CONVERTIBLE REVOLVING PROMISSORY NOTE
EXHIBIT 10.2
THIS
NOTE AND THE SECURITIES INTO WHICH THIS NOTE IS CONVERTIBLE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (“SECURITIES ACT”), AND
MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED EXCEPT (I) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR (II) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, BUT ONLY UPON LENDER FIRST
HAVING OBTAINED A WRITTEN OPINION OF XXXXXXXX’S COUNSEL, OR OTHER COUNSEL
ACCEPTABLE TO BORROWER, THAT THE PROPOSED DISPOSITION IS CONSISTENT WITH ALL
APPLICABLE PROVISIONS OF THE SECURITIES ACT AND ANY APPLICABLE “BLUE SKY” OR
OTHER SIMILAR SECURITIES LAW.
FORM OF
$6,894,362.00 November 6,
2008
Denver,
Colorado
THIS
CONVERTIBLE REVOLVING PROMISSORY NOTE (the “Note”) is executed
and delivered under and pursuant to the terms of that certain Senior Secured
Revolving Credit Agreement (the “Loan Agreement”) of
even date herewith by and between ADVANCE DISPLAY TECHNOLOGIES, INC., a Colorado
corporation (the “Borrower”) and
XXXXXXXX HOLDINGS THREE LLC, a Delaware limited liability company (the “Lender”). Capitalized
terms not otherwise defined herein shall have the meanings provided in the Loan
Agreement.
FOR VALUE
RECEIVED, Borrower hereby promises to pay to the order of Lender, at the office
of Lender located at 000 Xxxxxxxxxxxx Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx,
00000, or at such other place as Lender may from time to time designate to
Borrower in writing, on or before November 1, 2009 (the “Maturity Date”),
unless payable sooner pursuant to the provisions of the Loan Agreement, the
principal sum of SIX MILLION
EIGHT HUNDRED NINETY-FOUR THOUSAND THREE HUNDRED SIXTY-TWO DOLLARS
($6,894,362.00) or, if less, the aggregate unpaid principal amount of all
Loans under the Revolving Credit Facility, as follows:
1. Interest. The
aggregate outstanding principal amount of the Revolving Loans shall bear
interest in accordance with Section 3 of the Loan Agreement; provided that, in no
event shall interest exceed the maximum interest rate permitted by
law. Upon and after the occurrence of an Event of Default, and during
the continuation thereof, interest shall be payable at the Default
Rate.
2. Maximum
Revolving Credit Amount. In the event the aggregate
outstanding principal balance of the Revolving Credit Facility hereunder exceeds
the Maximum Revolving Credit Amount, Borrower shall, without notice or demand of
any kind, immediately pay Lender such amounts which are necessary to reduce the
aggregate outstanding principal to an amount which is equal to or less than the
Maximum Revolving Credit Amount.
3. Security
Interest. This Note is the “Revolving Note” referred to in the
Loan Agreement and is secured by the liens granted pursuant to the Loan
Agreement and the other Loan
Documents. This Note is entitled to all of the benefits of the
Loan Agreement and is subject to all of the agreements, terms and conditions of
the Loan Agreement.
4. Conversion. Lender
shall have the right, at its sole discretion and
in accordance with Section 8 of the Loan Agreement, to convert the unpaid
principal balance, if any, on this Note, or such lesser portion thereof as
Lender may elect, into Shares at any time unless this Note is paid in full
pursuant to the terms of this Note and Section 8 of the Loan
Agreement.
5. Event of
Default. If a Default shall occur, which is not cured within
the Cure Period, then this Note may, as provided in the Loan Agreement, be
declared to be immediately due and payable, without notice, together with
reasonable attorneys’ fees.
6. Waiver. Except
for such notices as may be required under the terms of the Loan Agreement,
Borrower waives presentment, demand, notice, protest, and all other demands, or
notices, in connection with the delivery, acceptance, performance, default, or
enforcement of this Note, and assents to any extension or postponement of the
time of payment or any other indulgence.
7. Replacement. This
Note is given in replacement of and extinguishes the indebtedness (including any
accrued interest) evidenced by the promissory notes set forth on Schedule 1(b)
of the Loan Agreement, each in favor of Xxxxxx’s affiliate, Xxxxxxxx X. XxXxxxxx
(“LFD”), and
executed by Borrower in favor of LFD, with an aggregate face value of
$2,500,000.
8. Severability. If one or more provisions of this Note are
held to be unenforceable under applicable law, such provision shall be excluded
from this Note and the balance of the Note shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.
9. No
Impairment. The Borrower will
not, by any voluntary action, avoid or seek to avoid the observance or
performance of any of the terms to be observed or performed hereunder by the
Borrower, but will at all times in good faith assist in the carrying out of all
the provisions of this Note and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the Lender against
impairment.
10. Transfer;
Successors and Assigns. The terms and conditions of this Note shall
inure to the benefit of and be binding upon the respective successors and
assigns of the parties. This Note may not be transferred in violation
of any restrictive legend set forth hereon. Each new Note issued upon
transfer of this Note shall bear a legend as to the applicable restrictions on
transferability in order to ensure compliance with the Securities Act, unless in
the opinion of counsel for Borrower such legend is not required in order to
ensure compliance with the Securities Act. Subject to the preceding
sentence, this Note may be transferred only upon surrender of the original Note
for registration of transfer, duly endorsed, or accompanied by a duly executed
written instrument of transfer in form satisfactory to the
Borrower. Thereupon, a new note for the same principal amount and
interest will be issued to, and registered in the name of, the
transferee.
11. Loss of
Note. Upon receipt by the Borrower of evidence
satisfactory to it of the loss, theft, destruction or mutilation of this Note or
any Note exchanged for it, and indemnity satisfactory to the Borrower (in case
of loss, theft or destruction) or surrender and cancellation of such Note (in
the case of mutilation), the Borrower will make and deliver in lieu of such Note
a new Note of like tenor.
12. Miscellaneous. The
Loans evidenced hereby have been made and/or issued and this Note has been
delivered at Lender’s main office set forth above. This Note shall be
governed and construed in accordance with the laws of the State of Colorado, in
which state it shall be performed, and shall be binding upon Borrower, and its
legal representatives, successors, and assigns. Wherever possible,
each provision of the Loan Agreement and this Note shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of the Loan Agreement or this Note shall be prohibited by or be invalid under
such law, such provision shall be severable, and be ineffective to the extent of
such prohibition or invalidity, without invalidating the remaining provisions of
the Loan Agreement or this Note. The term “Borrower” as used herein
shall mean the party signing this Note and such party and its successors and
assigns, shall be jointly and severally obligated hereunder.
IN
WITNESS WHEREOF, Xxxxxxxx has executed this Note as of the date set forth
above.
ADVANCE
DISPLAY TECHNOLOGIES, INC.
By:
___________________________________
Name: Xxxxxxx
X. Xxxxxxx
Title: Chief
Executive Officer
