Exhibit 10.1


 


LASER PROJECTION SYSTEMS AGREEMENT


 


BETWEEN


 


ROCKWELL COLLINS, INC.


 


ROCKWELL COLLINS SIMULATION & TRAINING SOLUTIONS, LLC


 


AND


 


EVANS & SUTHERLAND COMPUTER CORPORATION


 

















 


TABLE OF CONTENTS


 


	
  ARTICLE 1 -

  	
  SUBJECT
  MATTER AND CONTRACT PRICE

  	
  1

  
	
  ARTICLE 2 -

  	
  DESCRIPTION
  OF LASER PROJECTION SYSTEMS

  	
  1

  
	
  ARTICLE 3 -

  	
  DELIVERY

  	
  2

  
	
  ARTICLE 4 -

  	
  QUALITY
  ASSURANCE, TESTING AND ACCEPTANCE OF WORK

  	
  2

  
	
  ARTICLE 5 -

  	
  PENALTY FOR
  LATE DELIVERY

  	
  3

  
	
  ARTICLE 6 -

  	
  MODIFICATIONS
  AND IMPROVEMENTS

  	
  4

  
	
  ARTICLE 7 -

  	
  GENERAL
  LICENSE

  	
  5

  
	
  ARTICLE 8 -

  	
  FIXED-BASED
  LASER PROJECTION SYSTEM AND MOTION-BASED LASER PROJECTION SYSTEM LICENSES

  	
  10

  
	
  ARTICLE 9 -

  	
  INDEMNITY

  	
  10

  
	
  ARTICLE 10 -

  	
  TERMINATION

  	
  11

  
	
  ARTICLE 11 -

  	
  ASSIGNMENT

  	
  11

  
	
  ARTICLE 12 -

  	
  NOTICES

  	
  11

  
	
  ARTICLE 13 -

  	
  GOVERNING
  LAW; CONSENT TO JURISDICTION

  	
  13

  
	
  ARTICLE 14 -

  	
  INVALID
  PROVISIONS

  	
  13

  
	
  ARTICLE 15 -

  	
  SOFTWARE
  LICENSE

  	
  13

  
	
  ARTICLE 16 -

  	
  INTERPRETATION

  	
  13

  
	
  ARTICLE 17 -

  	
  GUARANTY

  	
  14

  
	
  ARTICLE 18 -

  	
  MISCELLANEOUS

  	
  14

  



 


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LASER PROJECTION SYSTEMS AGREEMENT


 


This Laser Projection Systems Agreement (this “Agreement”)
is made and entered into as of the 26th day of May, 2006, (the “Effective Date”)
by and among ROCKWELL COLLINS, INC., a Delaware corporation (“Parent”),
ROCKWELL COLLINS SIMULATION & TRAINING SOLUTIONS LLC, a Delaware
limited liability company and indirect wholly-owned subsidiary of Parent (“Buyer”),
and EVANS & SUTHERLAND COMPUTER CORPORATION, a Utah corporation (“Seller”),
and together with Buyer, hereinafter referred to as the “Parties”. Capitalized
terms used herein but not defined shall have the meanings given to such terms
in the APA (as defined below).


 


In consideration of the mutual agreements and
the obligations of the Parties hereinafter expressed, the receipt and
sufficiency of which are acknowledged, Seller and Buyer hereby agree as
follows:


 


ARTICLE 1 - SUBJECT
MATTER AND CONTRACT PRICE


 


1.1            As agreed
under the terms of that certain Asset Purchase Agreement, dated as of
February 7, 2006 (the “APA”), by and between Seller and Parent, the
Parties hereby enter into this Agreement to provide for, among other things,
the license by Seller to Buyer of rights to the Fixed-Based Laser Projection
System and the Motion-Based Laser Projection System (each as defined below).


 


1.2            In
recognition of the efforts undertaken for, and investments made by, Seller
under this Agreement, Parent agrees to (i) pay to Seller, by wire transfer
of immediately available funds, the amount of Two Million Dollars ($2,000,000)
(the “Initial Payment”) upon the effectiveness of the license with respect to
the Fixed-Based Laser Projection System as set forth in Section 8.1, and
(ii) deliver to the Escrow Agent, upon execution of this Agreement, Three
Million Dollars ($3,000,000) (together with the Initial Payment, the “Contract
Price”) to be held by the Escrow Agent in an escrow fund (the “Escrow Fund”)
pursuant to the Escrow Agreement (the “Escrow Agreement”), dated as of the date
hereof, by and between Seller, Parent and the Escrow Agent, which amount (as
may be reduced pursuant to Sections 5.1 and 5.2 or in accordance with the
terms of the Escrow Agreement) shall be released to Seller in two installments
in accordance with the terms of the Escrow Agreement in respect of the
effectiveness of the license with respect to the Motion-Based Laser Projection
System as set forth in Section 8.2.


 


1.3            The Contract
Price excludes all taxes, duties or other levies, which may be imposed. All
taxes, duties or other levies that are imposed shall be shared equally by
Parent and Seller, except for income taxes of Seller, which shall be the sole
responsibility of Seller.


 


ARTICLE 2 - DESCRIPTION
OF LASER PROJECTION SYSTEMS


 


2.1            Seller shall
provide a fixed-based laser projection system that meets or surpasses all
functional and performance specifications contained in Attachment 1 hereto
(the “Fixed-Based Laser Projection System”).


 


2.1.1            Seller shall
perform a demonstration of the prototype Fixed-Based Laser Projection System
(the “Fixed-Based Prototype Laser Projection System”).


 


2.1.2            Seller shall
produce a Fixed-Based Laser Projection System that meets manufacturing
acceptance testing (the “Fixed-Based First Article Laser Projection System”)
in accordance with Section 4.2.


 


2.2            Seller shall
provide a laser projection system that is motion capable that meets or
surpasses all functional and performance specifications contained in
Attachment 2 hereto (the “Motion-Based Laser Projection System”).


 


1

















 


2.2.1            Seller shall
perform a demonstration of the prototype Motion-Based Laser Projection System
(the “Motion-Based Prototype Laser Projection System”) in accordance with
Section 4.3.


 


2.2.2            Seller shall
produce a Motion-Based Laser Projection System that meets manufacturing
acceptance testing (the “Motion-Based First Article Laser Projection
System”) in accordance with Section 4.4.


 


2.3            Seller
agrees to provide Buyer with quarterly status reports and verbal question and
answer sessions regarding the Fixed-Based Laser Projection System and the Motion-Based
Laser Projection System, which shall include product status, project
accomplishment, achievement of performance standards, technological challenges
and program schedule status.


 


2.4            Seller
agrees to provide Buyer with a program schedule for the Fixed-Based Laser
Projection System and the Motion-Based Laser Projection System within a
reasonable time after execution of this Agreement.


 


2.5            Seller shall
provide Buyer with a listing of all documentation reasonably necessary for the
installation, operation, testing and support of the Fixed-Based Laser
Projection System and Motion-Based Laser Projection System.


 


2.6            Seller shall
be solely responsible for all costs associated with the research, development,
design, engineering, prototype and first production articles and associated
testing required to provide Buyer with laser projection systems that are fully
compliant with the specifications contained in Attachments 1 and 2 hereto.


 


ARTICLE 3 - DELIVERY


 


3.1            Seller shall
use commercially reasonable efforts to complete the Fixed-Based First
Article Laser Projection System on or before May 31, 2006.


 


3.2            Seller shall
use commercially reasonable efforts to complete the Motion-Based Prototype
Laser Projection System on or before July 1, 2007.


 


3.3            Seller shall
use commercially reasonable efforts to complete the Motion-Based First
Article Laser Projection System on or before December 31, 2007.


 


ARTICLE 4 - QUALITY
ASSURANCE, TESTING AND ACCEPTANCE OF WORK


 


4.1            Seller will
provide and maintain a quality control system in accordance with ISO 9001 for
the work performed under this Agreement. Upon request by Buyer, Seller shall
provide current proof of certification.


 


4.2            Buyer and
Seller will conduct manufacturing acceptance testing of the Fixed-Based First
Article Laser Projection System at Seller’s facilities in accordance with
a mutually developed plan that will test and evaluate the Fixed-Based First
Article Laser Projection System against the specifications contained in
Attachment 1 hereto. Upon completion of such testing, Buyer and Seller
will make a joint determination of system compliance and acceptance. Neither
Buyer nor Seller shall unreasonably withhold, delay or condition its
determination of compliance or noncompliance, as the case may be.


 


4.3            After demonstration
of the Motion-Based Prototype Laser Projection System at Seller’s facilities,
Buyer and Seller will test and evaluate the Motion-Based Prototype Laser
Projection System to ensure compliance with the specifications contained in
Attachment 2 hereto and FAA Level D standards, as in effect on the date of
this Agreement.


 


4.4            Buyer and
Seller will conduct manufacturing acceptance testing of the Motion-Based First
Article Laser Projection System at Seller’s facilities in accordance with
a mutually developed plan that


 


2

















 


will
test and evaluate the Motion-Based First Article Laser Projection System
against the specifications contained in Attachment 2 hereto and FAA Level
D standards, as in effect on the date of this Agreement. Upon completion of
such testing, Buyer and Seller will make a joint determination of system
compliance and acceptance. Neither Buyer nor Seller shall unreasonably
withhold, delay or condition its determination of compliance or noncompliance,
as the case may be.


 


4.5            If Seller
tenders nonconforming material, Seller will, at its option, replace or correct
the material, at no increase in the Contract Price.


 


4.6            Seller
agrees to provide to Buyer, by first production article inspection of the
Fixed-Based Laser Projection System and the Motion-Based Laser Projection
System, as applicable, and to maintain for five (5) years thereafter,
design, engineering and technical documentation and data reasonably necessary
to install, operate, test, support and sell the Fixed-Based Laser Projection
System and the Motion-Based Laser Projection System, as applicable. In
addition, if at any time after manufacturing acceptance testing and acceptance
of the Fixed-Based Laser Projection System or the Motion-Based Laser Projection
System, as applicable, such documentation or data is updated, revised or
supplemented, Seller agrees to provide to Buyer reasonably promptly any such
updated, revised or supplemented documentation or data to the extent that it
relates to the Fixed-Based Laser Projection System or the Motion-Based Laser
Projection System as designed and delivered to Buyer.


 


ARTICLE 5 - PENALTY FOR
LATE DELIVERY


 


5.1            If Buyer and
Seller have not completed manufacturing acceptance testing of the Motion-Based
First Article Laser Projection System on or before December 31, 2007,
Parent shall be entitled, out of the Escrow Fund, to (i) Forty-One
Thousand Six Hundred Sixty-Seven Dollars ($41,667) on each of the first four
(4) monthly anniversary dates following December 31, 2007,
(ii) Eighty-Three Thousand Three Hundred Thirty-Three Dollars ($83,333) on
each of the first four (4) monthly anniversary dates following
April 30, 2008, and (iii) One Hundred Twenty-Five Thousand Dollars
($125,000) on each of the first four (4) monthly anniversary dates
following August 31, 2008, in each such case if Buyer and Seller have not
completed manufacturing acceptance testing of the Motion-Based First
Article Laser Projection System on or before such monthly anniversary
date, except to the extent that such failure arises from any cause or causes
beyond the control of Seller, including acts of critical suppliers beyond the
control of Seller, acts of God, fire, storm, flood, earthquake, governmental
regulation or direction, acts of the public enemy, war, terrorism, rebellion,
insurrection, riot, invasion, strike or lockout, in each case not resulting
from the negligence of Seller (each a “Force Majeure Event”), in which event
the payment date with respect to each such payment shall be postponed by a
number of days equal to the duration of such Force Majeure Event; provided, that, if Buyer and Seller have not completed
manufacturing acceptance testing of the Motion-Based First Article Laser
Projection System on or before December 31, 2008, Parent shall be
entitled, out of the Escrow Fund, to an additional One Million Dollars
($1,000,000) on December 31, 2008, except to the extent that such failure
is caused by a Force Majeure Event, in which event the payment date with
respect to such payment shall be postponed by a number of days equal to the
duration of such Force Majeure Event.


 


5.2            If the
Motion-Based Prototype Laser Projection System has not been demonstrated on or
before December 31, 2008, Parent shall be entitled, out of the Escrow
Fund, to the amount of One Million Dollars ($1,000,000), except to the extent
that such failure is caused by a Force Majeure Event, in which event the
payment date with respect to such payment shall be postponed by a number of
days equal to the duration of such Force Majeure Event.


 


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ARTICLE 6 -
MODIFICATIONS AND IMPROVEMENTS


 


6.1            Buyer may
propose modifications to the Fixed-Based Laser Projection System or the
Motion-Based Laser Projection System at any time. Seller shall review any such
proposals and negotiate with Buyer in good faith with respect thereto to
attempt to reach agreement on reasonable commercial terms, provided that
modifications shall be made only upon mutual written agreement between Buyer
and Seller.


 


6.2            Buyer may
propose improvements to the Fixed-Based Laser Projection System or the
Motion-Based Laser Projection System at any time. Seller shall review any such
proposals and negotiate with Buyer in good faith with respect thereto to attempt
to reach agreement on reasonable commercial terms, provided that improvements
shall be made only upon mutual written agreement between Buyer and Seller.


 


6.3            After
manufacturing acceptance testing and acceptance of the Fixed-Based Laser
Projection System and the Motion-Based Laser Projection System, Seller may, at
its election, incorporate any enhancements, improvements or new capabilities,
designed for, or incorporated into, Seller’s commercial products that were
developed by Seller independently of Buyer into the Fixed-Based Laser
Projection Systems and the Motion-Based Laser Projection Systems supplied to
Buyer, at no additional developmental cost to Buyer. Any other enhancements,
improvements, or new capabilities designed for, or incorporated into, Seller’s
commercial products that were developed by Seller independently of Buyer will
be incorporated into the Fixed-Based Laser Projection System and the
Motion-Based Laser Projection System only to the extent that the commercial
terms upon which such enhancements, improvements or new capabilities are so
incorporated are mutually agreed by Seller and Buyer. Notwithstanding anything
herein to the contrary, Seller will have no obligation to incorporate any
enhancements, improvements or new capabilities into products which have already
been manufactured or delivered. To the extent that Seller incorporates any such
enhancements, improvements or new capabilities into the Fixed-Based Laser
Projection System and the Motion-Based Laser Projection System pursuant to the
first or second sentence of this Section 6.3, Seller will provide Buyer
with any updated design, engineering and technical documentation and data,
including but not limited to drawings, parts lists, bills of materials, and
fabrication instructions, to the extent related to the Fixed-Based Laser
Projection System and the Motion-Based Laser Projection System.


 


6.4            All
modifications and improvements to the laser projectors and all Intellectual
Property associated therewith shall be owned by Seller, regardless of whether
Buyer compensates Seller for creating such modifications or improvements. All
such Intellectual Property shall be deemed Laser Intellectual Property for the
purposes of this Agreement. Seller shall promptly notify Buyer of all such
modifications and improvements in writing, and Seller agrees to meet with Buyer
in person at least once annually, and by telephone at least once quarterly, for
the purpose of discussing such modifications and improvements.


 


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ARTICLE 7 -  GENERAL LICENSE


 


7.1            For purposes
of Articles 7 and 8, the following terms shall have the following
meanings:


 


7.1.1            “Catastrophe
Event” means (i) a Seller Bankruptcy Event; or (ii) the complete
cessation by Seller of its business relating to the design, manufacture and
sale of laser projectors (it being understood and agreed that the failure by
Seller to deliver any products at all under the Laser Supply Agreement for a
period of at least three (3) years after Buyer has submitted and not
withdrawn a purchase order for any products under the Laser Supply Agreement
following manufacturing acceptance testing of the Motion-Based Laser Projector
System shall be deemed to be such a cessation by Seller under this clause (ii),
except to the extent that such failure is caused by a Force Majeure Event, in
which event such three year period shall be extended by a number of days equal
to the duration of such Force Majeure Event).


 


7.1.2            “Exclusive
Laser Fields” means the following fields: 
(i) military and commercial simulation and training (and embedded
simulation and training); and (ii) aircraft flight decks and cabins.


 


7.1.3            “Laser
Intellectual Property” means all existing or future Seller Intellectual
Property covering or relating to laser projectors.


 


7.1.4            “Laser
Technology Escrow” shall have the meaning set forth in Section 7.5.2.


 


7.1.5            “Non-Exclusive
Laser Fields” means the following fields, in each case to the extent not
included in the Exclusive Laser Fields: 
(i) commercial air traffic control (ATC); (ii) military helmet
mounted laser displays; (iii) aircraft test equipment; (iv) military
global positioning systems (GPS); and (v) command and control for military
intelligence, surveillance and reconnaissance (C2ISR).


 


7.1.6            “Seller
Intellectual Property” means all Intellectual Property that is either owned by
Seller or under which Seller has the right to license without the payment of
royalties or other fees to any third party. Notwithstanding the foregoing,
Seller Intellectual Property shall exclude trademarks, service marks, logos,
trade dress, corporate names, and trade names, including the good will
appurtenant thereto, whether statutory or common law, and any and all
registrations and applications to register therefor.


 


7.1.7            “Seller Laser
Projector Business” means all businesses outside of the Exclusive Laser Fields
and the Non-Exclusive Laser Fields.


 


7.1.8            “Seller
Bankruptcy Event” means that Seller has become the subject of a case under
Chapter 7 of the U.S. Bankruptcy Code or any similar liquidation, dissolution,
or debtor relief statute under state or federal law (but excluding any such
statute, including Chapter 11 of the U.S. Bankruptcy Code, providing for
reorganization or restructuring of debtors), and such case shall not have been
dismissed for ninety (90) days.


 


7.2
         Laser
Intellectual Property License.


 


7.2.1            Effective as
of the Effective Time, Seller hereby grants to Buyer, and Buyer hereby accepts,
an exclusive (subject to Sections 7.2.4 and 7.4), perpetual, worldwide,
non-transferable (except as set forth in Section 11.1), fully-paid,
royalty-free right and license, without the right to grant sublicenses (except
to (i) Parent and all direct or indirect subsidiaries of Parent (for so
long as such subsidiary remains a direct or indirect subsidiary of Parent) and
(ii) end-users of software and databases, provided that such sublicenses
are granted solely for the use of, and to the extent reasonably necessary for
such end-user to use, such software and databases and such sublicenses are
subject to Section 7.3.4), under all Laser Intellectual Property to use,
sell, offer for sale, import and export laser projectors in the Exclusive Laser
Fields.


 


5

















 


7.2.2            Effective as
of the Effective Time, Seller hereby grants to Buyer, and Buyer hereby accepts,
a non-exclusive, perpetual, worldwide, non-transferable (except as set forth in
Section 11.1), fully-paid, royalty-free right and license, without the
right to grant sublicenses (except to (i) Parent and all direct or
indirect subsidiaries of Parent (for so long as such subsidiary remains a
direct or indirect subsidiary of Parent) and (ii) end-users of software
and databases, provided that such sublicenses are granted solely for the use
of, and to the extent reasonably necessary for such end-user to use, such
software and databases and such sublicenses are subject to Section 7.3.4),
under all Laser Intellectual Property to use, sell, offer for sale, import and
export laser projectors in the Non-Exclusive Laser Fields.


 


7.2.3            Effective
upon the occurrence of a Catastrophe Event, Seller hereby grants to Buyer, and
Buyer hereby accepts a non-exclusive, perpetual, worldwide, non-transferable
(except as set forth in Section 11.1), fully-paid, royalty-free right and
license, without the right to grant sublicenses (except to (i) Parent and
all direct or indirect subsidiaries of Parent (for so long as such subsidiary
remains a direct or indirect subsidiary of Parent) and (ii) end-users of
software and databases, provided that such sublicenses are granted solely for
the use of, and to the extent reasonably necessary for such end-user to use,
such software and databases and such sublicenses are subject to
Section 7.3.4), under all Laser Intellectual Property to make, have made
and modify laser projectors in the Exclusive Laser Fields and the Non-Exclusive
Laser Fields by third party manufacturers approved by Seller (which approval
shall not be unreasonably withheld or delayed).


 


7.2.4            All
exclusive licenses granted under this Agreement are exclusive against all
Persons, including the applicable licensor and its Affiliates; provided, however, that all exclusive licenses and all
rights granted under this Agreement shall be subject to (i) the third
party licenses granted by Seller existing as of the date of this Agreement, and
(ii) any restrictions contained in the third party licenses granted to
Seller as of the date of this Agreement, each of which are set forth on
Schedule 7.2.4 attached hereto and have been made available to Buyer.


 


7.2.5            Following
the date of completion of manufacturing acceptance testing of the Motion-Based
First Article Laser Projection System in accordance with Article 2,
if (i) Buyer fails to place any orders for laser projectors in the Exclusive
Laser Fields for any fifteen (15) month period, (ii) Seller demonstrates
in writing with reasonable detail following such fifteen (15) month period
that customers desire to buy simulators or other products within the Exclusive
Laser Fields using Seller’s laser projectors on terms that are in the aggregate
no more favorable to such customers than the terms offered to Buyer (including
the configuration of the Fixed-Based Laser Projection System or Motion-Based
Laser Projection System, as applicable, volume of purchasing, payment terms,
warranty terms and other contractual terms), and (iii) Buyer fails to
place any orders for laser projectors in the Exclusive Laser Fields for the
three (3) month period following receipt of Seller’s written demonstration
pursuant to clause (ii), the exclusive license under Section 7.2.1 shall
become nonexclusive, except to the extent that such failure is caused by a
Force Majeure Event, in which event such fifteen (15) month period or
three (3) month period, as the case may be, shall be extended by a number
of days equal to the duration of such Force Majeure Event.


 


7.2.6            Seller and
Buyer agree that the licensed rights granted pursuant to this Agreement
(including all licensed know-how and other licensed trade secrets) are “intellectual
property” as defined in 11 U.S.C. 101(35A). Seller and Buyer each intend, and
Seller and Buyer each agree that they will not make any argument to the
contrary in any court of law or equity, that the licenses and related rights
and benefits granted to Buyer pursuant to this Agreement, including the release
of escrow and Buyer’s right to make and have made upon the occurrence of a
Catastrophe Event, shall be entitled to the benefits and protections of
Section 365(n) of Title 11 of the U.S.


 


6

















 


Code.
For the purposes of Section 365(n), the “embodiments” of the intellectual
property licensed under this Agreement include (i) the know-how and other
trade secrets of Seller relating to the manufacture of laser projectors,
including the drawings and designs associated with the know-how for manufacture
of the laser projector (including drawings of the circuit boards and chip
design packets) and the methods and technology used to manufacture the laser
projector, and (ii) works of authorship used in connection with the
marketing and promotion of the laser projector.


 


7.3            Enforcement/Other
Restrictions.


 


7.3.1            Enforcement
By Buyer. Buyer shall have the sole power to institute and prosecute suits for
infringement or misappropriation of the Laser Intellectual Property that
relates solely to the Exclusive Laser Fields, and if required by law, Seller
will join as party plaintiff in such suits; provided, that
if Buyer fails to initiate an action to enforce the foregoing Intellectual
Property within ninety (90) days of written notice by Seller, Seller, at its
own expense, shall have the right to file suit against such infringer, in the
name of the Buyer and for Seller’s benefit. All costs and expenses of any such
suits instituted by Buyer or Seller shall be borne by the party who instituted
such suit against the infringer, and such party shall have the right to collect
for its own use all damages, profits and awards of whatever nature recoverable
for such infringement. Each party shall, at the requesting party’s expense,
reasonably cooperate with the other party in any such suit.


 


7.3.2            Enforcement
by Seller. Except as provided in Section 7.3.1, Seller shall have the sole
power to institute and prosecute suits for infringement or misappropriation of
the Laser Intellectual Property in all other instances (including, without
limitation, the sole power to institute and prosecute suits for infringement or
misappropriation of the Laser Intellectual Property that relates (i) to
any and all fields outside the Exclusive Laser Fields and/or (ii) to both
the Exclusive Laser Fields and a field outside the Exclusive Laser Fields) and
if required by law, Buyer will join as party plaintiff in such suits; provided, that if Seller fails to initiate an action to
enforce the foregoing Intellectual Property that relates directly to the
Exclusive Laser Fields within ninety (90) days of written notice by Buyer, the
Buyer, at its own expense and with the consent of Seller (not to be unreasonably
withheld), shall have the right to file suit against such infringer, in the
name of Seller and for Buyer’s benefit. All costs and expenses of any such
suits instituted by Buyer or Seller shall be borne by the party who instituted
such suit against the infringer, and such party shall have the right to collect
for its own use all damages, profits and awards of whatever nature recoverable
for such infringement. Each party shall, at the requesting party’s expense,
reasonably cooperate with the other party in any such suit.


 


7.3.3            Against
Licensees, Sublicensees or Transferees. In the event of a breach by a licensee,
sublicensee or transferee of either party hereto of the exclusivity and/or
field restrictions of the applicable license or sublicense agreement, the party
who learns of such breach shall promptly notify the other party in writing, and
the licensor, sublicensor or transferor, as the case may be, shall take
commercially reasonable actions to stop such breach. If such actions are not
successful in obtaining agreement from such third party to promptly cease such
use within sixty (60) days of notice of such breach, such licensor, sublicensor
or transferor shall, at the aggrieved party’s request, commence appropriate
action, which may include commencing suit, to stop such breach within sixty
(60) days of such request. The aggrieved party may participate in any such
suit, at its own expense, with the applicable licensor, sublicensor or
transferor, and such licensor, sublicensor or transferor shall not settle any
such suit in a manner that would materially adversely affect the aggrieved
party’s exclusive rights without the consent of the aggrieved party. Neither
party shall enter into any license or sublicense agreement whose terms conflict
with the rights of the parties set forth in this Section 7.3.3.


 


7

















 


7.3.4            As a
condition to the licenses granted Buyer hereunder, Buyer agrees (and shall
cause its sublicensees to agree) not to decompile, disassemble or otherwise
reverse engineer any laser projector or component thereof delivered by Seller,
or any software or firmware therein. Notwithstanding anything to the contrary,
any license to software granted to Buyer hereunder is for the object code only
and no license is granted (or implied) with respect to the source code, unless
and until the make and have made license is granted pursuant to
Section 7.2.3 and such source code is released pursuant to the escrow
agreement as provided in Section 7.5.3, in which case the license in
Section 7.2.3 shall include a license to such source code under such
license.


 


7.4            Exclusivity.
Except for the licenses granted to Buyer in the Exclusive Laser Fields in this
Agreement and laser projectors manufactured by Seller for Buyer pursuant to the
Supply Agreement, Seller shall not use, sell, offer for sale, import or export
laser projectors in the Exclusive Laser Fields, or license any Person to do so
and Seller hereby represents and warrants that it has not licensed any third
party to use, sell, offer for sale, import or export laser projectors in the
Exclusive Laser Fields. In connection with the foregoing:


 


7.4.1            Seller shall
require that all Persons (other than the U.S. government) who purchase laser
projectors, as a stand-alone product, from Seller agree in writing:
(i) not to use or resell such laser projectors in the Exclusive Laser
Fields; and (ii) to require that all future transferees of such laser
projectors agree in writing not to resell laser projectors into the Exclusive
Laser Fields and to cause such transferees to so agree in writing.


 


7.4.2            Seller shall
require that all Persons to whom Seller grants a license to make or have made
laser projectors agree in writing: (i) not to use or resell laser
projectors in the Exclusive Laser Fields; and (ii) to require that all
sublicensees and future sublicensees of such license agree in writing not to
use or sell laser projectors in the Exclusive Laser Fields and to cause such
sublicensees to so agree in writing.


 


7.4.3            Seller shall
not transfer or pledge as collateral any Laser Intellectual Property without
obtaining the transferee’s or secured party’s written agreement to the terms
and conditions of Sections 7.2, 7.3 and 7.4 of this Agreement. Any transfer or
pledge in violation of the foregoing shall be void ab initio.


 


7.4.4            Buyer shall
require that all Persons (other than the U.S. government) who purchase laser
projectors that were initially purchased from or manufactured by Seller, as a
stand-alone product, from Buyer, Parent or any direct or indirect subsidiaries
of Parent agree in writing: (i) not to use or resell such laser projectors
in the field of the Seller Laser Projector Business; and (ii) to require
that all future transferees of such laser projectors agree in writing not to resell
laser projectors in the field of the Seller Laser Projector Business and to
cause such transferees to so agree in writing.


 


7.4.5            Buyer shall
require that all Persons to whom Buyer, Parent or any direct or indirect
subsidiaries of Parent grants a license to make or have made laser projectors
that utilize the Laser Intellectual Property agree in writing: (i) not to
use or resell laser projectors in the field of the Seller Laser Projector
Business; and (ii) to require that all sublicensees and future sublicensees
of such license agree in writing not to use or sell laser projectors in field
of the Seller Laser Projector Business and to cause such sublicensees to so
agree in writing.


 


7.5            Documentation
and Laser Technology Escrow.


 


7.5.1            Seller shall
grant Buyer reasonable access to all design documentation reasonably necessary
to one of ordinary skill in the art for application development, installation,
testing, operation, sale, system integration and support of laser projectors.


 


8

















 


7.5.2            At or prior
to the Closing, Seller shall place into escrow with a recognized escrow agent
mutually acceptable to Seller and Buyer sufficient documentation and data to
enable the manufacture of laser projectors by one of ordinary skill in the art
on behalf of Buyer in the event of a Catastrophe Event, which escrow shall be
updated annually to include documentation and data relating to subsequent
improvements to the technology (“Laser Technology Escrow”). The cost of such
escrow shall be shared equally between the parties.


 


7.5.3            The escrow
agreement governing the Laser Technology Escrow shall provide that, upon the
occurrence of a Catastrophe Event, the Laser Technology Escrow shall be
released to Buyer subject to Section 7.2.3 and procedures set forth in
such escrow agreement agreed upon by the Parties.


 


7.6            Laser
Projectors Outside the Exclusive Laser Fields and the Non-Exclusive Laser
Fields.


 


7.6.1            In the event
that Buyer notifies Seller that Buyer desires to expand its use or sale of
laser projectors into additional lines of business outside of the Exclusive
Laser Fields and the Non-Exclusive Laser Fields, Seller agrees to negotiate in
good faith with Buyer to attempt to reach agreement on the terms and conditions
of a license, supply and/or related agreement between Buyer and Seller with
respect to any such expansion, subject to (i) any exclusive arrangements
Seller has entered into with third parties and (ii) Seller’s good faith
intention to enter the relevant line of business (other than the defense
electronics and commercial aviation markets).


 


7.6.2            In the event
that Seller initiates an expansion of the use or sale of laser projectors into
defense electronics and commercial aviation markets outside of the Exclusive
Laser Fields and the Non-Exclusive Laser Fields, Seller shall promptly notify
Buyer of any such expansion and, upon Buyer’s requests, negotiate in good faith
with Buyer to attempt to reach agreement on the terms and conditions of a
license, supply and/or related agreement between Buyer and Seller with respect
to any such expansion.


 


9

















 


ARTICLE 8 - FIXED-BASED
LASER PROJECTION SYSTEM AND MOTION-BASED LASER PROJECTION SYSTEM LICENSES


 


8.1            The
Fixed-Based Laser Projection System shall be deemed to be a laser projector for
the purpose of the licenses granted to Buyer and others in Article 7, and,
upon completion of manufacturing acceptance testing of the Fixed-Based First
Article Laser Projection System in accordance with Article 2, such
licenses in Article 7 shall become effective as to the Fixed-Based Laser
Projection System.


 


8.2            The
Motion-Based Laser Projection System shall be deemed to be a laser projector
for the purpose of the licenses granted to Buyer and others in Article 7,
and, upon completion of manufacturing acceptance testing of the Motion-Based
First Article Laser Projection System in accordance with Article 2,
such licenses in Article 7 shall become effective as to the Motion-Based Laser
Projection System.


 


ARTICLE 9 - INDEMNITY


 


9.1            Seller will
indemnify, defend and hold harmless Buyer, its directors, officers, employees,
agents, customers and each of the heirs, executors, successors, sublicensees
(but only to the extent they are direct or indirect parent, subsidiary or
sister companies of Buyer) and permitted assigns of any of the foregoing
(collectively, the “Buyer Indemnitees”) from and against all claims,
liabilities, demands, damages, or losses (collectively, “Third Party Claims”)
asserting that the Fixed-Based Laser Projection System or the Motion-Based
Laser Projection System (upon completion thereof) licensed herein infringes,
violates or misappropriates any intellectual property rights of any Person
insofar as and solely to the extent that such Third Party Claim is based on a
claim that the infringement or wrongful use is attributable to Buyer’s
application without modification (or combination with other technology) and
which use is in material compliance with the terms of this Agreement.


 


9.2            Should any
portion of the Fixed-Based Laser Projection System or the Motion-Based Laser
Projection System (upon completion thereof) licensed herein become or, in the
Seller’s reasonable opinion, be likely to become the subject of a claim of
infringement, violation or misappropriation of Person’s intellectual property
right, without limiting any of Buyer’s other remedies, Seller at its option and
expense shall either (i) procure for the Buyer the right to continue to
use that portion of the Fixed-Based Laser Projection System or the Motion-Based
Laser Projection System (upon completion thereof), or (ii) replace or
modify that portion of the Fixed-Based Laser Projection System or the
Motion-Based Laser Projection System (upon completion thereof) to avoid the
infringement or misappropriation, in each case to the extent such action can be
effected under commercially reasonable terms.


 


9.3            Except as
provided in Section 9.1, Buyer hereby agrees to indemnify, defend and hold
harmless Seller, its affiliates and their respective successors and assigns,
and its and their respective directors, officers, agents and employees
(collectively, the “Seller Indemnitees”), from and against all Third Party
Claims to the extent any such Third Party Claim arises directly from the use by
Buyer of the Laser Intellectual Property and which use is not in material
compliance with the terms of this Agreement.


 


9.4            The
indemnity provided to any Party herein shall be governed by the procedures for
indemnification set forth in Section 13.3 of the APA, which is
incorporated herein by reference.


 


9.5            Seller’s and
Buyer’s total liability to incur out-of-pocket costs in the defense of Third
Party Claims and to pay damages or awards in any and all Third Party Claims
under this Agreement is limited to Five Million Dollars ($5,000,000) in the
aggregate, and Buyer and Seller, as the case may be, will advance to Seller or
Buyer, as applicable, any amount required to be expended by Seller or Buyer in
excess of that limit.


 


10

















 


9.6            Without
limiting Buyer’s and Seller’s remedies under the Supply Agreement, Seller and
Buyer, as the case may be, shall not be liable to Buyer or Seller, as
applicable, for any loss of use, revenue, profit or any special, indirect, incidental
or consequential damages arising from any cause whatsoever in connection with
this Agreement; provided that this
Section 9.6 shall not apply to loss of use, revenue, profit or special,
indirect, incidental or consequential damages that are components of judgment
awards against a member of the Buyer Indemnitees or the Seller Indemnitees, as
the case may be, in actions by third parties to the extent any such judgment
award is subject to indemnification pursuant to Section 9.1 or
Section 9.3, respectively.


 


ARTICLE 10 - TERMINATION


 


10.1      Buyer may at
any time, by written notice to Seller, without prejudice to any other rights or
remedies provided under this Agreement, terminate this Agreement in any one of
the following circumstances:


 


10.1.1      if Seller has
been declared bankrupt, makes an assignment for the benefit of creditors, or is
in receivership; or


 


10.1.2      if Seller
materially fails to deliver the systems or perform the services reasonably
within the times specified herein or any extensions thereof and Seller has not
remedied such failure to perform within a reasonable time thereafter following
receipt of written notice thereof from Buyer.


 


10.2      If this
Agreement is terminated pursuant to this Article, Seller shall have no further
obligations.


 


ARTICLE 11 - ASSIGNMENT


 


11.1      Neither
party will convey, assign or otherwise transfer any of its rights or
obligations under this Agreement without the express written consent of the
other party, except that (i) Buyer may assign all or a portion of its
rights and obligations under this Agreement to a purchaser of all or
substantially all of the assets of the business that utilizes such rights, or
to Parent or any direct or indirect subsidiary of Parent (for so long as such
subsidiary remains a direct or indirect subsidiary of Parent), and
(ii) Seller may assign all or a portion of its rights and obligations
under this Agreement to a purchaser of all or substantially all of the assets
of the Seller Laser Projector Business, provided that, such party agrees in writing
to assume all of Buyer’s or Seller’s obligations, as applicable, under this
Agreement, it being understood that, in the event of an assignment of a portion
of its rights to a purchaser of assets in accordance with clauses (i) and
(ii), the assigning party shall not retain the same rights that are assigned to
such purchaser or assign the same rights to any other purchaser; provided, however, no
assignment of only a portion of Buyer’s rights to a purchaser of assets in
accordance with clause (i) may be made to a purchaser that is a competitor
of Seller. Any conveyance, assignment or transfer requiring the express written
consent of another party to this Agreement which is made without such consent
shall be void ab  initio.
No assignment of this Agreement shall relieve the assigning party of its
obligations hereunder, and all rights and obligations of each party hereunder
shall survive any change of control of such party.


 


ARTICLE 12 - NOTICES


 


12.1      All notices,
requests, claims, demands and other communications required or permitted to be
given under this Agreement will be in writing and will be delivered by hand or
telecopied, e-mailed or sent, postage prepaid, by registered, certified or
express mail or reputable overnight courier service and will be deemed given
when so delivered by hand or telecopied, when e-mail confirmation is received
if delivered by e-mail, or three business days after being so mailed (one
business day in the case of express mail or overnight courier service). All
such notices, requests, claims, demands and other


 


11

















 


communications
will be addressed as set forth below, or pursuant to such other instructions as
may be designated in writing by the party to receive such notice in accordance
with this Section 12.1:


 


	
   

  	
   

  	
  (a)

  	
  If to Parent
  or Buyer:

  
	
   

  	
   

  	
   

  	
  Rockwell
  Collins, Inc.

  
	
   

  	
   

  	
   

  	
  400 Collins
  Road N.E.

  
	
   

  	
   

  	
   

  	
  Cedar
  Rapids, Iowa 52498

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Attention:

  	
  Gary R.
  Chadick, Esq.

  
	
   

  	
   

  	
   

  	
   

  	
  Senior Vice
  President,

  
	
   

  	
   

  	
   

  	
   

  	
  General
  Counsel and

  
	
   

  	
   

  	
   

  	
   

  	
  Secretary

  
	
   

  	
   

  	
   

  	
  Telecopy:

  	
  (319) 295-3599

  
	
   

  	
   

  	
   

  	
  E-mail:

  	
  grchadic@rockwellcollins.com

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  and to:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Rockwell
  Collins Simulation &

  
	
   

  	
   

  	
   

  	
  Training
  Solutions, LLC

  
	
   

  	
   

  	
   

  	
  22626 Sally
  Ride Drive

  
	
   

  	
   

  	
   

  	
  Sterling,
  Virginia 20164

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Attention:

  	
  Tony Syme

  
	
   

  	
   

  	
   

  	
  Telecopy:

  	
  (703) 234-2103

  
	
   

  	
   

  	
   

  	
  E-mail:

  	
  jasyme@rockwellcollins.com

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  with a copy
  to:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Chadbourne &
  Parke LLP

  
	
   

  	
   

  	
   

  	
  30
  Rockefeller Plaza

  
	
   

  	
   

  	
   

  	
  New York,
  New York 10112

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Attention:

  	
  Peter R.
  Kolyer, Esq.

  
	
   

  	
   

  	
   

  	
  Telecopy:

  	
  (212) 541-5369

  
	
   

  	
   

  	
   

  	
  E-mail:

  	
  pkolyer@chadbourne.com

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)

  	
  If to
  Seller:

  	
   

  
	
   

  	
   

  	
   

  	
  Evans &
  Sutherland Computer Corporation

  
	
   

  	
   

  	
   

  	
  600 Komas
  Drive

  
	
   

  	
   

  	
   

  	
  Salt Lake
  City, Utah 84108

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Attention:

  	
  David
  Bateman

  
	
   

  	
   

  	
   

  	
  Telecopy:

  	
  (801) 588-4511

  
	
   

  	
   

  	
   

  	
  E-mail:

  	
  dbateman@es.com

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  with a copy
  to:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Skadden,
  Arps, Slate, Meagher & Flom LLP

  
	
   

  	
   

  	
   

  	
  525
  University Avenue, Suite 1100

  
	
   

  	
   

  	
   

  	
  Palo Alto,
  California 94301

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Attention:

  	
  Marc R.
  Packer

  
	
   

  	
   

  	
   

  	
  Telecopy:

  	
  (650) 470-4570

  
	
   

  	
   

  	
   

  	
  Email:

  	
  mpacker@skadden.com

  



 


12

















 


ARTICLE 13 - GOVERNING
LAW; CONSENT TO JURISDICTION


 


13.1      This
Agreement will be governed by and construed in accordance with the internal
laws of the State of Delaware applicable to contracts made and to be performed
entirely within such State, without regard to the conflicts of law principles
of such State.


 


13.2      Subject to
Section 15.15 of the Asset Purchase Agreement, each of Buyer and Seller
irrevocably submits to the exclusive jurisdiction of (i) the Court of
Chancery in and for the State of Delaware and the Superior Court in and for the
State of Delaware and (ii) the United States District Court for the
District of Delaware for the purposes of any Action arising out of this
Agreement, any provision hereof or the breach, performance, enforcement,
validity or invalidity hereof (and agrees not to commence any Action relating
thereto except in such courts). Each of Buyer and Seller further agrees that
service of any process, summons, notice or document hand delivered or sent by
U.S. first class mail to such party’s respective address set forth in
Section 12.1 shall be effective service of process for any Action in
Delaware with respect to any matters to which it has submitted to jurisdiction
as set forth in the immediately preceding sentence. Each of Buyer and Seller
irrevocably and unconditionally waives any objection to the laying of venue of
any Action arising out of this Agreement, any provision hereof or the breach,
performance, enforcement, validity or invalidity hereof in (i) the Court of
Chancery in and for the State of Delaware and the Superior Court in and for the
State of Delaware or (ii) the United States District Court for the
District of Delaware, and hereby further irrevocably and unconditionally waives
and agrees not to plead or claim in any such court that any such Action brought
in any such court has been brought in an inconvenient forum. Notwithstanding
the foregoing, each party agrees that a final judgment in any action or
proceeding so brought shall be conclusive and may be enforced by suit on the
judgment in any jurisdiction or in any other manner provided in Law or in
equity.


 


ARTICLE 14 - INVALID
PROVISIONS


 


14.1      If any of
the provisions of this Agreement shall contravene or be invalid, such
contravention or invalidity shall not invalidate the whole Agreement, but the
Agreement shall be construed as if not containing the particular provision or
provisions held to be invalid, and the rights and obligations of the Parties
shall be construed and enforced accordingly.


 


ARTICLE 15 - SOFTWARE
LICENSE


 


15.1      All software
provided under this Agreement requires a license agreement between Buyer and
Seller as part of this Agreement. Buyer hereby agrees and acknowledges to such
license agreement which shall be an attachment to this Agreement.


 


ARTICLE 16 -
INTERPRETATION


 


16.1      The parties
have participated jointly in the negotiation and drafting of this Agreement. In
the event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any of the provisions of this Agreement. Any
reference to any Federal, state, local, or foreign Law shall be deemed also to
refer to all rules and regulations promulgated thereunder, unless the
context requires otherwise. For the purposes of this Agreement, (i) words
in the singular shall be held to include the plural and vice
versa and words of one gender shall be
held to include the other gender as the context requires, (ii) the terms “hereof”,
“herein”, and “herewith” and words of similar import shall, unless otherwise
stated, be construed to refer to this Agreement as a whole and not to any
particular provision of this Agreement, (iii) the word


 


13

















 


“including”
and words of similar import when used in this Agreement shall mean “including,
without limitation” and (iv) the word “or” shall not be exclusive.


 


ARTICLE 17 - GUARANTY


 


17.1      Parent
hereby guarantees all of Buyer’s obligations hereunder.


 


ARTICLE 18 -
MISCELLANEOUS


 


18.1      This
Agreement, and documents referenced herein, contains the entire agreement
between Buyer and Seller.


 


18.2      This
Agreement may not be amended, modified or supplemented except by a written
agreement executed by Buyer and Seller.


 


IN WITNESS WHEREOF, the authorized
representatives of the Parties hereto have executed this Agreement on the date
first set forth above.


 


	
  ROCKWELL
  COLLINS, INC.

  	
   

  	
  ROCKWELL
  COLLINS SIMULATION &

  TRAINING SOLUTIONS LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Kent L.
  Statler/ Senior Vice President and 

  General Manager, Rockwell Collins Services

  	
   

  	
  J. Anthony
  Syme / President

  
	
  Name / Title

  	
   

  	
  Name / Title

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Kent L.
  Statler

  	
   

  	
  /s/ J.
  Anthony Syme

  
	
  Signature

  	
   

  	
  Signature

  
	
   

  	
   

  	
   

  
	
  May 26, 2006

  	
   

  	
  May 26, 2006

  
	
  Date

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EVANS &
  SUTHERLAND

  	
   

  	
   

  
	
  COMPUTER
  CORPORATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  James R.
  Oyler / President and

  Chief Executive Officer

  	
   

  	
   

  
	
  Name / Title

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ James R.
  Oyler

  	
   

  	
   

  
	
  Signature

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  May 26, 2006

  	
   

  	
   

  
	
  Date

  	
   

  	
   

  



 


14

















 


Attachment 1


 


Fixed-Based Laser Projection System Specifications


 


15

















 


Attachment 2


 


Motion-Based Laser Projection System Specifications


 


16