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Exhibit 10.5  


 
 

AGREEMENT OF TENDER, EXCHANGE AND TRANSMITTAL
  OF SERIES E-1 STOCK    
    


        Agreement of Tender, Exchange and Transmittal of Series E-1 Stock (this "Agreement") dated as of March 3, 2004, by and between
Displaytech, Inc., a Colorado corporation (the "Company"), and each of the persons and entities listed as Purchasers on the signature pages hereto (each, a "Purchaser" and, collectively, the
"Purchasers"). 


W I T N E S S E T H  


        WHEREAS, by resolution of its Board of Directors dated February 27, 2004, the Company has authorized holders of shares of the Company's
Series E-1 Senior Preferred Stock, par value $.001 per share (the "Series E-1 Stock"), and their designees, to tender their currently-owned shares of
Series E-1 Stock, together with any and all accrued, cumulative and unpaid dividends thereon, to the Company in exchange for shares of the Company's Series F Convertible
Preferred Stock, par value $.001 per share (the "Series F Stock"). 



        NOW,
THEREFORE, in consideration of the premises and the mutual promises set forth herein, and for good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereby agree as follows: 


SECTION 1. TENDER OF SERIES E-1 STOCK  


        Each Purchaser hereby tenders that certain number of shares of Series E-1 Stock set forth opposite such Purchaser's name on  Schedule I hereto, together with any and all accrued, cumulative and unpaid dividends thereon, in exchange for that certain number of shares of
Series F Stock as is set forth on Schedule I hereto. Each Purchaser hereby agrees that immediately as of the date hereof, all rights and
privileges of such Purchaser arising from such Purchaser's ownership of
Series E-1 Stock (whether arising from the Certificate of Designation and Determination of Preferences of the Series E-1 Senior Preferred Stock or otherwise) are
hereby extinguished and the Company is hereby immediately released from any and all obligations arising therefrom. 


SECTION 2. FURTHER ASSURANCES  



        Each Purchaser hereby agrees to cooperate with the Company and to take such actions as the Company may reasonably request to effectuate the transactions
contemplated hereby. 


SECTION 3. MISCELLANEOUS  


        Section 3.1    This
Agreement shall be binding upon, and shall inure to the benefit of, the Company and each of the Purchasers, and their respective successors and
assigns. Nothing expressed herein is intended or shall be construed to give any person or entity other than the persons and entities referred to in the preceding sentence any legal or equitable right,
remedy or claim under or in respect of this Agreement. 


        Section 3.2    This
Agreement shall be construed and enforced in accordance with, and the rights of the parties hereto shall be governed by, the internal laws of the
State of New York, without regard to conflict of laws. This Agreement may be executed in any number of counterparts (and by facsimile), and by the different parties on different counterparts, each
counterpart constituting an original, but all together constituting only one agreement. 


[The
remainder of page is intentionally left blank] 










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



	 	 	 	 	DISPLAYTECH, INC.
	

 	
 	

 	
 	

By:	
 	

/s/ RICHARD BARTON

	 	 	 	 	Name: Richard Barton

Title: Chief Executive Officer
	

Accepted and Agreed to as of the date first above written by the undersigned Purchasers:	
 	

 	
 	

 
	

FLEMING US DISCOVERY FUND III, L.P.
	

By:	
 	

FLEMING US DISCOVERY PARTNERS, L.P., its general partner
	

By:	
 	

FLEMING US DISCOVERY, LLC,

its general partner	
 	

 	
 	

 
	

By:	
 	

/s/ ROBERT L. BURR
 Robert L. Burr, member	
 	

 	
 	

 
	

FLEMING US DISCOVERY OFFSHORE FUND III, L.P.
	

By:	
 	

FLEMING US DISCOVERY PARTNERS, L.P., its general partner
	

By:	
 	

FLEMING US DISCOVERY, LLC,

its general partner	
 	

 	
 	

 
	

By:	
 	

/s/ ROBERT L. BURR
 Robert L. Burr, member	
 	

 	
 	

 











	INTERWEST CAPITAL, INC.	 	 
	

By:	
 	

/s/ WM. C. GLYNN
	
 	

 
	Name: William C. Glynn

Title: President	 	 
	

NISSHO ELECTRONICS CORPORATION	
 	

 
	

By:	
 	

/s/ TAKASHI FUKUDA
	
 	

 
	Name: Takashi Fukuda

Title: Senior Managing Director	 	 









Schedule I  



	 
	 	Shares of

	Name of Purchaser
 
	 	Series E-1 Stock Tendered Hereunder
	 	Series F Stock Issuable Hereunder

	 
	 	(together with any and all accrued, cumulative and unpaid dividends thereon as of date the hereof)
 
	 	 

	Fleming US Discovery Fund III, L.P.	 	29,069	 	29,069
	

Fleming US Discovery Offshore Fund III, L.P.	
 	

4,654	
 	

4,654
	

InterWest Capital, Inc.	
 	

33,724	
 	

33,724
	

Nissho Electronics Corporation	
 	

11,101	
 	

11,101













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AGREEMENT OF TENDER, EXCHANGE AND TRANSMITTAL OF SERIES E-1 STOCK