Exhibit 10.2
EXECUTION VERSION
 
 
 
 
 
 
AGREEMENT TO ACCEPT COLLATERAL IN PARTIAL SATISFACTION OF OBLIGATIONS
(STRICT FORECLOSURE)
 
among
 
 
 
ADVANCE DISPLAY TECHNOLOGIES, INC.,
 
DEGEORGE HOLDINGS THREE, LLC
 
and
 
ADTI MEDIA, LLC
 
 
Dated as of June 28, 2010
 
 
 

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TABLE OF CONTENTS
 
Page
 
 
ARTICLE I
 
DEFINITIONS
 
ARTICLE II
 
ACCEPTANCE OF COLLATERAL;
LIMITED ASSUMPTION OF LIABILITIES
 
Section 2.1
Acknowledgments of the Company. 
3

Section 2.2
Acceptance of the Collateral in Partial Satisfaction of the Obligations. 
3

Section 2.3
Assumption and Exclusion of Liabilities 
4

Section 2.4
Cash and Cash Equivalents 
4

 
ARTICLE III
 
REPRESENTATIONS AND WARRANTIES OF
THE COMPANY
 
Section 3.1
Existence and Enforceability 
5

Section 3.2
No Legal Bar 
5

Section 3.3
Taxes 
5

Section 3.4
Schedule of Transferred Assets 
5

Section 3.5
Approval of Transaction 
5

 
ARTICLE IV
 
REPRESENTATIONS AND WARRANTIES OF
THE ASSIGNEE
 
Section 4.1
Existence and Enforceability 
6

Section 4.2
No Legal Bar 
6

 
ARTICLE V
 
REPRESENTATIONS AND WARRANTIES OF
THE SECURED PARTY
 
Section 5.1
Existence and Enforceability 
6

Section 5.2
No Legal Bar 
6

 
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ARTICLE VI
 
CERTAIN WAIVERS, COVENANTS, AND AGREEMENTS
 
Section 6.1
Taxes 
7

Section 6.2
Satisfaction of Standards 
7

Section 6.3
Instruments of Conveyance and Transfer 
7

Section 6.4
Obligations Absolute 
7

Section 6.5
Further Assurances 
7

 
ARTICLE VII
 
CLOSING
 
Section 7.1
Deliveries by the Company. 
8

Section 7.2
Deliveries by the Secured Party. 
9

Section 7.3
Deliveries by the Assignee. 
9

Section 7.4
Other Matters 
9

 
ARTICLE VIII
 
MISCELLANEOUS
 
Section 8.1
Captions 
9

Section 8.2
Governing Law 
9

Section 8.3
Waiver of Jury Trial 
10

Section 8.4
Counterparts 
10

Section 8.5
Expenses 
10

Section 8.6
Parties Obligated and Benefited 
10

 

Schedule A   - Assumed Liabilities Schedule B    - List of Collateral        
Exhibit A  - Copy of Appraisal Exhibit B  - Form of Bill of Sale Exhibit C  -
Form of Company Assignment Exhibit D  - Form of Company Certificate Exhibit E  -
Copy of Event of Default and Company Consent Letter Exhibit F  - Form of Patent
Assignment Exhibit G  - Form of Trademark Assignment Exhibit H   - Form of
Transfer Statement

 
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AGREEMENT TO ACCEPT COLLATERAL IN PARTIAL  SATISFACTION OF OBLIGATIONS
(STRICT FORECLOSURE)
 
THIS AGREEMENT TO ACCEPT COLLATERAL IN PARTIAL SATISFACTION OF OBLIGATIONS
(STRICT FORECLOSURE) (this “Agreement”) is made and entered into as of June 28,
2010, among ADVANCE DISPLAY TECHNOLOGIES, INC., a Colorado corporation (the
“Company”), DEGEORGE HOLDINGS THREE, LLC, a Delaware limited liability company
(the “Secured Party”) and ADTI MEDIA, LLC, a Delaware limited liability company
and wholly owned subsidiary of the Secured Party (the “Assignee”).
 
RECITALS
 
WHEREAS, the Company and the Secured Party are parties to a Senior Secured
Revolving Loan Agreement dated as of November 6, 2008, as amended by that
certain First Amendment to Senior Secured Revolving Credit Agreement, dated as
of June 15, 2009 (as further amended, modified or supplemented, the “Loan
Agreement”), pursuant to which the Secured Party advanced Loans to the Company;
 
WHEREAS, the Company’s Obligations under the Loan Agreement and the other Loan
Documents are secured by the grant of valid liens and security interests in and
to all of the Collateral pursuant to the Loan Documents;
 
WHEREAS, as set forth in the Event of Default and Company Consent Letter, one or
more Events of Default has occurred and is continuing under the Loan Agreement;
 
WHEREAS, the aggregate outstanding principal amount of the Loans due from the
Company to the Secured Party as of the date hereof is Fourteen Million Two
Hundred Sixty Two Thousand Eight Hundred Sixty Eight Dollars and Eighty Five
Cents ($14,262,868.85) plus interest owing thereon through the date hereof in
the aggregate amount of One Million Two Hundred Twenty Thousand Three Hundred
Twenty Six Dollars and Fifty Six Cents ($1,220,326.56);
 
WHEREAS, the Secured Party is entitled to exercise certain remedies under the
Loan Documents and the Uniform Commercial Code as in effect in the state of
Colorado (“UCC”), including, but not limited to, foreclosing on the Collateral;
 
WHEREAS, on or about May 17, 2010, the Secured Party and the Company retained an
independent appraisal firm (“Appraiser”) to determine the fair market value of
the Company’s business enterprise (the “Appraisal”) for purposes of the
foreclosure;
 
WHEREAS, the Appraisal, attached hereto as Exhibit A and made a part hereof,
shows that the Company’s Obligations under the Loan Documents are substantially
greater than the value of the Collateral;
 
WHEREAS, the Secured Party intends to exercise its Foreclosure Rights by
accepting certain of the Collateral (the “Transferred Assets”) in partial
satisfaction of the Obligations in accordance with Section 4-9-620(a) of the UCC
through an assignment, conveyance, sale and transfer, as the case may be, of the
Transferred Assets from the Company to the Assignee;
 

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WHEREAS, the Company has determined that it is in the best interests of its
employees, creditors, and equity holders to consent to the foreclosure on the
Transferred Assets by the Secured Party, and the transfer, sale, assignment and
conveyance of those Transferred Assets, as the case may be, to Assignee, in the
manner and to the extent specifically provided elsewhere in this Agreement.
 
NOW, THEREFORE, in consideration of the premises contained herein, the receipt
and sufficiency of which are hereby acknowledged, and intending to be legally
bound, the parties hereto for themselves and their successors and assigns do
hereby agree as follows:
 
ARTICLE I
 
DEFINITIONS
 
The following definitions shall apply to this Agreement:
 
“Assumed Liabilities” means each of the liabilities described as such on
Schedule A.
 
“Bill of Sale” means a Bill of Sale (Absolute) in the form of Exhibit B, to be
executed and delivered by the Company to the Assignee pursuant to Section 2.2
hereof.
 
“Books and Records” means all books and records of the Company that relate to
the Transferred Assets or the business and operation of the Company, including
but not limited to (i) books and records relating to the purchase of materials
and supplies, invoices, customer lists, supplier lists and personnel records;
and (ii) computer software and data in computer readable and/or human readable
form used to maintain such books and records together with the media on which
such software and data are stored and all documentation relating thereto.
 
“Closing” means the consummation of the transactions contemplated by this
Agreement on the Agreement Date.
 
“Closing Offices” means the offices of Pillsbury Winthrop Shaw Pitman LLP, 1540
Broadway, New York, NY 10036.
 
“Company Assignment” means an Assignment and Assumption Agreement in the form of
Exhibit C, to be executed and delivered by the Company and the Assignee pursuant
to Section 2.3 hereof.
 
“Company Certificate” means the certificate of the Company in the form of
Exhibit D.
 
“Event of Default and Company Consent Letter” means that certain letter from
Secured Party to Company dated June 28, 2010, a copy of which is attached hereto
as Exhibit E.
 
“Patent Assignment” means the Patent Assignment in the form of Exhibit F.
 
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“Requirement of Law” means, as to any Person, the certificate of incorporation
and by-laws or other organizational or governing documents of such Person, and
any law, treaty, rule or regulation or determination of an arbitrator or a court
or other Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its property is
subject.
 
“Tax” means (a) all foreign, federal, state, local and other taxes, including
all income, gross receipts, sales, use, ad valorem, value-added, intangible,
unitary, transfer, franchise, license, payroll, employment, estimated, excise,
environmental, stamp, occupation, premium, property, prohibited transactions,
windfall or excess profits, customs, duties or other taxes, levies, fees,
assessments or charges of any kind whatsoever, together with any interest and
any penalties, additions to tax or additional amounts with respect thereto, (b)
any liability for payment of amounts described in clause (a) as a result of
transferee liability, of being a member of an affiliated, consolidated, combined
or unitary group for any period, or otherwise through operation of law, and (c)
any liability for payment of amounts described in clause (a) or (b) as a result
of any tax sharing, tax indemnity or tax allocation agreement or any other
express or implied agreement to indemnify any other Person for Taxes.
 
“Trademark Assignment” means the Trademark Assignment in the form of Exhibit G.
 
“Transfer Statement” means a Transfer Statement in the form of Exhibit H.
 
All capitalized terms used herein but not defined herein (including in the
recitals hereto) have the meaning ascribed to such term in the Loan Agreement.
 
ARTICLE II
 
ACCEPTANCE OF TRANSFERRED ASSETS;
LIMITED ASSUMPTION OF LIABILITIES
 
Section 2.1        Acknowledgments of the Company.
 
(a)   The Company hereby acknowledges that one or more Events of Default has
occurred and is continuing under the Loan Agreement.
 
(b)   The Company hereby acknowledges that the aggregate outstanding amount of
the Obligations, including, without limitation, all unpaid principal and accrued
interest on the Loans due from the Company to the Secured Party under the Loan
Documents as of the date hereof is Fifteen Million Four Hundred Eighty Three
Thousand One Hundred Ninety Five Dollars and Forty One Cents ($15,483,195.41),
and that the Company has no claims, counterclaims, rights of setoff or other
defenses to the payment of such amount.
 
Section 2.2        Acceptance of the Transferred Assets in Partial Satisfaction
of the Obligations.
 
The Secured Party hereby agrees to accept the Transferred Assets on an “As Is,
Where Is” basis, without warranty of any type or nature, express or implied,
including without limitation, warranties or merchantability, fitness for any
particular use or purpose, or as to physical or operating condition (other than
the representation set forth in Section 3.4 hereof), in partial satisfaction of
the Obligations through the assignment, conveyance, sale and transfer, as the
case may be, of the Transferred Assets from the Company to the Assignee, and the
Obligations are hereby deemed to be paid and discharged in part as a result of
such acceptance and transfer in the amount of Seven Million Six Hundred Thousand
Dollars ($7,600,000).   Such transfer and partial payment of the Obligations
shall be effected by the execution and delivery to Assignee by the Company of
the Bill of Sale, and any other assignments, instruments of transfer or
conveyance or other documents necessary therefor, and by the taking by the
Company of such other action as shall be necessary to sell, transfer, convey,
assign and deliver the Transferred Assets to the Assignee, and by the Secured
Party releasing its Lien and Security Interest in the Transferred Assets in
accordance herewith.
 
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The Company hereby consents to the foregoing acceptance by the Secured Party,
via the assignment, conveyance, sale and transfer, as the case may be, of the
Transferred Assets to the Assignee, in partial satisfaction of the Obligations,
and further agrees that, as of the date hereof, the deficiency owing to the
Secured Party is Seven Million Eight Hundred Eighty Three Thousand One Hundred
Ninety Five Dollars and Forty One Cents ($7,883,195.41), for which the Company
shall remain liable under the Loan Documents.  The Company acknowledges and
agrees that, (a) the Loan Documents shall remain in full force and effect, (b)
no failure by the Secured Party to exercise any right, remedy, power or
privilege under any of the Loan Documents or Applicable Law shall constitute, or
shall be construed as, a waiver thereof; and (c) that the Secured Party reserves
its rights (i) fully to invoke any and all such rights, remedies, powers and
privileges under the Loan Documents and Applicable Law, and (ii) to require that
all Loans continue to bear interest at the rate specified in the Loan Agreement.
 
Section 2.3        Limited Assumption and Exclusion of Liabilities.     On the
terms and subject to the conditions of this Agreement and in reliance upon the
representations and warranties contained herein, at the Closing, the Assignee
shall assume the Assumed Liabilities.  Such assumption of the Assumed
Liabilities shall be effected by the execution and delivery by the Company and
the Assignee of the Company Assignment.  Except for the Assumed Liabilities,
neither the Secured Party nor the Assignee shall assume or be responsible for,
and the Secured Party and the Assignee do not assume or agree to be responsible
for, any obligations or liabilities of the Company or any of its Affiliates of
any nature whatsoever, whether past, current or future, whether accrued,
contingent, unknown or otherwise (such other liabilities and obligations being
hereinafter referred to as the “Excluded Liabilities”), and the Company shall
remain responsible for all of the Excluded Liabilities.  Without limiting the
generality of the foregoing, the “Excluded Liabilities” shall include each
liability or obligation arising out of, relating to, in the nature of, or caused
by any  (a) outstanding checks, (b) litigation, claim, assessment, action, suit,
proceeding, order, judgment, decree or investigation of any kind or nature
asserted against the Company, or (c) with the exception of the Taxes the subject
of Section 6.1(b) hereof, any Taxes of any kind or nature whatsoever, whether
past, current or future, imposed or levied on the Company.
 
Section 2.4        Cash and Cash Equivalents.     Notwithstanding anything in
this Agreement, the Company shall retain all cash and cash equivalents presently
held by it.
 
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ARTICLE III
 
REPRESENTATIONS AND WARRANTIES OF
THE COMPANY
 
The Company represents and warrants to the Secured Party and the Assignee, as of
the Agreement Date, as follows:
 
Section 3.1        Existence and Enforceability.     The Company is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, and has the corporate power and authority, and
the legal right, to make, deliver and perform this Agreement and has taken all
necessary requisite action to authorize the execution, delivery and performance
of this Agreement.  No consent or authorization of, filing with, notice to or
other act by or in respect of, any Governmental Authority or any other Person is
required in connection with the execution, delivery, performance, validity or
enforceability of this Agreement by the Company, except consents,
authorizations, filings and notices which have been obtained or made and are in
full force and effect.  This Agreement has been duly executed and delivered on
behalf of the Company and constitutes a legal, valid and binding obligation of
the Company, enforceable against the Company in accordance with its terms,
subject to the effect of applicable bankruptcy and other similar laws affecting
the rights of creditors generally and the effect of equitable principles whether
applied in an action at law or a suit in equity.
 
Section 3.2        No Legal Bar.     None of the execution, delivery and
performance of this Agreement by the Company will violate any Requirement of Law
or Contract of the Company, except where such violation could not reasonably be
expected to have a material adverse effect on the ability of the Company to
perform its obligations under this Agreement.
 
Section 3.3        Taxes.     The Company has filed or caused to be filed all
tax returns which, to the knowledge of the Company, are required to be filed and
has paid all Taxes shown to be due and payable on said returns or on any
assessments made against it or any of its property and all other Taxes (other
than any amounts the validity of which are currently being contested in good
faith by appropriate proceedings and with respect to which reserves in
conformity with generally accepted accounting principles have been provided on
the books of the Company); no Tax lien has been filed, and, to the knowledge of
the Company, no claim is being asserted, with respect to any such Tax.
 
Section 3.4        Schedule of Transferred Assets.     Schedule B sets forth a
complete listing of all of the Transferred Assets.  Except for the Security
Interest granted pursuant to the terms of the Loan Agreement, the Company owns
the Transferred Assets, free and clear of all liens, claims, and encumbrances of
any kind.
 
Section 3.5        Appraisal/Approval of Transaction.     The Company is
satisfied that the Appraisal was conducted properly, was arm’s length in nature,
and has concluded that the execution and delivery of this Agreement, and the
performance of its obligations hereunder, is in the best interests of all of its
employees, creditors, and equity interest holders.
 
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ARTICLE IV
 
REPRESENTATIONS AND WARRANTIES OF
THE ASSIGNEE
 
Section 4.1        Existence and Enforceability.     The Assignee is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, has the corporate power and authority, and the
legal right, to make, deliver and perform this Agreement and has taken all
necessary requisite action to authorize the execution, delivery and performance
of this Agreement.  No consent or authorization of, filing with, notice to or
other act by or in respect of, any Governmental Authority or any other Person is
required in connection with the execution, delivery, performance, validity or
enforceability of this Agreement by the Assignee, except consents,
authorizations, filings and notices which have been obtained or made and are in
full force and effect.  This Agreement has been duly executed and delivered by
the Assignee and constitutes a legal, valid and binding obligation of the
Assignee, enforceable against the Assignee in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or law).
 
Section 4.2        No Legal Bar.     None of the execution, delivery and
performance of this Agreement by the Assignee will violate any Requirement of
Law or Contract of the Assignee, except where such violation could not
reasonably be expected to have a material adverse effect on the ability of
Assignee to perform its obligations under this Agreement.
 
ARTICLE V
 
REPRESENTATIONS AND WARRANTIES OF
THE SECURED PARTY
 
Section 5.1        Existence and Enforceability.     The Secured Party is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, has the corporate power and authority, and the
legal right, to make, deliver and perform this Agreement and has taken all
necessary requisite action to authorize the execution, delivery and performance
of this Agreement.   No consent or authorization of, filing with, notice to or
other act by or in respect of, any Governmental Authority or any other Person is
required in connection with the execution, delivery, performance, validity or
enforceability of this Agreement by the Secured Party, except consents,
authorizations, filings and notices which have been obtained or made and are in
full force and effect.  This Agreement has been duly executed and delivered by
the Secured Party and constitutes a legal, valid and binding obligation of the
Secured Party, enforceable against the Secured Party in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors’ rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or law).
 
Section 5.2        No Legal Bar.     None of the execution, delivery and
performance of this Agreement by the Secured Party will violate any Requirement
of Law or Contract of the Secured Party, except where such violation could not
reasonably be expected to have a material adverse effect on the ability of the
Secured Party to perform its obligations under this Agreement.
 
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Section 5.3        Appraisal/Approval of Transaction.     The Secured Party is
satisfied that the Appraisal was conducted properly and was arm’s length in
nature.
 
ARTICLE VI
 
CERTAIN WAIVERS, COVENANTS, AND AGREEMENTS
 
Section 6.1        Taxes.     (a)     The Company, the Secured Party and the
Assignee agree to furnish or cause to be furnished to each other, upon request,
as promptly as practicable, such information and assistance relating to the
Transferred Assets and Assumed Liabilities as is reasonably necessary for the
filing of all tax returns, the prosecution of a claim for a tax refund, the
making of any election relating to Taxes, the preparation for any audit by any
taxing authority, and the prosecution or defense of any claim, suit or
proceeding relating to any Tax.  The Company, the Secured Party and the Assignee
shall cooperate with each other in the conduct of any audit or other proceeding
relating to Taxes with respect to the Transferred Assets and Assumed
Liabilities.
 
(b)     All Taxes and fees incurred in connection with the transactions
contemplated by this Agreement shall be paid by Assignee when due; provided
however, that the Company will file all necessary tax returns and other
documentation with respect to all such Taxes and fees.
 
Section 6.2        Satisfaction of Standards.     The Company agrees that the
transfer of the Transferred Assets in accordance with this Agreement, and all
aspects thereof, is in full compliance with the UCC.
 
Section 6.3        Instruments of Conveyance and Transfer.     At the Closing,
the Company shall deliver to the Assignee all necessary bills of sale,
endorsements, certificates of title, assignments and other good and sufficient
instruments of conveyance and transfer, as shall be necessary to vest in the
Assignee all of the rights of the Company in the Transferred Assets in each case
in accordance herewith.   Simultaneously therewith, the Company shall take all
steps as may be required to put the Assignee in possession and exclusive
operating control of the Transferred Assets.
 
Section 6.4        Obligations Absolute.     The obligations of the Company to
complete the transactions contemplated by, and to perform its obligations under,
this Agreement are absolute and unconditional.
 
Section 6.5        Further Assurances.     The Company further agrees that it
will execute and deliver to Assignee such additional instruments and documents
and take such further actions as the Assignee may reasonably require in order to
more fully vest, record and/or perfect the Assignee's title to, or interest in,
the Transferred Assets.  Without limiting the foregoing, the Company agrees that
it shall reasonably cooperate with the Assignee to transfer to the Assignee all
goodwill and other aspects of the Company’s business, the benefits of which may
not otherwise be fully and effectively transferred by legal assignment.  No
later than ten (10) days after the Closing, the Company shall cause the
certificate of incorporation of the Subsidiary and its other governing documents
to be amended to change the name of the Subsidiary.
 
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ARTICLE VII
 
CLOSING
 
The Closing shall, unless another date or place is agreed to in writing by the
parties hereto, take place on the date hereof at the Closing Offices.  The
physical presence of any party or their representatives shall not be a required
condition of the Closing if such party has performed all acts and delivered all
items and documents necessary for the Closing (the time and date of such Closing
being herein called the “Agreement Date”).  On the Agreement Date at the Closing
Offices, the following shall occur:
 
Section 7.1        Deliveries by the Company.
 
(I)     The Company shall deliver to the Secured Party and the Assignee the
following documents which shall be satisfactory to the Secured Party in its sole
discretion in form and substance (unless otherwise waived by the Secured Party
or the Assignee):
 
(a)     (i) a certificate signed by the Secretary or Assistant Secretary or
equivalent officer of the Company to the effect that the constituent documents
of the Company are in the form delivered to the Secured Party at the closing of
the Loan Agreement, without amendment or modification and remain in full force
and effect on the Agreement Date and (ii) duly adopted resolution(s) of the
Company signed by the Secretary or Assistant Secretary of the Company,
authorizing the transactions contemplated by this Agreement; and
 
(b)     the Company Certificate, duly executed by an authorized office of the
Company.
 
(II)        The Company shall deliver to the Assignee the following documents
which shall be satisfactory to the Assignee in its sole discretion in form and
substance (unless otherwise waived by the Assignee):
 
(a)     the Bill of Sale, duly executed by an authorized officer of the Company;
 
(b)     the Books and Records;
 
(c)     the Trademark Assignment and the Patent Assignment, each duly executed
by the authorized officer(s) of the Company;
 
(d)     the Company Assignment, duly executed by an authorized officer of the
Company; and
 
(e)     assignments with respect to each of the contracts and other intangible
rights to be assigned to the Assignee hereunder.
 
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Section 7.2        Deliveries by the Secured Party.
 
(I)     The Secured Party shall deliver to the Assignee the following documents
which shall be satisfactory to the Assignee in its sole discretion in form and
substance (unless otherwise waived by the Assignee):
 
(a)     a duly authenticated Transfer Statement with respect to the Transferred
Assets; and
 
(b)     A UCC lien release statement and patent and trademark releases as to all
of the Transferred Assets transferred to the Assignee in recordable form and, if
necessary, executed by the appropriate officer(s) of the Secured Party.
 
Section 7.3        Deliveries by the Assignee.
 
The Assignee shall deliver to the Company the following documents which shall be
satisfactory to the Assignee in its sole discretion in form and substance
(unless otherwise waived by the Company):
 
(a)     the Company Assignment, duly executed by an authorized officer of the
Assignee; and
 
(b)     a copy of the constituent documents of the Assignee and duly adopted
resolution(s) authorizing the transactions contemplated by this Agreement.
 
Section 7.4        Other Matters.     Simultaneously with the Closing, the
Company shall surrender to the Assignee actual possession and operating control
of the Transferred Assets including disclosure by the Company to such persons as
the Assignee may designate of the Company’s trade secrets, formulae and other
proprietary information to the extent pertaining to the Transferred Assets.
 
ARTICLE VIII
 
MISCELLANEOUS
 
Section 8.1        Captions.     The captions and headings appearing herein are
included solely for convenience of reference and are not intended to affect the
interpretation or construction of any provision of this Agreement.
 
Section 8.2        Governing Law.     This Agreement is made in and shall be
governed by and construed and interpreted in accordance with the laws of the
State of Colorado, without giving effect to any conflict or choice of law
provision that would result in the application of another state’s law.  Each of
the parties hereto hereby submits to the non-exclusive jurisdiction of the State
and Federal courts located in the City and County of Denver and the State of
Colorado with respect to any action or proceeding relating to this Agreement.
 
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Section 8.3        Waiver of Jury Trial.     EACH OF THE COMPANY, THE SECURED
PARTY AND THE ASSIGNEE HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING
INVOLVING ANY CLAIM RELATED TO THIS AGREEMENT.
 
Section 8.4        Counterparts.     This Agreement may be executed in one or
more counterparts, each of which shall be an original but all of which, taken
together, shall constitute one and the same instrument.
 
Section 8.5        Severability.     Each portion of this Agreement is intended
to be severable.  If any term or provision hereof is illegal or invalid for any
reason whatsoever, such illegality or invalidity shall not affect the validity
of the remainder of this Agreement.
 
Section 8.6        Expenses.     Each party hereto agrees to bear its own
expenses in connection with this Agreement and the transactions contemplated
hereunder; provided however, this Section 8.6 shall not be deemed to eliminate
the Assignee’s obligations under Section 6.1(b) hereof for the payment of all
Taxes and fees incurred in connection with the transactions contemplated herein.
 
Section 8.7        Parties Obligated and Benefited.     This Agreement will be
binding upon the parties hereto and their respective assignees and successors in
interest and will inure solely to the benefit of such parties and their
respective assigns and successors in interest, and, except as otherwise provided
herein, no other Person will be entitled to any of the benefits conferred by
this Agreement.
 
(Signature page follows)
 
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IN WITNESS WHEREOF, the Company, the Secured Party and the Assignee have
hereunto set their hands as of the date first set forth above.
 
 

 
ADVANCE DISPLAY TECHNOLOGIES, INC.
               
 
By:
/s/ James P. Martindale      
Name: James P. Martindale
      Title: Executive Vice President and Chief Operating Officer          

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Agreement to Accept Collateral in Partial Satisfaction of Obligations

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DEGEORGE HOLDINGS THREE, LLC
 

 

 
By: DEGEORGE HOLDINGS III LP
 

 

       
 
By:
/s/ Lawrence F. DeGeorge      
Name: Lawrence F. DeGeorge
     
Title:  President
         

 

 
ADTI MEDIA, LLC
 

 
 

 
By: DEGEORGE HOLDINGS THREE, LLC
 

 

  By: DEGEORGE HOLDINGS III LP          
 
By:
/s/ Lawrence F. DeGeorge       Name: Lawrence F. DeGeorge      
Title:  President          

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Agreement to Accept Collateral in Partial Satisfaction of Obligations
 

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