Document:

Exhibit 10.2
SECURITY AGREEMENT
                    This SECURITY AGREEMENT, dated as of May 24, 2006 (this “Agreement”), is entered into by and among UNIPIXEL, INC., a Delaware corporation and UNIPIXEL DISPLAYS, INC., a Texas corporation (hereinafter collectively referred to as the “Debtors”) and the Holders of those certain 12% Senior Secured Convertible Debentures due May 23, 2007 (or such earlier contingent date as set forth therein) in the original aggregate principal amount of $1,500,000 (the “Debentures”), issued by Debtor to Trident Growth Fund, L.P. and CapSource Fund, L.P., the Holders thereof (the “Secured Parties”) in connection with that certain Securities Purchase Agreement of even date herewith entered into by and between the Debtors and the Secured Parties (the “Purchase Agreement”).
W I T N E S S E T H:
                    WHEREAS, pursuant to the Debentures, the Secured Parties have agreed to extend certain loans described above to the Debtors as evidenced by the Debentures; and
                    WHEREAS, in order to induce the Secured Parties to extend the loans evidenced by the Debentures, the Debtors have agreed to execute and deliver to the Secured Parties this Agreement and to grant the Secured Parties a perfected first priority security interest in all property of the Debtors to secure the prompt payment, performance and discharge in full of all of the Debtors’ obligations under the Debentures.
                    NOW, THEREFORE, in consideration of the agreements herein contained and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:
                    1.                 Certain Definitions. As used in this Agreement, the following terms shall have the meanings set forth in this Section 1.  Terms used but not otherwise defined in this Agreement that are defined in Article 9 of the Uniform Commercial Code (the “UCC”) shall have the respective meanings given such terms in Article 9 of the UCC, and capitalized terms not otherwise defined herein shall have the meaning given them in the Purchase Agreement.
(a)   “Collateral” means, as such terms are defined in Section 9.102 of the UCC: all “collateral,” “accounts,” “chattel paper” (including, but not limited to tangible and electronic chattel paper), “commercial tort claims,” “commodity contracts,” “commodity accounts,” “deposit accounts,” “documents,” “equipment,” “farm products,” “fixtures,” “general intangibles” (including “payment intangibles” and “software”), “goods,” “health care insurance receivables,” “instruments,” “inventory,” “investment property,” “letter of credit rights,” “mortgages,” and “records” of the Debtors, whether presently owned or existing or hereafter acquired or coming into existence, and all additions and accessions thereto and all substitutions and replacements thereof, and all “proceeds” (cash or noncash) (as defined in Article 9 of the UCC) thereof, including, without limitation, all proceeds from the sale or transfer of the Collateral and of insurance covering the same.  Without in any way limiting the generality of the foregoing, if not already included in the Collateral described above, the term “Collateral” shall also include, as defined in plain

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English: All machinery, equipment, computers, computer programs, motor vehicles, trucks, tanks, boats, ships, appliances, furniture, special and general tools, fixtures, test and quality control devices and other equipment of every kind and nature and wherever situated, contract rights, partnership interests, stock or other securities, licenses, distribution and other agreements, computer software (whether “off-the-shelf”, licensed from any third party or developed by Debtors) computer software development rights, leases, franchises, customer lists, quality control procedures, grants and rights, goodwill, trademarks, service marks, trade styles, trade names, patents, patent applications, copyrights, deposit and investment accounts and income tax refunds, insurance proceeds, and rights to refunds or indemnification whatsoever owing, together with all instruments, all documents of title representing any of the foregoing, all rights in any merchandising, goods, equipment, motor vehicles and trucks which any of the same may represent, and all right, title, security and guaranties with respect to same, including any right of stoppage in transit, business papers   together with all documents of title and documents representing the same, all additions and accessions thereto, replacements therefor, all parts therefor, and all substitutes for any of the foregoing and all other items used and useful in connection with the Debtors’ businesses and all improvements thereto.
(b)   “Obligations” means all of the Debtors’ obligations under the Transaction Documents, in each case, whether now or hereafter existing, voluntary or involuntary, direct or indirect, absolute or contingent, liquidated or unliquidated, whether or not jointly owed with others, and whether or not from time to time decreased or extinguished and later increased, created or incurred, and all or any portion of such obligations or liabilities that are paid, to the extent all or any part of such payment is avoided or recovered directly or indirectly from the Secured Parties as a preference, fraudulent transfer or otherwise as such obligations may be amended, supplemented, converted, extended or modified from time to time.
                    2.                 Grant of Perfected First Priority Security Interest. As an inducement for the Secured Parties to extend the loan as evidenced by the Debentures and to secure the complete and timely payment, performance and discharge in full, as the case may be, of all of the Obligations, the Debtors hereby unconditionally and irrevocably pledge, grant and hypothecate to the Secured Parties a continuing and perfected first priority security interest in and to, a lien upon and a right of set-off against all of their respective right, title and interest of whatsoever kind and nature in and to, the Collateral (the “Security Interest”).
                    3.                 Representations, Warranties, Covenants and Agreements of the Debtors. The Debtors, jointly and severally, represent and warrant to, and covenant and agree with, the Secured Parties as follows:
(a)   Each Debtor has the requisite corporate power and authority to enter into this Agreement and otherwise to carry out its obligations hereunder. The execution, delivery and performance by each Debtor of this Agreement and the filings contemplated therein have been duly authorized by all necessary action on the part of each Debtor and no further action is required by the Debtor.

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(b)   Each Debtor represents and warrants that they have no place of business or offices where their respective books of account and records are kept (other than temporarily at the offices of its attorneys or accountants) or places where Collateral is stored or located, except as set forth on Schedule A attached hereto.
(c)   The Debtors are collectively the sole owners of the Collateral (except for non-exclusive licenses granted by the Debtors in the ordinary course of business), free and clear of any liens, security interests, encumbrances, rights or claims, and are fully authorized to grant the Security Interest in and to pledge the Collateral.  There is not on file in any governmental or regulatory authority, agency or recording office an effective financing statement, security agreement, license or transfer or any notice of any of the foregoing (other than those that will be filed in favor of the Secured Parties pursuant to this Agreement) covering or affecting any of the Collateral.  So long as this Agreement shall be in effect, Debtors shall not execute and shall not knowingly permit to be on file in any such office or agency any such financing statement or other document or instrument (except to the extent filed or recorded in favor of the Secured Parties pursuant to the terms of this Agreement).
(d)  No part of the Collateral has been judged invalid or unenforceable. No written claim has been received that any Collateral or Debtors’ use of any Collateral violates the rights of any third party. There has been no adverse decision to Debtors’ claim of ownership rights in or exclusive rights to use the Collateral in any jurisdiction or to Debtors’ right to keep and maintain such Collateral in full force and effect, and there is no Proceeding involving said rights pending or, to the best knowledge of the Debtors, threatened before any court, judicial body, administrative or regulatory agency, arbitrator or other governmental authority.
(e)  The Debtors shall at all times maintain their books of account and records relating to the Collateral at its principal place of business and its Collateral at the locations set forth on Schedule A attached hereto and may not relocate such books of account and records or tangible Collateral unless it delivers to the Secured Parties at least 30 days prior to such relocation (i) written notice of such relocation and the new location thereof (which must be within the United States) and (ii) evidence that appropriate financing statements under the UCC and other necessary documents have been filed and recorded and other steps have been taken to perfect the Security Interest to create in favor of the Secured Parties a valid, perfected and continuing perfected first priority lien in the Collateral.
(f)   This Agreement creates in favor of the Secured Parties a valid security interest in the Collateral securing the payment and performance of the Obligations and, upon making the filings described in the immediately following subsection, a perfected first priority security interest in such Collateral.
(g)   The Debtors hereby authorize the Secured Parties to file one or more financing statements under the UCC, with respect to the Security Interest with the proper filing and recording agencies in any jurisdiction deemed proper by them.

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(h)  The execution, delivery and performance of this Agreement by the Debtors does not conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing Debtors’ debt or otherwise) or other understanding to which each Debtor is a party or by which any property or asset of such Debtor is bound or affected. No consent (including, without limitation, from stockholders or creditors of the Debtors) is required for the Debtors to enter into and perform its obligations hereunder.
(i)  The Debtors shall at all times maintain the liens and Security Interest provided for hereunder as valid and perfected first priority liens and security interests in the Collateral in favor of the Secured Parties until this Agreement and the Security Interest hereunder shall be terminated pursuant to Section 11 hereof. The Debtors hereby agree to defend the same against any and all persons. The Debtors shall safeguard and protect all Collateral for the account of the Secured Parties.   At the request of the Secured Parties, the Debtors will sign and deliver to the Secured Parties at any time or from time to time one or more financing statements pursuant to the UCC in form reasonably satisfactory to the Secured Parties and will pay the cost of filing the same in all public offices wherever filing is, or is deemed by the Secured Parties to be, necessary or desirable to effect the rights and obligations provided for herein. Without limiting the generality of the foregoing, the Debtors shall pay all fees, taxes and other amounts necessary to maintain the Collateral and the Security Interest hereunder, and the Debtors shall obtain and furnish to the Secured Parties from time to time, upon demand, such releases and/or subordinations of claims and liens which may be required to maintain the priority of the Security Interest hereunder.
(j)  The Debtors will not transfer, pledge, hypothecate, encumber, license (except for non-exclusive licenses granted by a Debtor in its ordinary course of business and sales of “inventory”), sell or otherwise dispose of any of the Collateral not in the ordinary course of its business without the prior written consent of the Secured Parties.
(k)       The Debtors shall keep and preserve their “equipment,” “inventory” and other tangible Collateral in good condition, repair and order and shall not operate or locate any such Collateral (or cause to be operated or located) in any area excluded from insurance coverage.
(l)  The Debtors shall, within ten (10) days of obtaining knowledge thereof, advise the Secured Parties promptly, in sufficient detail, of any substantial change in the Collateral, and of the occurrence of any event which would have a material adverse effect on the value of the Collateral or on the Secured Parties’ security interest therein.
 (m)   The Debtors shall promptly execute and deliver to the Secured Parties such further deeds, mortgages, assignments, security agreements, financing statements or other instruments, documents, certificates and assurances and take such further action as the 

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Secured Parties may from time to time request and may in its sole discretion deem necessary to perfect, protect or enforce its security interest in the Collateral including, without limitation, if applicable, the execution and delivery of a separate security agreement with respect to each Debtors’ intellectual property (“Intellectual Property Security Agreement”) in which the Secured Parties have been granted a security interest hereunder, substantially in a form acceptable to the Secured Parties, which Intellectual Property Security Agreement, other than as stated therein, shall be subject to all of the terms and conditions hereof.
(n)   The Debtors shall permit the Secured Parties and their respective representatives and agents to inspect the Collateral at any time, and to make copies of records pertaining to the Collateral as may be requested by the Secured Parties from time to time.
(o)  The Debtors shall take all steps reasonably necessary to diligently pursue and seek to preserve, enforce and collect any rights, claims, causes of action and accounts receivable in respect of the Collateral.
(p)  The Debtors shall promptly notify the Secured Parties in sufficient detail upon becoming aware of any attachment, garnishment, execution or other legal process levied against any Collateral and of any other information received by the Debtors that may materially affect the value of the Collateral, the Security Interest or the rights and remedies of the Secured Parties hereunder.
(q)  All information heretofore, herein or hereafter supplied to the Secured Parties by or on behalf of the Debtors with respect to the Collateral is accurate and complete in all material respects as of the date furnished.
(r)   The Debtors shall at all times preserve and keep in full force and effect its valid existence and good standing and any rights and franchises material to its business.
(s)   The Debtors will not change their respective names, corporate structure, or identity, or add any new fictitious name unless it provides at least 30 days prior written notice to the Secured Parties of such change and, at the time of such written notification, such Debtor provides any financing statements or fixture filings necessary to perfect and continue perfected the perfected first priority Security Interest granted and evidenced by this Agreement.
(t)        The Debtors may not consign any of their “inventory” or sell any of their “inventory” on bill and hold, sale or return, sale on approval, or other conditional terms of sale without the consent of the Secured Parties which shall not be unreasonably withheld.
(u)  The Debtors may not relocate their chief executive office to a new location without providing 30 days prior written notification thereof to the Secured Parties and so long as, at the time of such written notification, the Debtors provide any financing 

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statements or fixture filings necessary to perfect and continue the Security Interest granted and evidenced by this Agreement.
            4.     Defaults. The following events shall be “Events of Default”:
(a)   The occurrence of an Event of Default (as defined in the Debentures) under the Debentures;
(b)   Any representation or warranty of any Debtor in this Agreement shall prove to have been incorrect in any material respect when made;
(c)   The failure by any Debtor to observe or perform any of its obligations hereunder for five (5) days after delivery to Debtor of notice of such failure by or on behalf of a Secured Party; or
(d)   If any provision of this Agreement shall at any time for any reason be declared to be null and void, or the validity or enforceability thereof shall be contested by any Debtor, or a Proceeding shall be commenced by a Debtor, or by any governmental authority having jurisdiction over any Debtor, seeking to establish the invalidity or unenforceability thereof, or any Debtor shall deny that it has any liability or obligation purported to be created under this Agreement.
            5.     Duty To Hold In Trust. Upon the occurrence of any Event of Default and at any time thereafter, any Debtor shall, upon receipt of any revenue, income or other sums subject to the Security Interest, whether payable pursuant to the Debentures or otherwise, or of any check, draft, note, trade acceptance or other instrument evidencing an obligation to pay any such sum, hold the same in trust for the Secured Parties and shall forthwith endorse and transfer any such sums or instruments, or both, to the Secured Parties for application to the satisfaction of the Obligations.
            6.     Rights and Remedies Upon Default. Upon the occurrence of any Event of Default and at any time thereafter, the Secured Parties shall have the right to exercise all of the remedies conferred hereunder and under the Debentures, and the Secured Parties shall have all the rights and remedies of a secured party under the UCC.  Without limitation, the Secured Parties shall have the following rights and powers:
(a)   The Secured Parties shall have the right to take possession of the Collateral and, for that purpose, enter, with the aid and assistance of any person, any premises where the Collateral, or any part thereof, is or may be placed and remove the same, and Debtors shall assemble the Collateral and make it available to the Secured Parties at places which the Secured Parties shall reasonably select, whether at the Debtors’ premises or elsewhere, and make available to the Secured Parties, without rent, all of the Debtors’ respective premises and facilities for the purpose of the Secured Parties taking possession of, removing or putting the Collateral in saleable or disposable form.

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(b)   The Secured Parties shall have the right to operate the business of the Debtors using the Collateral and shall have the right to assign, sell, lease or otherwise dispose of and deliver all or any part of the Collateral, at public or private sale or otherwise, either with or without special conditions or stipulations, for cash or on credit or for future delivery, in such parcel or parcels and at such time or times and at such place or places, and upon such terms and conditions as the Secured Parties may deem commercially reasonable, all without (except as shall be required by applicable statute and cannot be waived) advertisement or demand upon or notice to the Debtors or right of redemption of a Debtor, which are hereby expressly waived.  Upon each such sale, lease, assignment or other transfer of Collateral, the Secured Parties may, unless prohibited by applicable law which cannot be waived, purchase all or any part of the Collateral being sold, free from and discharged of all trusts, claims, right of redemption and equities of the Debtors, which are hereby waived and released.
            7.    Applications of Proceeds. The proceeds of any such sale, lease or other disposition of the Collateral hereunder shall be applied first, to the expenses of retaking, holding, storing, processing and preparing for sale, selling, and the like (including, without limitation, any taxes, fees and other costs incurred in connection therewith) of the Collateral, to the reasonable attorneys’ fees and expenses incurred by the Secured Parties in enforcing its rights hereunder and in connection with collecting, storing and disposing of the Collateral, and then to satisfaction of the Obligations to the Secured Parties based on the then outstanding principal amount of the Debentures, and to the payment of any other amounts required by applicable law, after which the Secured Parties shall pay to the applicable Debtor any surplus proceeds. If, upon the sale, license or other disposition of the Collateral, the proceeds thereof are insufficient to pay all amounts to which the Secured Parties are legally entitled, the Debtors will be liable for the deficiency, together with interest thereon, at the rate of 18% per annum or the lesser amount permitted by applicable law (the “Default Rate”), and the reasonable fees of any attorneys employed by the Secured Parties to collect such deficiency.  To the extent permitted by applicable law, the Debtors waive all claims, damages and demands against the Secured Parties arising out of the repossession, removal, retention or sale of the Collateral, unless due to the gross negligence or willful misconduct of the Secured Parties.
            8.    Costs and Expenses. The Debtors agree to pay all reasonable out-of-pocket fees, costs and expenses incurred in connection with any filing required hereunder, including without limitation, any financing statements pursuant to the UCC, continuation statements, partial releases and/or termination statements related thereto or any expenses of any searches reasonably required by the Secured Parties.  The Debtors shall also pay all other claims and charges which in the reasonable opinion of the Secured Parties might prejudice, imperil or otherwise affect the Collateral or the Security Interest therein. The Debtors will also, upon demand, pay to the Secured Parties the amount of any and all reasonable expenses, including the reasonable fees and expenses of its counsel and of any experts and agents, which the Secured Parties may incur in connection with (i) the enforcement of this Agreement, (ii) the custody or preservation of, or the sale of, collection from, or other realization upon, any of the Collateral, or (iii) the exercise or enforcement of any of the rights of the Secured Parties under the Debentures. Until so paid, any fees payable hereunder shall be added to the principal amount of the Debentures and shall bear interest at the Default Rate.

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            9.    Responsibility for Collateral. The Debtors assume all liabilities and responsibility in connection with all Collateral, and the Obligations shall in no way be affected or diminished by reason of the loss, destruction, damage or theft of any of the Collateral or its unavailability for any reason.
            10.   Security Interest Absolute. All rights of the Secured Parties and all Obligations of the Debtors hereunder, shall be absolute and unconditional, irrespective of: (a) any lack of validity or enforceability of this Agreement, the Debentures or any agreement entered into in connection with the foregoing, or any portion hereof or thereof; (b) any change in the time, manner or place of payment or performance of, or in any other term of, all or any of the Obligations, or any other amendment or waiver of or any consent to any departure from the Debentures or any other agreement entered into in connection with the foregoing; (c) any exchange, release or nonperfection of any of the Collateral, or any release or amendment or waiver of or consent to departure from any other collateral for, or any guaranty, or any other security, for all or any of the Obligations; (d) any action by the Secured Parties to obtain, adjust, settle and cancel in its sole discretion any insurance claims or matters made or arising in connection with the Collateral; or (e) any other circumstance which might otherwise constitute any legal or equitable defense available to a Debtor, or a discharge of all or any part of the Security Interest granted hereby.  Until the Obligations shall have been paid and performed in full, the rights of the Secured Parties shall continue even if the Obligations are barred for any reason, including, without limitation, the running of the statute of limitations or bankruptcy.  The Debtors expressly waive presentment, protest, notice of protest, demand, notice of nonpayment and demand for performance. In the event that at any time any transfer of any Collateral or any payment received by the Secured Parties hereunder shall be deemed by final order of a court of competent jurisdiction to have been a voidable preference or fraudulent conveyance under the bankruptcy or insolvency laws of the United States, or shall be deemed to be otherwise due to any party other than the Secured Parties, then, in any such event, the Debtors’ obligations hereunder shall survive cancellation of this Agreement, and shall not be discharged or satisfied by any prior payment thereof and/or cancellation of this Agreement, but shall remain a valid and binding obligation enforceable in accordance with the terms and provisions hereof.  The Debtors waive all right to require the Secured Parties to proceed against any other person or to apply any Collateral which the Secured Parties may hold at any time, or to marshal assets, or to pursue any other remedy. The Debtors waive any defense arising by reason of the application of the statute of limitations to any obligation secured hereby.
            11.   Term of Agreement. This Agreement and the Security Interest shall terminate on the date on which all payments under the Debentures have been made in full or have been satisfied and all other Obligations have been paid or discharged. Upon such termination, the Secured Parties, at the request and at the expense of the Debtors, will join in executing any termination statement with respect to any financing statement executed and filed pursuant to this Agreement.
            12.   Power of Attorney; Further Assurances.
(a) The Debtors authorize the Secured Parties, and do hereby make, constitute and appoint the Secured Parties and its respective officers, agents, successors or assigns 

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with full power of substitution, as the Debtors’ true and lawful attorney-in-fact, with power, in the name of the Secured Parties or the Debtors, to, after the occurrence and during the continuance of an Event of Default, (i) endorse any note, checks, drafts, money orders or other instruments of payment (including payments payable under or in respect of any policy of insurance) in respect of the Collateral that may come into possession of the Secured Parties; (ii) to sign and endorse any financing statement pursuant to the UCC or any invoice, freight or express bill, bill of lading, storage or warehouse receipts, drafts against debtors, assignments, verifications and notices in connection with accounts, and other documents relating to the Collateral; (iii) to pay or discharge taxes, liens, security interests or other encumbrances at any time levied or placed on or threatened against the Collateral; (iv) to demand, collect, receipt for, compromise, settle and sue for monies due in respect of the Collateral; and (v) generally, to do, at the option of the Secured Parties, and at the expense of the Debtors, at any time, or from time to time, all acts and things which the Secured Parties deem necessary to protect, preserve and realize upon the Collateral and the Security Interest granted therein in order to effect the intent of this Agreement and the Debentures all as fully and effectually as the Debtors might or could do; and the Debtors hereby ratify all that said attorney shall lawfully do or cause to be done by virtue hereof.  This power of attorney is coupled with an interest and shall be irrevocable for the term of this Agreement and thereafter as long as any of the Obligations shall be outstanding.
(b) On a continuing basis, the Debtors will make, execute, acknowledge, deliver, file and record, as the case may be, with the proper filing and recording agencies in any jurisdiction, including, without limitation, the jurisdictions indicated on Schedule B attached hereto, all such instruments, and take all such action as may reasonably be deemed necessary or advisable, or as reasonably requested by the Secured Parties, to perfect the Security Interest granted hereunder and otherwise to carry out the intent and purposes of this Agreement, or for assuring and confirming to the Secured Parties the grant or perfection of a perfected security interest in all the Collateral under the UCC.
(c) The Debtors hereby irrevocably appoint the Secured Parties as the Debtors’ attorney-in-fact, with full authority in the place and instead of the Debtors and in the name of the Debtors, from time to time in the Secured Parties’ discretion, to take any action and to execute any instrument which the Secured Parties may deem necessary or advisable to accomplish the purposes of this Agreement, including the filing, in its sole discretion, of one or more financing or continuation statements and amendments thereto, relative to any of the Collateral without the signature of the Debtors where permitted by law.
            13.   Notices. All notices, requests, demands and other communications hereunder shall be subject to the notice provision of the Purchase Agreement.
            14.   Other Security. To the extent that the Obligations are now or hereafter secured by property other than the Collateral or by the guarantee, endorsement or property of any other Person, then the Secured Parties shall have the right, in their sole discretion, to pursue, 

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relinquish, subordinate, modify or take any other action with respect thereto, without in any way modifying or affecting any of the Secured Parties’ rights and remedies hereunder.
            15.   Best Efforts for  Licensed Collateral. Notwithstanding any other provision contained herein or any of the Transaction Documents, upon the occurrence of an Event of Default, the Debtors hereby agree that with respect to any part of the Collateral which may require the consent of any third party or third parties in order for Debtors to transfer and/or convey its interest in and to such Collateral to the Secured Parties, as may be required in accordance herewith, Debtors agree to and shall use their best efforts to obtain such consents or approvals in as expedient a manner as possible.
            16.   Miscellaneous.
(a)   No course of dealing between the Debtors and the Secured Parties, nor any failure to exercise, nor any delay in exercising, on the part of the Secured Parties, any right, power or privilege hereunder or under the Debentures shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or privilege hereunder or thereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege.
(b)   All of the rights and remedies of the Secured Parties with respect to the Collateral, whether established hereby or by the Debentures or by any other agreements, instruments or documents or by law shall be cumulative and may be exercised singly or concurrently.
(c)   This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof and is intended to supersede all prior negotiations, understandings and agreements with respect thereto. Except as specifically set forth in this Agreement, no provision of this Agreement may be modified or amended except by a written agreement specifically referring to this Agreement and signed by the parties hereto.
(d)   In the event any provision of this Agreement is held to be invalid, prohibited or unenforceable in any jurisdiction for any reason, unless such provision is narrowed by judicial construction, this Agreement shall, as to such jurisdiction, be construed as if such invalid, prohibited or unenforceable provision had been more narrowly drawn so as not to be invalid, prohibited or unenforceable.  If, notwithstanding the foregoing, any provision of this Agreement is held to be invalid, prohibited or unenforceable in any jurisdiction, such provision, as to such jurisdiction, shall be ineffective to the extent of such invalidity, prohibition or unenforceability without invalidating the remaining portion of such provision or the other provisions of this Agreement and without affecting the validity or enforceability of such provision or the other provisions of this Agreement in any other jurisdiction.
(e)   No waiver of any breach or default or any right under this Agreement shall be considered valid unless in writing and signed by the party giving such waiver, and no 

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such waiver shall be deemed a waiver of any subsequent breach or default or right, whether of the same or similar nature or otherwise.
(f)     This Agreement shall be binding upon and inure to the benefit of each party hereto and its successors and assigns.
(g)   Each party shall take such further action and execute and deliver such further documents as may be necessary or appropriate in order to carry out the provisions and purposes of this Agreement.
(h)   All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of Texas, without regard to the principles of conflicts of law thereof.  Each party agrees that all Proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and the Debentures (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, employees or agents) shall be commenced exclusively in the state and federal courts sitting in Dallas, Texas. Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in Dallas, Texas for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any Proceeding, any claim that it is not personally subject to the jurisdiction of any such court, or that such Proceeding is improper. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.  Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal Proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. If either party shall commence a Proceeding to enforce any provisions of this Agreement, then the prevailing party in such Proceeding shall be reimbursed by the other party for its reasonable attorneys fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Proceeding.
(i)   This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and, all of which taken together shall constitute one and the same Agreement. In the event that any signature is delivered by facsimile transmission, such signature shall create a valid binding obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such facsimile signature were the original thereof.

 

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            IN WITNESS WHEREOF, the parties hereto have caused this Security Agreement to be duly executed on the day and year first above written.

	
  DEBTORS 

  
	
   

  
	
  UNIPIXEL, INC.

  	
  Address for Notice and Delivery: 

  8708 Technology Forest Place 

  Suite 100 

  The Woodlands, Texas 77381 

  Telephone: (281) 825-4500 

  Facsimile: (281) 825-4599 

  Attn: Reed Killion, President

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name: Reed Killion 

  	
   

  
	
   

  	
  Title: President

  	
   

  
	
   

  
	
   

  
	
  DEBTORS

  
	
   

  
	
  UNIPIXEL DISPLAYS, INC.

  	
  Address for Notice and Delivery: 

  8708 Technology Forest Place 

  Suite 100 

  The Woodlands, Texas 77381 

  Telephone: (281) 825-4500 

  Facsimile: (281) 825-4599 

  Attn: Reed Killion, President

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name: Reed Killion 

  	
   

  
	
   

  	
  Title: President

  	
   

  
				

 

 

 

SECURED PARTIES’
SIGNATURE PAGE

	
  SECURED PARTIES:

  
	
   

  
	
  TRIDENT GROWTH FUND, L.P.

  
	
   

  
	
  By: 

  	
   

  	
  TRIDENT MANAGEMENT, LLC, its

  
	
   

  	
   

  	
  GENERAL PARTNER

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title: Authorized Member

  
	
   

  	
   

  	
   

  
	
  Address for Notice and Delivery

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  700 Gemini

  	
   

  	
   

  	
   

  	
   

  
	
  Houston, TX 77058

  	
   

  	
   

  	
   

  	
   

  
	
  Telephone: (281) 488-8484

  	
   

  	
   

  	
   

  	
   

  
	
  Facsimile: (281) 488-5353

  	
   

  	
   

  	
   

  	
   

  
	
  Attn: Larry St. Martin

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CAPSOURCE FUND, L.P.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By: 

  	
  CapSource Partners, L.P.

  	
   

  	
   

  	
   

  
	
   

  	
  its general partner

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By: 

  	
  CapSource Managers, Inc.

  	
   

  	
   

  	
   

  
	
   

  	
  its general partner

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name: R. Rand Ray

  	
   

  	
   

  	
   

  
	
   

  	
  Title: Vice President

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Address for Notice and Delivery

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  795 Woodlands Parkway, Suite 100

  	
   

  	
   

  	
   

  	
   

  
	
  Ridgeland, MS 39157

  	
   

  	
   

  	
   

  	
   

  
										

 

 

SCHEDULE A
Principal Place of Business of Debtors:

8708 Technology Forest Place

Suite 100

The Woodlands, Texas
77381

 

 

Locations Where Collateral is Located or Stored:

8708 Technology Forest Place

Suite 100

The Woodlands, Texas
77381

 

 

SCHEDULE B

UniPixel,
Inc.:  State of Delaware

UniPixel
Displays, Inc.:  State of TexasExhibit 10.1

PURCHASE AND SALE
AGREEMENT

(Goliath Project — North Dakota)

THIS PURCHASE AND
SALE AGREEMENT (the “Agreement”) is made as of April 10, 2006, by and between
American Oil & Gas, Inc. (“American”), a Nevada corporation
whose address is 1050 Seventeenth Street, Suite 1850, Denver, Colorado 80202, as seller, and Teton
Energy Corporation (“Teton”), a Delaware corporation whose address is 410
Seventeenth Street, Suite 1850, Denver, Colorado 80202, as buyer.

1.       Background.  American believes that it owns an undivided
75% leasehold interest in undeveloped oil and gas leases covering approximately
45,000 mineral acres in Dunn, McKenzie, Mountrail, and Williams Counties, North
Dakota, and that Evertson Energy Partners, LLC (“Evertson”) owns the remaining 25%.  American and Evertson are actively acquiring
new leases in the area and are discussing the possible adoption of a master
form joint operating agreement for use in the area.  Teton wishes to purchase an undivided 25%
interest in these leases, to establish an area of mutual interest with
American, and to become a party to any agreement that may be reached concerning
a master form joint operating agreement, all on the terms and conditions set
forth in this Agreement.

2.       Definitions.

“Area of Mutual Interest”
means the area identified in Appendix 2.

“Lease Deadline” means
5:00 p.m. on Monday, April 24, 2006.

 “Leases” means the leases identified in
Appendix 1 and all new leases within the Area of Mutual Interest in which
American may acquire an interest, either legally or beneficially, before the
Lease Deadline.

“Mineral Acre” means the
full fee oil and gas ownership interest in one acre of land, so that, for
example, a person may own one Mineral Acre either by owning a 100% fee oil and
gas interest in a single acre of land or by owning an undivided 25% fee oil and
gas interest in four acres of land.

“Net Leasehold Acre”
means the full oil and gas leasehold interest in one Mineral Acre, so that, for
example, a person may have one Net Leasehold Acre by owning the entire
leasehold interest in an oil and gas lease covering one Mineral Acre or by
owning an undivided 25% leasehold interest in an oil and gas lease covering
four Mineral Acres.

“Operator” means the
then-current operator of a well under a joint operating agreement covering the
lands comprising the drill site for that well.

“Tahosa Acquisition
Agreement” means the Purchase and Sale Agreement dated for identification
October 7, 2005, among American, Tahosa Holdings, LLC, Mélange International,
LLC, Evertson Energy Partners, LLC, Rose Exploration, Inc., and Empire Oil
Company, in accordance with which American acquired its interest in many of the
Leases.

 
  

“Title Defect” means a
cloud, encumbrance or other impediment rendering title to a Lease defective to a
degree that a reasonably prudent operator in the Rocky Mountains would not
acquire the lease as part of a very large exploratory acreage acquisition in
which it was seeking leases at an average 80% net revenue interest, unless and
until appropriate curative work had been performed to remove the cloud,
encumbrance or other impediment.  Teton
has full knowledge of the Tahosa Acquisition Agreement at the date hereof, and
expressly agrees that no term, condition or other provision of the Tahosa
Acquisition Agreement constitutes a Title Defect.

3.       Purchase and Sale.

3.1    Agreement.  American shall sell and assign to Teton, and
Teton shall purchase and accept from American, a 25% leasehold interest in the
Leases on the terms and conditions contained in this Agreement.

3.2    Purchase
Price.  The purchase price for
the Leases (the “Purchase Price”) shall be $450 per Net Leasehold Acre assigned
to Teton at Closing, payable as follows:

(a)        40% of the Purchase Price by wire
transfer to American at Closing; and

(b)       60% of the Purchase Price by wire
transfers to the Operator in payment of amounts due from American in connection
with drilling, completing and equipping operations within the Area of Mutual
Interest, when and as such amounts become due to the Operator; provided,
however, that if any portion of this 60% share of the Purchase Price has not
been paid to the Operator on behalf of American by May 31, 2007, then the
entire unpaid portion shall be paid by Teton to American on June 1, 2007,
thereby ending Teton’s obligation to pay further amounts to the Operator on
behalf of American.

The payment method in
clause (b) is a method of regulating the timing of the payment of the 60% share
of the Purchase Price.  Payments to the
Operator on behalf of American will begin when the first advance or other
payment is due from American in connection with the first well drilled within
the Area of Mutual Interest, and will continue as additional amounts become due
from American for that first well and for all subsequent wells within the Area
of Mutual Interest, until the full 60% share of the Purchase Price has been
paid.  As long as a portion of the
Purchase Price remains unpaid, Teton must timely pay all amounts due from
American to the Operator, unless American provides Teton specific written
instructions to the contrary before Teton transmits such funds to the
Operator.  The unpaid portion of the 60%
share of the Purchase Price will not bear interest while awaiting expenditure,
unless a payment is not timely made to the Operator when due.  If Teton fails timely to pay a required
amount to the Operator on behalf of American, then (i) Teton will be solely
responsible for any additional fees, interest or charges due the Operator as a
result of later payment (which fees, interest or charges will not be taken from
or otherwise reduce the unpaid portion of the Purchase Price) and (ii) the
entire remaining unpaid portion of the Purchase Price will, at American’s
option exercised by written notice to Teton, become immediately due and payable
to American and will bear interest at an annual rate of 18% from the date the
unpaid amount was due to the Operator until the date the entire remaining
unpaid portion of the Purchase Price is paid to American.

.

 2
 

 
  

4.       Title Review.

4.1       Title Information.  American will continue to make available to
Teton, at American’s office during reasonable business hours, all title
information in American’s possession pertaining to the Leases, although
American does not warrant the accuracy or completeness of such information.

4.2     No Subsequent Transfers. 
American represents and warrants for the benefit of Teton that it has
made no assignments of leasehold interests or assignments of overriding
royalties in any Lease since it acquired such Lease, other than overriding royalty
assignments made pursuant to the area of mutual interest provision in the
Tahosa Acquisition Agreement.  American
further represents and warrants that it has not mortgaged or otherwise
encumbered for security purposes its interest in any Lease.   These representations and warranties are
true at the date hereof, and will continue to be true until the leasehold
interest assignment is delivered to Teton at Closing.

4.3     Notice of Title Defects.  Until 5:00 p.m. on Monday, May 1, 2006, Teton
will provide prompt notice to American whenever it concludes that particular
circumstances may give rise to a Title Defect. 
After receiving each such notice, American may undertake curative work,
may provide Teton more information explaining the circumstances, or may simply
take the position that the circumstances do not constitute a Title Defect.  If American agrees at any time up to 5:00
p.m. on May 2, 2006 that a Lease suffers from a Title Defect, then such lease
will be excluded from the Leases, no interest in that lease will be transferred
at Closing, and the net acres covered by that lease will not be considered in
computing the purchase price for the remaining Leases.  If American has not agreed by 5:00 p.m. on
May 2, 2006 that a Lease suffers from a Title Defect, then, unless Teton
withdraws its Title Defect claim by 5:00 p.m. on May 3, 2006, (i) closing will
proceed as scheduled, but the Leases suffering from putative Title Defects will
be temporarily removed from the Leases, no interest in such leases will be transferred
at Closing, and the net acres covered by such leases will not be considered in
computing the purchase price to be paid at Closing for the remaining Leases and
(ii) the existence of the putative Title Defects will be finally determined in
accordance with Section 4.5.

4.4     Net Leasehold Acre Determination.  American and Teton will meet on Thursday, May
4, 2006, to agree upon the total number of Net Leasehold Acres that will be
assigned to Teton at the Closing.  If
such agreed number of Net Leasehold Acres is less than 85% of the number of Net
Leasehold Acres that were included in the Leases at the Lease Deadline, then
Teton may, at its sole option exercised before 6:00 p.m. on May 4, 2006, elect
not to proceed with Closing under this Agreement and, in that event, neither
American nor Teton shall have any liability to the other whatsoever; provided, however, that if American disputes a sufficient
number of Title Defects that, if American were correct, the agreed number of
Net Leasehold Acres would be more than 85% of the number of Net Leasehold Acres
included in the Leases at the Lease Deadline, then any election by Teton not to
proceed with Closing will be held in abeyance and the Closing will be suspended
until the actual number of Net Leasehold Acres has been resolved under Section
4.5.  If American and Teton cannot agree
upon the exact number of Net Leasehold Acres that will be assigned to Teton at
the Closing, but do agree that such number is more than 85% of the Net
Leasehold Acres at the Lease Deadline or, being less, Teton still wishes to
proceed with Closing, then the Closing will nonetheless occur as to such Leases
and Net Leasehold Acres as they are able to agree, with closing as to the
remaining Leases and Net Leasehold Acres suspended until the disputed Net
Leasehold Acres have been resolved under Section 4.5.  The number of Net Leasehold Acres assigned to
Teton will conclusively be deemed correct upon the parties’ agreement or, if
necessary, upon the arbitrator’s determination, and shall not be challenged
thereafter.

 3
 

 
  

4.5     Title Defect Dispute. 
American and Teton hereby agree that any dispute concerning the
existence of a Title Defect or the number of Net Leasehold Acres being assigned
to Teton (a “Title Dispute”) shall be resolved exclusively and solely by
arbitration in accordance with this Section 4.5.  Specifically, the parties agree that such
Title Dispute shall be finally determined by an independent arbitrator
knowledgeable about the oil and gas industry and mutually acceptable to the Parties
or, if no such arbitrator has been agreed by May 10, 2006, then by a member of
the law firm of Fleck, Mather & Strutz, Ltd., Bismarck, North Dakota,
acting as arbitrator, in either case with the assistance of such independent
landmen and other consultants as the arbitrator deems necessary.  No later than 21 days after the arbitrator’s
written agreement to serve, American and Teton shall present their respective
positions in writing to the arbitrator, together with such evidence as each
Party deems appropriate.  The arbitrator
shall be instructed to resolve the dispute through a final binding decision
within 21 days after such submission deadline and, when the arbitrator
determines the number of Net Leasehold Acres or finds that certain claimed
Title Defects do not exist, the arbitrator shall also set forth how and when
the assignment of such Leases to Teton and the payment of purchase price to
American shall be accomplished.  The
arbitrator may request oral presentations and shall decide any other procedural
matters presented by a party, which decisions shall be final and binding upon
the parties. Each party shall bear its own costs and expenses of the
arbitration, provided, however that the costs incurred in employing the
arbitrator (including not only the fees and costs of such arbitrator, but also
the fees and costs of landmen or other consultants engaged by the arbitrator)
shall be borne 50% by American and 50% by Teton.  The decision of the arbitrator may be filed
in any court of competent jurisdiction and may be enforced by any party as a
final judgment of such court.

5.       Tahosa Acquisition Agreement.  Teton has carefully reviewed the full text of
the Tahosa Acquisition Agreement and knows that, among other things, the Tahosa
Acquisition Agreement (i) requires the drilling of two horizontal wells by
October 1, 2008, (ii) requires the assignment of certain overriding royalties
on leases acquired within a specified area of mutual interest, and (iii)
imposes certain notice and reassignment obligations before leases expire or are
surrendered, abandoned or are released. 
Teton recognizes and agrees that it will be proportionately subject to
all continuing responsibilities of American imposed by the Tahosa Acquisition
Agreement, whether or not such responsibilities are mentioned or accurately
summarized in the preceding sentence. 
The assignment delivered by American at Closing will contain specific
language by which Teton assumes and agrees to perform such responsibilities in
accordance with their terms, just as surely as if Teton itself had been an
original party to the Tahosa Acquisition Agreement.

6.       Area of Mutual Interest.

6.1     Tahosa
AMI Responsibilities.  As noted in
Section 5, American is already subject to area of mutual interest
responsibilities under the Tahosa Acquisition Agreement.  Teton recognizes that it as well will be
burdened by such responsibilities following Closing.

6.2     New
AMI Responsibilities.  If either
American or Teton acquires leases or rights to acquire leases within the Area
of Mutual Interest during the period beginning at 5:01 p.m. on Monday, April
24, 2006 and ending October 1, 2010 (excluding, of course, the interests in the
Leases that are assigned by American to Teton pursuant to this Agreement), then
the acquiring party shall offer an interest (50% of Teton’s interest in the
case of an offer made by Teton to American and 25% of American’s interest in
the case of an offer made by American to Teton) in such leases or rights to the
other party.  The party to whom the offer
is made will have a period of 21 calendar days following receipt of the offer
in which to elect to acquire the offered interest by paying its

 4
 

 
  

proportionate share of the offering party’s
out-of-pocket acquisition costs for such leases or rights.  Failure of a party to respond within the
21-day period shall be an election not to acquire the interest.  If, pursuant to this Section 6.2, a party
acquires an interest in a farmin or other earning agreement but then elects not
to participate in the drilling of an earning well under that agreement, it
shall retain only those rights it previously earned by participating in past
drilling and will immediately assign its rights to participate in all future
drilling and earning to the other party.

7.       Joint Operating Agreement. 
American and Evertson have recently begun discussing a master form of
joint operating agreement, which, if mutually agreed, would be used to prepare
individual joint operating agreements as needed in the Area of Mutual Interest,
each of which would have as its contract area the anticipated drilling unit for
a particular well.  Immediately after
execution of this Agreement, American will use its best efforts to secure
Evertson’s permission for Teton to participate in such discussions.  If, despite American’s best efforts, Evertson
does not grant permission for Teton to participate in these master form
discussions, then American shall continue its discussions with Evertson,
keeping Teton informed of all material developments in the discussions and
carefully considering any requests, suggestions or comments made by Teton in
respect of the master form.  In either
event, if a master form is unanimously agreed by American, Teton and Evertson
before Closing, then American and Evertson shall execute appropriate evidence
of such agreement, which Teton shall join, ratify and confirm at Closing.  If the master form is not unanimously agreed
by American, Teton and Evertson before Closing, then either Teton or American
may independently elect, at any time before Closing occurs, not to proceed with
Closing under this Agreement and, in that event, neither American nor Teton
shall have any liability to the other whatsoever.  In any event, American will use reasonable
efforts in the negotiations to ensure that (i) Evertson is appointed Operator,
(ii) the first individual joint operating agreement provides in Article VI.A
that the initial well shall be commenced on or before June 30, 2006, and (iii)
the second well shall, if the first well is completed as a producer and subject
to delay upon the occurrence of an event of force majeure, be commenced within
120 days of release of the drilling rig from the first well location.

8.       Closing.

8.1     Date and Time.  Closing shall occur in American’s Denver
office at 10:30 a.m. on Friday, May 5, 2006, or at such other place and time as
may be agreed by the parties.

8.2     Closing Obligations.  At Closing, the following events shall occur,
each being a condition precedent to the others and each being deemed to have
occurred simultaneously with the others:

(a)    American shall execute, acknowledge and
deliver to Teton (or a subsidiary of Teton if Teton so desires), an assignment
of the Leases, substantially in the form attached as Appendix 3 and containing
a special warranty of title by, through and under American, but not otherwise;

(b)    Teton shall deliver 40% of the Purchase
Price by wire transfer to an account designated by American;

(c)    if American and Evertson have agreed upon a
master form of joint operating agreement, as explained in Section 7.3 above,
then Teton will join, ratify and confirm that agreement as if it had been an
original party thereto; and

 5
 

 
  

(d)    the Parties shall take such other actions
and deliver such other documents as may be necessary or convenient to effect
the purchase and sale contemplated herein.

9.      Miscellaneous.

9.1     Notices. 
Except as otherwise expressly provided in this Agreement, all communications
required or permitted under this Agreement will be in writing and any such
communication or delivery will be deemed to have been duly given and received
when actually delivered to the address set forth below of the party to be
notified personally (by a recognized commercial courier or delivery service
that provides a receipt) or by telecopier (confirmed in writing by a personal
delivery as set forth above), addressed as follows:

 

	
  If to American:

  	
   

  	
  American Oil & Gas, Inc.

  	
   

  	
   

  
	
   

  	
   

  	
  1050 Seventeenth Street, Suite 1850

  	
   

  	
   

  
	
   

  	
   

  	
  Denver, Colorado 80265

  	
   

  	
   

  
	
   

  	
   

  	
  Attention: Patrick D. O’Brien

  	
   

  	
   

  
	
   

  	
   

  	
  Telephone: 
  303.595.0125

  	
   

  	
   

  
	
   

  	
   

  	
  Facsimile: 
  303.595.0709

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  If to Teton:

  	
   

  	
  Teton Energy Corporation

  
	
   

  	
   

  	
  410 Seventeenth Street, Suite 1850

  
	
   

  	
   

  	
  Denver, Colorado 80202

  
	
   

  	
   

  	
  Attention: Karl F. Arleth, President and Chief
  Executive Officer

  
	
   

  	
   

  	
  Telephone: 303.565.4600

  
	
   

  	
   

  	
  Facsimile: 303.542.1817 

  

 

Any party may, by written notice so delivered to the
other, change the address to which delivery will thereafter be made.

9.2      Expenses. 
Each party will be solely responsible for all costs that it incurs in
connection with this Agreement and the activities contemplated herein, with no
right to recovery or contribution from any other party.

9.3      Entire Agreement.  This Agreement embodies the entire agreement
between the Parties with respect to the subject matter of this Agreement
(superseding all prior agreements, arrangements, understandings and
solicitations of interest or offers related to the subject matter of this
Agreement, including the letter from Teton dated March 17, 2006), and may be
supplemented, altered, amended, modified or revoked by writing only, signed by
all of the Parties to this Agreement. 
The headings in this Agreement are for convenience only and will have no
significance in the interpretation of any term or provision of this Agreement.

9.4      Governing Law.  This Agreement will be governed and construed
and enforced in accordance with the laws of the State of Colorado, without
regard to rules concerning conflicts of laws.

9.5      Counterparts.  This Agreement may be executed in any number
of counterparts, and each and every counterpart will be deemed for all purposes
one agreement.

 6
 

 
  

9.6      Binding Effect; Assignment.  All the terms, provisions, covenants,
representations and conditions of this Agreement will be binding upon and inure
to the benefit of and be enforceable by the Parties to this Agreement and their
respective successors and assigns, although this Agreement and the rights and
obligations hereunder will not be assignable or delegable by any party without
the prior written consent of the non-assigning or non-delegating party, which
may be withheld at the sole discretion of such party.  Notwithstanding the foregoing, Teton may
assign all of its rights and obligations under this Agreement to a wholly owned
subsidiary, without the need for any consent by American.

9.7       Independent Analysis.  In entering into this Agreement, Teton
acknowledges that it has relied solely upon its own independent analysis,
evaluation and investigation of, and judgment with respect to, the business,
economic, legal, tax or other consequences of the transaction contemplated
herein, including its own estimate, analysis and appraisal of the extent and
value of the hydrocarbon resources associated with the Leases, the future
operation, maintenance and development costs associated with the Leases, and
the legal risks of owning and operating the Leases.

9.8       Survival.  All terms
and conditions of this Agreement will survive the Closing and delivery of the
assignment from American to Teton.

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

	
  

  	
   

  	
   

  	
   

  	
   

  
	
  AMERICAN OIL
  & GAS, INC.

  	
   

  	
  TETON ENERGY CORPORATION

  
	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ Patrick D.
  O’Brien

  	
   

  	
  By: 

  	
  /s/ Karl F. Arleth

  
	
   

  	
  Patrick D. O’Brien, Chief Executive Officer

  	
   

  	
   

  	
  Karl F. Arleth, President and

  
	
   

  	
   

  	
   

  	
   

  	
  Chief Executive Officer

  
							

 

Appendix 1:      The Leases

Appendix 2:      AMI

Appendix 3:      Assignment

 

 7

 

 

APPENDIX 2:  AMI

(Goliath Project — North Dakota)

The Area of Mutual Interest consists of the following lands:

Township 155
North, Range 97 West

Sections: 1-9

Township 155
North, Range 98 West

Sections: 1-12

Township 155
North, Range 99 West

Sections: 1, 2, 11, 12

Township 156
North, Range 96 West

Sections: 5, 6

Township 156
North, Range 97 West

Sections: All

Township 156
North, Range 98 West

Sections: All

Township 156
North, Range 99 West

Sections: 1-4, 9-15, 23-26, 35, 36

Township 157
North, Range 96 West

Sections: 4-9, 16-23, 26-35

Township 157
North, Range 97 West

Sections: All

Township 157
North, Range 98 West

Sections: 1-3, 10-15, 22-36

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00108-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00108-of-00352.parquet"}]]