attached
hereto as Exhibit D.  Buyer and
Seller acknowledge that such allocation shall be binding upon the parties for
all applicable federal, state, local and foreign tax purposes.  Purchaser and Seller covenant to report gain
or loss or cost basis, as the case may be, in a manner consistent with such
allocation in all tax returns filed by either of them subsequent to the Closing
Date and not to take voluntarily any inconsistent position therewith in any
administrative or judicial proceeding relating to such returns.  Purchaser and Seller shall exchange mutually
acceptable and completed IRS Forms 8594, which they shall use to report the
transaction contemplated hereunder to the Internal Revenue Service in
accordance with such allocation.


 


3.               Representations and
Warranties of the Seller.  The
Seller   represents and warrants to the
Buyer that to Seller’s Knowledge, and, except as set forth in the Disclosure
Schedule, the statements contained in this Section 3 are correct and
complete as of the date of this Agreement and will be correct and complete to
the best of Seller’s knowledge, as of the Closing Date.  The Seller’s Disclosure Schedule will be
arranged in paragraphs corresponding to the lettered and numbered paragraphs
contained in this Section 3.


 


(a)          Organization of the Seller  The Seller is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Utah.


 


(b)         Authorization of Transaction.  The
Seller has full power and authority (including full corporate power and
authority) to execute and deliver this Agreement and to perform its obligations
hereunder.  Without limiting the
generality of the foregoing, the board of directors of the Seller has duly
authorized the execution, delivery, and performance of this Agreement by the
Seller. This Agreement constitutes the valid and legally binding obligation of
the Seller, enforceable in accordance with its terms and conditions.


 


(c)          Noncontravention. 
Neither the execution and the delivery of this Agreement, nor the
consummation of the transactions contemplated hereby (including the assignments
and assumptions referred to in Section 2 above), will (i) violate any
constitution, statute, regulation, rule, injunction, judgment, order, decree,
ruling, charge, or other restriction of any government, governmental agency, or
court to which the Seller is subject or any provision of the articles of
incorporation or bylaws of the Seller or (ii) conflict with, result in a breach
of, constitute a default under, result in the acceleration of, create in any
party the right to accelerate, terminate, modify, or cancel, or require any
notice under any agreement, contract, lease, license, instrument, or other
arrangement to which the Seller is a party or by which it is bound or to which
any of its assets is subject (or result in the imposition of any Security
Interest upon any of its assets).  The


 





















 


Seller does not need to give any notice to, make any
filing with, or obtain any authorization, consent, or approval of any
government or governmental agency in order for the Parties to consummate the
transactions contemplated by this Agreement (including the assignments and assumptions
referred to in Section 2 above).


 


(d)         Brokers’ Fees.  The
Seller has no Liability or obligation to pay any fees or commissions to any
broker, finder, or agent with respect to the transactions contemplated by this
Agreement for which the Buyer could become liable or obligated.


 


(e)          Title to Assets.  The
Seller has good and marketable title to all of the Acquired Assets, free and
clear of any Security Interest or restriction on transfer.


 


(f)            Tangible Assets.  The
Seller owns or leases all machinery, equipment, and other tangible assets,
including parts inventory, necessary for the conduct of the Seller’s CRT- based
projector businesses as presently conducted and as presently proposed to be
conducted.  Seller owns some of the raw
materials and supplies needed for operation of the CRT-based projector
businesses, and contracts for the balance of such materials and supplies.  The Seller makes no representation or
warranty as to the condition on usability of any tangible asset transferred
under this Agreement and each such tangible asset is SOLD AS IS WITHOUT ANY IMPLIED OR EXPRESS WARRANTY FOR A PARTICULAR
PURPOSE.


 


(g)         Product Liability.  The
Seller does not have any Liability to its Knowledge (and to Seller’s Knowledge,
there is no reasonable basis for any present or future action, suit,
proceeding, hearing, investigation, charge, complaint, claim, or demand against
the Seller giving rise to any Liability) arising out of any injury to
individuals or property as a result of the ownership, possession, or use of any
CRT projector product manufactured, sold, leased, or delivered by the Seller.


 


(h)         Litigation.  The
Disclosure Schedule sets forth each instance that relates to the Acquired
Assets in which the Seller (i) is subject to any outstanding injunction, judgment,
order, decree, ruling, or charge or (ii) is a party or is threatened to be made
a party to any action, suit, proceeding, hearing, or investigation of, in, or
before any court or quasi-judicial or administrative agency of any federal,
state, local, or foreign jurisdiction or before any arbitrator.


 


(i)             Product Warranty.  To
the Seller’s Knowledge, each product manufactured, sold, leased, or delivered
by the Seller pursuant to CRT projector business has been in conformity with
all applicable contractual commitments and all express and implied warranties,
and the Seller has no Knowledge of any existing claim of Liability (and to the
Seller’s Knowledge there is no  basis for
any present or future action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand against the Seller giving rise to any Liability)
for replacement or repair thereof or other damages in connection therewith.


 


(j)             Material Contracts.  
There exists no term or condition in any material contract that relates
to the Acquired Assets that would in any way or matter adversely affect Buyer’s
utilization of the Acquired Assets post Closing.


 


(k)          Inventory  The inventory portion of the
Acquired Assets consists of raw materials and supplies, manufactured and
purchased parts, goods in process, and finished goods, all of which is
merchantable and fit for the purpose for which it was procured or manufactured,
and none of which is, obsolete, damaged, or defective.


 





















 


(l)             Intellectual Property.   The
Seller owns or has the right to use pursuant to license, sublicense, agreement,
or permission all Intellectual Property being sold to Buyer as part of the
Acquired Assets.  Each item of
Intellectual Property owned or used by the Seller immediately prior to the
Closing hereunder will be owned or available for use by the Buyer on identical
terms and conditions immediately subsequent to the Closing hereunder.


 


(m)       Legal Compliance.  To
the Seller’s Knowledge, the Seller has complied with all applicable laws
(including rules, regulations, codes, plans, injunctions, judgments, orders,
decrees, rulings, and charges thereunder) of federal, state, local, and foreign
governments (and all agencies thereof), as they may relate directly to the
Acquired Assets, and to Seller’s Knowledge no action, suit, proceeding,
hearing, investigation, charge, complaint, claim, demand, or notice has been
filed or commenced against the Seller alleging any failure so to comply.


 


(n)         Reformatted Financial Information.  To
the Seller’s Knowledge, the reformatted financial information concerning the
Seller’s CRT- based projector business (as referenced in Section 4(e)
hereof) provided to Buyer at Buyer’s request is substantially accurate.


 


(o)         Disclosure.  To
the Knowledge of Seller, the representations and warranties contained in this Section 3
do not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements and information
contained in this Section 3 not misleading.


 


4.               Representations and
Warranties of the Buyer.  The
Buyer represents and warrants to the Seller that the statements contained in
this Section 4 are correct and complete as of the date of this Agreement
and will be correct and complete as of the Closing Date (as though made then
and as though the Closing Date were substituted for the date of this Agreement
throughout this Section 4), except as set forth in the Disclosure
Schedule.  The Buyer’s Disclosure Schedule will
be arranged in paragraphs corresponding to the lettered and numbered paragraphs
contained in this Section 4.


 


(a)          Organization of the Buyer.  The Buyer is a corporation duly organized,
validly existing, and in good standing under the laws of the jurisdiction of
its incorporation.


 


(b)         Authorization of Transaction.  The
Buyer has full power and authority (including full corporate power and
authority) to execute and deliver this Agreement and to perform its obligations
hereunder.  Without limiting the
generality of the foregoing, the board of directors of the Buyer has duly authorized
the execution, delivery, and performance of this Agreement by the Buyer. This
Agreement constitutes the valid and legally binding obligation of the Buyer,
enforceable in accordance with its terms and conditions.


 


(c)          Noncontravention. 
Neither the execution and the delivery of this Agreement, nor the
consummation of the transactions contemplated hereby (including the assignments
and assumptions referred to in Section 2 above), will (i) violate any
constitution, statute, regulation, rule, injunction, judgment, order, decree,
ruling, charge, or other restriction of any government, governmental agency, or
court to which the Buyer is subject or any provision of its charter or bylaws
or (ii) conflict with, result in a breach of, constitute a default under, result
in the acceleration of, create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice under any agreement, contract, lease,
license, instrument, or other arrangement to which the Buyer is a party or by
which it is bound or to which any of its assets is subject.  The Buyer does not need to give any notice
to, make any filing with, or obtain any


 





















 


authorization, consent, or approval of any government or
governmental agency in order for the Parties to consummate the transactions
contemplated by this Agreement (including the assignments and assumptions
referred to in Section 2 above).


 


(d)         Brokers’ Fees.  The
Buyer has no Liability or obligation to pay any fees or commissions to any
broker, finder, or agent with respect to the transactions contemplated by this
Agreement for which the Seller could become liable or obligated.


 


(e)          Risk of Business. The Buyer has a
conducted what it believes to be an appropriate “due diligence” investigation
of the Seller and the Seller’s CRT- based projector business, and has
satisfactorily received from Seller all information that Buyer deems material
and necessary to an independent and informed valuation by Buyer of the Acquired
Assets, and for Buyer otherwise to make a decision to enter into this
Agreement.   The Buyer has been informed
by the Seller that annual total revenues of Seller have been declining and
absolutely no representations, assurances and/or guarantees have been provided
for the growth or performance of financial or business results from the
utilization of the Acquired Assets or otherwise.  Buyer and Seller both acknowledge that they
have made best efforts to provide, review, and conduct their own analysis of
data related to the assets and business being transacted in this contract, and
that the valuation of the Acquired Assets is based on these best efforts as of
the date of this contract.  Buyer
acknowledges that much of the aforementioned Seller’s data required
reformatting by Seller to meet Buyer’s requests for information, and that
Seller undertook substantial efforts to improve the accuracy of the data over
the course of the Parties’ negotiations.


 


(f)            Disclosure.  To
the Knowledge of Buyer, the representations and warranties contained in this Section 4
do not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements and information
contained in this Section 4 not misleading.


 


5.              Pre-Closing Covenants.  The Parties agree as follows with respect to the period between the
execution of this Agreement and the Closing.


 


(a)          General.  Each of the Parties will use
its reasonable best efforts to take all action and to do all things necessary,
proper, or advisable in order to consummate and make effective the transactions
contemplated by this Agreement (including satisfaction, but not waiver, of the
closing conditions set forth in Section 6 below).


 


(b)         Notices and Consents  The
Seller will give any notices to third parties, and the Seller will use its best
efforts to obtain any third party consents, that the Buyer may reasonably
request in connection with the matters referred to in Section 3(c)
above.  Each of the Parties will give any
notices to, make any filings with, and use its reasonable best efforts to obtain
any authorizations, consents, and approvals of governments and governmental
agencies in connection with the matters referred to in Section 3(c) and Section 4(c)
above.


 


(c)          Operation of Business.  The
Seller will not engage in any practice, take any action, or enter into any
transaction in the CRT- based projector field or with respect to its CRT- based
projector business outside the Ordinary Course of Business, except as
envisioned by this Agreement.


 





















 


(d)         Preservation of Business.  The Seller will undertake best efforts to
keep its business and properties substantially intact, including its present
operations, physical facilities, working conditions, and relationships with
lessors, licensors, suppliers, customers, and employees.


 


(e)          Full Access.  The Seller
will permit representatives of the Buyer to have full access at all reasonable
times, and in a manner so as not to interfere with the normal business
operations of the Seller, to all premises, properties, personnel, books,
records, contracts, and documents of or pertaining to the Acquired Assets.


 


(f)            Publicity.  Prior to the Closing, any
written news releases by the Buyer or the Seller pertaining to this Agreement
or the sale contemplated by the Agreement shall be reviewed and approved by the
other Party hereto prior to release.


 


(g)         Confidentiality. 
Buyer shall hold in strict confidence, all documents and information
obtained with respect to Seller (“Confidential Information”). Buyer shall not
permit any Confidential Information to be utilized or to be disclosed or
conveyed to any other person or entity other than its legal and accounting
representatives in furtherance of this Agreement. This Section 5(g) shall
terminate if and when the Closing occurs in accordance with Section 1 of
this Agreement, or within one year of the date of execution of this Agreement,
whichever occurs first.


 


6.               Conditions to Obligation to
Close.


 


(a)          Conditions to Obligation of the Buyer.  The
obligation of the Buyer to consummate the transactions to be performed by it in
connection with the Closing is subject to satisfaction of the following
conditions:


 


(i)                                     the representations and warranties set forth in Section 3
above shall be true and correct in all material respects at and as of the
Closing Date;


 


(ii)                                  the Seller shall have performed and complied
with all of its covenants hereunder in all material respects through the
Closing;


 


(iii)                               the Seller shall have procured all of the third
party consents specified in Section 5(b) above;


 


(iv)                              no action, suit, or proceeding shall be
pending or threatened before any court or quasi-judicial or administrative
agency of any federal, state, local, or foreign jurisdiction or before any
arbitrator wherein an unfavorable injunction, judgment, order, decree, ruling,
or charge would (A) prevent consummation of any of the transactions
contemplated by this Agreement, (B) cause any of the transactions contemplated
by this Agreement to be rescinded following consummation, or (C) affect
adversely the right of the Buyer to own the Acquired Assets and to operate the
former businesses of the Seller (and no such injunction, judgment, order,
decree, ruling, or charge shall be in effect);


 


(v)                                 the Buyer shall have received all other
authorizations, consents, and approvals of governments and governmental
agencies referred to in Section 5 (b) above;


 





















 


(vi)                              the Seller shall have delivered to the Buyer a
certificate to the effect that each of the conditions specified above in Section 6(a)(i)-(v)
is satisfied in all respects.


 


(vii)                           the Seller and Buyer shall have entered into
side agreements in form and substance as set forth in Exhibits A through E
attached hereto and the same shall be in full force and effect;


 


(viii)                        all actions to be taken by the Seller in
connection with consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to effect the
transactions contemplated hereby will be reasonably satisfactory in form and
substance to the Buyer and its counsel.


 


(ix)                                Seller agrees with Buyer that the inventory
to be transferred to the Buyer at the Closing date shall consist of no less
than One Million Ninety-One Thousand Dollars ($1,091,000) of ESCP related
inventory (of which no more than $0.00 of such inventory shall be considered,
obsolete, damaged or defective) and no less than One Million Three Hundred
Fifteen Thousand Dollars ($1,315,000) of Targetview related inventory (of which
no more than Eight Hundred Forty-Eight Thousand Dollars ($848,000) of such
inventory shall be considered, obsolete, damaged or defective).


 


The
Buyer may waive any condition specified in this Section 6(a) if it
executes a writing so stating at or prior to the Closing.


 


(b)         Conditions to Obligation of the Seller  The obligation of the Seller to consummate the
transactions to be performed by it in connection with the Closing is subject to
satisfaction of the following conditions:


 


(i)                                     the representations and warranties set forth in Section 4
above shall be true and correct in all material respects at and as of the Closing
Date;


 


(ii)                                  the Buyer shall have performed and complied with
all of its covenants hereunder in all material respects through the Closing;


 


(iii)                               the Seller shall have received all other
authorizations, consents, and approvals of governments and governmental
agencies referred to in Section 5(b) above;


 


(iv)                              no action, suit, or proceeding shall be
pending or threatened before any court or quasi-judicial or administrative
agency of any federal, state, local, or foreign jurisdiction or before any
arbitrator wherein an unfavorable injunction, judgment, order, decree, ruling,
or charge would (A) prevent consummation of any of the transactions
contemplated by this Agreement or (B) cause any of the transactions
contemplated by this Agreement to be rescinded following consummation (and no
such injunction, judgment, order, decree, ruling, or charge shall be in
effect);


 


(v)                                 the Buyer shall have delivered to the Seller
a certificate to the effect that each of the conditions specified above in Section 6(b)(i)-(iv)
is satisfied in all respects;


 


(vi)                              all actions to be taken by the Buyer in
connection with consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to effect the
transactions contemplated hereby will be reasonably satisfactory in form and
substance to the Seller.


 





















 


The
Seller may waive any condition specified in this Section 6(b) if it
executes a writing so stating at or prior to the Closing.


 


7.              Termination.  The Buyer and the Seller may terminate this
Agreement by written consent of both Parties at any time prior to the Closing.
In the event of any such termination, none of the Parties shall be liable to
any of the other parties for any cost, expenses or damages in connection with this
Agreement.


 


8.              Post-Closing Covenants.  The
Parties agree as follows with respect to the period following the Closing.


 


(a)          General  In case at any time after the Closing any further action is necessary or
desirable to carry out the purposes of this Agreement, each of the Parties will
take such further action (including the execution and delivery of such further
instruments and documents) as any other Party reasonably may request, all at
the sole cost and expense of the requesting Party (unless the requesting Party
is entitled to indemnification therefore under Section 9 below


 


(b)         Litigation Support.  In
the event and for so long as any Party actively is contesting or defending
against any action, suit, proceeding, hearing, investigation, charge, complaint,
claim, or demand in connection with (i) any transaction contemplated under this
Agreement or (ii) any fact, situation, circumstance, status, condition,
activity, practice, plan, occurrence, event, incident, action, failure to act,
or transaction on or prior to the Closing Date involving the Seller, each of
the other Parties will cooperate with the contesting or defending Party and its
counsel in the contest or defense, make available its personnel, and provide
such testimony and access to his or its books and records as shall be necessary
in connection with the contest or defense, all at the sole cost and expense of
the contesting or defending Party (unless the contesting or defending Party is
entitled to indemnification therefore under Section 9 below).


 


(c)          Transition. 
Except as provided in Exhibit A (“Supply Agreement”), the Seller will
not take any action that is designed or intended to have the effect of
discouraging any lessor, licensor, customer, supplier, or other business
associate of the Seller from maintaining the same business relationships with
the Buyer after the Closing as it maintained with the Seller prior to the
Closing.  Except as provided in Exhibit A
(“Supply Agreement”), the Seller will refer all customer inquiries relating to
the CRT- based projector manufacturing, sales, replacement parts and repair
parts businesses of the Seller to the Buyer from and after the Closing.


 


(d)         Covenant Not to Compete.  The Parties agree that this covenant not to
compete is necessary in order to protect the value and goodwill of the assets
purchased pursuant to this Agreement and without this covenant not to compete,
the Buyer would not have entered into this Agreement.  Except as provided in Exhibit A (“Supply Agreement”),
for a period of Five (5) years from and after the Closing Date, the Seller will
not engage directly or indirectly in the CRT- based projector and projector
parts replacement or parts repair business that the Seller conducts as of the
Closing Date in any geographic area in which the Seller conducts that business
as of the Closing Date; provided, however, that the ownership of less than 10%
of the outstanding stock of any publicly traded corporation engaged in such
business shall not be deemed to be engaging in any such business.  If the final judgment of a court of competent
jurisdiction declares that any term or provision of this Section 8(d) is
invalid or unenforceable, the Parties agree that the court making the
determination of invalidity or unenforceability shall have the power to reduce
the scope, duration, or area of the term or provision, to delete specific words
or phrases, or to replace any invalid or unenforceable term or provision with a
term or


 





















 


provision that is valid and enforceable and that comes
closest to expressing the intention of the invalid or unenforceable term or
provision, and this Agreement shall be enforceable as so modified after the
expiration of the time within which the judgment may be appealed.


 


(e)          Agreement Not to Solicit Customers. 
Except as provided in Exhibit A (“Supply Agreement”), for a period of
five (5) years from and after the Closing Date, the Seller will not, directly
or indirectly, on Seller’s own behalf or on behalf of others, (1) solicit,
divert, appropriate to or accept on behalf of any Competing Business, or (2)
attempt to solicit, divert, appropriate to or accept on behalf of a Competing
Business, for the purpose of providing services or products substantially
similar to the current business of the Seller, that being any business from any
customer or actively sought prospective customer of the Seller at or prior to
the Closing Date.  For purposes of this
Agreement, “Competing Business” means manufacturing and sale of CRT projectors,
parts replacement or the repair of parts thereof.


 


(f)            Agreement Not to Solicit Employees. 
After the Buyer has hired such employees of the Seller as envisioned by Section 8(k)
below, the Buyer shall, for a period of two (2) years from and after the
Closing Date, neither directly nor indirectly, on the Buyer’s own behalf or on
behalf of others, solicit, divert or hire, or attempt to solicit, divert or
hire, any person employed by Seller


 


(g)         Premises Use.   The
Seller shall continue to carry on business at its present location for a period
of up to ninety (90) days after Closing, which shall allow the Buyer sufficient
and reasonable time to train the Buyer’s personnel in the Seller’s operations
and to transfer the technology and Acquired Assets.


 


(h)         Warranty Service.  The
Parties acknowledge that the Seller has been selling CRT- based projector
products with a “repair or replace” warranty and that the transfer of the
Acquired Assets to the Buyer as contemplated by this Agreement will make it
impracticable for the Seller to meet its obligations to customers under such
warranties.  Accordingly, the Buyer
agrees to provide the warranted service requirement projectors and parts to the
Seller on a “Most Favored Customer” basis for the duration of the warranty
period following the Closing Date on all CRT- based projector products sold by
Seller that meet the warranty eligibility requirements solely on the terms and
conditions as set forth in the Supply Agreement between Seller and Buyer
attached hereto as Exhibit A.


 


(i)             Spares Pricing. 
Buyer shall provide Seller spare parts, board repair and other repair
services as required for its on-going Service commitments as provided in the
Supply Agreement attached hereto as Exhibit “A”.


 


(j)             Transition Support.  The Seller shall assist and support Buyer in
the transition of the Export Control requirements, licensing, categorization,
etc. for the assets being acquired.  The
procedures and process for this is set forth in Exhibit A (the “Supply
Agreement”).  A Schedule for the
transition of the Acquired Assets to Buyer, and for training of Buyer’s
personnel, is set forth as        .


 


(k)          Employees.


 


(i)                                     Nothing in this Agreement obligates the Buyer
or Seller to transfer any employee of the Seller to the Buyer.  However, Buyer shall have the option to offer
employment to any, all or none of the current employees of the Seller engaged
in the CRT- based projector business to the employment of Buyer.


 





















 


(ii)                                  Seller will meet the continuation of coverage
requirements of COBRA as to any such employee hired by the Buyer with respect
to each Employee Benefit Plan, which is an Employee Welfare Benefit Plan
subject to COBRA.


 


(iii)                               Any such employee hired by Buyer shall be
treated as a terminated employee under the Seller’s Pension Plan and the
Seller’s 401-K Deferred Savings Plan.


 


(iv)                              Any such employee hired by the Buyer shall be treated as a terminated
employee under the long-term disability and life insurance programs of the
Seller and subject to the termination provisions and conversion privileges of
those insurance programs.


 


(v)                                 Any such employee hired by the buyer shall be
considered as voluntarily terminating employment from the Seller and shall not
be eligible for benefits under the Seller’s Reduction in Force Pay Plan.


 


(vi)                              Any such employee hired by Buyer shall continue to be bound, except for
Intellectual Property transferred under this Agreement, by the Seller’s
Confidentiality and Invention Agreement signed by the employee.


 


9.              Remedies for Breach of this
Agreement.


 


(a)          Survival of Representations and Warranties.   All
of the representations and warranties of the Seller contained in Section 3
of this Agreement shall survive the Closing (even if the Buyer knew or had
reason to know of any misrepresentation or breach of warranty at the time of
Closing) and continue in full force and effect for a period of fourteen (14)
months after Closing and expire and terminate in its entirety thereafter.  All of the representations and warranties of
the Buyer contained in Section 4 of this Agreement shall survive the
Closing (even if the Seller knew or had reason to know of any misrepresentation
or breach of warranty at the time of Closing) and continue in full force for a
period of fourteen (14) months after Closing and expire and terminate in its
entirety thereafter.  All covenants of
the Parties contained in this Agreement shall survive the Closing in accordance
with their terms.


 


(b)         Indemnification Provisions.


 


(i)                                     In the event either Party claims the other
Party has breached any of its representations, warranties and covenants
contained in the Agreement and if there is an applicable survival period
pursuant to Section 9 (a) above and provided the purportedly damaged Party
has made a written claim for indemnification against the other Party within
such survival period and the other Party is found to have breached the
Agreement, then the other Party agrees to indemnify the damaged Party from and
against the entirety of any Adverse Consequences the damaged Party may suffer
through and after the date of the breach as specified in the claim for indemnification
resulting from, arising out of, relating to, in the nature of, or caused by the
breach (or the alleged breach).


 


(ii)                                  The Seller specifically indemnifies Buyer
from any and all Adverse Consequences to Buyer arising out of, arising from, or
related to, directly or indirectly, from 
or caused by the Buyer’s use of any patent or patent related technology
purchased by Buyer from seller pursuant to this Agreement post Closing.  This specific indemnification protection
given to Buyer by Seller shall be an “evergreen” protection.


 





















 


10.       Disputes And
Arbitration.  If any dispute should arise after Closing
concerning performance under or interpretation of this Agreement, then, prior
to, and as a condition to either Seller’s or Buyer’s right to initiate any
arbitration action, the Parties will take the following steps in an attempt to
informally resolve any such dispute:


 


(a)          The initiating party to the dispute shall provide the other party thirty (30) days
written notice of the dispute and opportunity to cure.


 


(b)         If the dispute remains after the thirty (30) days written notice and
cure period, then within thirty (30) days of the request of either party, the
parties shall participate in non-binding mediation with a mutually agreeable
mediator at a mutually agreeable date, time and location.


 


(c)          If any such dispute
remains unresolved after the parties have attended mediation pursuant to Section 10(b),
then either party may initiate an arbitration proceeding.


 


(d)         The Parties agree that if they are unable to resolve any  controversy that arises under this
Agreement post-Closing as contemplated by this Section 10, then such
controversy and any ancillary claims not so resolved will be submitted to
mandatory and binding arbitration to be held in a mutually agreeable location
in the United States of America  in
accordance with the rules of the American Arbitration Association. Any award
rendered therein shall be final and binding on each and all of the Parties, and
judgment may be entered thereon in a court of competent jurisdiction in the
State of Georgia.  Seller and Buyer shall
appoint a maximum of three arbitrators. Seller shall appoint one arbitrator and
Buyer shall appoint one arbitrator. Each of these arbitrators shall appoint the
third. If any Party fails to appoint an arbitrator, the President or Chairman
of the American Arbitration Association, or his authorized subordinate, shall
appoint such arbitrator or arbitrators.


 


	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Seller

  	
   

  	
  Buyer

  



 


11.       Miscellaneous.


 


(a)          Survival of Representations and Warranties.  All
of the representations, warranties and covenants of the Parties contained in
this Agreement shall survive the Closing hereunder as and to the extent
provided in Section 9(a) above.


 


(b)         Entire Agreement  This
Agreement (including the documents referred to herein) constitutes the entire
agreement between the Parties and supersedes any and all prior understandings,
agreements, discussions or representations by or between the Parties, written
or oral, to the extent they relate in any way to the subject matter
hereof.  The Parties  acknowledge that they have each been
represented by counsel in preparing this Agreement.


 


(c)          Succession and Assignment.  This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective
successors and permitted assigns.  No
Party may assign either this Agreement or any of its rights, interests, or
obligations hereunder without the prior written approval of the other Party;
provided, however, that the Buyer may (i) assign any or all of its rights and
interests hereunder to one or more of its Affiliates and (ii) designate one or
more of its Affiliates to perform its obligations hereunder (in any or all of
which cases the Buyer nonetheless shall remain responsible for the performance
of all of its obligations hereunder).


 





















 


(d)         Counterparts  This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original but all of which together will constitute one and
the same instrument.


 


(e)          Headings.  The section headings
contained in this Agreement are inserted for convenience only and shall not
affect in any way the meaning or interpretation of this Agreement.


 


(f)            Notices.  All notices, requests,
demands, claims, and other communications hereunder will be in writing.  Any notice, request, demand, claim, or other
communication hereunder shall be deemed duly given if (and then two business
days after) it is sent by registered or certified mail, return receipt requested,
postage prepaid, and addressed to the intended recipient as set forth below:


 


	
  If to the Seller:

  	
   

  	
  Evans & Sutherland Computer Corp.

  
	
   

  	
   

  	
  600 Komas Drive

  
	
   

  	
   

  	
  Salt Lake City, Utah

  
	
   

  	
   

  	
  Fax: (801-588-4510)

  
	
   

  	
   

  	
  Attn.: James R. Oyler, CEO

  
	
   

  	
   

  	
   

  
	
  If to the Buyer:

  	
   

  	
  Video Display Corporation

  
	
   

  	
   

  	
  1868 Tucker Industrial Drive

  
	
   

  	
   

  	
  Tucker, Georgia 30084

  
	
   

  	
   

  	
  Fax: 770.493.3903

  
	
   

  	
   

  	
  Attn.: Ronald D. Ordway, CEO

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  Gambrell & Stolz, L.L.P.

  
	
   

  	
   

  	
  3414 Peachtree Road, Suite 1600

  
	
   

  	
   

  	
  Atlanta, Georgia 30326

  
	
   

  	
   

  	
  Fax: 404.221.6501

  
	
   

  	
   

  	
  Attn.: David S. Cooper, Esq.

  



 


Any
Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been
duly given unless and until it actually is received by the intended
recipient.  Any Party may change the
address to which notices, requests, demands, claims, and other communications
hereunder are to be delivered by giving the other Party notice in the manner
herein set forth.


 


(g)         Amendments and Waivers.  No
amendment of any provision of this Agreement shall be valid unless the same
shall be in writing and signed by the Buyer, the Seller and the Seller
Stockholder.  The Seller may consent to
any such amendment at any time prior to the Closing with the prior
authorization of its board of directors. 
No waiver by any Party of any default, misrepresentation, or breach of
warranty or covenant hereunder, whether intentional or not, shall be deemed to
extend to any prior or subsequent default, misrepresentation, or breach of
warranty or covenant hereunder or affect in any way any rights arising by
virtue of any prior or subsequent such occurrence.


 





















 


(h)         Severability.  Any
term or provision of this Agreement that is invalid or unenforceable in any
situation in any jurisdiction shall not affect the validity or enforceability
of the remaining terms and provisions hereof or the validity or enforceability
of the offending term or provision in any other situation or in any other
jurisdiction.


 


(i)             Expenses.  Each of the Buyer and the
Seller will bear its own costs and expenses (including legal fees and expenses)
incurred in connection with this Agreement and the transactions contemplated
hereby.


 


(j)             Incorporation of Exhibits and Schedules.  The
Exhibits and Schedules identified in this Agreement are incorporated herein by
reference and made a part hereof.


 


(k)          Bulk Transfer Laws.  The
Buyer acknowledges that the Seller will not comply with the provisions of any
bulk transfer laws of any jurisdiction in connection with the transactions
contemplated by this Agreement.


 


(l)             Governing Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of Georgia  as it applies to contracts to be
performed entirely within the State of Georgia.


 





















 


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


 


	
   

  	
  VIDEO DISPLAY CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Ronald D. Ordway

  	
   

  
	
   

  	
  Title:

  	
    CEO

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EVANS & SUTHERLAND COMPUTER CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David H. Bateman

  	
   

  
	
   

  	
  Title:

  	
    Vice President

  	
   

  
					



 





















 


[PORTIONS
OF THIS EXHIBIT HAVE BEEN REDACTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.]


 


EXHIBIT A


 


SUPPLY AGREEMENT


 


THIS SUPPLY AGREEMENT is executed as of this 11th day of October, 2004 by and
between EVANS & SUTHERLAND COMPUTER CORPORATION,
a Utah corporation having its headquarters at 600 Komas Drive, Salt Lake City,
UT  84108 (“E&S”), and VIDEO DISPLAY CORPORATION, a Georgia corporation having its
headquarters at 1868 Tucker Industrial Drive, Tucker, GA  30084 
(“VDC”).  E&S and VDC are
collectively referred to herein as the “Parties”.


 


W I T
N E S S E T H :


 


WHEREAS,
E&S and VDC are, concurrently with the execution of this Supply Agreement,
consummating certain transactions contemplated by that certain Asset Purchase
Agreement dated as of October 11, 2004 (the “Asset Purchase Agreement”),
whereby VDC is purchasing from E&S certain assets of E&S used in
E&S’s cathode ray tube based projector business; and


 


WHEREAS,
E&S and VDC desire that subsequent to the Closing as defined in the Asset
Purchase Agreement,  E&S
continue to offer the sale of new complete visual systems to potential
customers that include ESCP and TargetView products (the “Systems”) and that
VDC supply  E&S with all of its
requirements for ESCP and TargetView products pursuant to this Supply
Agreement;


 


NOW,
THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, E&S and VDC enter into this
Supply Agreement.


 


1.                                      SCOPE OF AGREEMENT.


 


1.1                                 From and after the
Closing under the Asset Purchase Agreement, the Parties agree to coordinate and
cooperate with respect to the “ESCP” and “TargetView” business developed by
E&S and purchased by VDC pursuant to the Asset Purchase Agreement.
Specifically, E&S will continue to sell Systems and Service Agreements to
customers that may include ESCP and TargetView products, and  E&S may also receive from
customers Independent Requests For Spares And/Or Repairs.


 


1.2                                 The Parties
acknowledge that VDC is buying the Assets primarily to obtain the E&S
spares and repairs business, and that E&S will not supply spares and
repairs as separately invoiced items except as provided in section 4.5


 


1.3                                 With respect to post-Closing sales of E&S
Systems, E&S agrees to purchase, and VDC agrees to supply, all of E&S’s
requirements for ESCP and TargetView products used in those Systems.  With respect to any E&S Service
Agreements, or E&S’s Warranty Obligations arising from pre- Closing System
sales, E&S agrees to purchase, and VDC agrees to use reasonable best
efforts to supply, all of E&S’s requirements for spares and/or repairs
involving ESCP and TargetView products.


 





















 


1.4                                 E&S shall be the customer point of
contact for, and shall fulfill, all customer requests involving Systems and/or
Warranty Obligations thereunder, or Seller’s Service Agreements, even if such
requests include ESCP or TargetView products. 
With respect to any Independent Request For Spares
And/Or Repairs received by E&S, E&S shall refer all such
requests to VDC for fulfillment by VDC, and all invoicing for such Independent
Requests will be handled directly between VDC and the customer.


 


2.                                      DEFINITIONS.  
Capitalized terms used in this Supply Agreement shall have the same
meaning as defined in the Asset Purchase Agreement unless otherwise defined
herein. “ESCP” and “TargetView” products are those cathode ray tube (“CRT”)-based projector products acquired by VDC from
E&S pursuant to the Asset Purchase Agreement.


 


3.                                      SUPPLY OF PRODUCTS AND SERVICES.


 


3.1                                 With respect to post-Closing sales of E&S
Systems, E&S agrees to purchase, and VDC agrees to supply, all of E&S’s
requirements for ESCP and TargetView products as set forth on periodic
forecasts in the manner stated in Exhibit A.


 


3.2                                 With respect to any E&S Service
Agreements, or E&S’s Warranty Obligations arising from pre-Closing Systems,
E&S agrees to purchase, and VDC agrees to use reasonable best efforts to
supply all of E&S’s requirements for spares and/or repairs involving ESCP
and TargetView products.


 


3.3                                 E&S will offer other VDC CRT projector
products as E&S deems appropriate as a preferred solution to potential
customers who desire CRT products. The Parties acknowledge and agree that
specific programs or customers may prefer CRT products other than those
manufactured by VDC, in which case E&S may choose to offer those other
products in any System proposal.


 


4.                                      PRICING.


 


4.1                                 During the first three years of this Supply
Agreement E&S shall have the right to purchase from VDC, in the aggregate,
up to XXXXXXXX (XX) standard ESCP projectors at either: i) $XXXXXX per
projector, or ii) E&S’s standard cost less $XXXXXXX for non-standard
projectors.


 


4.2                                 Other than as provided in subparagraph 4.1
and 4.3 hereof, all E&S purchases from VDC under this Supply Agreement
shall be made at Most Favored Customer (“MFC”) prices. MFC prices shall mean
those prices that are not 
higher than the lowest prices quoted to any VDC customer or
potential customer by VDC for the applicable product or service.


 


4.3                                 For warranty service on ESCP and TargetView
products manufactured and sold by E&S prior to Closing and still having
warranty commitments from E&S after Closing, VDC shall provide the warranty
services as follows:


 










[XXXXX – REDACTED PURSUANT TO REQUEST FOR CONFIDENTIAL
TREATMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.]


 





















 


4.3.1                        VDC shall supply warranty labor and parts
which shall be charged to E&S by VDC at VDC’s then current “Standard
Warranty Service and Parts” pricing XXXXX.


 


4.3.2                        All freight and shipping charges associated
with returns of warranty products to VDC shall be borne by E&S or the
applicable customer and not by VDC.


 


4.4                                 The VDC price to E&S for any System
spare, or for spares or repairs to support existing or future E&S Service Agreements
shall be the then applicable VDC MFC prices.


 


4.5                                 In the
event either VDC or a customer makes a request of E&S for additional,
customer-site service, E&S may provide such services.  These services may be provided on a Time and
Material (“T&M”) basis which could require separate invoicing for spares
and repair items.  Under this condition,
E&S and VDC will agree in advance on reasonable rates and prices for the
provision of required items.


 


5.                                      PRODUCT IMPROVEMENTS.


 


5.1                                 E&S shall complete the design and product implementation of the
improvements to the ESCP
deflection amplifier that are currently in process, including higher resolution
interlaced capability, redesigned heat sink assembly, and improved reliability
and constructability. When completed, all documentation, drawings, and product
structures shall be transferred and assigned by E&S  to VDC at no charge to VDC.  Completion of this work is estimated to 1,200
man-hours of engineering labor at a cost of $100 per hour.  The cost of this improvement is included in
the agreed purchase price and shall be accomplished at no cost to VDC.


 


5.2                                 The Parties have reviewed and discussed other potential ESCP product
improvements. The implementation of any of these improvements shall be at the
sole discretion of VDC.


 


5.3                                 Engineering assistance, if any, required by VDC from E&S for any future
ESCP improvements shall be negotiated between VDC and E&S on a T&M
basis or on other mutually acceptable commercial terms and conditions.


 


6.                                      WARRANTY SERVICE.


 


6.1                                 VDC shall
provide prompt warranty service for any ESCP and TargetView products manufactured and sold by E&S prior to the Closing
for the duration of the applicable warranties. Prices to be charged by VDC for
this warranty service shall be as provided in subparagraph 4.3 herein.


 


6.2                                 VDC shall
provide warranty service at its own expense for any products manufactured by
VDC in accordance with this Supply Agreement. Such warranty service shall
comply with the warranty terms extended to VDC’s customers, or, in the case of
products manufactured by VDC for inclusion in a System sold by E&S, or sold
by E&S under a service support or Encore contract, then in accordance only
with the written warranty terms as in effect between VDC and E&S.


 










[XXXXX – REDACTED PURSUANT TO REQUEST
FOR CONFIDENTIAL TREATMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.]


 





















 


6.3                                 E&S and VDC shall negotiate in good faith with respect  to any items returned by customers
that are alleged by the customer to be covered by an applicable warranty,
regardless of whether the affected item was manufactured by E&S or VDC.


 


7.                                      SERVICE AND SUPPORT.


 


7.1                                 VDC will supply the spares and make the repairs as provided herein. The
following process and procedures shall be followed in such instances:


 


7.1.1                        Except as provided in Para. 1.3, 7.2 and 7.3,
VDC shall be designated as the customer point of contact for spares and repairs
on ESCP and TargetView products sold by E&S, including without limitation
quotations, status tracking, and exception management.


 


7.1.2                        For all spares supplied by VDC under this
Agreement, VDC shall maintain a thirty (30) day Turn Around Time (“TAT”),
measured from customer or E&S request to shipment date, for E&S
manufactured items, and a ninety (90) day TAT for any third-party vendor item


 


7.1.3                        For all repairs provided by VDC under this
Agreement, VDC shall maintain a thirty (30) day TAT, measured from receipt of
the customer’s item to return shipment date.


 


7.1.4                        VDC shall
be responsible for any harm, damage or degradation occurring to customer’s
property while in VDC’s  possession and
VDC shall indemnify and hold harmless
E&S for loss, costs, damage, claim, action or liability, including without
limitation attorney’s fees, incurred or suffered by E&S as a result or in
connection with harm, damage or degradation to the customer’s property
occurring while in VDC’s possession.


 


7.2                                 Fulfillment Cycle for Spares.


 


7.2.1                        Other than System original spares sold with Systems, or spares requested
under existing or future E&S Service Agreements, customers will request additional  spares
from VDC.


 


7.2.2                        VDC shall be the Party providing the customer with price and availability
terms on all  spares
requested by customers other than System original spares sold with Systems by
E&S, or spares requested under existing or future E&S Service
Agreements.


 


7.3                                 Fulfillment Cycle for Repairs.


 


7.3.1                        Other than with respect to repairs of ESCP and TargetView products sold
with Systems, or repairs requested under existing or future E&S Service
Agreements,  all
repair requests will be sent to VDC.


 





















 


7.3.2                        For repairs requested of VDC, VDC will provide to customers requesting
repairs price, availability, terms, and Request for Material Action (“RMA”)
number.


 


8.                                      VISUAL SYSTEMS SALES.


 


8.1                                 The Parties acknowledge and agree that E&S shall continue in its normal
course of business to offer Systems with CRT-based projectors to current and
potential customers.


 


8.2                                 System sales include both Military and Civil Aviation programs and
opportunities.


 


8.3                                 For any such sales opportunities, VDC shall support E&S in any proposal
preparation and shall provide E&S with price and delivery schedules under
MFC terms.


 


8.4                                 E&S shall coordinate with VDC and refer any customers to VDC for any
stand-alone projector sales opportunities.


 


8.5                                 VDC shall
coordinate with and refer any VDC customers to E&S for any System sale opportunities with VDC customer approval.


 


8.6                                 The Parties hereby agree that neither the E&S activities described in
this Section 8 nor any other E&S activities properly performed under
this Supply Agreement shall be construed as violating Section 8 (c) (d) or
(e) of the Asset Purchase Agreement.


 


9.                                      EXPORT LICENSE CONTROL.


 


9.1                                 The Parties acknowledge that TargetView projectors are U.S. State
Department Munitions Control List (MCL) items under Category 9.


 


9.2                                 Any export outside of the United States requires a program specific Export
License.


 


9.3                                 E&S shall amend any applicable active Licenses to include VDC as the
manufacturer.


 


9.4                                 E&S shall assist and support VDC in its initial License applications
for any new programs including these products.


 


9.5                                 VDC shall identify their point of contact for Export Control and
Administration and coordinate with their E&S counterpart.


 


10,                               PRODUCT CHANGES AND IMPROVEMENTS.   VDC shall use its best efforts to establish and maintain coordination with
E&S for any future product changes to ensure that E&S can assess any
impacts to their customers.


 


11.                               DURATION AND TERMINATION.


 


11.1                           The initial term of this Supply Agreement shall be for a period of five
years beginning October 11, 2004 (the “Initial Term”), and will be
automatically renewed for an additional five year period unless terminated by
either VDC or E&S by written notice to the other ninety (90) days prior to
the expiration of the Initial Term.


 





















 


11.2                           This Agreement may be terminated by written agreement between the Parties.
This termination provision is without prejudice to such other rights and
remedies as either Party may have at law with respect of a breach of this
Agreement.


 


12.                               DISPUTES, MEDIATION AND
ARBITRATION.


 


12.1                           If any
dispute should arise concerning performance under or interpretation of this
Agreement, then, prior to, and as a condition to either E&S’s or VDC’s
right to initiate any arbitration action, the Parties will take the following
steps in an attempt to resolve any such dispute:


 


12.1.1                  The initiating party to the dispute shall provide the other party thirty
(30) days’ written notice of the dispute and opportunity to cure.


 


12.1.2                  If the dispute remains after the thirty (30) days written notice and cure
period, then within thirty (30) days of the request the parties shall
participate in non-binding mediation with a mutually agreeable mediator at a
mutually agreeable date, time and location.


 


12.1.3                  If any such dispute remains unresolved after the parties have attended
mediation, then either party may initiate an arbitration proceeding.


 


12.1.4                  The Parties agree that if they are unable to resolve any controversy that
arises under this Supply Agreement as contemplated by this Section 13,
then such controversy and any ancillary claims not so resolved will be
submitted to mandatory and binding arbitration to be held in a city located in
the United States of America to be mutually agreed upon.  Arbitration shall be in accordance with the
rules of the American Arbitration Association. 
Any award rendered therein shall be final and binding on each and all of
the Parties, and judgment may be entered thereon in a court of competent
jurisdiction.  The Parties shall appoint
a maximum of three arbitrators.  E&S
shall appoint one arbitrator and VDC shall appoint one arbitrator.  Each of these arbitrators shall appoint the
third.  If any Party fails to appoint an
arbitrator, the President or Chairman of the American Arbitration Association,
or his authorized subordinate, shall appoint such arbitrator or arbitrators.


 


13.                               FORCE MAJEURE.   The
Parties to this Supply Agreement shall be excused from performance of their
obligations under this Supply Agreement where they are prevented from so
performing by revolutions or other disorders, wars, acts of enemies or
terrorism, fires, floods, acts of God or, without limiting the foregoing, by
any cause not within the control of the


 





















 


party whose performance is interfered with and, which by the exercise of
reasonable diligence, the Party is unable to prevent.


 


14.                               MISCELLANEOUS.


 


14.1                           In the event of a conflict between the terms of this Supply Agreement and
the Asset Purchase Agreement, the Asset Purchase Agreement shall govern.


 


14.2                           A Party shall not assign to any third party any or all of its rights or
obligations under this Supply Agreement without the prior written consent of
the other Party except that VDC shall be permitted to assign this Supply
Agreement to any affiliated company.


 


14.3                           Neither any provision of this Supply Agreement nor any acts of the
parties to this Supply Agreement shall be construed to create a partnership,
joint venture or agency relationship between the Parties hereto.


 


14.4                           No waiver by either Party of any breach of this Supply Agreement by the
other Party or the granting of an extension for performance hereunder shall be
deemed to be a waiver of any other or subsequent breach.


 


14.5                           This Supply Agreement represents the entire agreement between E&S
and VDC for sale and purchase of ESCP and TargetView products and performance
of related sales and services.


 


14.6                           Each Party acknowledges that there are no representations, covenants or
understandings of any kind relating to the subject matter of this Supply Agreement
made by either Party to the other except those expressly set forth herein.


 


14.7                           If any of the provisions of this Supply Agreement shall contravene or
be invalid under the law, such contravention or invalidity shall not invalidate
the whole Supply Agreement, but it shall be construed as if not containing the
particular provision or provisions held to be invalid. The rights and
obligations of the Parties shall be construed and enforced accordingly and the
Parties shall endeavor to agree on a mutually acceptable alternative provision.


 


14.8                           This Agreement shall be construed in accordance with and governed by
the laws of the State of Georgia as it applies to contracts to be performed
entirely within the State of Georgia.


 


This Supply Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.


 


IN WITNESS WHEREOF, the Parties hereto have executed this Supply Agreement as of this  11th
day of October, 2004.


 





















 


	
   

  	
  VIDEO DISPLAY CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Ronald D. Ordway

  	
   

  
	
   

  	
  Title:

  	
    CEO

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EVANS & SUTHERLAND COMPUTER

  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/David H. Bateman

  	
   

  
	
   

  	
  Title:

  	
    Vice President

  	
   

  
					



 





















 


EXHIBIT
A TO SUPPLY AGREEMENT


 


VDC’s obligation to supply E&S’s requirements
for ESCP and TargetView products for use in post-Closing Systems shall be
limited by and administered through use of a twelve-month written forecast of
E&S’s anticipated requirements for such products, as provided herein.


 


Prior to the Closing, E&S shall submit to VDC a
written twelve-month forecast setting forth E&S’s anticipated product
requirements for Systems in the first twelve-month period of  the Supply Agreement (the
“Agreement”).


 


Thereafter, E&S shall issue to VDC a rolling twelve-month
forecast on a monthly basis setting forth the anticipated product requirements
for the next twelve-month period.  The
requirements set forth on each subsequent forecast for the first two months
shall be identical to the second and third month of the prior month’s forecast.


 


Immediately upon executing this Agreement, E&S
shall provide VDC with a written Purchase Order, pursuant to this Agreement,
for a minimum of the first three months of requirements. Thereafter, on a
monthly basis , E&S shall provide a Purchase Order
to VDC pursuant to this Agreement covering the next month in the then
applicable forecast that is not already subject to a Purchase Order.


 


E&S’s liability for submitted Purchase Orders
and forecasts shall be as follows:


 


E&S shall place the
initial Purchase Order 
as provided above and be irrevocably obligated to purchase the
products reflected on the forecast for 
the three months period covered thereby, and be irrevocably obligated
to  purchase any long lead material that
is non-cancelable and non-returnable that was purchased by VDC for forecasted
products reflected on the forecast for the fourth and fifth months period.


 


For all subsequent
Purchase Orders, E&S shall be irrevocably obligated to purchase the
products ordered thereby, and also shall be irrevocably obligated to purchase
any long lead material that is non-cancelable and non-returnable that was
purchased by VDC for products reflected in the forecast that is the basis of
the Purchase Order for the two months period following the month covered by the
Purchase Order.


 


Unplanned purchase orders
can be placed at any time and scheduled for delivery at full lead time.  These orders once placed are not cancelable.


 


E&S will have the
option to reschedule to later delivery dates in all purchase orders by a
maximum of 30 days but not to cancel deliveries once a Purchase Order is
submitted to VDC.


 





















 


EXHIBIT B


 


GENERAL
ASSIGNMENT OF INTELLECTUAL RIGHTS


 


THIS GENERAL ASSIGNMENT  OF INTELLECTUAL RIGHTS is executed as of this 11th day
of October, 2004 by and between EVANS & SUTHERLAND
COMPUTER CORP., a Utah corporation (“Seller”), and VIDEO DISPLAY CORPORATION, a Georgia corporation
(“Buyer”).  All capitalized terms used
herein but not defined herein shall have the meaning set forth in the Asset
Purchase Agreement (defined below).


 


W I T N E S S E T H :


 


WHEREAS,
Seller and Buyer are, concurrently with the execution of this General
Assignment of Intellectual Rights, consummating certain transactions
contemplated by that certain Asset Purchase Agreement dated as of October 11,
2004 (the “Asset Purchase Agreement”), whereby Buyer is purchasing from Seller
certain assets of the Seller used in Seller’s cathode ray tube based projector
business; and


 


WHEREAS,
Seller now delivers this General Assignment of Intellectual Rights
transferring, conveying, and assigning the Intellectual Property to Buyer as
contemplated by Section 2(a) of the Asset Purchase Agreement, which
Intellectual Property is specifically enumerated in Schedules 3 through 6 inclusive
of the Asset Purchase Agreement;


 


NOW, THEREFORE,
for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and pursuant to the terms of the Asset Purchase Agreement,
Seller does hereby irrevocably, exclusively and unconditionally convey, grant,
transfer, relinquish and assign all its right, title and interest whatsoever
throughout the world in the Intellectual Property to Buyer and its successors
and assigns, in perpetuity or such lesser time as law permits such rights to be
effective, as of October 11, 2004 pursuant to the terms of the Asset
Purchase Agreement.


 


This assignment of rights is intended to encompass
all of the Seller’s rights in the Intellectual Property, including, but not
limited to: inventions, discoveries, concepts, ideas, proprietary business
methods and technical know-how, whether patentable or not; trade secrets;
letters patent, both United States and foreign; applications for letters
patent, both United States and foreign; trademarks and service marks including,
without limitation, the following trademarks: “ESCP 2000” (US) (Registration
Number 2432687), “ESCP 2000” (Canada) (Registration Number 565568), “ESCP 2000”
(Japan) (Registration Number 4432843), “ESCP 3000” (US) (Registration Number
2468759), “ESCP 3000” (Canada) (Registration Number 565562), and  “ESCP 3000” (Japan) (Registration Number
4432844), whether registered or not, together with the goodwill associated with
such marks; copyrights and the right to secure copyrights and renewals and
extensions thereof throughout the world; internet domain name registrations;
and all contracts and receivables relating to the foregoing.


 


Seller represents and warrants that it has the full
power and right to make this Assignment; that, there exists no claim in or
to  the Intellectual Property rights
being assigned adverse to Buyer; and that, the Intellectual Property does not
infringe any rights of any person or business entity anywhere in the world.  Seller hereby agrees to indemnify Buyer and
hold Buyer harmless from any claims by third parties that are inconsistent with
any of the foregoing representations and warranties of Seller.


 





















 


Seller agrees to execute such other documents, and
to provide such further assistance, as Buyer may reasonably require to protect or enforce its rights to the assigned
Intellectual Property in the United States or elsewhere.


 


This General Assignment of Intellectual Rights may
be executed in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.


 


IN WITNESS WHEREOF, the parties hereto have caused their duly authorized representatives
to execute and deliver this General Assignment of Intellectual Rights to be
effective as of date first written above.


 


	
   

  	
  EVANS & SUTHERLAND COMPUTER CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/David H. Bateman

  	
   

  
	
   

  	
  Name:

  	
  David H. Bateman

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  	
   

  



 


 


	
  VIDEO DISPLAY CORPORATION

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Ronald D. Ordway

  	
   

  	
   

  
	
  Name:

  	
  Ronald D. Ordway

  	
   

  	
   

  
	
  Title:

  	
  CEO

  	
   

  	
   

  



 





















 


EXHIBIT C


 


ASSUMPTION AGREEMENT


 


THIS ASSUMPTION AGREEMENT is executed as of this 11th day of October, 2004 by and
between EVANS & SUTHERLAND COMPUTER CORP.,
a Utah corporation (“Seller”), and VIDEO DISPLAY CORPORATION,
a Georgia corporation (“Buyer”).  All
capitalized terms used herein but not defined herein shall have the meaning set
forth in the Asset Purchase Agreement (defined below).


 


W I T N E S S E T H :


 


WHEREAS,
Seller and Buyer are, concurrently with the execution of this Assumption
Agreement, consummating certain transactions contemplated by that certain Asset
Purchase Agreement dated as of October 11, 2004 (the “Asset Purchase
Agreement”), whereby Buyer is purchasing from Seller certain assets of the
Seller used in Seller’s cathode ray tube based projector business; and


 


WHEREAS,
Seller now delivers this Assumption Agreement as contemplated by Section 2(b)
of the Asset Purchase Agreement which provides that the Buyer neither agrees to
assume nor become responsible for any of the Seller’s Liabilities;


 


NOW, THEREFORE,
for and in consideration of the mutual covenants contained herein and in the
Asset Purchase Agreement and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties agree as follows:


 


1.                                       Seller and Buyer hereby acknowledge and agree
that Buyer does not assume nor agree to become responsible for any of Seller’s
Liabilities of any nature whatsoever.


 


2.                                       Other than as specifically stated in this
Assumption Agreement or in the Asset Purchase Agreement, Buyer is not assuming,
becoming subject to, or in any way becoming liable or responsible for any
liability or obligation of Seller, whether accrued, absolute or contingent, or
choate or inchoate.


 


This Assumption Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.


 


IN WITNESS WHEREOF, the undersigned have executed this Assumption Agreement effective as
of the day and year first above written.


 


	
  BUYER:

  	
   

  	
  SELLER:

  
	
   

  	
   

  	
   

  
	
  VIDEO DISPLAY CORPORATION

  CORP.

  	
   

  	
  EVANS & SUTHERLAND COMPUER

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   /s/Ronald D. Ordway

  	
   

  	
   

  	
  By:

  	
  /s/ David H. Bateman

  	
   

  
	
  Name:

  	
   Ronald D. Ordway

  	
   

  	
   

  	
  Name:

  	
   David H. Bateman

  	
   

  
	
  Title:

  	
   CEO

  	
   

  	
   

  	
  Title:

  	
   Vice President

  	
   

  



 





















 


EXHIBIT D


 


ALLOCATION SCHEDULE


 





















 


EXHIBIT E


 


TRANSITION PLAN


 


Major Tasks and Duration of time estimated for
completion after Closing:


 


	
  Major Task

  	
   

  	
  Duration

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  In House
  Activities at E&S

  	
   

  	
  90

  	
   

  
	
  Data
  Transfer

  	
   

  	
  5

  	
   

  
	
  Knowledge
  Transfer (Training)

  	
   

  	
  15

  	
   

  
	
  Information
  Support

  	
   

  	
  90

  	
   

  
	
  Inventory
  Transfer

  	
   

  	
  25

  	
   

  
	
  Equipment
  Transfer

  	
   

  	
  21

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  On Site
  Activities at VDC

  	
   

  	
  94

  	
   

  
	
  Production
  Process Installation

  	
   

  	
  17

  	
   

  
	
  Training

  	
   

  	
  4

  	
   

  
	
  Produce ESCP
  for Q4 2004

  	
   

  	
  90

  	
   

  
	
  Supplier
  Qualification

  	
   

  	
  2

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Spares
  Responsibility Transition

  	
   

  	
  15

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Repairs
  Responsibility Transition

  	
   

  	
  15

  	
   

  



 


Note:  Times shown may run in
parallel.  Total transition time is days after Closing.  The Parties shall cooperate in good faith to
promptly transition the Acquired Assets to VDC under the above schedule.  ESCP products manufactured by E&S prior
to Closing remain undelivered at VDC’s request, and will be completed at
E&S jointly by E&S and VDC personnel in furtherance of E&S’s
training obligations herein.


 





















 


SCHEDULE 1



ACQUIRED ASSETS


 


1.                                       ESCP and TargetView manufacturing furniture,
assembly and test fixtures, test equipment, tooling, and documentation.


 


2.                                       ESCP inventories located on the 1st
Floor at the E&S Manufacturing Facility located at 560 Arapeen Dr., Salt
Lake City, UT 84108 , as disclosed to Buyer, including
materials, supplies, purchased parts, assemblies, sub-assemblies and goods in
process.


 


3.                                       ESCP projector software including all C++
source files and the source file for the sequencer firmware including assembler
and associated hardware and firmware development tools.


 


4.                                       ESCP and TargetView
related CAD design files and specifications.


 


5.                                       ESCP Digital
Controller PC (DCPC) software including C++ source code and the Matrox MIL
library file including associated hardware and firmware development tools.


 


6.                                       Target View inventories located on the 1st
and 2nd Floors at the E&S Manufacturing Facility located at 560
Arapeen Dr., Salt Lake City, UT 84108, as disclosed to Buyer, including
materials, supplies, purchased parts assemblies, sub-assemblies, and good in process.


 


7.                                       ESCP and TargetView marketing and sales
materials.


 


8.                                       ESCP and
TargetView manuals including Operations & Maintenance and Service manuals.


 


9.                                       ESCP and TargetView Training coursework.


 


10.                                 Current active submitted Bids & Proposals
for ESCP and TargetView sales opportunities.


 


11.                                 Rolling 12 month forecast for ESCP and
TargetView projectors.


 


12.                                 ESCP and TargetView Customers and contacts
lists.


 


13.                                 ESCP and TargetView Service and Encore
contract status.


 


14.                                 ESCP and TargetView spares and repairs
pricing lists.


 


15.                                 ESCP and TargetView projector catalog
pricing.


 


16.                                 As shipped configurations and Request for
Material Action (RMA) history for ESCP.


 


17.                                 ESCP and TargetView bills of material.


 


18.                                 ESCP and TargetView assembly drawings and
schematics.


 





















 


SCHEDULE 2



EXCLUDED ASSETS


 


1.                                       Seller’s ESCP and TargetView-related
inventories located in the U.S. Depot on the 2nd Floor of 560
Arapeen Dr., Salt Lake City, UT 84108 in a room named U.S. Depot and UK Depot;
these inventories are necessary to support on-going existing customer support requirements.


 


2.                                       All accounts receivable, accounts payable and
cash.


 


3.                                       Rights and
obligations existing under any contract, agreement, or supply arrangement between
Seller and any third party.


 


4.                                       Rights that
accrue or will accrue to Seller under this Asset Purchase Agreement.


 





















 


SCHEDULE 3



LIST OF TRADEMARKS


 


	
  Trademark

  	
   

  	
  Country

  	
   

  	
  Registration No.

  	
   

  	
  Registration Date

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “ESCP 2000”

  	
   

  	
  U.S.

  	
   

  	
  2432687

  	
   

  	
  3/6/01

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “ESCP 2000”

  	
   

  	
  Canada

  	
   

  	
  565568

  	
   

  	
  8/7/02

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “ESCP 2000”

  	
   

  	
  Japan

  	
   

  	
  4432843

  	
   

  	
  11/17/00

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “ESCP 3000”

  	
   

  	
  U.S.

  	
   

  	
  2468759

  	
   

  	
  7/17/01

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “ESCP 3000”

  	
   

  	
  Canada

  	
   

  	
  565562

  	
   

  	
  8/7/02

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “ESCP 3000”

  	
   

  	
  Japan

  	
   

  	
  4432844

  	
   

  	
  11/17/00

  



 





















 


SCHEDULE 4



LIST OF COPYRIGHTS AND PATENTS


 


As
previously disclosed to Buyer, there are no copyrights or patents, or
copyrightable or patentable works, associated with or related to the Acquired
Assets.


 





















 


SCHEDULE 5



OTHER INTELLECTUAL PROPERTY


 


1.                                       Trade secrets and
manufacturing know-how related to ESCP and TargetView.


 


2.                                       ESCP projector software including all C++
source files and the source file for the sequencer firmware including assembler
and associated tools.


 


3.                                       ESCP-related CAD
design


 


4.                                       Digital Controller PC (DCPC) software
including C++ source code and the Matrox MIL library file.


 


5.                                       ESCP and TargetView marketing and sales
materials.


 


6.                                       ESCP and TargetView manuals including
Operations & Maintenance and Service manuals.


 


7.                                       ESCP and TargetView Training coursework.


 


8.                                       Open/unsubmitted Bids & Proposals for
ESCP and TargetView sales contracts.


 


9.                                       Rolling 12 month forecast for ESCP and
TargetView projectors.


 


10.                                 ESCP and TargetView Customers and contacts
lists.


 


11.                                 ESCP and TargetView Service contract status.


 


12.                                 ESCP and TargetView spares and repairs
pricing lists.


 


13.                                 ESCP and TargetView projector catalog
pricing.


 


14.                                 ESCP and TargetView bills of material.


 


15.                                 ESCP and TargetView assembly drawings and
schematics.


 





















 


SCHEDULE 6



EXCEPTIONS TO PROPRIETARY RIGHTS


 


1.               Any proprietary
rights or intellectual property not used exclusively in Seller’s ESCP or
TargetView business.


 


2.               Any proprietary
rights or intellectual property not specifically enumerated on Schedules 1 or 3
through 5 of the Asset Purchase Agreement.