8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of report (Date of earliest event reported):  May 26, 2006

EVANS & SUTHERLAND COMPUTER CORPORATION

(Exact name of registrant as specified in its charter)

Utah	001-14677	87-0278175
(State or other jurisdiction of	(Commission File Number)	(IRS Employer Identification No.)
incorporation)

770 Komas Drive, Salt Lake City, Utah	84108
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (801) 588-1000

Former address: 600 Komas Drive, Salt Lake City, Utah 84108

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01.              Entry into a Material Definitive Agreement.

See the information presented in “Item 2.01. Completion of Acquisition or Disposition of Assets” which is incorporated herein by reference.

Item 2.01.Completion of Acquisition or Disposition of Assets.

On May 26, 2006, Evans & Sutherland Computer Corporation, a Utah corporation (the “Company”), completed the sale of substantially all of the assets and certain liabilities of its commercial and military simulation businesses and related service and support operations (collectively, the “Simulation Business”) to certain subsidiaries of Rockwell Collins, Inc., a Delaware corporation (“Rockwell Collins”), pursuant to an asset purchase agreement (the “Asset Purchase Agreement”), dated as of February 7, 2006, by and between the Company and Rockwell Collins.  In connection with the completion of the sale of the Simulation Business, on May 26, 2006 the Company entered into a laser projection systems agreement (the “Laser Projection Systems Agreement”) with Rockwell Collins and Rockwell Collins Simulation & Training Solutions LLC, pursuant to which the Company has agreed to provide, and grant exclusive and non-exclusive intellectual property licenses to use and sell, laser projection systems in connection with the Simulation Business and certain related businesses of Rockwell Collins.  The transaction was approved by the Company’s shareholders at a combined annual and special meeting of shareholders held on May 25, 2006.

The aggregate consideration was $71.5 million in cash, consisting of $66.5 million under the Asset Purchase Agreement for the assets primarily related to the Simulation Business, subject to a potential post-closing adjustment, and $5.0 million under the Laser Projection Systems Agreement, subject to the Company achieving certain milestones.  At the closing of the sale of the Simulation Business on May 26, 2006, (i) the Company received $59.5 million in cash under the terms of the Asset Purchase Agreement, and (ii) an additional $10.0 million in cash (consisting of $7.0 million under the Asset Purchase Agreement and $3.0 million under the Laser Projection Systems Agreement) was deposited in escrow pursuant to an escrow agreement (the “Escrow Agreement”), dated as of May 26, 2006, by and between the Company, Rockwell Collins and U.S. Bank National Association, as escrow agent.  Another $2.0 million in cash will be paid under the Laser Projection Systems Agreement upon completion of manufacturing acceptance testing of the Company’s fixed-based laser projection system.  Under the terms of the Escrow Agreement, the deposited amount will be held in escrow to secure (i) any post-closing reduction in the purchase price under the Asset Purchase Agreement, (ii) the Company’s indemnification obligations under the Asset Purchase Agreement and (iii) the Company’s obligations (not to exceed $3.0 million of the escrowed funds) to meet specified milestones under the Laser Projection Systems Agreement.  The escrowed funds will be released in installments as set forth in the Escrow Agreement.

The descriptions of the Laser Projection Systems Agreement and the Escrow Agreement do not purport to be complete and are qualified in their entirety by reference

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to the complete text of such agreements.  The Laser Projection Systems Agreement and the Escrow Agreement are attached hereto as Exhibits 10.1 and 10.2, respectively.

In connection with the sale of the Simulation Business, on May 26, 2006 the Company issued a notice to redeem and pay its 6% Convertible Subordinated Debentures due 2012 (the “6% Debentures”) on June 26, 2006 (the “Redemption Date”) and deposited with the indenture trustee the amount of $18,360,287.50, which amount, on the Redemption Date, will be sufficient to pay the $18,015,000 principal amount outstanding of the 6% Debentures, together with the $345,287.50 in accrued and unpaid interest on the 6% Debentures through and including the Redemption Date.

Immediately following completion of the transaction with Rockwell Collins, the Company changed its principal executive offices to 770 Komas Drive, Salt Lake City, Utah 84108.

On May 30, 2006, the Company issued a press release to announce the completion of the sale of the Simulation Business, a copy of which is attached hereto as Exhibit 99.1 and incorporated herein by reference.

Item 2.04.              Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement.

Pursuant to the Company’s indenture relating to its 6% Debentures, a conveyance or transfer of the Company’s assets substantially as an entirety to any person is prohibited unless such person expressly assumes all of the obligations and liabilities of such indenture.  Accordingly, pursuant to the Asset Purchase Agreement, the Company agreed to satisfy and discharge its obligations under the 6% Debentures and the indenture.  See the information presented in the fourth paragraph of “Item 2.01. Completion of Acquisition or Disposition of Assets” which is incorporated herein by reference.

Item 5.02.              Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.

(b)  On May 30, 2006, Wolf-Dieter Hass resigned as a director of the Company.  Mr. Hass’s resignation was not as a result of any disagreements with the Company.  A copy of Mr. Hass’s letter of resignation is attached hereto as Exhibit 17.1 and incorporated herein by reference.

Item 9.01.              Financial Statements and Exhibits.

(b)           Pro forma financial information.  The pro forma financial statements required to be filed under this Item 9.01(b) will be filed by an amendment to this Form 8-K no later than 71 calendar days after the date that this Form 8-K must be filed.

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(d)           Exhibits.

10.1         Laser Projection Systems Agreement, dated as of May 26, 2006, by and among Evans & Sutherland Computer Corporation, Rockwell Collins, Inc. and Rockwell Collins Simulation & Training Solutions LLC.

10.2         Escrow Agreement, dated as of May 26, 2006, by and among Evans & Sutherland Computer Corporation, Rockwell Collins, Inc. and U.S. Bank National Association.

17.1         Letter of Resignation, dated May 30, 2006, from Wolf-Dieter Hass to Evans & Sutherland Computer Corporation.

99.1         Press Release, dated May 30, 2006.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	EVANS & SUTHERLAND COMPUTER CORPORATION
	By:	/s/ James R. Oyler
		Name: James R. Oyler
		Title: President and Chief Executive Officer
Date: June 1, 2006

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EXHIBIT INDEX

EXHIBIT NO.	DESCRIPTION
10.1	Laser Projection Systems Agreement, dated as of May 26, 2006, by and among Evans & Sutherland Computer Corporation, Rockwell Collins, Inc. and Rockwell Collins Simulation & Training Solutions LLC.
10.2	Escrow Agreement, dated as of May 26, 2006, by and among Evans & Sutherland Computer Corporation, Rockwell Collins, Inc. and U.S. Bank National Association.
17.1	Letter of Resignation, dated May 30, 2006, from Wolf-Dieter Hass to Evans & Sutherland Computer Corporation.
99.1	Press Release, dated May 30, 2006.

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EX-10.1

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

1.1As 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).

1.2In 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.

1.3The 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

2.1Seller 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”).

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

2.1.2Seller 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.

2.2Seller 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”).

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2.2.1Seller 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.

2.2.2Seller 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.

2.3Seller 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.

2.4Seller 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.

2.5Seller 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.

2.6Seller 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

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

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

3.3Seller 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

4.1Seller 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.

4.2Buyer 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.

4.3After 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.

4.4Buyer 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

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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.

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

4.6Seller 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

5.1If 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.

5.2If 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

6.1Buyer 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.

6.2Buyer 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.

6.3After 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.

6.4All 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

7.1For 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.

7.2.1Effective 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.

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7.2.2Effective 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.

7.2.3Effective 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).

7.2.4All 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.

7.2.5Following 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.

7.2.6Seller 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.

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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.

7.3Enforcement/Other Restrictions.

7.3.1Enforcement 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.

7.3.2Enforcement 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.

7.3.3Against 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.

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7.3.4As 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.

7.4Exclusivity. 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:

7.4.1Seller 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.

7.4.2Seller 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.

7.4.3Seller 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.

7.4.4Buyer 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.

7.4.5Buyer 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.

7.5Documentation and Laser Technology Escrow.

7.5.1Seller 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.

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7.5.2At 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.

7.5.3The 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.

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

7.6.1In 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).

7.6.2In 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.

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

8.1The 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.

8.2The 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

9.1Seller 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.

9.2Should 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.

9.3Except 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.

9.4The 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.

9.5Seller’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.

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9.6Without 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

10.1Buyer 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:

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

10.1.2if 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.

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

ARTICLE 11 - ASSIGNMENT

11.1Neither 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

12.1All 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

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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

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ARTICLE 13 - GOVERNING LAW; CONSENT TO JURISDICTION

13.1This 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.

13.2Subject 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

14.1If 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

15.1All 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

16.1The 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

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“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

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

ARTICLE 18 - MISCELLANEOUS

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

18.2This 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

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Attachment 1

Fixed-Based Laser Projection System Specifications

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Attachment 2

Motion-Based Laser Projection System Specifications

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EX-10.2

Exhibit 10.2

ESCROW AGREEMENT

ESCROW AGREEMENT (this “Agreement”), dated as of May 26, 2006, by and among (i) ROCKWELL COLLINS, INC., a Delaware corporation (“Buyer”), (ii) EVANS & SUTHERLAND COMPUTER CORPORATION, a Utah corporation (“Seller”), and (iii) U.S. BANK NATIONAL ASSOCIATION, as escrow agent (the “Escrow Agent” and, together with Buyer and Seller, the “Parties” and each a “Party”).  Capitalized terms used but not defined herein shall have the meanings given to such terms in the Asset Purchase Agreement, dated as of February 7, 2006, by and between Buyer and Seller (the “Asset Purchase Agreement”).

W I T N E S S E T H

WHEREAS, Buyer and Seller have entered into the Asset Purchase Agreement providing for, among other things, the purchase by Buyer of the Assets and the assumption by Buyer of the Assumed Liabilities, and setting forth certain covenants and conditions in respect thereof;

WHEREAS, Section 4.1(a) of the Asset Purchase Agreement provides that Buyer is required to deposit with the Escrow Agent Seven Million dollars ($7,000,000);

WHEREAS, in connection with the Asset Purchase Agreement, Buyer, Rockwell Collins Simulation & Training Solutions, LLC, a Delaware limited liability company and indirect wholly-owned subsidiary of Buyer, and Seller have entered into the Laser Projection Systems Agreement, of even date therewith;

WHEREAS, Section 1.2 of the Laser Projection Systems Agreement provides that Buyer is required to deposit with the Escrow Agent Three Million dollars ($3,000,000); and

WHEREAS, Buyer and Seller desire that the Escrow Agent hold and dispose of such escrowed monies, and the Escrow Agent is willing to do so, on the terms and conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants hereinafter set forth, the Parties agree as follows:

1.Appointment.  Buyer and Seller hereby appoint the Escrow Agent as their escrow agent for the purposes set forth herein, and the Escrow Agent hereby accepts such appointment solely under the terms and conditions set forth herein.

2.Establishment of Escrow Fund.

(a)Pursuant to Section 4.1(a) of the Asset Purchase Agreement and Section 1.2 of the Laser Projection Systems Agreement simultaneously with the execution and delivery of this Agreement, Buyer is depositing in escrow with the Escrow Agent cash in the amount of Ten Million dollars ($10,000,000) (the “Escrow Amount”) to be held in escrow pursuant to the

terms of this Agreement to satisfy any obligations of the Seller pursuant to Section 4.1(c)(i) and Article XIII of the Asset Purchase Agreement and Sections 5.1 and 5.2 of the Laser Projection Systems Agreement.  The Escrow Amount and any and all interest and earnings thereon shall be collectively referred to as the “Escrow Fund”.  The Escrow Agent shall hold and administer the Escrow Fund solely in accordance with the terms and conditions set forth in this Agreement.

(b)No part of the Escrow Fund may be withdrawn or distributed from the escrow established hereunder, except as expressly provided in Section 4 of this Agreement.

3.Reports on Escrow Fund.

(a)The Escrow Agent shall provide to Buyer and Seller monthly statements identifying transactions, transfers, payments and holdings of the Escrow Fund and each such statement shall be deemed to be correct and final upon receipt thereof by Buyer and Seller unless the Escrow Agent is notified in writing to the contrary within thirty (30) calendar days of the date of such statement.

(b)Buyer and Seller acknowledge that regulations of the Comptroller of the Currency grant Buyer and Seller the right to receive brokerage confirmations of security transactions as they occur.  Buyer and Seller specifically waive such notification to the extent permitted by law and acknowledge that Buyer and Seller will receive periodic cash transaction statements, which will detail all investment transactions.

4.Distributions from the Escrow Fund.  The Escrow Agent is directed to hold and distribute the Escrow Fund in the following manner:

(a)Joint Instructions.

(i)Upon the Escrow Agent’s receipt of written instructions to the Escrow Agent signed by both Buyer and Seller (a “Joint Instruction”) directing the Escrow Agent to disburse all or any part of the Escrow Fund, including in resolution of a Disputed Claim (which Joint Instruction shall set forth the amount to be disbursed (including whether such disbursement shall be accompanied by any interest and earnings thereon), the applicable section of the Asset Purchase Agreement or Laser Projection Systems Agreement for which such amount is being disbursed (including the specific amount allocated to disbursements made under the Asset Purchase Agreement or Laser Projection Systems Agreement, as the case may be), the payee thereof, the date requested for such disbursement and sufficient details regarding the account to which such disbursement is to be made), the Escrow Agent will release such amount from the Escrow Fund strictly in accordance with such written instructions.  Buyer and Seller each agree to prepare and sign a Joint Instruction that directs the Escrow Agent to distribute cash held in the Escrow Fund pursuant to and in accordance with (i) Section 4.1(c)(i) of the Asset Purchase Agreement, if any payment pursuant to Section 4.1(c)(i) of the Asset Purchase Agreement is determined to be due and payable following determination of the Final Closing Net Assets Statement, (ii) Section 5.1 of the Laser Projection Systems Agreement, if any payments pursuant to Section 5.1 of the Laser Projection Systems Agreement are determined to be due and payable; (iii) Section 5.2 of the Laser Projection

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Systems Agreement, if any payment pursuant to Section 5.2 of the Laser Projection Systems Agreement is determined to be due and payable; (iv) pursuant to paragraph 4(e)(i)(A)(1), if any payment is determined to be due and payable; and (v) pursuant to paragraph 4(e)(i)(B), if any payment is determined to be due and payable.  To the extent that any amount is released from the Escrow Fund to Buyer pursuant to Section 4.1(c)(i) of the Asset Purchase Agreement and Sections 5.1 and 5.2 of the Laser Projection Systems Agreements, such amount shall be accompanied by interest and earnings thereon.

(ii)No Joint Instruction shall be required prior to any releases by the Escrow Agent pursuant to paragraphs 4(e)(i)(A)(2), 4(e)(i)(C) and 4(e)(i)(D) of this Agreement.  Buyer and Seller agree that a copy of this Agreement provided to the Escrow Agent shall constitute instructions from the Buyer and the Seller to the Escrow Agent to cause funds to be released in accordance with paragraphs 4(e)(ii) and 4(e)(iii)in the amounts and on the dates specified below, pursuant to paragraphs 4(e)(i)(A)(2), 4(e)(i)(C) and 4(e)(i)(D) of this Agreement.

(b)Undisputed Claim.  Upon any Claim becoming an Undisputed Claim, the Escrow Agent will release to Buyer cash held in the Escrow Fund in the amount called for in the corresponding Claim Notice, and such amount shall be accompanied by interest and earnings thereon; provided that if the amount of such Undisputed Claim exceeds the amount of cash held in the Escrow Fund, the Escrow Agent shall release to Buyer all of the cash held in the Escrow Fund.

(c)Court Order or Final Arbitration Order.  Upon the Escrow Agent’s receipt of a certified copy of a purportedly final, non-appealable order of a court of competent jurisdiction or a final arbitration award issued by a arbitration tribunal in accordance with the dispute resolution provisions under Section 15.15 of the Asset Purchase Agreement ordering the Escrow Agent to disburse all or part of the Escrow Fund, the Escrow Agent will make such disbursement from the Escrow Fund in accordance with such court order or final arbitration order.  The Escrow Agent shall be entitled to rely upon the certified copy of such order or award without being required to determine the authenticity or the correctness of any fact stated therein or the propriety or validity of the service thereof.  The Escrow Agent may act in reliance upon any instrument or signature believed by it to be genuine and may assume that any person purporting to give documents in connection with the provision hereof has been duly authorized to do so.

(d)Limitations on Distributions.

(i)All APA Indemnification Claims shall be subject to the limitations set forth in Section 13.4 of the Asset Purchase Agreement.

(ii)Under no circumstances shall (A) the aggregate amount of all distributions by the Escrow Agent to Buyer pursuant to Laser Projector Claims exceed Three Million dollars ($3,000,000) and all interest and earnings thereon or (B) the aggregate amount of all distributions by the Escrow Agent to Buyer pursuant to this

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Agreement exceed Ten Million dollars ($10,000,000) and all interest and earnings thereon.

(e)Scheduled Escrow Releases.

(i)The Escrow Fund is scheduled to be released to Seller within two business days of four release dates (individually, a “Scheduled Release Date” and, collectively, the “Scheduled Release Dates”):

(A)(1) upon demonstration of the Motion-Based Prototype Laser Projection System (as defined in the Laser Projection Systems Agreement) in accordance with Section 4.3 of the Laser Projection Systems Agreement and upon the Escrow Agent receiving a Joint Instruction, or, (2) if later, July 1, 2007 (the “Prototype Release Date”), One Million dollars ($1,000,000) (the “Prototype Release Amount”) is scheduled to be released to Seller by the Escrow Agent;

(B)upon completion of the manufacturing acceptance testing of the Motion-Based First Article Laser Projection System (as defined in the Laser Projection Systems Agreement) in accordance with Section 4.4 of the Laser Projection Systems Agreement (the “First Article Inspection Release Date”), and upon the Escrow Agent receiving a Joint Instruction, Two Million dollars ($2,000,000) (the “ First Article Inspection Release Amount”) is scheduled to be released to Seller by the Escrow Agent;

(C)on December 31, 2006 (the “December 31, 2006 Release Date”), Five Million dollars ($5,000,000) (the “December 31, 2006 Release Amount”) is scheduled to be released to Seller by the Escrow Agent; and

(D)on July 1, 2007 (the “July 1, 2007 Release Date”), Two Million dollars ($2,000,000) (the “July 1, 2007 Release Amount”) is scheduled to be released to Seller by the Escrow Agent;

the Prototype Release Amount, First Article Inspection Amount, December 31, 2006 Release Amount and July 1, 2007 Release Amount are referred to herein individually as a “Scheduled Release Amount” and collectively as the “Scheduled Release Amounts.”

(ii)Within two (2) business days after each Scheduled Release Date, the Escrow Agent shall release to Seller an amount, if any, equal to the Escrow Amount, less the sum of (A) any Post Closing Adjustment or Claims that have been paid to the Buyer under this Agreement prior to such Scheduled Release Date, (B) any Post Closing Adjustment or Claims pending as of such Scheduled Release Date, and (C) the Scheduled Release Amounts due on the Scheduled Release Dates, if any, that have not occurred as of such Scheduled Release Date, and all interest and earnings thereon; provided, however, that no amount shall be released to Seller hereunder until after the earlier of (x) Buyer’s delivery of the Closing Net Assets Statement pursuant to Section 4.1(b) of the Asset Purchase Agreement or (y) the deadline for such delivery thereunder.  Buyer and Seller shall provide the Escrow Agent joint notice of the earlier to occur of (i) the

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delivery of the Closing Net Assets Statement pursuant to Section 4.1(b) of the Asset Purchase Agreement or (ii) the expiration of the deadline for delivery of the Closing Net Assets Statement in accordance with the terms and conditions of the Asset Purchase Agreement.

(iii)Within two (2) business days after the date on which any pending Post Closing Adjustment (if payable by Seller) or Claim is resolved (each a “Resolution Date”), and upon the Escrow Agent receiving Joint Instruction, the Escrow Agent shall release (A) to Buyer the amount payable to Buyer in connection with such Post Closing Adjustment or Claim and (B) to Seller an amount, if any, equal to the Escrow Amount and all interest and earnings thereon, less the sum of (x) any Post Closing Adjustment or Claims that have been paid to the Buyer under this Agreement prior to such Resolution Date, (y) any Post Closing Adjustment or Claims pending as of such Resolution Date, and (z) the Scheduled Release Amounts due on the Scheduled Release Dates, if any, that have not occurred as of such Resolution Date.

(iv)The Escrow Fund shall be deemed closed for all purposes on the Final Release Date.

(f)Definitions.  For purposes hereof, the terms set forth below shall have the following meanings:

“Claim” shall mean (i) any claim for indemnification pursuant to Section 13.1 of the Asset Purchase Agreement (an “APA Indemnification Claim”), or (ii) any claim pursuant to Sections 5.1 or 5.2 of the Laser Projection Systems Agreement (a “Laser Projector Claim”), for which notice (each such notice, a “Claims Notice”) has been delivered by Buyer to Seller in accordance with Section 13.3(a) or 13.3(d) of the Asset Purchase Agreement or Sections 5.1 or 5.2 of the Laser Projection Systems Agreement, as the case may be.  To be valid, each Claims Notice must clearly specify whether claims asserted therein are APA Indemnification Claims or Laser Projector Claims.  Buyer shall promptly provide notice of any Claim to the Escrow Agent.  For purposes of this Agreement, a Claim shall be deemed “pending” if Buyer has provided notice of such Claim to Escrow Agent and such Claim has not been paid from the Escrow Fund or otherwise resolved by Joint Instruction, court order or arbitration order.

“Disputed Claim” shall mean any Claim which Seller shall have disputed in an Objection delivered to the Escrow Agent, with a copy to Buyer, within thirty (30) calendar days from receipt by Seller of the corresponding Claims Notice.  If no Objection is delivered to the Escrow Agent in such 30-day period, then such Claim shall be deemed an “Undisputed Claim.”  If Seller withdraws, in writing delivered to Buyer, its Objection to a Disputed Claim, such Claim shall be deemed an Undisputed Claim upon delivery by Seller to the Escrow Agent of a copy of such written withdrawal.

“Final Release Date” means the date upon which all amounts held in the Escrow Fund are released in accordance with the provisions of this Agreement.

“Objection” shall mean a written objection to a Claim stating in reasonable

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detail the basis for such objection.

“Post Closing Adjustment” shall mean, upon determination of the Final Closing Net Assets Statement in accordance with Section 4.1(b) of the Asset Purchase Agreement, any reduction in the Purchase Price in accordance with Section 4.1(c)(i) of the Asset Purchase Agreement is determined to be due and payable. For purposes of this Agreement, a Post Closing Adjustment shall be deemed “pending” if Buyer has delivered a Closing Net Assets Statement in accordance with Section 4.1(b) of the Asset Purchase Agreement and the amount of Net Assets on the Closing Net Assets Statement is less than the Benchmark Amount and such Post Closing Adjustment has not been paid from the Escrow Fund or otherwise resolved by Joint Instruction, court order or arbitration order (it being understood that the amount of any such pending Post Closing Adjustment shall be equal to the amount of such deficit).

5.Manner of Distributions.  All disbursements hereunder to be made in cash shall be made by the Escrow Agent by wire transfer of immediately available funds to such account(s) as may be designated in writing to the Escrow Agent by the Party entitled to such payment. All interest and earnings, if any, attributable to the Escrow Fund or any other amount held in the Escrow Account pursuant to this Agreement shall be calculated on a pro rata basis from the initial deposit of the funds into the Escrow Fund to the date of such disbursement.

6.Escrow Agent; Investment of Escrow Fund.

(a)The Escrow Agent shall deal with the Escrow Fund only in conformity with the terms of this Agreement.  In the event the Escrow Agent shall have received written notice of a dispute between Buyer and Seller, the Escrow Agent shall have no duty to determine whether a dispute exists between such Parties or is a bona fide dispute.  The Escrow Agent shall have no duty to inquire as to the provisions of any agreement other than this Agreement.  The Escrow Agent may rely upon and shall not be liable for acting or refraining from acting upon any written notice, instruction or request furnished to it hereunder and believed in good faith by it to be genuine and to have been signed or presented by the proper Party or Parties.  The Escrow Agent may execute any of its powers and perform any of its duties hereunder directly or through agents or attorneys appointed with due care and may consult with counsel, accountants and other skilled persons to be selected and retained by it.  In the event that the Escrow Agent shall be uncertain as to its duties or rights hereunder or shall receive instructions, claims or demands from any Party which, in its opinion, conflict with any of the provisions of this Agreement, it shall be entitled to refrain from taking any action and its sole obligation shall be to keep safely all property held in escrow until it shall be directed otherwise in writing by all of the other Parties or by a final non-appealable order or judgment of a court of competent jurisdiction.

(b)The Escrow Agent shall invest and reinvest the Escrow Fund in any of the following investments: (i) securities with maturities not later than ninety (90) days from the date of acquisition of such securities, issued or directly and fully guaranteed or insured by the United States Government or any agency or instrumentality thereof; (ii) commercial paper with maturities not later than ninety (90) days from the date of acquisition of such commercial paper and rated A1/P1 or better; (iii) money market investments consisting solely of the investments

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identified in item (i) or (ii) above; (iv) certificates of deposit with maturities not later than ninety (90) days from the date of acquisition of such certificates of deposit and overnight bank deposits with any domestic commercial bank having capital and surplus in excess of $5,000,000,000; or (v) institutional money market funds as approved in writing in advance by Buyer and Seller, including those offered by the Escrow Agent or any affiliate of the Escrow Agent, in any one or more of the aforementioned types of instruments.  The Escrow Agent may make investments permitted by paragraph 6(b) through or from its own or its parent’s or affiliate’s bond department or trust investment department.  Any interest received by the Escrow Agent shall be reinvested as provided in this Section 6(b) and remain in the Escrow Fund until disbursed in accordance with the terms hereof.  The Escrow Agent shall not be responsible or liable for any loss suffered in connection with any investment of the funds held pursuant to this Agreement made by it in accordance with this paragraph 6(b) or realized as a result of the sale of any such investment.

(c)All fees and expenses associated with this Section 6 shall be paid to the Escrow Agent out of the Escrow Fund.  Prior to any investment of the Escrow Fund, Buyer and Seller shall provide the Escrow Agent with written certification of the respective taxpayer identification numbers or appropriate foreign taxpayer exemptions of Buyer and Seller, respectively. Failure to provide such information may incur a penalty and cause the Escrow Agent to be required to withhold tax on any interest payable hereunder. Any payments of income shall be subject to applicable United States withholding regulations then in force.

(d)To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account.  For a non-individual person such as a business entity, a charity, a trust or other legal entity, the Escrow Agent will require documentation to verify its formation and existence as a legal entity.  The Escrow Agent may also request identification, licenses and authorization documents from individuals claiming authority to represent the entity.

7.No Creditor Rights.  Buyer and Seller shall be entitled to payments from the Escrow Funds solely in accordance with the terms hereof.  No creditor of Buyer or Seller will have any rights in or to the Escrow Funds.  Accordingly, in order to effectuate the parties’ intentions under this Agreement, Buyer hereby grants to Seller and Seller hereby grants to Buyer, a security interest in all of the grantor’s rights, title and interest in and to the Escrow Funds and any proceeds (as such term is defined in Section 9-102 of the Uniform Commercial Code) of such funds so long as the Escrow Funds and/or any such proceeds remain subject to the terms of this Agreement.  In addition, Buyer and Seller hereby appoint the Escrow Agent as Buyer’s and Seller’s agent for possession of the Escrow Funds to perfect Buyer’s and Seller’s respective security interests therein.  The Escrow Agent agrees to this appointment and acknowledges that, in connection with the security interest granted in this Paragraph 7, it is acting as bailee with respect to such Escrow Funds and/or such proceeds on behalf of Buyer and Seller.  Buyer and Seller further agree to take any and all necessary additional steps to perfect and continue perfection of the security interests granted hereunder.

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8.Succession.

(a)The Escrow Agent may (i) resign and be discharged from its duties or obligations hereunder by giving at least thirty (30) calendar days advance notice in writing of such resignation to the other Parties specifying a date when such resignation shall take effect or (ii) be removed and be discharged from its duties or obligations hereunder by the delivery of Joint Instructions to the Escrow Agent specifying a date when such removal shall take place.  Any corporation or association into which the Escrow Agent may be merged or converted or with which it may be consolidated, or any corporation or association to which all or substantially all the escrow business of the Escrow Agent’s corporate trust line of business may be transferred, shall be the Escrow Agent under this Agreement without further action, except where an instrument of transfer or assignment is required by law to effect such succession, anything herein to the contrary notwithstanding.

(b)In case the office of the Escrow Agent shall become vacant for any reason, Buyer and Seller shall appoint a bank or trust company with an office in Chicago, Illinois, having a net worth (as reflected in its latest publicly available certified financial statements) in excess of $500,000,000 as successor Escrow Agent hereunder by an instrument or instruments in writing executed by Buyer and Seller and delivered to such successor Escrow Agent, and give notice of such to the retiring Escrow Agent, whereupon such successor Escrow Agent shall succeed to all rights and obligations of the retiring Escrow Agent as if this Agreement were originally executed by such successor Escrow Agent, and the retiring Escrow Agent shall deliver to such successor Escrow Agent the Escrow Fund.  If no successor shall have been so appointed and have accepted appointment within thirty (30) days after the giving of such notice of resignation by the Escrow Agent in accordance with Section 8(a) above, the retiring Escrow Agent may petition any court of competent jurisdiction for the appointment of a successor or for other appropriate relief.  Upon any delivery of the Escrow Fund under this Section 8, all of the Escrow Agent’s obligations under this Agreement shall cease and terminate.  The Escrow Agent’s sole responsibility following thirty (30) calendar days after its notice of resignation given under this Section 8 shall be to safekeep the Escrow Fund.

9.Fees.

(a)The Escrow Agent shall charge fees as set forth in Schedule A hereto (the “Fees”).  One-half of the Fees and all other costs, charges and fees referred to above shall be paid to the Escrow Agent by Buyer and one-half of the Fees and all other costs, charges and fees referred to above shall be paid to the Escrow Agent by Seller.

(b)The Escrow Agent shall charge any other out-of-pocket expenses, disbursements and advances, including reasonable attorney’s fees and expenses, incurred or made by the Escrow Agent in connection with the performance, modification and termination of this Agreement, all of which shall be paid to the Escrow Agent by the Parties promptly after they become due.  One-half of such expenses shall be paid to the Escrow Agent by Buyer and one-half shall of such expenses shall be paid to the Escrow Agent by Seller.

10.Indemnity.  Buyer and Seller shall severally indemnify, defend and hold harmless the Escrow Agent and its officers, directors, employees, representatives and agents against all damages and liabilities, and all expenses, disbursements, and attorneys’ fees incurred in

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connection therewith, which it in good faith may incur or suffer in connection with or arising out of this Agreement or its acceptance of its appointment as the Escrow Agent, except for such liabilities, damages, expenses, disbursements, damages and attorneys’ fees incurred by reason of the Escrow Agent’s own bad faith, gross negligence or willful misconduct.

11.Taxes.  Notwithstanding any other provision in this Agreement to the contrary, for all tax purposes, Seller shall (a) treat itself as the owner of the Escrow Fund, (b) report all gain incurred as a result of or attributable to the disbursement, distribution or transfer of any assets that comprise the Escrow Fund pursuant to the terms of this Agreement and pay all taxes attributable thereto and (c) report all income, if any, that is earned on, or derived from, the Escrow Fund as its income in the taxable year or years in which such income may properly be included, and pay all taxes attributable thereto.

12.Representations and Warranties.  Each of the Parties individually (and only with respect to itself) hereby represents and warrants as of the date hereof that:

(a)Such Party is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has all requisite power and authority to enter into this Agreement and perform its obligations hereunder.

(b)The execution, delivery and performance by such Party of this Agreement and the consummation by such Party of the transactions contemplated hereby have been duly authorized by all necessary organizational action of the board of directors or similar governing body of such Party, and no other action on the part of such Party is necessary for the execution, delivery and performance by such Party of this Agreement and the consummation by such Party of the transactions contemplated hereby.  This Agreement has been duly executed and delivered by such Party and, assuming due authorization, execution and delivery on behalf of the other Party hereto, is a legal, valid and binding obligation of such Party, enforceable against such Party in accordance with its terms, except to the extent that enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting creditors’ rights generally and by general equity principles.

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13.Notices.  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 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 Paragraph 13:

if to Buyer, to:
	Rockwell Collins, Inc. 400 Collins Road N.E. Cedar Rapids, Iowa 52498
	Attention:			Gary R. Chadick, Esq.
				Senior Vice President,
				General Counsel and
				Secretary
	Telephone:			(319) 295-1000
	Telecopy:			(319) 295-3599
	E-mail:			grchadic@rockwellcollins.com
	with a copy to:
	Chadbourne & Parke LLP 30 Rockefeller Plaza New York, New York 10112
	Attention:		Peter R. Kolyer, Esq.
	Telephone:		(212) 408-5564
	Telecopy:		(212) 541-5369
	E-mail:		pkolyer@chadbourne.com
if to the Seller, to:
	Evans & Sutherland Computer Corporation 600 Komas Drive Salt Lake City, Utah 84108
	Attention:	David Bateman
	Telephone:	(801) 588-1674
	Telecopy:	(801) 588-4511
	E-mail:	dbateman@es.com

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	with a copy to:
	Skadden, Arps, Slate, Meagher & Flom LLP 525 University Avenue, Suite 1100 Palo Alto, California 94301
	Attention:		Marc R. Packer
	Telephone:		(650) 470-4500
	Telecopy:		(650) 470-4570
	Email:		mpacker@skadden.com
if to the Escrow Agent, to:
	U.S. Bank National Association 209 South LaSalle Street, Suite 300 Chicago, Illinois 60604
	Attention:	Grace A. Gorka
	Telephone:	(312) 325-8907
	Telecopy:	(312) 325-8905
	E-mail:	grace.gorka@usbank.com

14.Termination of this Agreement.  This Agreement shall terminate upon the Final Release Date in accordance with the provisions of this Agreement.  Upon any termination of this Agreement pursuant to this Section 14, this Agreement shall forthwith become void and of no further force or effect, and no Party shall have any liability to the other Parties or their respective affiliates, directors, officers or employees; provided nothing in this Section 14 shall relieve any Party from any liability for any breach of such Party’s covenants or agreements contained in this Agreement prior to such termination or for any breach of such Party’s representations and warranties under this Agreement prior to such termination.

15.Entire Agreement.  This Agreement (including the schedules attached hereto) constitute the entire understanding and agreement of the Parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, written or oral, between the Parties with respect to the subject matter hereof and thereof, other than in the case of Buyer and Seller which are party to a Confidentiality Agreement, the Asset Purchase Agreement and any ancillary agreements related thereto, which shall remain in full force and effect.

16.Assignability.  Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the Parties (whether by operation of law or otherwise) without the prior written consent of the other Parties, except that Buyer may assign any or all of its rights and interests hereunder to any direct or indirect wholly owned subsidiary of Buyer and except as described in Section 8 of this Agreement.  Subject to the preceding

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sentence, this Agreement shall be binding upon, inure to the benefit of and be enforceable by the Parties and their respective successors and assigns.

17.No Third-Party Beneficiaries.  Nothing in this Agreement, expressed or implied, shall confer or is intended to confer on any person other than the Parties or their respective permitted successors and assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement.

18.Amendment; Waiver.  This Agreement may be amended, modified and supplemented in any and all respects, but only by a written instrument signed by all of the Parties expressly stating that such instrument is intended to amend, modify or supplement this Agreement.  No waiver by any Party of any of the provisions hereof shall be effective unless explicitly set forth in writing and executed by the Party so waiving.  Except as provided in the preceding sentence, no action taken pursuant to this Agreement, including without limitation, any investigation by or on behalf of any Party, shall be deemed to constitute a waiver by the Party taking such action of compliance with any representations, warranties, covenants or agreements contained herein, or in any documents delivered or to be delivered pursuant to this Agreement.  The failure of any Party to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of those rights.  The waiver by any Party of a breach of any provisions of this Agreement shall not operate or be construed as a waiver of any subsequent breach.

19.Section Headings.  The section headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.

20.Severability.  Any term or provision of this Agreement that is held by a court of competent jurisdiction or other authority to be invalid, void 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.  If the final judgment of a court of competent jurisdiction or other authority declares that any term or provision hereof is invalid, void or unenforceable, the Parties agree that the court making such determination shall have the power to reduce the scope, duration, area or applicability of the term or provision, to delete specific words or phrases, or to replace any invalid, void 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.

21.Governing Law.  This Agreement shall 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.

22.Venue.  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

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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 Paragraph 13 above 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.

23.Counterparts.  This Agreement may be executed in counterparts, all of which may be delivered by facsimile transmission, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  The exchange of copies of this Agreement and of signature pages by facsimile transmission shall constitute effective execution and delivery of this Agreement as to the Parties and may be used in lieu of the original Agreement for all purposes.  Signatures of the Parties transmitted by facsimile shall be deemed to be their original signature for all purposes.

Remainder of page intentionally left blank.

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IN WITNESS WHEREOF, each of Buyer, Seller and the Escrow Agent has caused this Agreement to be executed by its authorized officer thereunto duly authorized as of the date first above written.

ESCROW AGENT:

U.S. BANK NATIONAL ASSOCIATION

By:		/s/ Grace A. Gorka
Name:						Grace A. Gorka
Title:						Vice President, Corporate Trust Services
BUYER:
ROCKWELL COLLINS, INC.
By:	/s/ Gary R. Chadick
Name:					Gary R. Chadick
Title:					Senior Vice President, General Counsel and Secretary
SELLER:
EVANS & SUTHERLAND COMPUTER CORPORATION
By:			/s/ James R. Oyler
Name:				James R. Oyler
Title:				President and Chief Executive Officer

[Signature Page to Escrow Agreement]

EX-17.1

Exhibit 17.1

WOLF-DIETER HASS

Nassauer Strasse 2

D-65187 wiesbaden, germany

Wiesbaden, May 30^th 2006

Mr. David Coghlan

Chairman of the Board

Evans & Sutherland Computer Corporation

600 Komas Drive

Salt Lake City, Utah 84108

U.S.A.

Resignation from the E&S Board

Dear David,

Due to the sale of Evans & Sutherland’s Simulation Business to Rockwell Collins, which closed on May 26, 2006, I herewith declare my resignation from the E&S Board effective May 30, 2006.

As you know I have been a longtime senior manager in the aircraft simulation and training industry and feel that following the sale of the Company’s activities in that industry I should stand down.

I enjoyed serving on the Board during the past five years and wish Evans & Sutherland all success in the time to come.

Best Regards,

/s/ Wolf-Dieter Hass

Wolf-Dieter Hass

cc:Jim Oyler

EX-99.1

Exhibit 99.1

770 Komas Drive	NEWS RELEASE
Salt Lake City, UT 84108 USA	For Immediate Release

Evans & Sutherland Completes Sale of Simulation Business to Rockwell Collins

SALT LAKE CITY, UTAH, May 30, 2006—Evans & Sutherland Computer Corporation (NASDAQ: ESCC) today announced that it completed the sale of its simulation business to Rockwell Collins, Inc (NYSE: COL) on May 26, 2006.  Rockwell Collins is a leader in aviation electronics and communications.

Under the terms of a previously-announced agreement, Rockwell Collins acquired E&S’s military and commercial simulation assets, together with certain liabilities, including simulation facilities in Salt Lake City, Orlando and the United Kingdom, in a $71.5 million cash transaction.  As part of this transaction, E&S granted Rockwell Collins exclusive rights to use and sell the E&S laser projector for simulation. Approximately 200 former E&S employees have joined Rockwell Collins.

“This transaction is an important step in the development of Evans & Sutherland,” said James R. Oyler, E&S President and CEO.  “E&S will continue to focus on advanced technology in its digital theater and laser projector businesses to produce and deliver the highest quality visual images.  The sale of our simulation business will allow us to pursue this strategy with additional resources and sharper focus.”

In connection with the closing of the sale of its simulation business, E&S has called its outstanding convertible subordinated debentures due 2012 for redemption.

Evans & Sutherland produces professional hardware and software to create highly realistic visual images for digital theater and other applications throughout the world.  The company has recently introduced its laser projector for ultra-high resolution projection requirements in simulation, digital theaters, and other high-end projection applications.  In April 2006, E&S completed the acquisition of Spitz, Inc., adding to its digital theater capabilities.  Headquartered in Salt Lake City, Utah, E&S

employs approximately 125 professionals worldwide.  Additional information is available at www.es.com.

Statements in this press release which are not historical, including statements regarding E&S’s or management’s intentions, hopes, beliefs, expectations, representations, projections, plans, or predictions of the future are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  These include statements that E&S will continue to focus on advanced technology to produce and deliver the highest quality visual images and that the sale of the simulation business will allow E&S to pursue this strategy with additional resources and sharper focus.  It is important to note that actual results could differ materially from those in any such forward-looking statements.  Various factors could cause actual results to differ materially, such as the risk factors listed from time to time in E&S’s SEC reports.

E&S is a registered trademark of Evans & Sutherland Computer Corporation.

###

Contact:

James R. Oyler

President and CEO

Evans & Sutherland

770 Komas Drive, Salt Lake City, UT 84108

801-588-1700

joyler@es.com

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