Document:

Exhibit
10.1

    

     

    DeGeorge
Holdings Three, LLC

    140
Intracoastal Pointe Drive, Suite 410

    Jupiter,
Florida 33477

    

    

    Event of Default and Company
Consent Letter

    

    

    June 28,
2010

    

    James P.
Martindale,

    Chief
Operating Officer

    Advance
Display Technologies, Inc.

    7334
South Alton Way, Building 14, Suite F

    Centennial,
Colorado 80112

    

    Re:           Notice
of Event of Default and Acceptance of Collateral in Partial Satisfaction of the
Obligations (Strict Foreclosure)

    

    Dear Mr.
Martindale:

    

    We refer
to the Senior Secured Revolving Credit Agreement, dated November 6, 2008,
between DeGeorge Holdings Three, LLC (“DH3”) and Advance Display Technologies,
Inc. (“ADTI”), 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 “Agreement”).   DH3 hereby notifies
you that an Event of Default has occurred and is continuing under Section 13(f)
of the Agreement by virtue of the fact that ADTI has been insolvent because: (a)
its total liabilities substantially exceed the value of its total Transferred
Assets; and (b) it is unable to pay all of its debts as they come
due.

    

    As such,
DH3 is electing to exercise its Foreclosure Rights under Section 15 of the
Agreement, as well as all other rights and remedies that it is entitled to
exercise in accordance with the Loan Documents or under Applicable
Law.   DH3’s decision to foreclose at this time is based upon its
need to preserve the value of the Collateral, which might otherwise be
irretrievably and materially diminished by ADTI’s insolvency.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    On or
around May 17, 2010, DH3 and ADTI engaged an independent appraisal firm
(the “Appraiser”) to determine, among other things, the fair market value of
ADTI’s business enterprise for purposes of completing a
foreclosure.  The appraisal of the Collateral by the Appraiser is
complete, and it is DH3’s intention to exercise its right to foreclose on the
Collateral as permitted by Section 15 of the Agreement and in accordance with
Applicable Law.  ADTI’s Obligations under the Agreement are
substantially greater than the value of the Collateral and ADTI does not have
any other Transferred Assets that are not included in the Collateral that could
be leveraged to pay its Obligations under the Agreement.  As such, in
accordance with Section 4-9-620(a) of the Uniform Commercial Code currently in
effect in Colorado (the “UCC”), DH3 will accept the
Collateral in partial satisfaction of the Obligations in a strict foreclosure
transaction scheduled to occur on or around June 28, 2010 (the “Strict Foreclosure”), and a
deficiency will be owed to DH3 for the balance of the Obligations left
outstanding.   For such purposes, DH3 hereby directs ADTI to
transfer, assign, sell or convey, as the case may be, the Collateral to be set
forth in a strict foreclosure agreement between ADTI, DH3, and ADTI Media, LLC
(“ADTI Media”), a
Delaware limited liability company and wholly owned subsidiary of DH3, to ADTI
Media on the effective date (the “Effective Date”) of the Strict
Foreclosure.   By its signature hereto, in accordance with
Section 4-9-620(a)(1) of the UCC, ADTI hereby consents to the Strict Foreclosure
contemplated hereby and agrees (i) to transfer, assign, sell and convey, as
applicable, such Collateral and all of ADTI’s rights and interest thereto, to
ADTI Media, and (ii) to cooperate fully with DH3 and ADTI Media in completing
the Strict Foreclosure by taking all action requested by DH3 or ADTI Media in
connection with such Strict Foreclosure on or after the Effective
Date.

    

    DH3
hereby advises ADTI: (a) that no failure by it 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 (b) that it 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 Obligations bear interest at the rate specified in the
Agreement.  Nothing in this letter shall constitute, or shall be
construed as, an acknowledgment or determination by DH3 that, except as
described herein, no Event of Default has occurred and is continuing or that any
such Event of Default has been waived.

    

    All
capitalized terms not otherwise defined herein have the meaning given to them in
the Agreement.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      
        	 	      
                DEGEORGE
      HOLDINGS THREE, LLC

              	 

      

       

      
        	 	 	 
	 	      
                By:
      DEGEORGE HOLDINGS III LP

              	 
	 	 	 	 
	
                 

              	
                By:
      

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

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      AGREED
AND CONSENTED TO BY:

    

    

    
      ADVANCE
DISPLAY TECHNOLOGIES, INC.

    

    

    

    
      By: /s/ James P.
Martindale                
   

    

    
      Name:
James P. Martindale

    

    
      Title:
Executive Vice President and

    

    
      Chief
Operating OfficerExhibit
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

              
	
                 
      

                 

                 

              

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      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

              

      

       

      
        
          
          

        

        
          i

          
            

          

        

        
          
          

        

         

      

      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

      

       

      
        
          
          

        

        
          ii

          
            

          

        

        
          
          

        

      

      

      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;

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      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.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

         

      

      “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.

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

         

      

      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.

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      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.

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      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.

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

         

      

      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.

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      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.

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

         

      

      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.

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

         

      

      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)

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

         

      

      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

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        
          	 	
                  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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