SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 8-K


                                 CURRENT REPORT


Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Date of Report (Date of Earliest Event Reported): May 19, 1997
                                                  ------------



                       ADVANCE DISPLAY TECHNOLOGIES, INC.
              -----------------------------------------------------
             (Exact name of registrant as specified in its charter)



     Colorado                     0-15224                     84-0969445
----------------------          -----------               ------------------
(State of other juris-          (Commission                (I.R.S. Employer
 diction of incorpora-          File Number)              Identification No.)
 tion)



      1251 South Huron, Unit C
          Denver, Colorado                                      80223
---------------------------------------                        ---------
(Address of Principal Executive Offices)                      (Zip Code)



Registrant's telephone number including area code: (303) 733-5339
                                                   --------------

Former name or former address if changed since last report:

         N/A





<PAGE>

ITEM 1. CHANGES IN CONTROL OF REGISTRANT

          Effective  May 19,  1997,  Advance  Display  Technologies,  Inc.  (the
     "Company")  experienced  a change in  control  as a result  of an  exchange
     transaction  ("Exchange") in which the operations of Display  Optics,  Ltd.
     (the "Partnership")  were consolidated with those of the Company.  Pursuant
     to the Exchange, the Company was restructured such that certain individuals
     and entities  acquired in the  aggregate a direct  interest in Common Stock
     equal to approximately eighty two percent (82%) of the Company's issued and
     outstanding  Common Stock.  Prior to the Exchange,  these  investors  owned
     partnership interests and other securities  convertible into Company Common
     Stock.  Contemporaneously,  the Company agreed to appoint  certain of those
     individuals  to its Board of  Directors.  As a result of this  transaction,
     management believes a change in control of the Company has occurred.

          The  Exchange  was  completed  pursuant  to  an  agreement  ("Exchange
     Agreement")  effective  May 19,  1997,  by and  between  the  Company,  the
     Partnership,  Display  Group,  LLC (the  managing  general  partner  of the
     Partnership),  Keith  A.  Hancock,  G.  Schneider  Holdings,  Co.,  Mark L.
     Schneider,  Bruce H. Etkin, certain additional  individuals and a privately
     held general partnership (all of the individual investors together with the
     general  partnership  are  hereinafter  referred  to  collectively  as  the
     "Investors"). Messrs. Hancock, Etkin and Mark Schneider, together with Gene
     Schneider (the general partner of G. Schneider Holdings,  Co.) are proposed
     to be appointed to the Company's Board of Directors.  Such appointment will
     be completed not less than ten (10) days following  delivery of information
     to Company  shareholders  pursuant to rules of the  Securities and Exchange
     Commission.  The exchange transaction was designed in an effort to simplify
     administration  of the  Company's  affairs  and public  reporting  with the
     Securities and Exchange Commission.

          The Company  issued  17,509,868  shares of Common Stock and  1,843,900
     shares of a newly created class of Series C Preferred Stock in exchange for
     equity  securities  and  convertible  loans  originally   acquired  by  the
     Investors  for  $2,302,567.  All of the stock  issued in the  Exchange  was
     issued  pursuant to exemptions  from the  registration  requirements of the
     Securities  Act of 1933, as amended.  However,  the Company  granted to the
     Investors  piggyback  registration  rights with regard to the Common Stock.
     The assets  transferred by the Investors  include  equity  interests in the
     Partnership and Display Group,  together with promissory notes representing
     certain loans  previously made to the Partnership or Display Group.  (For a
     more complete  description of the assets acquired by the Company,  see Item
     2. ACQUISITION OF ASSETS,  below).  The capital stock was distributed among
     the Investors in accordance  with their interest in the assets  transferred
     to the Company.  The Exchange  Agreement and  distribution of capital stock
     was designed to approximate the economic  benefits held by the Investors in
     the  Partnership  prior to the Exchange.  The Series C Preferred Stock pays
     dividend and liquidation  preferences which, if paid by the Company,  would
     provide the Investors an economic  return  comparable to that to which they
     were entitled under the terms of the original Partnership Agreement.

        

                                        2

<PAGE>



          The  following  table  depicts  beneficial  ownership of the Company's
     Common Stock, the only class of voting securities  outstanding,  by certain
     Investors on the date of this Report, who own or are deemed beneficially to
     own, more than five percent (5%) of the Company's  Common Stock, as well as
     by  individuals  proposed to be added to the Company's  Board of Directors.
     The  percentages  are based on an  aggregate  of  21,343,923  shares of the
     Company's Common Stock outstanding as of the date of this Report:

   Beneficial Owner                             Amount of         Percentage of
   and Address                              Voting Securities  Voting Securities
   -----------                              -----------------  -----------------
   American Consolidated                       1,249,750             5.9%
   Growth Corporation
   8100 E. Arapahoe Rd., Suite 309
   Englewood, CO 80112

   William W. Becker                           1,873,369             8.8%
   Box 143
   Grand Cayman Island
   British West Indies

   Display Group, LLC (1)                      1,715,030             8.0%
   5251 DTC Parkway, Suite 1210
   Englewood, CO 801 11

   William J. Elsner                           1,126,812             5.3%
   83 Glenmoor Place
   Englewood, CO 80110

   Bruce H. Etkin (2)                          3,247,456             15.2%
   1512 Larimer St., No. 325
   Denver, CO 80202

   Keith A. Hancock                            76,045                 4.0%
   5251 DTC Parkway, Ste. 1210
   Englewood, CO 80111

   Jan E. Helen                                1,126,797              5.3%
   5251 DTC Parkway, Suite 1010
   Englewood, CO 80111

   G. Schneider Holdings, Co.                  4,491,959             23.1%
   4643 S. Ulster, Suite 1300
   Denver, CO 80237

   Gene W. Schneider (2)(3)                    4,491,959             23.1%
   4643 S. Ulster, Suite 1300
   Denver, CO 80237

                                        3

<PAGE>



    Mark L. Schneider (2)                       2,509,173             11.8%
    4643 S. Ulster St., Suite 1300
    Denver, CO 80237

     ---------------

     (1)  Includes  1,365,030  shares  of  Common  Stock  beneficially  owned by
          American Consolidated Growth Corporation and affiliated entities which
          the  reporting  person has the right to vote pursuant to a court order
          pending resolution of a civil proceeding  regarding ownership of those
          shares.  Also includes 350,000 shares acquired by the reporting person
          pursuant to a settlement agreement, which the reporting person intends
          to surrender to the Company.

     (2)  Proposed director.

     (3)  Includes  4,491,959  shares  of  Common  Stock  owned by G.  Schneider
          Holdings Co. of which Gene W. Schneider is the general partner.
-------------

          Prior  to  consummation  of the  Exchange,  holders  of the  Company's
     previously  outstanding  Series B Preferred  Stock were entitled to approve
     certain  fundamental  activities  undertaken by the Company.  Pursuant to a
     loan agreement with such  individuals,  the Company agreed not to undertake
     certain actions, including,  without limitation,  amendment of its Articles
     of Incorporation,  consummation of mergers, acquisitions or sales or leases
     of assets otherwise than in the ordinary course of business,  sale or other
     issuance of equity or debt  securities,  or consummation of agreements with
     directors,  officers or affiliates. Such provisions will continue in effect
     until the earliest to occur of ninety days after the effective  date of the
     Exchange  or  the  date  upon  which  the  aforementioned  individuals  are
     appointed to the Company's Board of Directors.

          The Company knows of no other  circumstances or events,  the happening
     of which would result in a further change of control in the Company.  It is
     anticipated  that the  shareholder  notice  required by  regulations of the
     Securities and Exchange Commission preceding appointment of the new members
     of the Board of Directors would be mailed on or about June 15, 1997.

ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.

          In  connection  with the  Exchange,  the Company  acquired  all of the
     assets and  liabilities  of the  Partnership  and  Display  Group,  LLC. In
     connection with the Exchange Agreement, the Company became the owner of all
     of  the  equity  interest  of  both  the  Partnership  and  Display  Group,
     effectively making those entities wholly-owned subsidiaries of the Company.

          The  assets of the  Partnership  include  patents  to  display  screen
     technology,  together  with  associated  intangibles  associated  with  the
     manufacturing,  marketing and selling of the display screens. The assets of
     Display  Group consist of rights in two matters of pending  litigation  and
     Common  Stock of the  Company  acquired  in  connection  with a  settlement
     agreement, anticipated to be surrendered to the Company.

          The Company also acquired all of the  liabilities  of the  Partnership
     and Display Group.  Foremost among the  liabilities  assumed by the Company
     were  present  and  future   obligations  for  general  and  administrative
     expenses,  including  personnel  salaries  and a  liability  for legal fees
     previously  incurred by Display  Group,  for which the  Company  received a
     credit in the Exchange.


                                        4

<PAGE>



          The  Company  intends to  utilize  the  assets of the  Partnership  to
     continue  the  business of  manufacturing,  marketing  and selling  display
     screens and developing and marketing related technology.

ITEM 3. BANKRUPTCY OR RECEIVERSHIP.

          No report required.

ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.

          No report required.

ITEM 5. OTHER EVENTS.

          Subsequent  to completion  of the  Exchange,  the Company  completed a
     private  placement  of its Common  Stock in a  transaction  exempt from the
     registration requirements of the 1933 Act. The Company sold 10% Convertible
     Promissory Notes in the aggregate  principal amount of $500,000 to a single
     accredited investor pursuant to the provisions of Regulation D, Rule 506 of
     the 1933 Act.  The  Promissory  Notes are  convertible  into  shares of the
     Company's  Common Stock at the rate of $0.1315 per share until the earliest
     to occur of  completion of a subsequent  private  placement or December 31,
     1997. Proceeds of the private placement will be utilized by the Company for
     repayment of debt, marketing of the display screens, development of related
     technologies, accounts payable and working capital.

ITEM 6. RESIGNATION OF REGISTRANT'S DIRECTORS.

          No report required.

ITEM 7. FINANCIAL STATEMENTS, PROFORMA FINANCIAL INFORMATION AND EXHIBITS

          (a) Financial Statements of Businesses Acquired.

                    It is  impractical  for the Company to provide the  required
                    financial  statements at the time of filing this Report. The
                    required   financial   statements  and  proforma   financial
                    information will be filed by amendment to this Report within
                    sixty days of filing.

          (b) Proforma Financial Information.

                    See response to (a) above.

          (c) Exhibits.

                    (i)  Exchange  Agreement  by and  between the  Company,  the
                         Partnership, Display Group and the Investors, dated May
                         19, 1997, without exhibits.

                                        5

<PAGE>



                    (ii) Registration   Rights  Agreement  by  and  between  the
                         Company and the Investors.

                    (iii)Articles  of  Amendment  to the  Company's  Articles of
                         Incorporation  regarding  designation  of the  Series C
                         Preferred Stock.

ITEM 8. CHANGE IN FISCAL YEAR.

          No report required.





                                        6

<PAGE>


                                    SIGNATURE


          Pursuant to the  requirements of the Securities  Exchange Act of 1934,
     the Registrant has duly caused this report to be filed on its behalf by the
     undersigned thereunto duly authorized.

                                          ADVANCE DISPLAY TECHNOLOGIES, INC.



Date:       06/03/97                       By:  /s/ Darrell D. Avey
                                                --------------------------------
                                                 Darrell D. Avey, Chairman






















                                        7

<PAGE>

                               EXCHANGE AGREEMENT


     THIS EXCHANGE  AGREEMENT (this "Agreement") is entered into as of this 19th
day of May, 1997 by and among Keith A.  Hancock,  individually  ("Hancock"),  G.
Schneider  Holdings  Co.,  a Colorado  limited  partnership  ("G.S.  Holdings"),
William W. Becker, individually ("Becker"), Mark L. Schneider, individually ("M.
Schneider"),   Jan  E.  Helen,   individually  ("Helen"),   William  J.  Elsner,
individually ("Elsner"), J. Timothy Brittan, individually ("Brittan"),  Bruce H.
Etkin,  individually  ("Etkin"),   Peregrine  Investments,  a  Virginia  general
partnership ("Peregrine"),  John D. Seiver,  individually ("Seiver") and John P.
Cole, Jr.,  individually ("Cole")  (collectively,  the "Exchanging Parties," and
each an "Exchanging  Party"),  Advance  Display  Technologies,  Inc., a Colorado
corporation   (the  "Company"),   Display  Optics,   Ltd.,  a  Colorado  limited
partnership  (the  "Partnership"),  and Display Group,  LLC, a Colorado  limited
liability company (the "LLC").

                                    RECITALS

     A. The Exchanging Parties individually own the assets indicated on Schedule
A to this Agreement,  including (i) Series B Preferred Stock of the Company, (b)
Class A  limited  partnership  interests  in the  Partnership,  (c)  debt of the
Partnership,  (d)  equity  interests  in the  LLC and (e)  debt of the  LLC.  In
addition,  as  also  indicated  on  Schedule  A,  the  LLC  holds  debt  of  the
Partnership.

     B. The Series B Preferred  Stock of the Company is convertible  into common
stock  of the  Company  ("Common  Stock").  All of the debt  described  above is
convertible into Class B limited partnership  interests in the Partnership.  The
Partnership  Agreement of the Partnership provides that 99% of all distributions
by the  Partnership  will be made to the  limited  partners  until  the  limited
partners have received  distributions  equal to 150% of their  investment in the
Partnership.  The  Class  A  and  Class  B  limited  partnership  interests  are
convertible into Common Stock.

     C. In order to simplify the  structure  of the  Company's  business,  while
retaining  to  the  extent  practicable  the  economic  characteristics  of  the
investments  described above,  the parties desire for the Exchanging  Persons to
transfer to the Company the assets listed on Schedule A (the "Exchanged Assets")
in  exchange  for the  assets  and rights  listed on  Schedule  B and  otherwise
described in this Agreement.

     D. The  independent  directors of the Company have  unanimously  determined
that the  transactions  contemplated  by this  Agreement are fair to, and in the
best  interests of, the Company and the  shareholders  of the Company other than
the exchanging Persons.


#25204.V.
                                                       

<PAGE>



The parties agree as follows:

Section 1 Exchange.
-------------------

     1.1 (a) The parties hereto  acknowledge  that the exchange  contemplated by
Section  1.1(b)  below does not include  value for any  accrued  interest on the
Loans.  Each Exchanging  Party hereby expressly waives all rights to any accrued
but unpaid interest on the Loans.

          (b) Each Exchanging Party hereby transfers all of its right, title and
interest in and to all assets  indicated  as owned by such  Exchanging  Party on
Schedule A in  exchange  for the  number of shares of Common  Stock and Series C
Preferred Stock of the Company indicated for such Exchanging Party on Schedule B
and the other consideration referred to elsewhere in this Agreement. The Company
accepts such assignment and hereby issues to each Exchanging  Party the stock of
the Company as  indicated  on Schedule B (the  "Company  Stock").  The  exchange
contemplated  by this Section 1.1(b) shall be  immediately  effective as soon as
this Agreement has been signed by all the parties (the "Effective Time").

     1.2  After  the  Effective  Time,  each  Exchanging  Party  shall  promptly
surrender to the Company all notes,  certificates  or other  instruments  of any
kind evidencing  ownership of any of the Exchanged Assets,  all duly endorsed to
the Company and accompanied by proper instruments of transfer to the Company, at
its office designated as herein provided.  Upon receipt of the foregoing from an
Exchanging  Person,  the Company shall promptly deliver or send the following to
such Exchanging Person:

          (a) certificates in the name of such Exchanging  Person evidencing the
Company  Stock to which  such  Exchanging  Party is  entitled  as  indicated  on
Schedule B.

          (b) a  Registration  Rights  Agreement  in the form  attached  to this
Agreement as Exhibit A, duly executed by the Company.

     1.3 For each Exchanging Person, the exchange contemplated by this Agreement
shall be deemed to have  occurred as of the  Effective  Time,  and the person or
persons entitled to receive the shares of Company Stock shall be treated for all
purposes as the record  shareholder  or  shareholders  of such shares of Company
Stock on the Effective Time.

     1.4 If any Exchanging  Party is unable to locate a promissory note or stock
certificate to be surrendered by such  Exchanging  Party under Section 1.2, such
Exchanging Party shall be entitled nevertheless to receive the items referred to
in clauses (a) and (b) of Section 1.2 upon  submission  to the Company of a lost
note or lost certificate affidavit in customary form. The affidavit shall state,
among other things,  that the lost note or certificate  has not been endorsed or
otherwise  transferred  to  encumbered  and  that  such  Exchanging  Party  will
indemnify the Company and the other Exchanging  Parties for any damages they may
incur in  connection  with any claim by any third party to have any  interest in
the lost note or certificate.


#25204.V.
                                       -2-

<PAGE>



     1.5 All obligations of the Exchanging Parties under this Agreement shall be
several and not joint. Under no circumstances will any Exchanging Party have any
liability  for any  failure  by any other  Exchanging  Party to comply  with any
provision of this Agreement.

Section 2 Assignment and Assumption.
------------------------------------

     2.1 In connection with and as part of the exchange described in Section 1.2
above,  the Company  hereby assumes the obligation of the LLC to pay $163,000 to
Holme  Roberts & Owen LLP ("HRO") for fees and  disbursements  relating to legal
services,  pending  review of the legal invoices  therefor.  The final amount of
legal fees shall be agreed  upon by the LLC,  the  Company  and HRO,  and in the
event that the amount of such fees is not equal to $163,000,  the Company  stock
to be issued pursuant to Schedule B shall be adjusted accordingly.

Section 3 Company  Representations  and Warranties.  As a material inducement to
the  Exchanging  Parties to enter into this  Agreement,  the  Company  makes the
following  representations and warranties to the Exchanging Parties,  subject to
the  disclosures  set  forth on  Exhibit  B  attached  hereto  (the  "Disclosure
Schedule"):

     3.1  Organization,   Standing,   and   Qualification.   The  Company  is  a
corporation,  duly  organized,  validly  existing and in good standing under the
laws of the State of Colorado,  and has all necessary power and authority to own
its properties owned by it and carry on its business as currently conducted.

     3.2  Authorization;  Enforceability.  All action on the part of the Company
necessary for the authorization, execution, delivery, and performance of all the
obligations  of the Company  under this  Agreement and the  consummation  of the
transactions  contemplated hereby has been taken. This Agreement constitutes the
valid and binding obligations of the Company, enforceable against the Company in
accordance  with its terms.  The members of the Company's Board of Directors are
Darrel Avey,  Vincent D. Bradshaw,  and John D. Kilgore,  and there are no other
Directors of the  Company.  Each such person was duly  appointed  and remains in
good  standing  as a Director of the  Company.  The  Company  has  provided  the
Exchanging Parties and their respective counsel with true and accurate copies of
the appropriate  resolutions of the Company's Board of Directors relating to the
transactions  contemplated by this Agreement,  certified by the Secretary of the
Company as true, accurate, and effective as of the date hereof.

     3.3 Capitalization. The authorized capital stock of the Company consists of
100,000,000  shares of Common Stock,  par value $.001 per share, and 100,000,000
shares of Preferred Stock par value $.001 per share,  of which 1,000,000  shares
have been  designated as Series A Preferred  Stock,  2,991,474  shares have been
designated as Series B Preferred Stock and 1,843,900 shares have been designated
as Series C Preferred  Stock.  Of the  authorized  capital stock of the Company,
3,834,505  shares of Common Stock,  no shares of Series A Preferred  Stock,  and
2,991,505  shares of Series B Preferred Stock are  outstanding.  All outstanding
shares of the Company's capital stock are duly authorized, validly issued, fully
paid and nonassessable. Upon completion of the transactions contemplated by this

#25204.V.
                                       -3-

<PAGE>



Agreement,  21,343,923  shares of Common Stock,  no shares of Series A Preferred
Stock,  no shares of Series B Preferred  Stock and 1,843,900  shares of Series C
Preferred  Stock  will be  issued  and  outstanding.  Except as set forth on the
Disclosure Schedule,  there are no outstanding rights,  subscriptions,  options,
warrants,  conversion  privileges,  preemptive  rights,  or other  agreements or
commitments  obligating the Company to issue or transfer any  additional  equity
securities  (with or without the passage of time  and/or the  occurrence  of any
other  events)  except for the items  being  transferred  to the  Company by the
Exchanging  Parties  under  Section  1  above,  none  of  which  items  will  be
outstanding upon completion of the transactions contemplated by this Agreement.

     3.4  Validity  of Stock.  The  Articles  of  Amendment  to the  Articles of
Incorporation  (the  "Articles of  Amendment")  of the  Company,  a complete and
accurate copy of which are attached  hereto as Exhibit C, are duly authorized by
the Company's  Amended and Restated  Articles of  Incorporation,  have been duly
adopted by the Board of  Directors  of the  Company  and govern the terms of the
Series C Preferred  Stock.  The Articles of  Amendment  have been filed with the
Colorado  Secretary  of State and are in full  force and  effect.  The shares of
Common  Stock  and  Series C  Preferred  Stock  to be  issued  pursuant  to this
Agreement (collectively,  the "Shares"),  when issued, shall be duly authorized,
validly issued,  fully paid, and non-assessable and will be free of any liens or
encumbrances.

     3.5 Control of Shares. Upon completion of the transactions  contemplated by
this  Agreement,  the  Exchanging  Parties,  in the  aggregate,  will own  stock
possessing  at least 80% of the total  combined  voting  power of all classes of
stock of the Company  entitled  to vote and at least 80% of the total  number of
shares of all other classes of stock of the Company.

     3.6  Securities  and  Exchange  Commission  Filings.  (a) True and complete
copies of all reports, registration statements,  definitive proxy statements and
other documents,  including all amendments to any of the foregoing (collectively
the "Commission  Filings") filed by the Company with the Securities and Exchange
Commission  (the  "Commission")  have been  furnished  to  Display  Group by the
Company.  The Commission  Filings constitute all of the documents required to be
filed by the Company with the Commission during the last five years. As of their
respective  dates,  each of such  Commission  Filings  complied in all  material
respects with the applicable  requirements of the Securities Act of 1933 and the
Securities  Exchange Act of 1934, and none of such Commission  Filings contained
as of such date any untrue  statement  of a material  fact or omitted to state a
material fact required to be stated  therein or necessary to make the statements
therein,  in  light  of the  circumstances  under  which  they  were  made,  not
misleading.

          (b) When filed with the Commission,  the financial statements included
in the Commission  Filings filed during the three-year period ending on the date
of this  Agreement  complied  as to  form  in all  material  respects  with  the
applicable  rules  and  regulations  of the  Commission  and  were  prepared  in
accordance with generally accepted accounting principles applied on a consistent
basis (except as may be indicated therein or in the notes or schedules thereto),
and such  financial  statements  fairly  present the  financial  position of the
Company as at the dates thereof and the results of its operations and its cash

#25204.V.
                                       -4-

<PAGE>



flows for the periods then ended,  subject, in the case of the unaudited interim
financial statements, to normal, recurring year-end audit adjustments. Except to
the extent reflected or reserved against in the financial statements included in
the Company's  Quarterly  Report on Form 10-Q for the quarter ended December 31,
1996 (the "10-Q"),  the Company does not have any liability or obligation of any
kind, whether accrued, absolute,  contingent,  unliquidated or other and whether
due or to become due (including any liability for breach of contract,  breach of
warranty, torts, infringements,  claims or lawsuits), other than liabilities for
debt included in the Exchanged Assets and immaterial  liabilities incurred since
December 31, 1996, in the ordinary course of business.  Since December 31, 1996,
the Company has not entered into any agreement (other than this  Agreement),  or
transaction outside of the ordinary course of business,  or declared or paid any
dividend or acquired or  committed  to acquire any of its capital  stock  (other
than  pursuant to this  Agreement)  and there has not been any material  adverse
change in the Company's financial position, results of operations or prospects.

     3.7 Tax Returns and Audits.  The Company has filed all federal,  state, and
local tax returns and reports  within the times and in the manner  prescribed by
law and has paid (or made adequate  provision in the balance  sheet  included in
the  10-Q  for)  all  taxes  shown  due on such  returns,  as well as all  other
assessments  and  penalties  which have become due and  payable.  The  Company's
federal income tax returns have not been audited by the Internal Revenue Service
or any other  taxing  authority  and no notice of audit has been  received.  The
provisions  for taxes in the balance sheet included in the 10-Q are adequate for
any and all federal,  state, county, local and other taxes for the period ending
on such date and for all prior periods, whether or not disputed. The Company has
not  received  notice  of any  disputes,  deficiency  assessments,  or  proposed
adjustments to taxes payable by the Company.

     3.8 Articles of Incorporation and Bylaws: No Conflicts.  The Company is not
in violation of any  provision of its Articles of  Incorporation  or Bylaws,  as
amended and in effect as of the date hereof.  There is no default or event that,
with notice or lapse of time,  or both,  would  conflict  with or  constitute  a
breach of the  Company's  Amended  and  Restated  Articles of  Incorporation  or
Bylaws. The execution, delivery and performance of this Agreement by the Company
will not  violate,  cause a  default  under,  otherwise  breach or result in the
actual or potential acceleration of any obligations or any loss or forfeiture of
any rights by the Company  pursuant to any existing  agreement or arrangement to
which the Company or, to the best of the Company's  knowledge,  the Partnership,
is a party or by which their respective assets may be affected.

     3.9 Litigation. There are no actions, suits, or legal,  administrative,  or
other  proceedings  or  investigations  pending or, to the best of the Company's
knowledge,  threatened before any court,  agency, or other tribunal to which the
Company or, to the best of the Company's knowledge, the Partnership,  is a party
or against or affecting any of the property,  assets,  businesses,  or financial
condition  of the  Company  or,  to the  best of the  Company's  knowledge,  the
Partnership. Neither the Company nor, to the best of the Company's knowledge,

#25204.V.
                                       -5-

<PAGE>



the Partnership,  is in default with respect to any order, writ, injunctions, or
decree of any federal,  state,  local or foreign court,  department,  agency, or
instrumentality to which it is a party.

     3.10 Agreement Will Not Cause Breach or Violation.  The consummation of the
transactions  contemplated  by this  Agreement  (including  the  issuance of the
Company Stock) will not result in any violation of or constitute a default or an
event  that,  with  notice or lapse of time,  or both,  would  conflict  with or
constitute a breach or default of the  Partnership  Agreement or the Articles of
Incorporation  or Bylaws of the Company or of any contract  commitment  or other
arrangement  or any  material  provision  of state or  federal  law and will not
result in the creation or  imposition of any lien or  encumbrance  on any of the
property  of the  Company  or,  to the  best  of the  Company's  knowledge,  the
Partnership,  or on the  Company  Stock,  the  limitation  of any  rights of the
Company or, to the best of the  Company's  knowledge,  the  Partnership,  or the
increase or acceleration of any obligations of the Company or the Partnership.

     3.11 Governmental Approvals/Third Party Consents. All consents,  approvals,
or   authorizations   of,  or   registrations,   qualifications,   designations,
declarations,  or filings with any federal or state governmental authority,  and
all  consents,  approvals  or  authorizations  of any third  party,  required in
connection   with  the  execution  of  this   Agreement  and  the   transactions
contemplated  hereby (including the issuance and sale of the Company Stock) have
been obtained by the Company.

     3.12  Registration  Rights.  The  Company  is not under any  obligation  to
register any of its presently outstanding  securities pursuant to the Securities
Act of 1933 (the  "Securities  Act")  except  as set  forth in the  Registration
Rights Agreement in form  substantially  similar to Exhibit A, to be executed by
the Exchanging Parties and the Company simultaneously with this Agreement.

     3.13 The Company and its Board of Directors have received a written opinion
from Neidiger,  Tucker, Bruner, Inc.,  independent financial advisors,  that the
transactions  contemplated by this Agreement are fair, from a financial point of
view, to the shareholders of the Company other than the Exchanging Parties.

     3.14 Accuracy of Information Furnished.  The representations and warranties
in this Agreement do not contain any untrue statement of a material fact or omit
to state any material  fact that is necessary to make the  statements  contained
herein or therein not misleading as of the Effective Time.

     3.15  Compliance  with Laws.  The Company (a) has  complied  with and is in
compliance in all material respects with all federal,  state and local statutes,
laws, ordinances,  regulations,  rules, judgments, orders and decrees applicable
to it and its assets, business and operations and (b) has not received notice of
any  claim of  default  under  or  violation  of any  statute,  law,  ordinance,
regulation, rule, judgment, order or decree.

Section 4 Remedies on and Notices of Default. In addition to any other available
legal or equitable  remedies,  if the representation and warranty in Section 3.3
of this Agreement is ever determined to have been inaccurate in any respect when
made, then the Company shall promptly issue to each Exchanging Person the number
of shares of Common  Stock and/or  Series C Preferred  Stock that will cause the



#25204.V.
                                       -6-

<PAGE>

total amount of Company Stock issued to each  Exchanging  Party to represent the
same percentage voting and economic interest in the Company as such person would
have received if there had been no inaccuracy in Section 3.3.

Section 5  Representations  and Warranties of the Exchanging  Parties.  (a) Each
Exchanging Party represents severally, but not jointly, that this Agreement is a
valid and binding obligation of such Exchanging Party,  enforceable against such
Exchanging Party in accordance with its terms, and that the Exchanging Party has
not taken any action that would cause any of the Exchanged  Assets owned by such
Exchanging Party (as indicated on Schedule A to this Agreement) to be subject to
the claims of any third party.

          (b) Each  Exchanging  Party  acknowledges,  represents and warrants as
follows:

               (i) Each Exchanging  Party that is a natural person is twenty-one
(21)  years of age,  of legal  capacity  to  execute  this  Agreement,  and in a
financial  position to hold the Shares for an  indefinite  period of time and is
able to bear the economic  risks and withstand a complete loss of his investment
in the Shares; and

               (ii) Each Exchanging  Party,  either alone or with the assistance
of his own professional  advisor, has such knowledge and experience in financial
and business  matters that he is capable of evaluating the merits and risk of an
investment in the Shares and has the net worth to undertake such risks; and

               (iii) Each Exchanging  Party has received and had the opportunity
to review the  Company's  Annual Report on Form 10-KSB for the fiscal year ended
June 30, 1996 and the Articles of  Amendment  to the  Articles of  Incorporation
describing the Series C Preferred  Stock,  and has been given access to full and
complete  information  regarding the Company and has utilized such access to his
satisfaction for the purpose of obtaining such information regarding the Company
as he has reasonably  requested;  and,  particularly,  each Exchanging Party has
been given reasonable opportunity to ask questions of, and receive answers from,
representatives  of the  Company  concerning  the  terms and  conditions  of the
exchange  and to obtain any  additional  information,  to the extent  reasonably
available; and

               (iv) Each  Exchanging  Party  recognizes  that the  Company has a
limited  operating  history and that the Shares as an investment  involve a high
degree of risk,  including  but not limited to the risk of economic  losses from
operations of the Company; and

               (v) Each  Exchanging  Party realizes that (A) the purchase of the
Shares is a long-term investment;  (B) the purchaser of the Shares must bear the
economic risk of investment for an indefinite  period of time because the Shares
have not be registered  under the Securities Act of 1933 or under the securities
laws of any state and,  therefore,  the Shares cannot be resold unless the Share
are   subsequently   registered   under  said  laws  or  exemptions   from  such
registrations  are  available;  and (C) the  transferability  of the  Shares  is
restricted and requires conformity with the restrictions  contained in paragraph
(c) below.


#25204.V.
                                       -7-

<PAGE>


          (c) Each Exchanging Party  acknowledges  that the Shares have not been
registered  under the Securities Act of 1933 or applicable state securities laws
and that the Shares are being offered and sold pursuant to exemptions  from such
laws and that the Company's  reliance upon such exemptions is predicated in part
on each Exchanging Party's  representations as contained herein. Each Exchanging
Party  represents  and warrants that the Shares are being  purchased for his own
account and for investment purposes only, and without the intention of reselling
or  redistributing  the same, that each  Exchanging  Party has made no agreement
with  others  regarding  any of the  Shares,  and that each  Exchanging  Party's
financial  condition  is such that it is not likely that it will be necessary to
dispose of any of such  securities in the  foreseeable  future.  Each Exchanging
Party  further  represents  and  agrees  that  if,  contrary  to  the  foregoing
intentions,  he  should  later  desire to  dispose  of or  transfer  any of such
securities  in any manner,  he shall not do so without  first  obtaining (i) the
opinion of counsel to the Company that such proposed disposition or transfer may
be lawfully made without the  registration  of such  securities  pursuant to the
Securities Act of 1933, as then amended,  and applicable  state securities laws,
or  (ii)  such  registration  (it  being  understood  that  the  Company  has no
obligation to register any  securities).  The Company will restrict  transfer in
accordance with the foregoing representation.

          (d) Each Exchanging Party hereby represents and warrants that he is an
"accredited  investor" and within the meaning of Rule 501 of Regulation D of the
1933 Act.

          (e) Each  Exchanging  Party has  obtained  independent  tax counsel or
advice regarding the tax treatment and effect of the Exchange to such Exchanging
Party. None of the Exchanging  Parties has relied on any advice from the Company
regarding the tax treatment of the Exchange,  and  understands  that the Company
has made no representations or warranties to that effect.

          (f) The  financial  statements of the LLC as of December 31, 1996 (the
"LLC  Financials")  and  previously  delivered  to the  Company  are a true  and
accurate statement of the financial  condition of the respective  entities as of
the dates  therein  stated,  prepared  in  accordance  with  Federal  Income Tax
principles.  Except to the  extent  reflected  or  reserved  against  in the LLC
Financials,  the LLC does not have any  liability  or  obligation  of any  kind,
whether accrued, absolute, contingent,  unliquidated or other and whether due or
to become  due  (including  any  liability  for  breach of  contract,  breach of
warranty,  torts,  infringements,  claims or  lawsuits),  other than  immaterial
liabilities  incurred  since  December  31,  1996,  in the  ordinary  course  of
business.

Section 6 Covenants of the Company.
-----------------------------------

     6.1 Affirmative  Covenants.  The Company shall use its best efforts to make
all required filings under Rule 14f-1 of the Securities  Exchange Act of 1934 in
connection with the election of additional directors of the Company.

     6.2 Negative  Covenants.  For a period  commencing as of the Effective Time
through  the  earlier  to occur of (i) 90 days  thereafter,  or (ii) the date on
which the  holders  of the  Series C  Preferred  Stock  have  elected 4 of the 7
members of the Board of Directors of the Company after filing of all  applicable
securities  filing  described in Section 6.1 above,  the Company  agrees that it

#25204.V.
                                       -8-

<PAGE>


will not take any of the  following  actions by the  Company  without  the prior
written  consent of a majority of the holders of Series C Preferred Stock of the
Company:

          (a) Amend the Articles of Incorporation or Bylaws of the Company;

          (b)  Consummate any mergers,  acquisitions,  sales or leases of assets
and other significant transactions involving the Company;

          (c) Sell or  otherwise  issue  any  equity or debt  securities  of the
Company;

          (d) Approve any annual operating and capital budgets of the Company or
any significant changes thereto;

          (e)  Change  the  Company's  business  activities  beyond the scope of
individual display screen products;

          (f) Enter  into any  agreements  with  directors,  officers  and other
affiliates of the Company;

          (g)  Consummate  any stock  splits or other  reclassifications  by the
Company;

          (h)  Compromise  or  release  any  claims  of, or debts  owed to,  the
Company;

          (i)  Consummate  any  other  actions  out of the  ordinary  course  of
business of the Company; or

          (j)  Review  and  approve  any   publicity  or  other   communications
pertaining to the technology being developed by the Company or the shareholders.

The holders of the Series C Preferred shall reply promptly to any request by the
Company to take any of the foregoing actions.

In addition,  up to 2 representatives of the holders of Series C Preferred Stock
shall be  permitted  to attend all  meetings  of the Board of  Directors  of the
Company.  Also,  upon request of the holders of Series C Preferred  Stock and at
the expense of the Company,  the Company will engage  auditors and  attorneys to
conduct  a due  diligence  review  of the  Company,  and the  Company  agrees to
cooperate in such review.

Section 7 Miscellaneous Provisions.
-----------------------------------

     7.1  Modifications  and  Waivers.  This  Agreement  may not be  amended  or
modified,  nor may the  rights  of any  party be  waived,  except  by a  written
document that is executed by (a) the Company and (b) Exchanging  Persons with at
least 50% of the "amount at risk" as indicated in Schedule A. No amendment to

#25204.V.
                                       -9-

<PAGE>



 
this  Agreement  reducing  the  consideration  to be received by any  Exchanging
Person  shall  be  effective  unless  signed  by each  Exchanging  Person  whose
consideration is to be reduced.

     7.2  Assignment.  This  Agreement  is binding  upon and shall  inure to the
benefit of the parties and their respective successors and permitted assigns. No
party  hereto may assign this  Agreement  to any third  party  without the prior
written consent of (a) the Company and (b) Exchanging  Persons with at least 50%
of the "amount at risk" as indicated in Schedule A.

     7.3 Rights and  Obligations  of Third Parties.  Nothing in this  Agreement,
whether  express or implied,  is intended to confer any rights or remedies under
or by reason of this  Agreement on any persons  other than the parties to it and
their  respective  successors  and  permitted  assigns,  nor is anything in this
Agreement  intended to relieve or discharge  the  obligation or liability of any
third parties to any party to this  Agreement,  nor shall any provision give any
third  party  any  right of  subrogation  or  action  against  any party to this
Agreement.

     7.4 Notices. Any notice, request, consent, or other communication hereunder
shall be in writing,  and shall be sent by one of the  following  means:  (i) by
registered  or  certified  first class mail,  postage  prepaid,  return  receipt
requested; (ii) by facsimile transmission with confirmation of receipt; (iii) by
overnight courier service;  or (iv) by personal delivery,  and shall be properly
addressed as follows:

                  If to the Company to:

                           Advance Display Technologies,  Inc.
                           1251 South Huron Street
                           Denver, Colorado  80223
                           Attention:  Darrell Avey
                           Facsimile:  (303) 733-5363

                  With a copy to:

                           David Babiarz, Esq.
                           Overton Babiarz & Sykes
                           7720 E. Belleview Ave., Suite 200
                           Englewood, Colorado 80111
                           Facsimile: (303) 779-6006

                 If to Partnership, to:

                           Display Optics, Ltd.
                           5251 DTC Parkway, Suite 1210
                           Englewood, Colorado  80111
                           Attention:  Darrell Avey
                           Facsimile:  (303) 694-0770



#25204.V.
                                      -10-

<PAGE>
                 

                  If to LLC, to:

                           Display Group, LLC
                           5251 DTC Parkway, Suite 1210
                           Englewood, Colorado  80111
                           Attention:  Keith Hancock
                           Facsimile:  (303) 694-0770

          If to an Exchanging Party, to such Exchanging Party at the address set
forth on  Schedule  C attached  to this  Agreement,or  to such other  address or
addresses as the Company,  the  Partnership or the LLC or any  Exchanging  Party
shall hereafter designate to the other parties in writing.  Notices sent by mail
shall be effective 7 days after they are sent, and notices delivered  personally
by facsimile or by courier shall be effective at the time of delivery thereof.

     7.5 Further Actions. All parties hereto agree to execute and deliver to the
other parties, from time to time hereafter,  for no additional consideration and
at no  additional  cost  to the  requesting  party,  such  further  assignments,
certificates,  instruments, records, or other documents, assurances or things as
may be reasonably  necessary to give full effect to this  Agreement and to allow
each party fully to enjoy and  exercise  the rights  accorded and acquired by it
under this Agreement.

     7.6 Entire Agreement. This Agreement,  including the schedules and exhibits
to this Agreement,  constitutes the entire agreement  between the parties hereto
in  relation  to  the  subject  matter   hereof.   Any  prior  written  or  oral
negotiations,  correspondence,  or understandings relating to the subject matter
hereof shall be superseded by this  Agreement and shall have no force or effect.
The  representations,  warranties,  covenants and  agreements  made herein shall
survive any investigation made by the Exchanging Parties.

     7.7   Severability.   If  any  provision  that  is  not  essential  to  the
effectuation  of the basic purpose of this Agreement is determined by a court of
competent jurisdiction to be invalid and contrary to any existing or future law,
such  invalidity  shall not impair the operation of the remaining  provisions of
this Agreement.

     7.8 Headings.  The headings of the Sections of this  Agreement are inserted
for  convenience  of  reference  only and shall not affect the  construction  or
interpretation of any provisions hereof.

     7.9 Schedules and  Exhibits.  The schedules and exhibits to this  Agreement
are a part of this  Agreement for all purposes.  Terms which are defined in this
Agreement shall have the same meanings when used in such schedules and exhibits.


#25204.V.
                                      -11-

<PAGE>

     7.10  Counterparts.  This  Agreement  may  be  executed  in any  number  of
counterparts,  each of which when executed and  delivered  shall be an original,
but all of which together shall constitute one and the same instrument.

     7.11 Expenses.  Each party shall bear and pay its own expenses  incurred in
connection  with  negotiating  and  preparing  this  Agreement  and the exhibits
hereto.

     7.12 Governing Law. This  Agreement  shall be construed in accordance  with
and governed by the laws of the State of Colorado.

     7.13 Delays or  Omissions.  No delay or  omission  to  exercise  any right,
power,  or remedy  accruing to either  party,  upon any breach or default of the
other party under this Agreement, shall impair any such right, power, or remedy,
nor shall it be  construed  to be a waiver of any such breach or default,  or an
acquiescence  therein,  or of or in any  similar  breach of  default  thereafter
occurring;  nor shall any  waiver of any  single  breach or  default be deemed a
waiver of any other breach or default theretofore or thereafter  occurring.  Any
waiver,  permit,  consent, or approval on the part of either party of any breach
or  default  by the other  party  under  this  Agreement,  or any  waiver of any
provisions or conditions of this Agreement must be made in writing signed by the
parties and shall be effective only to the extent specifically set forth in such
writing.  All  remedies,  either  under this  Agreement  or by law or  otherwise
afforded to either party, shall be cumulative and not alternative.

     7.14 Attorneys  Fees. If any party elects to pursue legal action to enforce
its  rights  under  this  Agreement,  and if a court of  competent  jurisdiction
adjudicates  the  matter,  then the  prevailing  party in such  action  shall be
entitled to receive from the losing  party all  reasonable  costs and  expenses,
including the  reasonable  fees of attorneys,  accountants,  and other  experts,
incurred by the prevailing party in investigating and prosecuting (or defending)
such action at the arbitration, trial and appellate levels.

                                       COMPANY:

                                       ADVANCE DISPLAY
                                       TECHNOLOGIES, INC.,
                                       a Colorado corporation
   

                                       By: /s/  DARRELL AVEY
                                           -------------------------------------
                                           Name: Darrell Avey
                                           Title: Chairman




#25204.V.
                                      -12-

<PAGE>

                                  PARTNERSHIP:

                                  DISPLAY OPTICS, LTD.,
                                  a Colorado limited partnership

                                  By:   Advance  Display Technologies, Inc., a
                                        Colorado corporation, General Partner

                                  By: /S/  DARRELL AVEY
                                      ------------------------------------------
                                      Name:  Darrell Avey
                                      Title:  Chairman

                                  LLC:

                                  DISPLAY GROUP, LLC,
                                  a Colorado limited liability company


                                  By: /S/  KEITH A. HANCOCK
                                      ------------------------------------------
                                      Name:  Keith A. Hancock
                                      Title: Manager


                                  EXCHANGING PARTIES:

                                  /S/  KEITH A. HANCOCK
                                  ----------------------------------------------
                                  Keith A. Hancock

                                  G. SCHNEIDER HOLDINGS CO.,
                                  a Colorado limited partnership


                                  By:  /S/  GENE W. SCHNEIDER
                                       ----------------------------------------
                                       Gene W. Schneider
                                       General Partner

                                   /S/  WILLIAM W. BECKER
                                   ---------------------------------------------
                                   William W. Becker


#25204.V.
                                      -13-

<PAGE>
                                   /S/  MARK L. SCHNEIDER
                                   ---------------------------------------------
                                   Mark L. Schneider

                                   /S/  JAN E. HELEN
                                   ---------------------------------------------
                                   Jan E. Helen

                                   /S/  WILLIAM J. ELSNER
                                   ---------------------------------------------
                                   William J. Elsner

                                   /S/  J. TIMOTHY BRITTAN
                                   ---------------------------------------------
                                   J. Timothy Brittan

                                   /S/  BRUCE H. ETKIN
                                   ---------------------------------------------
                                   Bruce H. Etkin


                                   PEREGRINE INVESTMENTS,
                                   a Virginia general partnership

                                   By: /S/  DARYL OWEN
                                       -----------------------------------------
                                       Name: Daryl Owen
                                       Title:    General Partner

                                   /S/  JOHN D. SEIVER
                                   ---------------------------------------------
                                   John D. Seiver

                                   /S/  JOHN P. COLE, JR.
                                   ---------------------------------------------
                                   John P. Cole, Jr.


#25204.V.
                                      -14-

<PAGE>

                                    
                                     FORM OF
                          REGISTRATION RIGHTS AGREEMENT


This Registration  Rights Agreement (this "Agreement") is entered into as of May
19th, 1997,  among Advance Display  Technologies,  Inc., a Colorado  corporation
(the  "Company"),  and the  several  shareholders  of the  Company  named on the
signature pages to this Agreement (the "Holders").


                                    RECITALS

A.   Each Holder  owns  shares of Common  Stock of the Company as of the date of
     such Holder's  execution of this Agreement and none of the Holders have any
     registration rights under the Securities Act of 1933 (the "Securities Act")
     with respect to such shares.

B.   As an inducement to each Holder to enter into an Exchange Agreement of even
     date herewith among the Holders, the Company and certain other parties (the
     "Exchange  Agreement"),  and as consideration for the other agreements made
     by the  Holders  in this  Agreement,  the  Company  is  entering  into this
     Agreement  with the Holders.  This  Agreement sets forth the terms on which
     each  Holder  shall  have  the  right  to  join  in  any   registration  of
     "Registrable  Securities"  by the  Company  under the Act.  As used in this
     Agreement,  "Registrable  Securities"  means  Common  Stock of the  Company
     issued to the Holders and any securities issued or issuable with respect to
     such  Common  Stock  by way of any  stock  split  or in  connection  with a
     combination of shares,  merger,  recapitalization,  merger consolidation or
     other reorganization.


                                    AGREEMENT

The parties agree as follows:

1.   Piggyback  Registration  Rights.  For a period  of 5 years  after  the date
     hereof, subject to the other terms and conditions of this Agreement,  if at
     any time the  Company  proposes  to  register  for offer and sale under the
     Securities  Act of 1933 (the  "Securities  Act") any of its Common Stock or
     other securities,  whether or not for sale for its own account, the Company
     shall   provide  each  Holder  with  a  written   notice  of  the  proposed
     registration  (unless the  proposed  registration  is on Form S-4,  S-8, or
     another  form  that  may not be used  for  sales  of  Common  Stock  by the
     Holders).  Such notice  shall not be required to include the price at which
     the securities  will be offered for sale.  Upon the written request of each
     Holder  given within 20 days after any such notice is given by the Company,
     the  Company  shall  include  in  such  registration  statement  all of the
     Registrable Securities held

#25355.V4
                                                      

<PAGE>



     by such Holder that such Holder so requests to be  registered  and included
     in such offering (subject to Section 6 of this Agreement in connection with
     underwritten offerings).

2.   Withdrawal.  A Holder  shall have the right to withdraw its shares from the
     registration  process, but if the same relates to an underwritten  offering
     it may only do so during the time  period and on terms  agreed  upon by the
     managing underwriter for such underwritten offering. Under no circumstances
     will  this  Agreement  limit  the  right of the  Company  to  withdraw  any
     registration statement at any time.

3.   Obligations of the Company. Whenever required under Section 1 to effect the
     registration  of  any  Registrable   Securities,   the  Company  shall,  as
     expeditiously as reasonably possible:

     (a)  Prepare and file with the SEC a registration statement with respect to
          such  Registrable  Securities  and  employ  in good  faith  reasonable
          efforts to cause such registration statement to become effective,  and
          keep such  registration  statement  effective for a period of up to 90
          days  or  until  the  distribution  contemplated  in the  registration
          statement  has  been  completed,  whichever  first  occurs;  provided,
          however, that before filing a registration  statement or prospectus or
          any   amendments   or   supplements   thereto,   including   documents
          incorporated by reference after the initial filing of the registration
          statement  and  prior to  effectiveness  thereof,  the  Company  shall
          furnish to one counsel  designated by the selling Holders (by majority
          vote based on the number of  Registrable  Securities to be registered)
          copies of all such documents in the form  substantially as proposed to
          be filed with the SEC at least four  business days prior to filing for
          review by such counsel.

     (b)  Prepare and file with the SEC such  amendments and supplements to such
          registration statement and the prospectus used in connection with such
          registration  statement necessary to comply, in all material respects,
          with the provisions of the Act with respect to the  disposition of all
          securities covered by such registration statement.

     (c)  Furnish  to the  Holders  such  numbers  of  copies  of a  prospectus,
          including  a   preliminary   prospectus,   in   conformity   with  the
          requirements  of the  Act,  and  such  other  documents  as  they  may
          reasonably   request  in  order  to  facilitate  the   disposition  of
          Registrable Securities owned by them.

     (d)  Employ in good faith  reasonable  efforts to register  and qualify the
          securities   covered  by  such   registration   statement  under  such
          securities  or Blue  Sky  laws  of  such  jurisdictions  as  shall  be
          reasonably  requested by the Holders or managing underwriter or agent,
          if  applicable;  provided  that the  Company  shall not be required in
          connection  therewith  or as a  condition  thereto  to  qualify  to do
          business

#25355.V4
                                       -2-

<PAGE>



          or to file a general  consent to service of process in any such states
          or jurisdictions,  unless the Company is already subject to service in
          such jurisdiction and except as may be required by the Act.

     (e)  In the event of any  underwritten  or agented public  offering,  enter
          into  and  perform  its  obligations  (including  indemnification  and
          contribution  obligations)  under an underwriting or agency agreement,
          in usual and customary form, with the managing underwriter or agent of
          such offering.

     (f)  Notify  each  Holder  of  Registrable   Securities   covered  by  such
          registration statement, at any time when a prospectus relating thereto
          is  required  to be  delivered  under  the  Act,  upon  the  Company's
          discovery  that,  or upon the  happening  of any  event as a result of
          which, the prospectus included in such registration statement, as then
          in effect, includes an untrue statement of a material fact or omits to
          state any material fact required to be stated  therein or necessary to
          make the statements  therein in the light of the  circumstances  under
          which they were made not  misleading,  and at the  request of any such
          Holder   promptly   prepare  and  furnish  to  such  Holder  and  each
          underwriter,  if any, a reasonable number of copies of a supplement to
          or an amendment  of such  prospectus  as may be necessary so that,  as
          thereafter  delivered  to the  purchasers  of  such  securities,  such
          prospectus shall not include an untrue statement of a material fact or
          omit to  state a  material  fact  required  to be  stated  therein  or
          necessary  to  make  the  statements  therein  in  the  light  of  the
          circumstances  under  which they were made not  misleading;  provided,
          however,  that,  except in the case of an underwritten  offering as to
          which  Registrable  Securities have been sold thereunder,  the Company
          may delay  effecting or causing to be effected a  supplement  or post-
          effective  amendment  to the  registration  statement  or the  related
          prospectus for a period not to exceed 90 days in any 365 day period.

     (g)  Cause all such  Registrable  Securities  covered by such  registration
          statement  to be  listed  on each  securities  exchange,  if  any,  or
          National  Association of Securities Dealers Automatic Quotation System
          (Nasdaq),  on which similar  securities issued by the Company are then
          listed.

     (h)  Provide a transfer agent and registrar for all Registrable  Securities
          registered  hereunder  and a CUSIP  number  for all  such  Registrable
          Securities,  in each case not later  than the  effective  date of such
          registration.

     (i)  Promptly  notify  each  selling  Holder  of any stop  order  issued or
          threatened in writing to be issued by the SEC in connection  therewith
          and take all reasonable  actions required to prevent the entry of such
          stop order or to remove it if entered.

     (j)  Make available to the Company's  security  holders upon request copies
          of all  periodic  reports,  proxy  statements,  and other  information
          referred to in Section 11, including an earnings statement  satisfying
          the  provisions  of  Section  11(a),  of the Act no later than 90 days
          
               

#25355.V4
                                       -3-

<PAGE>



          following  the end of the  12-month  period  beginning  with the first
          month of the  Company's  first  fiscal  quarter  commencing  after the
          effective date of each  registration  statement filed pursuant to this
          Agreement.

     (k)  Use the Company's reasonable efforts to obtain a "comfort letter" from
          its independent public  accountants,  and legal opinions of counsel to
          the Company  addressed to the selling  Holders,  in customary form and
          covering such matters of the type customarily covered by such letters,
          and in a form that shall be  reasonably  satisfactory  to the  selling
          Holders.  The Company shall furnish to counsel for the selling Holders
          a signed  counterpart  of any such  comfort  letter or legal  opinion.
          Delivery  of any such  opinion or comfort  letter  shall be subject to
          each  Selling  Holder  furnishing  such  written   representations  or
          acknowledgments  as are customarily  provided by selling  stockholders
          who  receive  such  comfort  letters  or  opinions,  and an opinion of
          counsel for the selling stockholders  addressed to the Company and the
          underwriters  in customary  form and covering such matters of the type
          customarily covered by such opinion letters.

     (l)  Take all other reasonable actions necessary to expedite and facilitate
          disposition by the Holders of the Registrable  Securities  pursuant to
          the registration statement.

Each Holder of Registrable  Securities  agrees that,  upon receipt of any notice
from the  Company  of the  occurrence  of any  event of the  kind  described  in
Subsection   3(f),  such  Holder  shall  forthwith   discontinue  such  Holder's
disposition of Registrable  Securities  pursuant to the  registration  statement
relating  to such  Registrable  Securities  until such  Holder's  receipt of the
copies of the supplemented or amended prospectus contemplated by Subsection 3(f)
and,  if so  directed  by the  Company,  shall  deliver to the  Company  (at the
Company's  expense) all copies,  other than permanent file copies,  then in such
Holder's  possession of the prospectus  relating to such Registrable  Securities
current at the time of receipt of such  notice.  In the event the Company  shall
give any such notice, the period of time for which the Company shall be required
to keep the applicable  registration  statement  effective under Subsection 3(a)
shall be extended by the length of the period from and  including  the date when
each Holder of any Registrable Securities covered by such registration statement
shall  have been given  such  notice to the date on which  each such  Holder has
received the copies of the  supplemented or amended  prospectus  contemplated by
Subsection  3(f).  The Company  agrees to use its best  efforts to minimize  the
duration  and  frequency  of any periods  during  which  Holders are required to
discontinue  their  disposition of Registrable  Securities under Section 3(f) to
those where distributing a supplement or filing a post-effective amendment would
materially  interfere with, or require  premature  disclosure of, any financing,
acquisition or  reorganization  involving the Company or any of its wholly-owned
subsidiaries or would otherwise have a material adverse effect on the Company.


#25355.V4
                                       -4-

<PAGE>



4.   Furnish  Information.  It shall be a condition precedent to the obligations
     of the Company to take any action pursuant to Section 1 with respect to the
     Registrable Securities of any selling Holder that such Holder shall furnish
     to  the  Company  such  information   regarding  itself,   the  Registrable
     Securities  held by it,  and the  intended  method of  disposition  of such
     securities as shall be required to effect the registration of such Holder's
     Registrable Securities.

5.   Expenses.  Except as otherwise  required by applicable  securities  laws or
     policies,  all  expenses  incurred  by the  Company  in  connection  with a
     registration pursuant to this Agreement, including, but not limited to, all
     registration  and  filing  fees,  fees  and  expenses  of  compliance  with
     securities or blue sky laws,  and fees and  disbursements  of the Company's
     counsel,  of one  counsel  for  the  selling  Holders  and  of  independent
     certified public  accountants of the Company (including the expenses of any
     special audit required by or incident to such performance),  shall be borne
     by the Company.  This  provision  shall not apply to payment of any selling
     commissions or other selling  expenses of the selling  Holders,  other than
     the fees and disbursements of one counsel for the selling Holders.

6.   Underwriting Requirements.

     (a)  In connection with any underwritten  offering of the Company's capital
          stock or, if the managing  underwriter or agent expressly  consents to
          the inclusion of Registerable  Securities in such underwriting,  other
          securities  under the Act,  the Company  shall not be  required  under
          Section 1 to include any of a Holder's Registrable  Securities in such
          underwriting  unless such Holder accepts the terms of the underwriting
          as agreed upon  between the Company and the  underwriters  selected by
          it. If the  managing  underwriter  advises  the selling  Holders  that
          marketing  factors  require  any  limitation  as  to  the  Registrable
          Securities  included in such  offering,  subject to Section 6(b),  the
          Registrable  Securities to be included in such  registration  shall be
          allocated  among all selling Holders of Registrable  Securities  which
          would  otherwise be  underwritten  pursuant  hereto in proportion  (as
          nearly as practicable) to the amount of Registrable  Securities  owned
          by each  selling  Holder  or as shall  mutually  be  agreed  to by the
          Company and the selling Holders.

     (b)  If the managing underwriter advises the selling Holders that marketing
          factors  require any  limitation as to  Registerable  Securities to be
          underwritten and shares other than the selling Holders are proposed to
          be  included in the  registration,  then (A) first,  securities  being
          registered by the Company will be included in such registration before
          those of the  selling  Holders  or any other  stockholders  exercising
          piggyback registration rights, (B) second, securities being registered
          by selling Holders will be included in such  registration  pursuant to
          Section 6(a) above before those of any other  stockholders  exercising
          piggyback  registration  rights,  and (C)  finally,  securities  being
          

#25355.V4
                                       -5-

<PAGE>

          registered by any other stockholders exercising piggyback registration
          rights shall be included in such registration on a basis comparable to
          that stated in the last sentence of Section 6(a).

7.   Delay of Registration.  No Holder shall have any right to obtain or seek an
     injunction  restraining or otherwise  delaying any such registration as the
     result  of  any   controversy   that  might  arise  with   respect  to  the
     interpretation or implementation of this Agreement.

8.   Indemnification.

     (a)  In  connection  with  any  registration  statement  in  which a Holder
          participates  pursuant  to  this  Agreement,  the  Company  agrees  to
          indemnify,  to the extent  permitted  by law,  each such  Holder,  the
          officers and  directors  of each Holder,  and each person who controls
          such  Holder  (within  the  meaning  of  the  Securities  Act  or  the
          Securities  Exchange  Act of 1934 (the  "Exchange  Act"))  against all
          losses,  claims,  damages,  liabilities,  and  expenses  caused by any
          untrue or alleged  untrue  statement of material fact contained in any
          registration statement,  prospectus,  preliminary prospectus, or other
          related  filing with the  Securities  and Exchange  Commission  or any
          other federal or state governmental agency, or any omission or alleged
          omission  to state  therein  a  material  fact  required  to be stated
          therein or necessary to make the  statements  therein not  misleading,
          except  insofar  as  the  same  are  caused  by or  contained  in  any
          information  furnished to the Company by such Holder expressly for use
          therein  or  by  such  Holder's  failure  to  comply  with  any  legal
          requirement  applicable  to him and not  contractually  assumed by the
          Company to deliver a copy of the registration  statement or prospectus
          or any  amendments  or  supplements  thereto  after  the  Company  has
          furnished such Holder with a sufficient number of copies of the same.

     (b)  In  connection  with  any  registration  statement  in  which a Holder
          participates pursuant to this Agreement, each such Holder will furnish
          to the Company or the  underwriter  in writing  such  information  and
          affidavits  as the Company  reasonably  requests for use in connection
          with any such registration  statement or prospectus and, to the extent
          permitted by law,  will  indemnify  the  Company,  its  directors  and
          officers, and each person who controls the Company (within the meaning
          of the Securities Act or the Exchange Act) against all losses, claims,
          damages,  liabilities,  and  expenses  resulting  from any  untrue  or
          alleged  untrue  statement of material fact or any omission or alleged
          omission of a material fact required to be stated in the  registration
          statement or prospectus or other  related  filing with the  Securities
          and Exchange  Commission  or any other  federal or state  governmental
          agency, or any amendment thereof or supplement thereto or necessary to
          make the  statements  therein not  misleading,  but only to the extent
          that such untrue  statement  or omission is caused by or  contained in
          any information  furnished to the Company by such Holder expressly for
          use  therein;  provided  that  the  obligation  to  indemnify  will be
          several, not joint, among such Holders.


#25355.V4
                                       -6-

<PAGE>

          
     (c)  Any person entitled to indemnification  hereunder will (i) give prompt
          written notice to the indemnifying  party of any claim with respect to
          which it seeks  indemnification  and (ii)  unless in such  indemnified
          party's  reasonable  judgment  (based on written  advice of counsel) a
          conflict of interest between such indemnified and indemnifying parties
          may exist with respect to such claim, permit the indemnifying party to
          assume the defense of the claim with counsel  reasonably  satisfactory
          to  the  indemnified  party.  If  the  defense  is  so  assumed,   the
          indemnifying  party  will  not be  subject  to any  liability  for any
          settlement  made by the indemnified  party without its consent,  which
          will not be unreasonably  withheld.  An indemnifying  party who is not
          entitled to or elects not to assume the  defense of a claim,  will not
          be obligated to pay the fees and expenses of more than one counsel for
          all parties it indemnifies  with respect to such claim,  unless in the
          reasonable  judgment of any indemnified party (based on written advice
          of counsel) a conflict of interest may exist between such  indemnified
          party and any other indemnified parties with respect to such claim.

9.   Participation in Underwritten  Registrations.  No Holder may participate in
     any registration  hereunder for an underwritten offering unless such Holder
     (a) agrees to sell its securities on the basis provided in any underwriting
     arrangements  approved by the Company and (b)  completes  and  executes all
     questionnaires,  powers of attorney,  indemnities,  underwriting agreements
     and  other  documents   required  under  the  terms  of  such  underwriting
     arrangements.

10.  Lock-up In Public Offering.  If the Company files a registration  statement
     under the Securities Act in connection with any proposed public offering of
     securities  issued by the  Company,  each  Holder,  if so  requested by the
     Company and by the managing underwriter of such offering,  agrees to sign a
     lock-up  agreement  or letter in  customary  form to the  effect  that such
     Holder will not,  directly  or  indirectly,  sell,  make any short sale of,
     grant any option for the purchase  of, or otherwise  dispose of any capital
     stock of the  Company  (except  securities  included  in such  registration
     statement and public offering) during the 30-day period ending, and up to a
     180-day period  beginning,  on the first date of the  effectiveness of such
     registration statement.

11.  Covenants  of the  Company.  The Company  hereby  agrees and  covenants  as
     follows: The Company shall not, directly or indirectly,  (x) enter into any
     merger,  consolidation or  reorganization in which the Company shall not be
     the surviving corporation,  unless prior to such merger, consolidation,  or
     reorganization,  the surviving  corporation shall have agreed in writing to
     assume the  obligations of the Company under this  Agreement,  and for that
     purpose references hereunder to "Registrable Securities" shall be deemed to
     include the securities which the Holders of Registrable Securities would be
     entitled to receive in exchange for Registrable  Securities pursuant to any
     such merger, consolidation or reorganization.

12.  Miscellaneous.


#25355.V4
                                       -7-

<PAGE>

     (a)  Suspension  of  Registration  Obligation.  The  Company  shall  not be
          required to register securities under this Agreement for any Holder at
          any time when such Holder could  publicly sell all of its  Registrable
          Securities without registration during a single 90-day period pursuant
          to Rule 144 under the Securities Act or otherwise.

     (b)  Remedies.  Any  person  having  rights  under this  Agreement  will be
          entitled to enforce them  specifically,  to recover  damages caused by
          reason  of any  breach  of any  provision  of this  Agreement,  and to
          exercise all other rights granted by law.

     (c)  Amendments  and Waivers.  Except as otherwise  provided  herein,  this
          Agreement  may be amended and the  Company may take any action  herein
          prohibited, or fail to perform any act herein required to be performed
          by it, only with the  written  consent of Holders of a majority of the
          Registrable Securities.

     (d)  Successors and Assigns. All covenants and agreements in this Agreement
          by or on behalf of any of the  parties  hereto  will bind and inure to
          the benefit of the  respective  successors  and assigns of the parties
          hereto,  whether so expressed or not. In addition,  any  provisions of
          this Agreement for the benefit of Holders are also for the benefit of,
          and  enforceable by, any subsequent  Holder of Registrable  Securities
          who  has  been  expressly  assigned  such  rights  at the  time of the
          transfer of the Registrable Securities to him, but not otherwise.

     (e)  Assignment of Registration  Rights. The rights to cause the Company to
          register  Registrable  Securities  pursuant  to this  Section 1 may be
          assigned  (but  only  with all  related  obligations)  by a Holder  (a
          "Permitted  Transferee"),  provided:  (a) the  Company  is,  within 10
          business days of such  transfer,  furnished with written notice of the
          name and address of such  transferee  or assignee  and the  securities
          with respect to which such registration rights are being assigned; (b)
          such  transferee  or  assignee  agrees in  writing  to be bound by and
          subject to the terms and conditions of this Agreement; (c) immediately
          following such transfer the further  disposition of such securities by
          the  transferee or assignee is  restricted  under the Act; and (d) the
          number of shares of Common Stock to be held by such  transferee  is at
          least 50,000  (adjusted for stock  dividends,  stock  splits,  reverse
          stock splits, combinations and the like).

     (f)  Severability.  The invalidity or  unenforceability of any provision in
          this  Agreement  in any  application  will not affect the  validity or
          enforceability of any other provision of this Agreement or of the same
          provision in any other application.

     (g)  Notices.

          (i)  How   Given.   All   notices,   requests,   consents   and  other
               communications  given  pursuant  to this  Agreement  shall  be in
               writing and shall be sent by first class registered mail, postage
               prepaid,  addressed  as  follows,  or by  facsimile  transmission
               directed as follows:

#25355.V4
                                       -8-

<PAGE>
 
                        If to the Company, at

                        Advance Display Technologies,  Inc.
                        1251 South Huron Street
                        Denver, Colorado  80223
                        Attention:  Darrell Avey
                        Facsimile:  (303) 733-5363

                        with a copy to

                        David Babiarz, Esq.
                        Overton Babiarz & Sykes
                        7720 E. Belleview Ave., Suite 200
                        Englewood, Colorado 80111
                        Facsimile: (303) 779-6006

                  If to  the  Holders,  to the  addresses  and,  if  applicable,
                  facsimile numbers,  shown for such Holders on the record books
                  of the Company.

          (ii) Deemed  Receipt;  Change of Address.  Any such  notice,  request,
               consent  or other  communication  shall be deemed to be  received
               three   business   days  after  being  sent  by  mail,   or  upon
               confirmation of a facsimile transmission. Any party may designate
               a different  address or  facsimile  number by notice given to the
               other parties pursuant to this Section 7(f).

     (h)  Confidentiality  of  Notices.  Each  Holder  agrees  to keep  strictly
          confidential  the fact that any notice  has been given by the  Company
          under  Section  1 of this  Agreement  until a  registration  statement
          referred  to in such  notice has been filed  with the  Securities  and
          Exchange  Commission,  except that a Holder may disclose the existence
          of such a notice to the  Holder's  legal,  financial  and tax advisors
          solely for the purpose of determining how to respond to the notice and
          then only if such  advisors  agree in writing  for the  benefit of the
          Company to keep the existence of such notice strictly confidential.

     (i)  Governing Law. This Agreement will be governed by Colorado law.

IN WITNESS  WHEREOF,  the parties  hereto have  executed  this  Agreement on the
respective  dates  indicated  below to be effective as of the date first written
above.

                                        COMPANY:

                                        ADVANCE DISPLAY TECHNOLOGIES, INC., a
                                        Colorado corporation

#25355.V4
                                       -9-

<PAGE>

Date: May 19, 1997                          By: /S/  DARRELL AVEY
                                                --------------------------------
                                            Name:      Darrell Avey
                                            Title:   Chairman

                                            HOLDERS:

                                            /S/  KEITH A. HANCOCK
Date: May 19, 1997                          ------------------------------------
                                            Keith A. Hancock

                                            G. SCHNEIDER HOLDINGS CO.,
                                             a Colorado limited partnership

                                            /S/  GENE W. SCHNEIDER
Date: May 19, 1997                          ------------------------------------
                                            Gene W. Schneider, General Partner

                                            /S/  WILLIAM W. BECKER
Date: May 19, 1997                          ------------------------------------
                                            William W. Becker

                                            /S/  MARK L. SCHNEIDER
Date: May 19, 1997                          ------------------------------------
                                            Mark L. Schneider

                                            /S/  JAN E. HELEN
Date: May 19, 1997                          ------------------------------------
                                            Jan E. Helen

                                            /S/  WILLIAM J. ELSNER          
Date: May 19, 1997                          ------------------------------------
                                            William J. Elsner

                                            /S/  J. TIMOTHY BRITTAN
Date: May 19, 1997                          ------------------------------------
                                            J. Timothy Brittan

                                            /S/  BRUCE H. ETKIN
Date: May 19, 1997                          ------------------------------------
                                            Bruce H. Etkin



#25355.V4
                                      -10-

<PAGE>


                                            PEREGRINE INVESTMENTS,
                                           a Virginia general partnership


Date: May 19, 1997                         By: /S/  DARYL OWEN
                                               ---------------------------------
                                            Name: Daryl Owen
                                            Title:   General Partner

                                            /S/  JOHN D. SEIVER
Date: May 19, 1997                          ------------------------------------
                                            John D. Seiver

                                           /S/  JOHN P. COLE, JR.
Date: May 19, 1997                         ------------------------------------
                                            John P. Cole, Jr.


#25355.V4
                                      -11-

<PAGE>

                           Mail to: Secretary of State
                              Corporations Section
                            1560 Broadway, Suite 200
                                Denver, CO 80202
                                 (303) 894-2251
                               Fax (303) 894-2242
MUST BE TYPED
FILING FEE: $25.00
MUST SUBMIT TWO COPIES
            ---

Please include a typed
self-addressed envelope

                          ARTICLES OF AMENDMENT TO THE
                            ARTICLES OF INCORPORATION

Pursuant  to the  provisions  of the  Colorado  Business  Corporation  Act,  the
undersigned  corporation  adopts the  following  Articles  of  Amendment  to its
Amended and Restated Articles of Incorporation:

FIRST:  The name of the corporation is Advance Display Technologies, Inc.

SECOND:  The  following  amendment  to the  Amended  and  Restated  Articles  of
Incorporation  was adopted on May 14th,  1997,  as  prescribed  by the  Colorado
Business  Corporation  Act, such amendment was adopted by the board of directors
where shares have been issued and shareholder approval is not required.

THIRD: The Amended and Restated Articles of Incorporation of the corporation are
amended by adding the following thereto:

ARTICLE XV: The Board of Directors hereby creates and authorizes the issuance of
a series of preferred stock,  par value $.001 per share, of the Corporation,  to
consist of 1,843,900 shares, and hereby fixes the designations, dividend rights,
voting  powers,  rights on  liquidation  and  other  preferences  and  relative,
participating,   optional  or  other  special  rights  and  the  qualifications,
limitations  or  restrictions  of the shares of such series (in  addition to the
designations,   preferences   and  relative,   participating,   limitations   or
restrictions  thereof  set  forth  in  the  Amended  and  Restated  Articles  of
Incorporation that are applicable to preferred stock of all series) as follows:

     1. Designation. The designation of the series of preferred stock, par value
$.001 per share,  of the  Corporation  authorized  hereby is "Series C Preferred
Stock"  (the  "Series  C  Preferred  Stock").  The issue  price of the  Series C
Preferred Stock is $1.00 per share.
 
     2. Certain  Definitions.  Unless the context otherwise requires,  the terms
defined in this Section 2 shall have the meanings herein specified:

#25441 v8
                                        1

<PAGE>
               

     Affiliate:  As to any person or, entity,  any other person or entity which.
directly  or  indirectly,  controls,  or is under  common  control  with,  or is
controlled  by, such  person or entity.  As used in this  definition,  "control"
(including,  with its correlative meanings,  "controlling,"  "controlled by" and
"under common control with") shall mean possession,  directly or indirectly,  of
the power to direct or cause the direction of management or policies of a Person
(whether through the ownership of securities,  or partnership or other ownership
interest, by contract or otherwise).

     Articles  of  Amendment:  The  Articles  of  Amendment  to the  Articles of
Incorporation  of the Company which set forth the rights and  preferences of the
Series C Preferred Stock.

     Board of  Directors:  The Board of  Directors  of the  Corporation  and any
authorized committee thereof.

     Business  Day: Any day other than a Saturday,  Sunday,  or holiday on which
banking institutions in Denver, Colorado, are closed for business.

     Capital  Stock:  Any and all  shares,  interests,  participations  or other
equivalents (however designated) of corporate stock of the Corporation.

     Change of Control:  A "Change of Control"  shall be deemed to have occurred
if (i) a  person  (as  such  term is used in  Section  13(d)  of the  Securities
Exchange Act) becomes the  beneficial  owner (as defined in Rule 13d-3 under the
Securities  Exchange  Act) of shares of the Company or the  Company's  successor
having  30% or more of the  total  number  of  votes  that  may be cast  for the
election of  directors of the Company  without the prior  approval of at least a
majority of the members of the Company's  board of directors  unaffiliated  with
such person (unless such person  beneficially  owned shares with at least 15% of
such votes as of the date of these Articles of Amendment),  or (ii)  individuals
who  constitute  the  directors  of the Company at the  beginning  of a 24-month
period cease to constitute at least 2/3 of all directors at any time during such
period,  other than as a result of the voluntary  resignation of any director or
directors. (For these purposes any new or replacement directors elected with the
approval  of at  least a  majority  of the  members  of the  Company's  board of
directors  in  office  immediately  prior  to  such  period  and of the  new and
replacement  directors so approved shall be considered to have been directors at
the beginning of such period.)

     Common  Stock:  The  Common  Stock,  par value  $0.001  per  share,  of the
Corporation.

     Junior  Securities:  Any class or series  of stock of the  Corporation  not
entitled to receive any assets upon  liquidation,  dissolution  or winding up of
the affairs of the Corporation until the Series C Preferred Stock shall have

#25441 v8
                                        2

<PAGE>


received  the  entire   amount  to  which  such  stock  is  entitled  upon  such
liquidation, dissolution or winding up.

     Liquidation  Value:  $0.67 per Share,  plus the amount of any dividends not
previously paid on the Series C Preferred Stock in accordance with Section 4.

     Market Price:  The "Market  Price" of a share of Common Stock on any day is
the average of the Quoted  Prices of the Common  Stock  during the four  trading
weeks  before  the  date  in  question.  In the  absence  of one  or  more  such
quotations,  the  Corporation  shall  determine the current  market price on the
basis of such  quotations  as it  considers  appropriate.  As used  herein,  the
"Quoted  Price" of the Common Stock is the last reported sales price regular way
or, in case no such  reported  sale takes place on such day,  the average of the
closing  bid and asked  prices  regular  way for such  day,  in each case on the
principal national  securities  exchange on which the shares of Common Stock are
listed or admitted to trading or, if not listed or admitted to trading, the last
sale  price  regular  way for the  Common  Stock as  published  by the  National
Association of Securities Dealers Automated  Quotation System ("NASDAQ"),  or if
such last price is not so  published by NASDAQ or if no such sale takes place on
such day, the mean between the closing bid and asked prices for the Common Stock
as  published  by NASDAQ or in the  absence  of any of the  foregoing,  the fair
market value as determined by the Board of Directors (whose  determination shall
be conclusive).

     Parity Securities: Any class or series of stock of the Corporation entitled
to receive assets upon liquidation,  dissolution or winding up of the affairs of
the Corporation on a parity with the Series C Preferred Stock.

     Redemption Date: As to any Share, (i) the date fixed for redemption of such
Share as specified in the notice of redemption  given in accordance with Section
7(d) for  redemptions  pursuant to Section 7(a) or (ii) the date that is 15 days
after the date the  Corporation  receives the notice referred to in Section 7(b)
with respect to Shares to be redeemed pursuant to Section 7(b), provided that no
such date will be a Redemption  Date unless the applicable  Redemption  Price is
actually  paid on such  date or the  consideration  sufficient  for the  payment
thereof,  and for no other purpose,  has been irrevocably set apart in trust for
the benefit of the holders of Shares to be redeemed, and if the Redemption Price
is not so paid in full or the consideration  sufficient  therefor so irrevocably
set apart in trust for the benefit of the holders of Shares to be redeemed, then
the  Redemption  Date will be the date on which such  Redemption  Price is fully
paid or the consideration  sufficient for the payment thereof,  and for no other
purpose,  has been irrevocably set apart in trust for the benefit of the holders
of Shares to be redeemed.


#25441 v8
                                        3

<PAGE>


          Redemption  Price:  As to any  Share  that  is to be  redeemed  on any
     Redemption Date, the Liquidation Value, payable either in (i) cash, or (ii)
     at the option of the  Corporation,  shares of Common  Stock (the  number of
     which  shall be  determined  based on the then  Market  Price of the Common
     Stock), subject to the provisions of Section 7.

          Securities Act: The Securities Act of 1933, as amended.

          Securities  Exchange  Act: The  Securities  Exchange  Act of 1934,  as
     amended.

          Senior  Securities:  Any class or  series of stock of the  Corporation
     ranking  senior to the Series C Preferred  Stock in respect of the right to
     participate in any distribution upon liquidation, dissolution or winding up
     of the affairs of the Corporation.

          Share: A share of Series C Preferred Stock.

          Subsidiary:  With respect to any person or entity,  any corporation or
     partnership  more  than  50% of  whose  outstanding  voting  securities  or
     partnership interests, as the case may be, are directly or indirectly owned
     by such person or entity.

     3. Voting. The Series C Preferred Stock shall have no voting rights, except
as required by law.

     4. Dividends. The holders of the Series C Preferred Stock shall be entitled
to receive  when,  as and if  declared by the Board of  Directors,  out of funds
legally available therefor,  cash dividends, in one or more payments, but in the
aggregate of $0.83 per share (as adjusted for any stock dividends,  combinations
or splits with respect to such  shares).  Upon payment of dividends  aggregating
$0.83  per  share of Series C  Preferred  Stock,  the  holders  of the  Series C
Preferred  Stock shall have no further right to receive any dividends as holders
of such stock.  Dividends on the Series C Preferred  Stock,  including,  without
limitation,  liquidating  distributions,  shall be paid before any  dividends or
other  distributions  shall be  declared or paid or set aside for payment on the
Common Stock or any other stock.  No dividends will be paid on any other Capital
Stock until all dividends contemplated by this paragraph have been fully paid on
all outstanding Series C Preferred Stock.

     5.  Liquidation.  Upon any  liquidation,  dissolution  or winding up of the
Corporation, whether voluntary or involuntary, the holders of Series C Preferred
Stock  shall be  entitled  to be paid an amount in cash  equal to the  aggregate
Liquidation  Value at the date fixed for  liquidation of all Shares  outstanding
before any distribution or payment is made upon Common Stock or any other Junior
Securities, which payment shall be made pari passu with any such payment made to
the holders of any Parity  Securities.  The holders of Series C Preferred  Stock
shall be entitled to no other or further distribution of or participation in any


#25441 v8
                                        4

<PAGE>



remaining  assets of the Corporation  after receiving the Liquidation  Value per
Share.  If upon such  liquidation,  dissolution or winding up, the assets of the
Corporation to be distributed  among the holders of Series C Preferred Stock and
to all holders of Parity  Securities are  insufficient to permit payment in full
to such holders of the aggregate preferential amounts which they are entitled to
be paid,  then the entire assets of the  Corporation  to be  distributed to such
holders shall be distributed ratably among them based upon the full preferential
amounts  to which  the  shares  of  Series C  Preferred  Stock  and such  Parity
Securities would otherwise respectively be entitled.  Upon any such liquidation,
dissolution  or winding up,  after the  holders of Series C Preferred  Stock and
Parity Securities have been paid in full the amounts to which they are entitled,
the remaining  assets of the Corporation may be distributed to holders of Common
Stock or other Junior  Securities.  The Corporation shall mail written notice of
such  liquidation,  dissolution  or winding up to each record holder of Series C
Preferred  Stock not less than 30 days prior to the payment  date stated in such
written notice.  Neither the  consolidation or merger of the Corporation into or
with any other corporation or corporations,  nor the sale,  transfer or lease by
the  Corporation  of all or any  part of its  assets,  shall be  deemed  to be a
liquidation,  dissolution or winding up of the Corporation within the meaning of
this Section 5.

     6. [Intentionally Omitted]

     7. Redemption.  (a) At any time, and from time to time, the Corporation may
elect to redeem some or all of the Series C  Preferred  Stock by giving a notice
of  redemption  pursuant  to  Section  7(d),  and then the  shares  of  Series C
Preferred  Stock may be redeemed out of funds  legally  available  therefor,  in
whole or in part,  at the  Redemption  Price.  If less than all the  shares  are
redeemed, they will be redeemed ratably among all the shareholders.

          (b)  Redemption  at the  Option of the  Holders.  (i)  Subject  to the
provisions  of Section  7(g),  at any time after payment in full of the Series C
Preferred Stock dividend preference pursuant to Section 4 hereof, the holders of
Series C Preferred Stock may elect to have the Corporation  redeem such holder's
Series C Preferred  Stock, by giving a notice of redemption,  which notice shall
be mailed,  first class, postage prepaid, not less than 10 days nor more than 30
days prior to the  Redemption  Date,  and then the shares of Series C  Preferred
Stock may be redeemed out of funds legally  available  therefor,  in whole or in
part, at the Redemption  Price per Share as of the Redemption Date. If less than
all  Shares are to be  redeemed,  Shares  shall be  redeemed  ratably  among the
holders thereof.

               (ii)  Subject  to the  rights of any  Parity  Securities,  and in
addition to its rights set forth in Section  7(b)(i) above,  at any time after a
Change of Control of the  Corporation,  any holder shall have the right, at such
holder's  option,  to require  redemption by the  Corporation  at the Redemption
Price per Share as of the Redemption Date of all (but not less than all) of such
holder's  Shares by  written  notice to the  Corporation  stating  the number of
Shares to be redeemed.  The Corporation  shall redeem the Shares so requested to
be redeemed on the applicable Redemption Date.

#25441 v8
                                        5

<PAGE>


          If the funds of the  Corporation  legally  available for redemption of
Shares and not otherwise  restricted are insufficient to redeem the total number
of shares  required to be redeemed  pursuant to this Section  7(b),  those funds
which are legally  available  for  redemption  of such Shares and not  otherwise
restricted  will be used to redeem the  maximum  possible  number of such Shares
ratably  among the holders who have  required  Shares to be redeemed  under this
Section 7(b). At any time thereafter  when  additional  funds of the Corporation
are legally  available and not so restricted  for such purpose,  such funds will
immediately  be used to redeem the Shares  the  Corporation  failed to redeem on
such Redemption Date until the balance of such Shares are redeemed.

          (c) Redemption by Issuance of Common Stock. Subject to compliance with
the conditions contained in this Section 7(c), in the event any holder of Series
C Preferred Stock elects to have the  Corporation  redeem such holder's Series C
Preferred  Stock pursuant to Section 7(b) above,  the  Corporation  may elect to
redeem all (but not less than all) of the Shares of Series C Preferred  Stock to
be redeemed pursuant to this Section 7 by issuance to such holder, in respect of
his shares to be redeemed (the "Redeemed Shares"),  a number of shares of Common
Stock equal to (i) the number of Redeemed Shares,  multiplied by a fraction, (A)
the numerator of which shall be the Redemption Price, and (B) the denominator of
which shall be the Market  Price per share of the Common Stock as of the date of
the notice from the Corporation  described in the next paragraph.  No fractional
shares of Common Stock or scrip shall be issued upon such redemption.  As to any
final fraction of a share of Common Stock that would  otherwise be issuable to a
holder  upon  redemption  of his  Shares  (determined  on the basis of the total
number of such  holder's  Shares in respect of which  shares of Common Stock are
issuable),  the Corporation shall pay an amount in cash or by its check equal to
the same fraction of the Market Price per share of a share of Common Stock.

          The  Corporation's  right  to elect to pay the  Redemption  Price  (or
designated  portion  thereof) of the Shares  through  the  issuance of shares of
Common Stock  pursuant to this Section 7(c) shall be  conditioned  upon: (i) the
Corporation's  having received the holder's election at least five Business Days
prior to the applicable  Redemption Date, (ii) the Corporation's having obtained
and filed,  on or before the  Redemption  Date, at the office of the  redemption
agent for the Series C Preferred  Stock (or with the books of the Corporation if
there  is no  redemption  agent)  an  opinion  of  counsel  satisfactory  to the
Corporation  to the effect that (A) the shares of Common Stock to be issued upon
such  redemption  have been duly  authorized  and,  when issued and delivered in
payment of the Redemption Price (or designated portion thereof) of the Shares to
be redeemed, will be validly issued, fully paid and non-assessable and free from
preemptive  rights, (B) the issuance and delivery of such shares of Common Stock
upon  such  redemption  of  Shares  will not  violate  the laws of the  state of
incorporation of the Corporation and (C) the issuance and delivery of the shares
of Common Stock upon such  redemption  of shares of Series C Preferred  Stock is
exempt from the registration or qualification requirements of the Securities Act
and applicable state securities laws or, if no such exemption is available, that
the issuance of the shares of Common Stock to be issued has been duly registered
or qualified under the Securities Act and such applicable state securities laws,
and (iii) the  Corporation's  having filed, on or before the Redemption Date, at


#25441 v8
                                        6

<PAGE>


the office of such  redemption  agent (or with the books of the  Corporation  if
there is no  redemption  agent),  a  certificate  signed  by an  officer  of the
Corporation  setting  forth the number of shares of Common Stock to be issued in
payment of the Redemption Price (or designated portion thereof) of each share of
Series C Preferred Stock and the method of determining the same (consistent with
the  provisions  hereof).  If the foregoing  conditions  have not been satisfied
prior to or on the  Redemption  Date,  the  Redemption  Price for the  shares of
Series C Preferred  Stock (or portion  thereof  designated  to be paid in Common
Stock) shall be paid in cash.

          (d) Notice of Redemption. Notice of any redemption pursuant to Section
7(a) or 7(b) shall be mailed,  first class,  postage  prepaid,  not less than 10
days nor more than 30 days  prior to the  Redemption  Date,  to the  holders  of
record of the  shares  of  Series C  Preferred  Stock to be  redeemed,  at their
respective addresses as the same appear upon the books of the Corporation or are
supplied by them in writing to the  Corporation  for the purpose of such notice;
but no  accidental  failure to mail such notice or any defect  therein or in the
mailing  thereof shall affect the validity of the proceedings for the redemption
of any shares of the Series C Preferred Stock; provided that this sentence shall
not  prejudice  the right of any holder to receive such damages which may result
from any such  defective  notice.  Such  notice  shall set forth the  Redemption
Price,  the  Redemption  Date,  the  number  of Shares  to be  redeemed,  if the
Redemption  Price or a designated  portion thereof is to be paid in Common Stock
pursuant to Section 7(c), the  Corporation's  election to do so and the place at
which the Shares called for redemption will, upon  presentation and surrender of
the stock certificates  evidencing such Shares, be redeemed.  In case fewer than
the  total  number of shares of  Series C  Preferred  Stock  represented  by any
certificate  are  redeemed,  a  new  certificate   representing  the  number  of
unredeemed  Shares  will be issued to the holder  thereof  without  cost to such
holder.

          (e) Shares No Longer  Outstanding.  If notice of any redemption by the
Corporation  pursuant  to this  Section 7 shall have been  mailed as provided in
Section 7(d) and if on or before the  Redemption  Date  specified in such notice
the consideration  necessary for such redemption shall have been irrevocably set
apart in trust for the  benefit of the holders of Shares to be so redeemed so as
to be  available  therefor  and only  therefor,  then on and  after the close of
business  on  the   Redemption   Date,   the  Shares   called  for   redemption,
notwithstanding  that any certificate  therefor shall not have been  surrendered
for  cancellation,  shall no longer be deemed  outstanding,  and all rights with
respect to such Shares shall forthwith cease and terminate,  except the right of
the  holders  thereof  to  receive  upon  surrender  of their  certificates  the
consideration payable upon redemption thereof.

          (f)  Retirement  of  Shares.  All shares of Series C  Preferred  Stock
redeemed,  retired,  purchased or otherwise acquired by the Corporation shall be
retired and shall be restored to the status of authorized and unissued shares of
preferred  stock (and may be reissued as part of another series of the preferred
stock of the  Corporation,  but such  shares  shall not be  reissued as Series C
Preferred Stock).

          (g) Failure to Redeem.  The Corporation  shall not redeem or otherwise
acquire or  discharge  any sinking fund  obligation  with respect to, any Junior
Securities,  unless all then outstanding  shares of Series C Preferred Stock are
redeemed, and shall not purchase or otherwise acquire any shares of

#25441 v8
                                        7

<PAGE>

Series C Preferred Stock (other than by way of redemption) or Junior Securities.
Nothing contained in this Section 7(g) shall prevent the purchase or acquisition
of shares of Series C Preferred  Stock  pursuant to a purchase or exchange offer
or offers made to holders of all outstanding shares of Series C Preferred Stock,
provided  that as to holders  of all  outstanding  shares of Series C  Preferred
Stock,  the terms of the  purchase  or  exchange  offer for all such  shares are
identical. The provisions of this Section 7(g) are for the benefit of holders of
Series C Preferred  Stock and  accordingly  the  provisions of this Section 7(g)
shall not  restrict  any  redemption  by the  Corporation  of Shares held by any
holder,  provided  that all other holders of Shares shall have waived in writing
the benefits of this provision with respect to such redemption.  The Corporation
shall not permit any Subsidiary thereof to take any action which the Corporation
is prohibited from taking pursuant to this Section 7(g).

     8.  Amendment.  No amendment or modification  of the  designation,  rights,
preferences,  and limitations of the Shares set forth herein shall be binding or
effective  without  the  prior  consent  (in  writing  or in a  meeting)  of the
Corporation  and the  holders of record of at least 50% of the then  outstanding
Shares at the time such action is taken. Any amendment for which such consent is
obtained  shall be valid except that no amendment  may (a) decrease the dividend
preference or liquidation value or (b) remove the requirement that any less than
total redemption be pro rata without the consent of each holder affected by such
amendment.

     9. Preemptive  Rights. The holders of the Series C Preferred Stock will not
have any  preemptive  right to subscribe  for or purchase any shares of stock or
any other securities which may be issued by the Corporation,  provided that this
Section 9 shall not limit the rights of holders of the Series C Preferred  Stock
pursuant to Section 7 hereof.

     10.  Parity or Senior  Securities.  The  Corporation  may not issue  Parity
Securities  (including any additional shares of Series C Preferred Stock) or any
Senior  Securities  without the consent of the holders of record of at least 50%
of the then outstanding Shares.

     11. No dividends or distributions will be paid or made on any capital stock
of the Company (other than dividends on the Shares or dividends or  distribution
of Junior Securities) while any Shares are outstanding.

     12.  Exclusion of Other Rights.  Except as may otherwise be required by law
and for the  equitable  rights and remedies  that may  otherwise be available to
holders of Series C  Preferred  Stock,  the shares of Series C  Preferred  Stock
shall not have any  designations,  preferences,  limitations or relative rights,
other  than  those   specifically  set  forth  in  these  resolutions  (as  such
resolutions  may, subject to Section 8, be amended from time to time) and in the
Restated Certificate of Incorporation of the Corporation.

     13. Headings.  The headings of the various sections and subsections  hereof
are for convenience of reference only and shall not affect the interpretation of
any of the provisions hereof.


#25441 v8
                                        8

<PAGE>


     
     FOURTH:  The Certificate of Designation and Determination of Preferences of
Series "A"  Convertible  Preferred  Stock of the Company is hereby  amended such
that the second sentence of Section 1  (Designation)  is deleted in its entirety
and the following is inserted in lieu thereof:

     "The Series A Stock shall have a par value of $.001 per share."

     FIFTH: Except as amended hereby, the provisions of the Amended and Restated
Articles of Incorporation, as heretofore amended, shall remain in full force and
effect until hereafter amended in accordance with applicable law.


Dated May 19, 1997
                                    ADVANCE DISPLAY TECHNOLOGIES, INC.,
                                    a Colorado corporation



                                    By:  /S/  DARRELL AVEY
                                        ----------------------------------------
                                         Name:    Darrell Avey
                                         Title:   Chairman

#25441 v8
                                        9
[{"type": "8-K", "sequence": "1", "description": "FORM 8-K", "secsgml_size_bytes": 116409}]
{"company-data": {"conformed-name": "ADVANCE DISPLAY TECHNOLOGIES INC", "cik": "0000770034", "assigned-sic": "6794", "irs-number": "840969445", "state-of-incorporation": "CO", "fiscal-year-end": "0630"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-15224", "film-number": "97619233"}, "business-address": {"street1": "1251 S HURON UNIT C", "city": "DENVER", "state": "CO", "zip": "80223", "phone": "3037416695"}, "mail-address": {"street1": "5251 DTC PARKWAY", "street2": "SUITE 1210", "city": "ENGLEWOOD", "state": "CO", "zip": "80111"}}
SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Date of Report (Date of Earliest Event Reported): May 19, 1997
                                                  ------------

                       ADVANCE DISPLAY TECHNOLOGIES, INC.
              -----------------------------------------------------
             (Exact name of registrant as specified in its charter)

     Colorado                     0-15224                     84-0969445
----------------------          -----------               ------------------
(State of other juris-          (Commission                (I.R.S. Employer
 diction of incorpora-          File Number)              Identification No.)
 tion)

      1251 South Huron, Unit C
          Denver, Colorado                                      80223
---------------------------------------                        ---------
(Address of Principal Executive Offices)                      (Zip Code)

Registrant's telephone number including area code: (303) 733-5339
                                                   --------------

Former name or former address if changed since last report:

         N/A
ITEM 1. CHANGES IN CONTROL OF REGISTRANT

          Effective  May 19,  1997,  Advance  Display  Technologies,  Inc.  (the
     "Company")  experienced  a change in  control  as a result  of an  exchange
     transaction  ("Exchange") in which the operations of Display  Optics,  Ltd.
     (the "Partnership")  were consolidated with those of the Company.  Pursuant
     to the Exchange, the Company was restructured such that certain individuals
     and entities  acquired in the  aggregate a direct  interest in Common Stock
     equal to approximately eighty two percent (82%) of the Company's issued and
     outstanding  Common Stock.  Prior to the Exchange,  these  investors  owned
     partnership interests and other securities  convertible into Company Common
     Stock.  Contemporaneously,  the Company agreed to appoint  certain of those
     individuals  to its Board of  Directors.  As a result of this  transaction,
     management believes a change in control of the Company has occurred.

          The  Exchange  was  completed  pursuant  to  an  agreement  ("Exchange
     Agreement")  effective  May 19,  1997,  by and  between  the  Company,  the
     Partnership,  Display  Group,  LLC (the  managing  general  partner  of the
     Partnership),  Keith  A.  Hancock,  G.  Schneider  Holdings,  Co.,  Mark L.
     Schneider,  Bruce H. Etkin, certain additional  individuals and a privately
     held general partnership (all of the individual investors together with the
     general  partnership  are  hereinafter  referred  to  collectively  as  the
     "Investors"). Messrs. Hancock, Etkin and Mark Schneider, together with Gene
     Schneider (the general partner of G. Schneider Holdings,  Co.) are proposed
     to be appointed to the Company's Board of Directors.  Such appointment will
     be completed not less than ten (10) days following  delivery of information
     to Company  shareholders  pursuant to rules of the  Securities and Exchange
     Commission.  The exchange transaction was designed in an effort to simplify
     administration  of the  Company's  affairs  and public  reporting  with the
     Securities and Exchange Commission.

          The Company  issued  17,509,868  shares of Common Stock and  1,843,900
     shares of a newly created class of Series C Preferred Stock in exchange for
     equity  securities  and  convertible  loans  originally   acquired  by  the
     Investors  for  $2,302,567.  All of the stock  issued in the  Exchange  was
     issued  pursuant to exemptions  from the  registration  requirements of the
     Securities  Act of 1933, as amended.  However,  the Company  granted to the
     Investors  piggyback  registration  rights with regard to the Common Stock.
     The assets  transferred by the Investors  include  equity  interests in the
     Partnership and Display Group,  together with promissory notes representing
     certain loans  previously made to the Partnership or Display Group.  (For a
     more complete  description of the assets acquired by the Company,  see Item
     2. ACQUISITION OF ASSETS,  below).  The capital stock was distributed among
     the Investors in accordance  with their interest in the assets  transferred
     to the Company.  The Exchange  Agreement and  distribution of capital stock
     was designed to approximate the economic  benefits held by the Investors in
     the  Partnership  prior to the Exchange.  The Series C Preferred Stock pays
     dividend and liquidation  preferences which, if paid by the Company,  would
     provide the Investors an economic  return  comparable to that to which they
     were entitled under the terms of the original Partnership Agreement.

        

                                        2
The  following  table  depicts  beneficial  ownership of the Company's
     Common Stock, the only class of voting securities  outstanding,  by certain
     Investors on the date of this Report, who own or are deemed beneficially to
     own, more than five percent (5%) of the Company's  Common Stock, as well as
     by  individuals  proposed to be added to the Company's  Board of Directors.
     The  percentages  are based on an  aggregate  of  21,343,923  shares of the
     Company's Common Stock outstanding as of the date of this Report:

   Beneficial Owner                             Amount of         Percentage of
   and Address                              Voting Securities  Voting Securities
   -----------                              -----------------  -----------------
   American Consolidated                       1,249,750             5.9%
   Growth Corporation
   8100 E. Arapahoe Rd., Suite 309
   Englewood, CO 80112

   William W. Becker                           1,873,369             8.8%
   Box 143
   Grand Cayman Island
   British West Indies

   Display Group, LLC (1)                      1,715,030             8.0%
   5251 DTC Parkway, Suite 1210
   Englewood, CO 801 11

   William J. Elsner                           1,126,812             5.3%
   83 Glenmoor Place
   Englewood, CO 80110

   Bruce H. Etkin (2)                          3,247,456             15.2%
   1512 Larimer St., No. 325
   Denver, CO 80202

   Keith A. Hancock                            76,045                 4.0%
   5251 DTC Parkway, Ste. 1210
   Englewood, CO 80111

   Jan E. Helen                                1,126,797              5.3%
   5251 DTC Parkway, Suite 1010
   Englewood, CO 80111

   G. Schneider Holdings, Co.                  4,491,959             23.1%
   4643 S. Ulster, Suite 1300
   Denver, CO 80237

   Gene W. Schneider (2)(3)                    4,491,959             23.1%
   4643 S. Ulster, Suite 1300
   Denver, CO 80237

                                        3
Mark L. Schneider (2)                       2,509,173             11.8%
    4643 S. Ulster St., Suite 1300
    Denver, CO 80237

     ---------------

     (1)  Includes  1,365,030  shares  of  Common  Stock  beneficially  owned by
          American Consolidated Growth Corporation and affiliated entities which
          the  reporting  person has the right to vote pursuant to a court order
          pending resolution of a civil proceeding  regarding ownership of those
          shares.  Also includes 350,000 shares acquired by the reporting person
          pursuant to a settlement agreement, which the reporting person intends
          to surrender to the Company.

     (2)  Proposed director.

     (3)  Includes  4,491,959  shares  of  Common  Stock  owned by G.  Schneider
          Holdings Co. of which Gene W. Schneider is the general partner.
-------------

          Prior  to  consummation  of the  Exchange,  holders  of the  Company's
     previously  outstanding  Series B Preferred  Stock were entitled to approve
     certain  fundamental  activities  undertaken by the Company.  Pursuant to a
     loan agreement with such  individuals,  the Company agreed not to undertake
     certain actions, including,  without limitation,  amendment of its Articles
     of Incorporation,  consummation of mergers, acquisitions or sales or leases
     of assets otherwise than in the ordinary course of business,  sale or other
     issuance of equity or debt  securities,  or consummation of agreements with
     directors,  officers or affiliates. Such provisions will continue in effect
     until the earliest to occur of ninety days after the effective  date of the
     Exchange  or  the  date  upon  which  the  aforementioned  individuals  are
     appointed to the Company's Board of Directors.

          The Company knows of no other  circumstances or events,  the happening
     of which would result in a further change of control in the Company.  It is
     anticipated  that the  shareholder  notice  required by  regulations of the
     Securities and Exchange Commission preceding appointment of the new members
     of the Board of Directors would be mailed on or about June 15, 1997.

ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.

          In  connection  with the  Exchange,  the Company  acquired  all of the
     assets and  liabilities  of the  Partnership  and  Display  Group,  LLC. In
     connection with the Exchange Agreement, the Company became the owner of all
     of  the  equity  interest  of  both  the  Partnership  and  Display  Group,
     effectively making those entities wholly-owned subsidiaries of the Company.

          The  assets of the  Partnership  include  patents  to  display  screen
     technology,  together  with  associated  intangibles  associated  with  the
     manufacturing,  marketing and selling of the display screens. The assets of
     Display  Group consist of rights in two matters of pending  litigation  and
     Common  Stock of the  Company  acquired  in  connection  with a  settlement
     agreement, anticipated to be surrendered to the Company.

          The Company also acquired all of the  liabilities  of the  Partnership
     and Display Group.  Foremost among the  liabilities  assumed by the Company
     were  present  and  future   obligations  for  general  and  administrative
     expenses,  including  personnel  salaries  and a  liability  for legal fees
     previously  incurred by Display  Group,  for which the  Company  received a
     credit in the Exchange.

                                        4
The  Company  intends to  utilize  the  assets of the  Partnership  to
     continue  the  business of  manufacturing,  marketing  and selling  display
     screens and developing and marketing related technology.

ITEM 3. BANKRUPTCY OR RECEIVERSHIP.

          No report required.

ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.

          No report required.

ITEM 5. OTHER EVENTS.

          Subsequent  to completion  of the  Exchange,  the Company  completed a
     private  placement  of its Common  Stock in a  transaction  exempt from the
     registration requirements of the 1933 Act. The Company sold 10% Convertible
     Promissory Notes in the aggregate  principal amount of $500,000 to a single
     accredited investor pursuant to the provisions of Regulation D, Rule 506 of
     the 1933 Act.  The  Promissory  Notes are  convertible  into  shares of the
     Company's  Common Stock at the rate of $0.1315 per share until the earliest
     to occur of  completion of a subsequent  private  placement or December 31,
     1997. Proceeds of the private placement will be utilized by the Company for
     repayment of debt, marketing of the display screens, development of related
     technologies, accounts payable and working capital.

ITEM 6. RESIGNATION OF REGISTRANT'S DIRECTORS.

          No report required.

ITEM 7. FINANCIAL STATEMENTS, PROFORMA FINANCIAL INFORMATION AND EXHIBITS

          (a) Financial Statements of Businesses Acquired.

                    It is  impractical  for the Company to provide the  required
                    financial  statements at the time of filing this Report. The
                    required   financial   statements  and  proforma   financial
                    information will be filed by amendment to this Report within
                    sixty days of filing.

          (b) Proforma Financial Information.

                    See response to (a) above.

          (c) Exhibits.

                    (i)  Exchange  Agreement  by and  between the  Company,  the
                         Partnership, Display Group and the Investors, dated May
                         19, 1997, without exhibits.

                                        5
(ii) Registration   Rights  Agreement  by  and  between  the
                         Company and the Investors.

                    (iii)Articles  of  Amendment  to the  Company's  Articles of
                         Incorporation  regarding  designation  of the  Series C
                         Preferred Stock.

ITEM 8. CHANGE IN FISCAL YEAR.

          No report required.

                                        6
SIGNATURE

          Pursuant to the  requirements of the Securities  Exchange Act of 1934,
     the Registrant has duly caused this report to be filed on its behalf by the
     undersigned thereunto duly authorized.

                                          ADVANCE DISPLAY TECHNOLOGIES, INC.

Date:       06/03/97                       By:  /s/ Darrell D. Avey
                                                --------------------------------
                                                 Darrell D. Avey, Chairman

                                        7
EXCHANGE AGREEMENT

     THIS EXCHANGE  AGREEMENT (this "Agreement") is entered into as of this 19th
day of May, 1997 by and among Keith A.  Hancock,  individually  ("Hancock"),  G.
Schneider  Holdings  Co.,  a Colorado  limited  partnership  ("G.S.  Holdings"),
William W. Becker, individually ("Becker"), Mark L. Schneider, individually ("M.
Schneider"),   Jan  E.  Helen,   individually  ("Helen"),   William  J.  Elsner,
individually ("Elsner"), J. Timothy Brittan, individually ("Brittan"),  Bruce H.
Etkin,  individually  ("Etkin"),   Peregrine  Investments,  a  Virginia  general
partnership ("Peregrine"),  John D. Seiver,  individually ("Seiver") and John P.
Cole, Jr.,  individually ("Cole")  (collectively,  the "Exchanging Parties," and
each an "Exchanging  Party"),  Advance  Display  Technologies,  Inc., a Colorado
corporation   (the  "Company"),   Display  Optics,   Ltd.,  a  Colorado  limited
partnership  (the  "Partnership"),  and Display Group,  LLC, a Colorado  limited
liability company (the "LLC").

                                    RECITALS

     A. The Exchanging Parties individually own the assets indicated on Schedule
A to this Agreement,  including (i) Series B Preferred Stock of the Company, (b)
Class A  limited  partnership  interests  in the  Partnership,  (c)  debt of the
Partnership,  (d)  equity  interests  in the  LLC and (e)  debt of the  LLC.  In
addition,  as  also  indicated  on  Schedule  A,  the  LLC  holds  debt  of  the
Partnership.

     B. The Series B Preferred  Stock of the Company is convertible  into common
stock  of the  Company  ("Common  Stock").  All of the debt  described  above is
convertible into Class B limited partnership  interests in the Partnership.  The
Partnership  Agreement of the Partnership provides that 99% of all distributions
by the  Partnership  will be made to the  limited  partners  until  the  limited
partners have received  distributions  equal to 150% of their  investment in the
Partnership.  The  Class  A  and  Class  B  limited  partnership  interests  are
convertible into Common Stock.

     C. In order to simplify the  structure  of the  Company's  business,  while
retaining  to  the  extent  practicable  the  economic  characteristics  of  the
investments  described above,  the parties desire for the Exchanging  Persons to
transfer to the Company the assets listed on Schedule A (the "Exchanged Assets")
in  exchange  for the  assets  and rights  listed on  Schedule  B and  otherwise
described in this Agreement.

     D. The  independent  directors of the Company have  unanimously  determined
that the  transactions  contemplated  by this  Agreement are fair to, and in the
best  interests of, the Company and the  shareholders  of the Company other than
the exchanging Persons.

#25204.V.
The parties agree as follows:

Section 1 Exchange.
-------------------

     1.1 (a) The parties hereto  acknowledge  that the exchange  contemplated by
Section  1.1(b)  below does not include  value for any  accrued  interest on the
Loans.  Each Exchanging  Party hereby expressly waives all rights to any accrued
but unpaid interest on the Loans.

          (b) Each Exchanging Party hereby transfers all of its right, title and
interest in and to all assets  indicated  as owned by such  Exchanging  Party on
Schedule A in  exchange  for the  number of shares of Common  Stock and Series C
Preferred Stock of the Company indicated for such Exchanging Party on Schedule B
and the other consideration referred to elsewhere in this Agreement. The Company
accepts such assignment and hereby issues to each Exchanging  Party the stock of
the Company as  indicated  on Schedule B (the  "Company  Stock").  The  exchange
contemplated  by this Section 1.1(b) shall be  immediately  effective as soon as
this Agreement has been signed by all the parties (the "Effective Time").

     1.2  After  the  Effective  Time,  each  Exchanging  Party  shall  promptly
surrender to the Company all notes,  certificates  or other  instruments  of any
kind evidencing  ownership of any of the Exchanged Assets,  all duly endorsed to
the Company and accompanied by proper instruments of transfer to the Company, at
its office designated as herein provided.  Upon receipt of the foregoing from an
Exchanging  Person,  the Company shall promptly deliver or send the following to
such Exchanging Person:

          (a) certificates in the name of such Exchanging  Person evidencing the
Company  Stock to which  such  Exchanging  Party is  entitled  as  indicated  on
Schedule B.

          (b) a  Registration  Rights  Agreement  in the form  attached  to this
Agreement as Exhibit A, duly executed by the Company.

     1.3 For each Exchanging Person, the exchange contemplated by this Agreement
shall be deemed to have  occurred as of the  Effective  Time,  and the person or
persons entitled to receive the shares of Company Stock shall be treated for all
purposes as the record  shareholder  or  shareholders  of such shares of Company
Stock on the Effective Time.

     1.4 If any Exchanging  Party is unable to locate a promissory note or stock
certificate to be surrendered by such  Exchanging  Party under Section 1.2, such
Exchanging Party shall be entitled nevertheless to receive the items referred to
in clauses (a) and (b) of Section 1.2 upon  submission  to the Company of a lost
note or lost certificate affidavit in customary form. The affidavit shall state,
among other things,  that the lost note or certificate  has not been endorsed or
otherwise  transferred  to  encumbered  and  that  such  Exchanging  Party  will
indemnify the Company and the other Exchanging  Parties for any damages they may
incur in  connection  with any claim by any third party to have any  interest in
the lost note or certificate.

#25204.V.
                                       -2-
1.5 All obligations of the Exchanging Parties under this Agreement shall be
several and not joint. Under no circumstances will any Exchanging Party have any
liability  for any  failure  by any other  Exchanging  Party to comply  with any
provision of this Agreement.

Section 2 Assignment and Assumption.
------------------------------------

     2.1 In connection with and as part of the exchange described in Section 1.2
above,  the Company  hereby assumes the obligation of the LLC to pay $163,000 to
Holme  Roberts & Owen LLP ("HRO") for fees and  disbursements  relating to legal
services,  pending  review of the legal invoices  therefor.  The final amount of
legal fees shall be agreed  upon by the LLC,  the  Company  and HRO,  and in the
event that the amount of such fees is not equal to $163,000,  the Company  stock
to be issued pursuant to Schedule B shall be adjusted accordingly.

Section 3 Company  Representations  and Warranties.  As a material inducement to
the  Exchanging  Parties to enter into this  Agreement,  the  Company  makes the
following  representations and warranties to the Exchanging Parties,  subject to
the  disclosures  set  forth on  Exhibit  B  attached  hereto  (the  "Disclosure
Schedule"):

     3.1  Organization,   Standing,   and   Qualification.   The  Company  is  a
corporation,  duly  organized,  validly  existing and in good standing under the
laws of the State of Colorado,  and has all necessary power and authority to own
its properties owned by it and carry on its business as currently conducted.

     3.2  Authorization;  Enforceability.  All action on the part of the Company
necessary for the authorization, execution, delivery, and performance of all the
obligations  of the Company  under this  Agreement and the  consummation  of the
transactions  contemplated hereby has been taken. This Agreement constitutes the
valid and binding obligations of the Company, enforceable against the Company in
accordance  with its terms.  The members of the Company's Board of Directors are
Darrel Avey,  Vincent D. Bradshaw,  and John D. Kilgore,  and there are no other
Directors of the  Company.  Each such person was duly  appointed  and remains in
good  standing  as a Director of the  Company.  The  Company  has  provided  the
Exchanging Parties and their respective counsel with true and accurate copies of
the appropriate  resolutions of the Company's Board of Directors relating to the
transactions  contemplated by this Agreement,  certified by the Secretary of the
Company as true, accurate, and effective as of the date hereof.

     3.3 Capitalization. The authorized capital stock of the Company consists of
100,000,000  shares of Common Stock,  par value $.001 per share, and 100,000,000
shares of Preferred Stock par value $.001 per share,  of which 1,000,000  shares
have been  designated as Series A Preferred  Stock,  2,991,474  shares have been
designated as Series B Preferred Stock and 1,843,900 shares have been designated
as Series C Preferred  Stock.  Of the  authorized  capital stock of the Company,
3,834,505  shares of Common Stock,  no shares of Series A Preferred  Stock,  and
2,991,505  shares of Series B Preferred Stock are  outstanding.  All outstanding
shares of the Company's capital stock are duly authorized, validly issued, fully
paid and nonassessable. Upon completion of the transactions contemplated by this

#25204.V.
                                       -3-
Agreement,  21,343,923  shares of Common Stock,  no shares of Series A Preferred
Stock,  no shares of Series B Preferred  Stock and 1,843,900  shares of Series C
Preferred  Stock  will be  issued  and  outstanding.  Except as set forth on the
Disclosure Schedule,  there are no outstanding rights,  subscriptions,  options,
warrants,  conversion  privileges,  preemptive  rights,  or other  agreements or
commitments  obligating the Company to issue or transfer any  additional  equity
securities  (with or without the passage of time  and/or the  occurrence  of any
other  events)  except for the items  being  transferred  to the  Company by the
Exchanging  Parties  under  Section  1  above,  none  of  which  items  will  be
outstanding upon completion of the transactions contemplated by this Agreement.

     3.4  Validity  of Stock.  The  Articles  of  Amendment  to the  Articles of
Incorporation  (the  "Articles of  Amendment")  of the  Company,  a complete and
accurate copy of which are attached  hereto as Exhibit C, are duly authorized by
the Company's  Amended and Restated  Articles of  Incorporation,  have been duly
adopted by the Board of  Directors  of the  Company  and govern the terms of the
Series C Preferred  Stock.  The Articles of  Amendment  have been filed with the
Colorado  Secretary  of State and are in full  force and  effect.  The shares of
Common  Stock  and  Series C  Preferred  Stock  to be  issued  pursuant  to this
Agreement (collectively,  the "Shares"),  when issued, shall be duly authorized,
validly issued,  fully paid, and non-assessable and will be free of any liens or
encumbrances.

     3.5 Control of Shares. Upon completion of the transactions  contemplated by
this  Agreement,  the  Exchanging  Parties,  in the  aggregate,  will own  stock
possessing  at least 80% of the total  combined  voting  power of all classes of
stock of the Company  entitled  to vote and at least 80% of the total  number of
shares of all other classes of stock of the Company.

     3.6  Securities  and  Exchange  Commission  Filings.  (a) True and complete
copies of all reports, registration statements,  definitive proxy statements and
other documents,  including all amendments to any of the foregoing (collectively
the "Commission  Filings") filed by the Company with the Securities and Exchange
Commission  (the  "Commission")  have been  furnished  to  Display  Group by the
Company.  The Commission  Filings constitute all of the documents required to be
filed by the Company with the Commission during the last five years. As of their
respective  dates,  each of such  Commission  Filings  complied in all  material
respects with the applicable  requirements of the Securities Act of 1933 and the
Securities  Exchange Act of 1934, and none of such Commission  Filings contained
as of such date any untrue  statement  of a material  fact or omitted to state a
material fact required to be stated  therein or necessary to make the statements
therein,  in  light  of the  circumstances  under  which  they  were  made,  not
misleading.

          (b) When filed with the Commission,  the financial statements included
in the Commission  Filings filed during the three-year period ending on the date
of this  Agreement  complied  as to  form  in all  material  respects  with  the
applicable  rules  and  regulations  of the  Commission  and  were  prepared  in
accordance with generally accepted accounting principles applied on a consistent
basis (except as may be indicated therein or in the notes or schedules thereto),
and such  financial  statements  fairly  present the  financial  position of the
Company as at the dates thereof and the results of its operations and its cash

#25204.V.
                                       -4-
flows for the periods then ended,  subject, in the case of the unaudited interim
financial statements, to normal, recurring year-end audit adjustments. Except to
the extent reflected or reserved against in the financial statements included in
the Company's  Quarterly  Report on Form 10-Q for the quarter ended December 31,
1996 (the "10-Q"),  the Company does not have any liability or obligation of any
kind, whether accrued, absolute,  contingent,  unliquidated or other and whether
due or to become due (including any liability for breach of contract,  breach of
warranty, torts, infringements,  claims or lawsuits), other than liabilities for
debt included in the Exchanged Assets and immaterial  liabilities incurred since
December 31, 1996, in the ordinary course of business.  Since December 31, 1996,
the Company has not entered into any agreement (other than this  Agreement),  or
transaction outside of the ordinary course of business,  or declared or paid any
dividend or acquired or  committed  to acquire any of its capital  stock  (other
than  pursuant to this  Agreement)  and there has not been any material  adverse
change in the Company's financial position, results of operations or prospects.

     3.7 Tax Returns and Audits.  The Company has filed all federal,  state, and
local tax returns and reports  within the times and in the manner  prescribed by
law and has paid (or made adequate  provision in the balance  sheet  included in
the  10-Q  for)  all  taxes  shown  due on such  returns,  as well as all  other
assessments  and  penalties  which have become due and  payable.  The  Company's
federal income tax returns have not been audited by the Internal Revenue Service
or any other  taxing  authority  and no notice of audit has been  received.  The
provisions  for taxes in the balance sheet included in the 10-Q are adequate for
any and all federal,  state, county, local and other taxes for the period ending
on such date and for all prior periods, whether or not disputed. The Company has
not  received  notice  of any  disputes,  deficiency  assessments,  or  proposed
adjustments to taxes payable by the Company.

     3.8 Articles of Incorporation and Bylaws: No Conflicts.  The Company is not
in violation of any  provision of its Articles of  Incorporation  or Bylaws,  as
amended and in effect as of the date hereof.  There is no default or event that,
with notice or lapse of time,  or both,  would  conflict  with or  constitute  a
breach of the  Company's  Amended  and  Restated  Articles of  Incorporation  or
Bylaws. The execution, delivery and performance of this Agreement by the Company
will not  violate,  cause a  default  under,  otherwise  breach or result in the
actual or potential acceleration of any obligations or any loss or forfeiture of
any rights by the Company  pursuant to any existing  agreement or arrangement to
which the Company or, to the best of the Company's  knowledge,  the Partnership,
is a party or by which their respective assets may be affected.

     3.9 Litigation. There are no actions, suits, or legal,  administrative,  or
other  proceedings  or  investigations  pending or, to the best of the Company's
knowledge,  threatened before any court,  agency, or other tribunal to which the
Company or, to the best of the Company's knowledge, the Partnership,  is a party
or against or affecting any of the property,  assets,  businesses,  or financial
condition  of the  Company  or,  to the  best of the  Company's  knowledge,  the
Partnership. Neither the Company nor, to the best of the Company's knowledge,

#25204.V.
                                       -5-
the Partnership,  is in default with respect to any order, writ, injunctions, or
decree of any federal,  state,  local or foreign court,  department,  agency, or
instrumentality to which it is a party.

     3.10 Agreement Will Not Cause Breach or Violation.  The consummation of the
transactions  contemplated  by this  Agreement  (including  the  issuance of the
Company Stock) will not result in any violation of or constitute a default or an
event  that,  with  notice or lapse of time,  or both,  would  conflict  with or
constitute a breach or default of the  Partnership  Agreement or the Articles of
Incorporation  or Bylaws of the Company or of any contract  commitment  or other
arrangement  or any  material  provision  of state or  federal  law and will not
result in the creation or  imposition of any lien or  encumbrance  on any of the
property  of the  Company  or,  to the  best  of the  Company's  knowledge,  the
Partnership,  or on the  Company  Stock,  the  limitation  of any  rights of the
Company or, to the best of the  Company's  knowledge,  the  Partnership,  or the
increase or acceleration of any obligations of the Company or the Partnership.

     3.11 Governmental Approvals/Third Party Consents. All consents,  approvals,
or   authorizations   of,  or   registrations,   qualifications,   designations,
declarations,  or filings with any federal or state governmental authority,  and
all  consents,  approvals  or  authorizations  of any third  party,  required in
connection   with  the  execution  of  this   Agreement  and  the   transactions
contemplated  hereby (including the issuance and sale of the Company Stock) have
been obtained by the Company.

     3.12  Registration  Rights.  The  Company  is not under any  obligation  to
register any of its presently outstanding  securities pursuant to the Securities
Act of 1933 (the  "Securities  Act")  except  as set  forth in the  Registration
Rights Agreement in form  substantially  similar to Exhibit A, to be executed by
the Exchanging Parties and the Company simultaneously with this Agreement.

     3.13 The Company and its Board of Directors have received a written opinion
from Neidiger,  Tucker, Bruner, Inc.,  independent financial advisors,  that the
transactions  contemplated by this Agreement are fair, from a financial point of
view, to the shareholders of the Company other than the Exchanging Parties.

     3.14 Accuracy of Information Furnished.  The representations and warranties
in this Agreement do not contain any untrue statement of a material fact or omit
to state any material  fact that is necessary to make the  statements  contained
herein or therein not misleading as of the Effective Time.

     3.15  Compliance  with Laws.  The Company (a) has  complied  with and is in
compliance in all material respects with all federal,  state and local statutes,
laws, ordinances,  regulations,  rules, judgments, orders and decrees applicable
to it and its assets, business and operations and (b) has not received notice of
any  claim of  default  under  or  violation  of any  statute,  law,  ordinance,
regulation, rule, judgment, order or decree.

Section 4 Remedies on and Notices of Default. In addition to any other available
legal or equitable  remedies,  if the representation and warranty in Section 3.3
of this Agreement is ever determined to have been inaccurate in any respect when
made, then the Company shall promptly issue to each Exchanging Person the number
of shares of Common  Stock and/or  Series C Preferred  Stock that will cause the

#25204.V.
                                       -6-
total amount of Company Stock issued to each  Exchanging  Party to represent the
same percentage voting and economic interest in the Company as such person would
have received if there had been no inaccuracy in Section 3.3.

Section 5  Representations  and Warranties of the Exchanging  Parties.  (a) Each
Exchanging Party represents severally, but not jointly, that this Agreement is a
valid and binding obligation of such Exchanging Party,  enforceable against such
Exchanging Party in accordance with its terms, and that the Exchanging Party has
not taken any action that would cause any of the Exchanged  Assets owned by such
Exchanging Party (as indicated on Schedule A to this Agreement) to be subject to
the claims of any third party.

          (b) Each  Exchanging  Party  acknowledges,  represents and warrants as
follows:

               (i) Each Exchanging  Party that is a natural person is twenty-one
(21)  years of age,  of legal  capacity  to  execute  this  Agreement,  and in a
financial  position to hold the Shares for an  indefinite  period of time and is
able to bear the economic  risks and withstand a complete loss of his investment
in the Shares; and

               (ii) Each Exchanging  Party,  either alone or with the assistance
of his own professional  advisor, has such knowledge and experience in financial
and business  matters that he is capable of evaluating the merits and risk of an
investment in the Shares and has the net worth to undertake such risks; and

               (iii) Each Exchanging  Party has received and had the opportunity
to review the  Company's  Annual Report on Form 10-KSB for the fiscal year ended
June 30, 1996 and the Articles of  Amendment  to the  Articles of  Incorporation
describing the Series C Preferred  Stock,  and has been given access to full and
complete  information  regarding the Company and has utilized such access to his
satisfaction for the purpose of obtaining such information regarding the Company
as he has reasonably  requested;  and,  particularly,  each Exchanging Party has
been given reasonable opportunity to ask questions of, and receive answers from,
representatives  of the  Company  concerning  the  terms and  conditions  of the
exchange  and to obtain any  additional  information,  to the extent  reasonably
available; and

               (iv) Each  Exchanging  Party  recognizes  that the  Company has a
limited  operating  history and that the Shares as an investment  involve a high
degree of risk,  including  but not limited to the risk of economic  losses from
operations of the Company; and

               (v) Each  Exchanging  Party realizes that (A) the purchase of the
Shares is a long-term investment;  (B) the purchaser of the Shares must bear the
economic risk of investment for an indefinite  period of time because the Shares
have not be registered  under the Securities Act of 1933 or under the securities
laws of any state and,  therefore,  the Shares cannot be resold unless the Share
are   subsequently   registered   under  said  laws  or  exemptions   from  such
registrations  are  available;  and (C) the  transferability  of the  Shares  is
restricted and requires conformity with the restrictions  contained in paragraph
(c) below.

#25204.V.
                                       -7-
(c) Each Exchanging Party  acknowledges  that the Shares have not been
registered  under the Securities Act of 1933 or applicable state securities laws
and that the Shares are being offered and sold pursuant to exemptions  from such
laws and that the Company's  reliance upon such exemptions is predicated in part
on each Exchanging Party's  representations as contained herein. Each Exchanging
Party  represents  and warrants that the Shares are being  purchased for his own
account and for investment purposes only, and without the intention of reselling
or  redistributing  the same, that each  Exchanging  Party has made no agreement
with  others  regarding  any of the  Shares,  and that each  Exchanging  Party's
financial  condition  is such that it is not likely that it will be necessary to
dispose of any of such  securities in the  foreseeable  future.  Each Exchanging
Party  further  represents  and  agrees  that  if,  contrary  to  the  foregoing
intentions,  he  should  later  desire to  dispose  of or  transfer  any of such
securities  in any manner,  he shall not do so without  first  obtaining (i) the
opinion of counsel to the Company that such proposed disposition or transfer may
be lawfully made without the  registration  of such  securities  pursuant to the
Securities Act of 1933, as then amended,  and applicable  state securities laws,
or  (ii)  such  registration  (it  being  understood  that  the  Company  has no
obligation to register any  securities).  The Company will restrict  transfer in
accordance with the foregoing representation.

          (d) Each Exchanging Party hereby represents and warrants that he is an
"accredited  investor" and within the meaning of Rule 501 of Regulation D of the
1933 Act.

          (e) Each  Exchanging  Party has  obtained  independent  tax counsel or
advice regarding the tax treatment and effect of the Exchange to such Exchanging
Party. None of the Exchanging  Parties has relied on any advice from the Company
regarding the tax treatment of the Exchange,  and  understands  that the Company
has made no representations or warranties to that effect.

          (f) The  financial  statements of the LLC as of December 31, 1996 (the
"LLC  Financials")  and  previously  delivered  to the  Company  are a true  and
accurate statement of the financial  condition of the respective  entities as of
the dates  therein  stated,  prepared  in  accordance  with  Federal  Income Tax
principles.  Except to the  extent  reflected  or  reserved  against  in the LLC
Financials,  the LLC does not have any  liability  or  obligation  of any  kind,
whether accrued, absolute, contingent,  unliquidated or other and whether due or
to become  due  (including  any  liability  for  breach of  contract,  breach of
warranty,  torts,  infringements,  claims or  lawsuits),  other than  immaterial
liabilities  incurred  since  December  31,  1996,  in the  ordinary  course  of
business.

Section 6 Covenants of the Company.
-----------------------------------

     6.1 Affirmative  Covenants.  The Company shall use its best efforts to make
all required filings under Rule 14f-1 of the Securities  Exchange Act of 1934 in
connection with the election of additional directors of the Company.

     6.2 Negative  Covenants.  For a period  commencing as of the Effective Time
through  the  earlier  to occur of (i) 90 days  thereafter,  or (ii) the date on
which the  holders  of the  Series C  Preferred  Stock  have  elected 4 of the 7
members of the Board of Directors of the Company after filing of all  applicable
securities  filing  described in Section 6.1 above,  the Company  agrees that it

#25204.V.
                                       -8-
will not take any of the  following  actions by the  Company  without  the prior
written  consent of a majority of the holders of Series C Preferred Stock of the
Company:

          (a) Amend the Articles of Incorporation or Bylaws of the Company;

          (b)  Consummate any mergers,  acquisitions,  sales or leases of assets
and other significant transactions involving the Company;

          (c) Sell or  otherwise  issue  any  equity or debt  securities  of the
Company;

          (d) Approve any annual operating and capital budgets of the Company or
any significant changes thereto;

          (e)  Change  the  Company's  business  activities  beyond the scope of
individual display screen products;

          (f) Enter  into any  agreements  with  directors,  officers  and other
affiliates of the Company;

          (g)  Consummate  any stock  splits or other  reclassifications  by the
Company;

          (h)  Compromise  or  release  any  claims  of, or debts  owed to,  the
Company;

          (i)  Consummate  any  other  actions  out of the  ordinary  course  of
business of the Company; or

          (j)  Review  and  approve  any   publicity  or  other   communications
pertaining to the technology being developed by the Company or the shareholders.

The holders of the Series C Preferred shall reply promptly to any request by the
Company to take any of the foregoing actions.

In addition,  up to 2 representatives of the holders of Series C Preferred Stock
shall be  permitted  to attend all  meetings  of the Board of  Directors  of the
Company.  Also,  upon request of the holders of Series C Preferred  Stock and at
the expense of the Company,  the Company will engage  auditors and  attorneys to
conduct  a due  diligence  review  of the  Company,  and the  Company  agrees to
cooperate in such review.

Section 7 Miscellaneous Provisions.
-----------------------------------

     7.1  Modifications  and  Waivers.  This  Agreement  may not be  amended  or
modified,  nor may the  rights  of any  party be  waived,  except  by a  written
document that is executed by (a) the Company and (b) Exchanging  Persons with at
least 50% of the "amount at risk" as indicated in Schedule A. No amendment to

#25204.V.
                                       -9-
this  Agreement  reducing  the  consideration  to be received by any  Exchanging
Person  shall  be  effective  unless  signed  by each  Exchanging  Person  whose
consideration is to be reduced.

     7.2  Assignment.  This  Agreement  is binding  upon and shall  inure to the
benefit of the parties and their respective successors and permitted assigns. No
party  hereto may assign this  Agreement  to any third  party  without the prior
written consent of (a) the Company and (b) Exchanging  Persons with at least 50%
of the "amount at risk" as indicated in Schedule A.

     7.3 Rights and  Obligations  of Third Parties.  Nothing in this  Agreement,
whether  express or implied,  is intended to confer any rights or remedies under
or by reason of this  Agreement on any persons  other than the parties to it and
their  respective  successors  and  permitted  assigns,  nor is anything in this
Agreement  intended to relieve or discharge  the  obligation or liability of any
third parties to any party to this  Agreement,  nor shall any provision give any
third  party  any  right of  subrogation  or  action  against  any party to this
Agreement.

     7.4 Notices. Any notice, request, consent, or other communication hereunder
shall be in writing,  and shall be sent by one of the  following  means:  (i) by
registered  or  certified  first class mail,  postage  prepaid,  return  receipt
requested; (ii) by facsimile transmission with confirmation of receipt; (iii) by
overnight courier service;  or (iv) by personal delivery,  and shall be properly
addressed as follows:

                  If to the Company to:

                           Advance Display Technologies,  Inc.
                           1251 South Huron Street
                           Denver, Colorado  80223
                           Attention:  Darrell Avey
                           Facsimile:  (303) 733-5363

                  With a copy to:

                           David Babiarz, Esq.
                           Overton Babiarz & Sykes
                           7720 E. Belleview Ave., Suite 200
                           Englewood, Colorado 80111
                           Facsimile: (303) 779-6006

                 If to Partnership, to:

                           Display Optics, Ltd.
                           5251 DTC Parkway, Suite 1210
                           Englewood, Colorado  80111
                           Attention:  Darrell Avey
                           Facsimile:  (303) 694-0770

#25204.V.
                                      -10-
If to LLC, to:

                           Display Group, LLC
                           5251 DTC Parkway, Suite 1210
                           Englewood, Colorado  80111
                           Attention:  Keith Hancock
                           Facsimile:  (303) 694-0770

          If to an Exchanging Party, to such Exchanging Party at the address set
forth on  Schedule  C attached  to this  Agreement,or  to such other  address or
addresses as the Company,  the  Partnership or the LLC or any  Exchanging  Party
shall hereafter designate to the other parties in writing.  Notices sent by mail
shall be effective 7 days after they are sent, and notices delivered  personally
by facsimile or by courier shall be effective at the time of delivery thereof.

     7.5 Further Actions. All parties hereto agree to execute and deliver to the
other parties, from time to time hereafter,  for no additional consideration and
at no  additional  cost  to the  requesting  party,  such  further  assignments,
certificates,  instruments, records, or other documents, assurances or things as
may be reasonably  necessary to give full effect to this  Agreement and to allow
each party fully to enjoy and  exercise  the rights  accorded and acquired by it
under this Agreement.

     7.6 Entire Agreement. This Agreement,  including the schedules and exhibits
to this Agreement,  constitutes the entire agreement  between the parties hereto
in  relation  to  the  subject  matter   hereof.   Any  prior  written  or  oral
negotiations,  correspondence,  or understandings relating to the subject matter
hereof shall be superseded by this  Agreement and shall have no force or effect.
The  representations,  warranties,  covenants and  agreements  made herein shall
survive any investigation made by the Exchanging Parties.

     7.7   Severability.   If  any  provision  that  is  not  essential  to  the
effectuation  of the basic purpose of this Agreement is determined by a court of
competent jurisdiction to be invalid and contrary to any existing or future law,
such  invalidity  shall not impair the operation of the remaining  provisions of
this Agreement.

     7.8 Headings.  The headings of the Sections of this  Agreement are inserted
for  convenience  of  reference  only and shall not affect the  construction  or
interpretation of any provisions hereof.

     7.9 Schedules and  Exhibits.  The schedules and exhibits to this  Agreement
are a part of this  Agreement for all purposes.  Terms which are defined in this
Agreement shall have the same meanings when used in such schedules and exhibits.

#25204.V.
                                      -11-
7.10  Counterparts.  This  Agreement  may  be  executed  in any  number  of
counterparts,  each of which when executed and  delivered  shall be an original,
but all of which together shall constitute one and the same instrument.

     7.11 Expenses.  Each party shall bear and pay its own expenses  incurred in
connection  with  negotiating  and  preparing  this  Agreement  and the exhibits
hereto.

     7.12 Governing Law. This  Agreement  shall be construed in accordance  with
and governed by the laws of the State of Colorado.

     7.13 Delays or  Omissions.  No delay or  omission  to  exercise  any right,
power,  or remedy  accruing to either  party,  upon any breach or default of the
other party under this Agreement, shall impair any such right, power, or remedy,
nor shall it be  construed  to be a waiver of any such breach or default,  or an
acquiescence  therein,  or of or in any  similar  breach of  default  thereafter
occurring;  nor shall any  waiver of any  single  breach or  default be deemed a
waiver of any other breach or default theretofore or thereafter  occurring.  Any
waiver,  permit,  consent, or approval on the part of either party of any breach
or  default  by the other  party  under  this  Agreement,  or any  waiver of any
provisions or conditions of this Agreement must be made in writing signed by the
parties and shall be effective only to the extent specifically set forth in such
writing.  All  remedies,  either  under this  Agreement  or by law or  otherwise
afforded to either party, shall be cumulative and not alternative.

     7.14 Attorneys  Fees. If any party elects to pursue legal action to enforce
its  rights  under  this  Agreement,  and if a court of  competent  jurisdiction
adjudicates  the  matter,  then the  prevailing  party in such  action  shall be
entitled to receive from the losing  party all  reasonable  costs and  expenses,
including the  reasonable  fees of attorneys,  accountants,  and other  experts,
incurred by the prevailing party in investigating and prosecuting (or defending)
such action at the arbitration, trial and appellate levels.

                                       COMPANY:

                                       ADVANCE DISPLAY
                                       TECHNOLOGIES, INC.,
                                       a Colorado corporation
   

                                       By: /s/  DARRELL AVEY
                                           -------------------------------------
                                           Name: Darrell Avey
                                           Title: Chairman

#25204.V.
                                      -12-
PARTNERSHIP:

                                  DISPLAY OPTICS, LTD.,
                                  a Colorado limited partnership

                                  By:   Advance  Display Technologies, Inc., a
                                        Colorado corporation, General Partner

                                  By: /S/  DARRELL AVEY
                                      ------------------------------------------
                                      Name:  Darrell Avey
                                      Title:  Chairman

                                  LLC:

                                  DISPLAY GROUP, LLC,
                                  a Colorado limited liability company

                                  By: /S/  KEITH A. HANCOCK
                                      ------------------------------------------
                                      Name:  Keith A. Hancock
                                      Title: Manager

                                  EXCHANGING PARTIES:

                                  /S/  KEITH A. HANCOCK
                                  ----------------------------------------------
                                  Keith A. Hancock

                                  G. SCHNEIDER HOLDINGS CO.,
                                  a Colorado limited partnership

                                  By:  /S/  GENE W. SCHNEIDER
                                       ----------------------------------------
                                       Gene W. Schneider
                                       General Partner

                                   /S/  WILLIAM W. BECKER
                                   ---------------------------------------------
                                   William W. Becker

#25204.V.
                                      -13-
/S/  MARK L. SCHNEIDER
                                   ---------------------------------------------
                                   Mark L. Schneider

                                   /S/  JAN E. HELEN
                                   ---------------------------------------------
                                   Jan E. Helen

                                   /S/  WILLIAM J. ELSNER
                                   ---------------------------------------------
                                   William J. Elsner

                                   /S/  J. TIMOTHY BRITTAN
                                   ---------------------------------------------
                                   J. Timothy Brittan

                                   /S/  BRUCE H. ETKIN
                                   ---------------------------------------------
                                   Bruce H. Etkin

                                   PEREGRINE INVESTMENTS,
                                   a Virginia general partnership

                                   By: /S/  DARYL OWEN
                                       -----------------------------------------
                                       Name: Daryl Owen
                                       Title:    General Partner

                                   /S/  JOHN D. SEIVER
                                   ---------------------------------------------
                                   John D. Seiver

                                   /S/  JOHN P. COLE, JR.
                                   ---------------------------------------------
                                   John P. Cole, Jr.

#25204.V.
                                      -14-
FORM OF
                          REGISTRATION RIGHTS AGREEMENT

This Registration  Rights Agreement (this "Agreement") is entered into as of May
19th, 1997,  among Advance Display  Technologies,  Inc., a Colorado  corporation
(the  "Company"),  and the  several  shareholders  of the  Company  named on the
signature pages to this Agreement (the "Holders").

                                    RECITALS

A.   Each Holder  owns  shares of Common  Stock of the Company as of the date of
     such Holder's  execution of this Agreement and none of the Holders have any
     registration rights under the Securities Act of 1933 (the "Securities Act")
     with respect to such shares.

B.   As an inducement to each Holder to enter into an Exchange Agreement of even
     date herewith among the Holders, the Company and certain other parties (the
     "Exchange  Agreement"),  and as consideration for the other agreements made
     by the  Holders  in this  Agreement,  the  Company  is  entering  into this
     Agreement  with the Holders.  This  Agreement sets forth the terms on which
     each  Holder  shall  have  the  right  to  join  in  any   registration  of
     "Registrable  Securities"  by the  Company  under the Act.  As used in this
     Agreement,  "Registrable  Securities"  means  Common  Stock of the  Company
     issued to the Holders and any securities issued or issuable with respect to
     such  Common  Stock  by way of any  stock  split  or in  connection  with a
     combination of shares,  merger,  recapitalization,  merger consolidation or
     other reorganization.

                                    AGREEMENT

The parties agree as follows:

1.   Piggyback  Registration  Rights.  For a period  of 5 years  after  the date
     hereof, subject to the other terms and conditions of this Agreement,  if at
     any time the  Company  proposes  to  register  for offer and sale under the
     Securities  Act of 1933 (the  "Securities  Act") any of its Common Stock or
     other securities,  whether or not for sale for its own account, the Company
     shall   provide  each  Holder  with  a  written   notice  of  the  proposed
     registration  (unless the  proposed  registration  is on Form S-4,  S-8, or
     another  form  that  may not be used  for  sales  of  Common  Stock  by the
     Holders).  Such notice  shall not be required to include the price at which
     the securities  will be offered for sale.  Upon the written request of each
     Holder  given within 20 days after any such notice is given by the Company,
     the  Company  shall  include  in  such  registration  statement  all of the
     Registrable Securities held

#25355.V4
by such Holder that such Holder so requests to be  registered  and included
     in such offering (subject to Section 6 of this Agreement in connection with
     underwritten offerings).

2.   Withdrawal.  A Holder  shall have the right to withdraw its shares from the
     registration  process, but if the same relates to an underwritten  offering
     it may only do so during the time  period and on terms  agreed  upon by the
     managing underwriter for such underwritten offering. Under no circumstances
     will  this  Agreement  limit  the  right of the  Company  to  withdraw  any
     registration statement at any time.

3.   Obligations of the Company. Whenever required under Section 1 to effect the
     registration  of  any  Registrable   Securities,   the  Company  shall,  as
     expeditiously as reasonably possible:

     (a)  Prepare and file with the SEC a registration statement with respect to
          such  Registrable  Securities  and  employ  in good  faith  reasonable
          efforts to cause such registration statement to become effective,  and
          keep such  registration  statement  effective for a period of up to 90
          days  or  until  the  distribution  contemplated  in the  registration
          statement  has  been  completed,  whichever  first  occurs;  provided,
          however, that before filing a registration  statement or prospectus or
          any   amendments   or   supplements   thereto,   including   documents
          incorporated by reference after the initial filing of the registration
          statement  and  prior to  effectiveness  thereof,  the  Company  shall
          furnish to one counsel  designated by the selling Holders (by majority
          vote based on the number of  Registrable  Securities to be registered)
          copies of all such documents in the form  substantially as proposed to
          be filed with the SEC at least four  business days prior to filing for
          review by such counsel.

     (b)  Prepare and file with the SEC such  amendments and supplements to such
          registration statement and the prospectus used in connection with such
          registration  statement necessary to comply, in all material respects,
          with the provisions of the Act with respect to the  disposition of all
          securities covered by such registration statement.

     (c)  Furnish  to the  Holders  such  numbers  of  copies  of a  prospectus,
          including  a   preliminary   prospectus,   in   conformity   with  the
          requirements  of the  Act,  and  such  other  documents  as  they  may
          reasonably   request  in  order  to  facilitate  the   disposition  of
          Registrable Securities owned by them.

     (d)  Employ in good faith  reasonable  efforts to register  and qualify the
          securities   covered  by  such   registration   statement  under  such
          securities  or Blue  Sky  laws  of  such  jurisdictions  as  shall  be
          reasonably  requested by the Holders or managing underwriter or agent,
          if  applicable;  provided  that the  Company  shall not be required in
          connection  therewith  or as a  condition  thereto  to  qualify  to do
          business

#25355.V4
                                       -2-
or to file a general  consent to service of process in any such states
          or jurisdictions,  unless the Company is already subject to service in
          such jurisdiction and except as may be required by the Act.

     (e)  In the event of any  underwritten  or agented public  offering,  enter
          into  and  perform  its  obligations  (including  indemnification  and
          contribution  obligations)  under an underwriting or agency agreement,
          in usual and customary form, with the managing underwriter or agent of
          such offering.

     (f)  Notify  each  Holder  of  Registrable   Securities   covered  by  such
          registration statement, at any time when a prospectus relating thereto
          is  required  to be  delivered  under  the  Act,  upon  the  Company's
          discovery  that,  or upon the  happening  of any  event as a result of
          which, the prospectus included in such registration statement, as then
          in effect, includes an untrue statement of a material fact or omits to
          state any material fact required to be stated  therein or necessary to
          make the statements  therein in the light of the  circumstances  under
          which they were made not  misleading,  and at the  request of any such
          Holder   promptly   prepare  and  furnish  to  such  Holder  and  each
          underwriter,  if any, a reasonable number of copies of a supplement to
          or an amendment  of such  prospectus  as may be necessary so that,  as
          thereafter  delivered  to the  purchasers  of  such  securities,  such
          prospectus shall not include an untrue statement of a material fact or
          omit to  state a  material  fact  required  to be  stated  therein  or
          necessary  to  make  the  statements  therein  in  the  light  of  the
          circumstances  under  which they were made not  misleading;  provided,
          however,  that,  except in the case of an underwritten  offering as to
          which  Registrable  Securities have been sold thereunder,  the Company
          may delay  effecting or causing to be effected a  supplement  or post-
          effective  amendment  to the  registration  statement  or the  related
          prospectus for a period not to exceed 90 days in any 365 day period.

     (g)  Cause all such  Registrable  Securities  covered by such  registration
          statement  to be  listed  on each  securities  exchange,  if  any,  or
          National  Association of Securities Dealers Automatic Quotation System
          (Nasdaq),  on which similar  securities issued by the Company are then
          listed.

     (h)  Provide a transfer agent and registrar for all Registrable  Securities
          registered  hereunder  and a CUSIP  number  for all  such  Registrable
          Securities,  in each case not later  than the  effective  date of such
          registration.

     (i)  Promptly  notify  each  selling  Holder  of any stop  order  issued or
          threatened in writing to be issued by the SEC in connection  therewith
          and take all reasonable  actions required to prevent the entry of such
          stop order or to remove it if entered.

     (j)  Make available to the Company's  security  holders upon request copies
          of all  periodic  reports,  proxy  statements,  and other  information
          referred to in Section 11, including an earnings statement  satisfying
          the  provisions  of  Section  11(a),  of the Act no later than 90 days
          
               

#25355.V4
                                       -3-
following  the end of the  12-month  period  beginning  with the first
          month of the  Company's  first  fiscal  quarter  commencing  after the
          effective date of each  registration  statement filed pursuant to this
          Agreement.

     (k)  Use the Company's reasonable efforts to obtain a "comfort letter" from
          its independent public  accountants,  and legal opinions of counsel to
          the Company  addressed to the selling  Holders,  in customary form and
          covering such matters of the type customarily covered by such letters,
          and in a form that shall be  reasonably  satisfactory  to the  selling
          Holders.  The Company shall furnish to counsel for the selling Holders
          a signed  counterpart  of any such  comfort  letter or legal  opinion.
          Delivery  of any such  opinion or comfort  letter  shall be subject to
          each  Selling  Holder  furnishing  such  written   representations  or
          acknowledgments  as are customarily  provided by selling  stockholders
          who  receive  such  comfort  letters  or  opinions,  and an opinion of
          counsel for the selling stockholders  addressed to the Company and the
          underwriters  in customary  form and covering such matters of the type
          customarily covered by such opinion letters.

     (l)  Take all other reasonable actions necessary to expedite and facilitate
          disposition by the Holders of the Registrable  Securities  pursuant to
          the registration statement.

Each Holder of Registrable  Securities  agrees that,  upon receipt of any notice
from the  Company  of the  occurrence  of any  event of the  kind  described  in
Subsection   3(f),  such  Holder  shall  forthwith   discontinue  such  Holder's
disposition of Registrable  Securities  pursuant to the  registration  statement
relating  to such  Registrable  Securities  until such  Holder's  receipt of the
copies of the supplemented or amended prospectus contemplated by Subsection 3(f)
and,  if so  directed  by the  Company,  shall  deliver to the  Company  (at the
Company's  expense) all copies,  other than permanent file copies,  then in such
Holder's  possession of the prospectus  relating to such Registrable  Securities
current at the time of receipt of such  notice.  In the event the Company  shall
give any such notice, the period of time for which the Company shall be required
to keep the applicable  registration  statement  effective under Subsection 3(a)
shall be extended by the length of the period from and  including  the date when
each Holder of any Registrable Securities covered by such registration statement
shall  have been given  such  notice to the date on which  each such  Holder has
received the copies of the  supplemented or amended  prospectus  contemplated by
Subsection  3(f).  The Company  agrees to use its best  efforts to minimize  the
duration  and  frequency  of any periods  during  which  Holders are required to
discontinue  their  disposition of Registrable  Securities under Section 3(f) to
those where distributing a supplement or filing a post-effective amendment would
materially  interfere with, or require  premature  disclosure of, any financing,
acquisition or  reorganization  involving the Company or any of its wholly-owned
subsidiaries or would otherwise have a material adverse effect on the Company.

#25355.V4
                                       -4-
4.   Furnish  Information.  It shall be a condition precedent to the obligations
     of the Company to take any action pursuant to Section 1 with respect to the
     Registrable Securities of any selling Holder that such Holder shall furnish
     to  the  Company  such  information   regarding  itself,   the  Registrable
     Securities  held by it,  and the  intended  method of  disposition  of such
     securities as shall be required to effect the registration of such Holder's
     Registrable Securities.

5.   Expenses.  Except as otherwise  required by applicable  securities  laws or
     policies,  all  expenses  incurred  by the  Company  in  connection  with a
     registration pursuant to this Agreement, including, but not limited to, all
     registration  and  filing  fees,  fees  and  expenses  of  compliance  with
     securities or blue sky laws,  and fees and  disbursements  of the Company's
     counsel,  of one  counsel  for  the  selling  Holders  and  of  independent
     certified public  accountants of the Company (including the expenses of any
     special audit required by or incident to such performance),  shall be borne
     by the Company.  This  provision  shall not apply to payment of any selling
     commissions or other selling  expenses of the selling  Holders,  other than
     the fees and disbursements of one counsel for the selling Holders.

6.   Underwriting Requirements.

     (a)  In connection with any underwritten  offering of the Company's capital
          stock or, if the managing  underwriter or agent expressly  consents to
          the inclusion of Registerable  Securities in such underwriting,  other
          securities  under the Act,  the Company  shall not be  required  under
          Section 1 to include any of a Holder's Registrable  Securities in such
          underwriting  unless such Holder accepts the terms of the underwriting
          as agreed upon  between the Company and the  underwriters  selected by
          it. If the  managing  underwriter  advises  the selling  Holders  that
          marketing  factors  require  any  limitation  as  to  the  Registrable
          Securities  included in such  offering,  subject to Section 6(b),  the
          Registrable  Securities to be included in such  registration  shall be
          allocated  among all selling Holders of Registrable  Securities  which
          would  otherwise be  underwritten  pursuant  hereto in proportion  (as
          nearly as practicable) to the amount of Registrable  Securities  owned
          by each  selling  Holder  or as shall  mutually  be  agreed  to by the
          Company and the selling Holders.

     (b)  If the managing underwriter advises the selling Holders that marketing
          factors  require any  limitation as to  Registerable  Securities to be
          underwritten and shares other than the selling Holders are proposed to
          be  included in the  registration,  then (A) first,  securities  being
          registered by the Company will be included in such registration before
          those of the  selling  Holders  or any other  stockholders  exercising
          piggyback registration rights, (B) second, securities being registered
          by selling Holders will be included in such  registration  pursuant to
          Section 6(a) above before those of any other  stockholders  exercising
          piggyback  registration  rights,  and (C)  finally,  securities  being
          

#25355.V4
                                       -5-
registered by any other stockholders exercising piggyback registration
          rights shall be included in such registration on a basis comparable to
          that stated in the last sentence of Section 6(a).

7.   Delay of Registration.  No Holder shall have any right to obtain or seek an
     injunction  restraining or otherwise  delaying any such registration as the
     result  of  any   controversy   that  might  arise  with   respect  to  the
     interpretation or implementation of this Agreement.

8.   Indemnification.

     (a)  In  connection  with  any  registration  statement  in  which a Holder
          participates  pursuant  to  this  Agreement,  the  Company  agrees  to
          indemnify,  to the extent  permitted  by law,  each such  Holder,  the
          officers and  directors  of each Holder,  and each person who controls
          such  Holder  (within  the  meaning  of  the  Securities  Act  or  the
          Securities  Exchange  Act of 1934 (the  "Exchange  Act"))  against all
          losses,  claims,  damages,  liabilities,  and  expenses  caused by any
          untrue or alleged  untrue  statement of material fact contained in any
          registration statement,  prospectus,  preliminary prospectus, or other
          related  filing with the  Securities  and Exchange  Commission  or any
          other federal or state governmental agency, or any omission or alleged
          omission  to state  therein  a  material  fact  required  to be stated
          therein or necessary to make the  statements  therein not  misleading,
          except  insofar  as  the  same  are  caused  by or  contained  in  any
          information  furnished to the Company by such Holder expressly for use
          therein  or  by  such  Holder's  failure  to  comply  with  any  legal
          requirement  applicable  to him and not  contractually  assumed by the
          Company to deliver a copy of the registration  statement or prospectus
          or any  amendments  or  supplements  thereto  after  the  Company  has
          furnished such Holder with a sufficient number of copies of the same.

     (b)  In  connection  with  any  registration  statement  in  which a Holder
          participates pursuant to this Agreement, each such Holder will furnish
          to the Company or the  underwriter  in writing  such  information  and
          affidavits  as the Company  reasonably  requests for use in connection
          with any such registration  statement or prospectus and, to the extent
          permitted by law,  will  indemnify  the  Company,  its  directors  and
          officers, and each person who controls the Company (within the meaning
          of the Securities Act or the Exchange Act) against all losses, claims,
          damages,  liabilities,  and  expenses  resulting  from any  untrue  or
          alleged  untrue  statement of material fact or any omission or alleged
          omission of a material fact required to be stated in the  registration
          statement or prospectus or other  related  filing with the  Securities
          and Exchange  Commission  or any other  federal or state  governmental
          agency, or any amendment thereof or supplement thereto or necessary to
          make the  statements  therein not  misleading,  but only to the extent
          that such untrue  statement  or omission is caused by or  contained in
          any information  furnished to the Company by such Holder expressly for
          use  therein;  provided  that  the  obligation  to  indemnify  will be
          several, not joint, among such Holders.

#25355.V4
                                       -6-
(c)  Any person entitled to indemnification  hereunder will (i) give prompt
          written notice to the indemnifying  party of any claim with respect to
          which it seeks  indemnification  and (ii)  unless in such  indemnified
          party's  reasonable  judgment  (based on written  advice of counsel) a
          conflict of interest between such indemnified and indemnifying parties
          may exist with respect to such claim, permit the indemnifying party to
          assume the defense of the claim with counsel  reasonably  satisfactory
          to  the  indemnified  party.  If  the  defense  is  so  assumed,   the
          indemnifying  party  will  not be  subject  to any  liability  for any
          settlement  made by the indemnified  party without its consent,  which
          will not be unreasonably  withheld.  An indemnifying  party who is not
          entitled to or elects not to assume the  defense of a claim,  will not
          be obligated to pay the fees and expenses of more than one counsel for
          all parties it indemnifies  with respect to such claim,  unless in the
          reasonable  judgment of any indemnified party (based on written advice
          of counsel) a conflict of interest may exist between such  indemnified
          party and any other indemnified parties with respect to such claim.

9.   Participation in Underwritten  Registrations.  No Holder may participate in
     any registration  hereunder for an underwritten offering unless such Holder
     (a) agrees to sell its securities on the basis provided in any underwriting
     arrangements  approved by the Company and (b)  completes  and  executes all
     questionnaires,  powers of attorney,  indemnities,  underwriting agreements
     and  other  documents   required  under  the  terms  of  such  underwriting
     arrangements.

10.  Lock-up In Public Offering.  If the Company files a registration  statement
     under the Securities Act in connection with any proposed public offering of
     securities  issued by the  Company,  each  Holder,  if so  requested by the
     Company and by the managing underwriter of such offering,  agrees to sign a
     lock-up  agreement  or letter in  customary  form to the  effect  that such
     Holder will not,  directly  or  indirectly,  sell,  make any short sale of,
     grant any option for the purchase  of, or otherwise  dispose of any capital
     stock of the  Company  (except  securities  included  in such  registration
     statement and public offering) during the 30-day period ending, and up to a
     180-day period  beginning,  on the first date of the  effectiveness of such
     registration statement.

11.  Covenants  of the  Company.  The Company  hereby  agrees and  covenants  as
     follows: The Company shall not, directly or indirectly,  (x) enter into any
     merger,  consolidation or  reorganization in which the Company shall not be
     the surviving corporation,  unless prior to such merger, consolidation,  or
     reorganization,  the surviving  corporation shall have agreed in writing to
     assume the  obligations of the Company under this  Agreement,  and for that
     purpose references hereunder to "Registrable Securities" shall be deemed to
     include the securities which the Holders of Registrable Securities would be
     entitled to receive in exchange for Registrable  Securities pursuant to any
     such merger, consolidation or reorganization.

12.  Miscellaneous.

#25355.V4
                                       -7-
(a)  Suspension  of  Registration  Obligation.  The  Company  shall  not be
          required to register securities under this Agreement for any Holder at
          any time when such Holder could  publicly sell all of its  Registrable
          Securities without registration during a single 90-day period pursuant
          to Rule 144 under the Securities Act or otherwise.

     (b)  Remedies.  Any  person  having  rights  under this  Agreement  will be
          entitled to enforce them  specifically,  to recover  damages caused by
          reason  of any  breach  of any  provision  of this  Agreement,  and to
          exercise all other rights granted by law.

     (c)  Amendments  and Waivers.  Except as otherwise  provided  herein,  this
          Agreement  may be amended and the  Company may take any action  herein
          prohibited, or fail to perform any act herein required to be performed
          by it, only with the  written  consent of Holders of a majority of the
          Registrable Securities.

     (d)  Successors and Assigns. All covenants and agreements in this Agreement
          by or on behalf of any of the  parties  hereto  will bind and inure to
          the benefit of the  respective  successors  and assigns of the parties
          hereto,  whether so expressed or not. In addition,  any  provisions of
          this Agreement for the benefit of Holders are also for the benefit of,
          and  enforceable by, any subsequent  Holder of Registrable  Securities
          who  has  been  expressly  assigned  such  rights  at the  time of the
          transfer of the Registrable Securities to him, but not otherwise.

     (e)  Assignment of Registration  Rights. The rights to cause the Company to
          register  Registrable  Securities  pursuant  to this  Section 1 may be
          assigned  (but  only  with all  related  obligations)  by a Holder  (a
          "Permitted  Transferee"),  provided:  (a) the  Company  is,  within 10
          business days of such  transfer,  furnished with written notice of the
          name and address of such  transferee  or assignee  and the  securities
          with respect to which such registration rights are being assigned; (b)
          such  transferee  or  assignee  agrees in  writing  to be bound by and
          subject to the terms and conditions of this Agreement; (c) immediately
          following such transfer the further  disposition of such securities by
          the  transferee or assignee is  restricted  under the Act; and (d) the
          number of shares of Common Stock to be held by such  transferee  is at
          least 50,000  (adjusted for stock  dividends,  stock  splits,  reverse
          stock splits, combinations and the like).

     (f)  Severability.  The invalidity or  unenforceability of any provision in
          this  Agreement  in any  application  will not affect the  validity or
          enforceability of any other provision of this Agreement or of the same
          provision in any other application.

     (g)  Notices.

          (i)  How   Given.   All   notices,   requests,   consents   and  other
               communications  given  pursuant  to this  Agreement  shall  be in
               writing and shall be sent by first class registered mail, postage
               prepaid,  addressed  as  follows,  or by  facsimile  transmission
               directed as follows:

#25355.V4
                                       -8-
If to the Company, at

                        Advance Display Technologies,  Inc.
                        1251 South Huron Street
                        Denver, Colorado  80223
                        Attention:  Darrell Avey
                        Facsimile:  (303) 733-5363

                        with a copy to

                        David Babiarz, Esq.
                        Overton Babiarz & Sykes
                        7720 E. Belleview Ave., Suite 200
                        Englewood, Colorado 80111
                        Facsimile: (303) 779-6006

                  If to  the  Holders,  to the  addresses  and,  if  applicable,
                  facsimile numbers,  shown for such Holders on the record books
                  of the Company.

          (ii) Deemed  Receipt;  Change of Address.  Any such  notice,  request,
               consent  or other  communication  shall be deemed to be  received
               three   business   days  after  being  sent  by  mail,   or  upon
               confirmation of a facsimile transmission. Any party may designate
               a different  address or  facsimile  number by notice given to the
               other parties pursuant to this Section 7(f).

     (h)  Confidentiality  of  Notices.  Each  Holder  agrees  to keep  strictly
          confidential  the fact that any notice  has been given by the  Company
          under  Section  1 of this  Agreement  until a  registration  statement
          referred  to in such  notice has been filed  with the  Securities  and
          Exchange  Commission,  except that a Holder may disclose the existence
          of such a notice to the  Holder's  legal,  financial  and tax advisors
          solely for the purpose of determining how to respond to the notice and
          then only if such  advisors  agree in writing  for the  benefit of the
          Company to keep the existence of such notice strictly confidential.

     (i)  Governing Law. This Agreement will be governed by Colorado law.

IN WITNESS  WHEREOF,  the parties  hereto have  executed  this  Agreement on the
respective  dates  indicated  below to be effective as of the date first written
above.

                                        COMPANY:

                                        ADVANCE DISPLAY TECHNOLOGIES, INC., a
                                        Colorado corporation

#25355.V4
                                       -9-
Date: May 19, 1997                          By: /S/  DARRELL AVEY
                                                --------------------------------
                                            Name:      Darrell Avey
                                            Title:   Chairman

                                            HOLDERS:

                                            /S/  KEITH A. HANCOCK
Date: May 19, 1997                          ------------------------------------
                                            Keith A. Hancock

                                            G. SCHNEIDER HOLDINGS CO.,
                                             a Colorado limited partnership

                                            /S/  GENE W. SCHNEIDER
Date: May 19, 1997                          ------------------------------------
                                            Gene W. Schneider, General Partner

                                            /S/  WILLIAM W. BECKER
Date: May 19, 1997                          ------------------------------------
                                            William W. Becker

                                            /S/  MARK L. SCHNEIDER
Date: May 19, 1997                          ------------------------------------
                                            Mark L. Schneider

                                            /S/  JAN E. HELEN
Date: May 19, 1997                          ------------------------------------
                                            Jan E. Helen

                                            /S/  WILLIAM J. ELSNER          
Date: May 19, 1997                          ------------------------------------
                                            William J. Elsner

                                            /S/  J. TIMOTHY BRITTAN
Date: May 19, 1997                          ------------------------------------
                                            J. Timothy Brittan

                                            /S/  BRUCE H. ETKIN
Date: May 19, 1997                          ------------------------------------
                                            Bruce H. Etkin

#25355.V4
                                      -10-
PEREGRINE INVESTMENTS,
                                           a Virginia general partnership

Date: May 19, 1997                         By: /S/  DARYL OWEN
                                               ---------------------------------
                                            Name: Daryl Owen
                                            Title:   General Partner

                                            /S/  JOHN D. SEIVER
Date: May 19, 1997                          ------------------------------------
                                            John D. Seiver

                                           /S/  JOHN P. COLE, JR.
Date: May 19, 1997                         ------------------------------------
                                            John P. Cole, Jr.

#25355.V4
                                      -11-
Mail to: Secretary of State
                              Corporations Section
                            1560 Broadway, Suite 200
                                Denver, CO 80202
                                 (303) 894-2251
                               Fax (303) 894-2242
MUST BE TYPED
FILING FEE: $25.00
MUST SUBMIT TWO COPIES
            ---

Please include a typed
self-addressed envelope

                          ARTICLES OF AMENDMENT TO THE
                            ARTICLES OF INCORPORATION

Pursuant  to the  provisions  of the  Colorado  Business  Corporation  Act,  the
undersigned  corporation  adopts the  following  Articles  of  Amendment  to its
Amended and Restated Articles of Incorporation:

FIRST:  The name of the corporation is Advance Display Technologies, Inc.

SECOND:  The  following  amendment  to the  Amended  and  Restated  Articles  of
Incorporation  was adopted on May 14th,  1997,  as  prescribed  by the  Colorado
Business  Corporation  Act, such amendment was adopted by the board of directors
where shares have been issued and shareholder approval is not required.

THIRD: The Amended and Restated Articles of Incorporation of the corporation are
amended by adding the following thereto:

ARTICLE XV: The Board of Directors hereby creates and authorizes the issuance of
a series of preferred stock,  par value $.001 per share, of the Corporation,  to
consist of 1,843,900 shares, and hereby fixes the designations, dividend rights,
voting  powers,  rights on  liquidation  and  other  preferences  and  relative,
participating,   optional  or  other  special  rights  and  the  qualifications,
limitations  or  restrictions  of the shares of such series (in  addition to the
designations,   preferences   and  relative,   participating,   limitations   or
restrictions  thereof  set  forth  in  the  Amended  and  Restated  Articles  of
Incorporation that are applicable to preferred stock of all series) as follows:

     1. Designation. The designation of the series of preferred stock, par value
$.001 per share,  of the  Corporation  authorized  hereby is "Series C Preferred
Stock"  (the  "Series  C  Preferred  Stock").  The issue  price of the  Series C
Preferred Stock is $1.00 per share.
 
     2. Certain  Definitions.  Unless the context otherwise requires,  the terms
defined in this Section 2 shall have the meanings herein specified:

#25441 v8
                                        1
Affiliate:  As to any person or, entity,  any other person or entity which.
directly  or  indirectly,  controls,  or is under  common  control  with,  or is
controlled  by, such  person or entity.  As used in this  definition,  "control"
(including,  with its correlative meanings,  "controlling,"  "controlled by" and
"under common control with") shall mean possession,  directly or indirectly,  of
the power to direct or cause the direction of management or policies of a Person
(whether through the ownership of securities,  or partnership or other ownership
interest, by contract or otherwise).

     Articles  of  Amendment:  The  Articles  of  Amendment  to the  Articles of
Incorporation  of the Company which set forth the rights and  preferences of the
Series C Preferred Stock.

     Board of  Directors:  The Board of  Directors  of the  Corporation  and any
authorized committee thereof.

     Business  Day: Any day other than a Saturday,  Sunday,  or holiday on which
banking institutions in Denver, Colorado, are closed for business.

     Capital  Stock:  Any and all  shares,  interests,  participations  or other
equivalents (however designated) of corporate stock of the Corporation.

     Change of Control:  A "Change of Control"  shall be deemed to have occurred
if (i) a  person  (as  such  term is used in  Section  13(d)  of the  Securities
Exchange Act) becomes the  beneficial  owner (as defined in Rule 13d-3 under the
Securities  Exchange  Act) of shares of the Company or the  Company's  successor
having  30% or more of the  total  number  of  votes  that  may be cast  for the
election of  directors of the Company  without the prior  approval of at least a
majority of the members of the Company's  board of directors  unaffiliated  with
such person (unless such person  beneficially  owned shares with at least 15% of
such votes as of the date of these Articles of Amendment),  or (ii)  individuals
who  constitute  the  directors  of the Company at the  beginning  of a 24-month
period cease to constitute at least 2/3 of all directors at any time during such
period,  other than as a result of the voluntary  resignation of any director or
directors. (For these purposes any new or replacement directors elected with the
approval  of at  least a  majority  of the  members  of the  Company's  board of
directors  in  office  immediately  prior  to  such  period  and of the  new and
replacement  directors so approved shall be considered to have been directors at
the beginning of such period.)

     Common  Stock:  The  Common  Stock,  par value  $0.001  per  share,  of the
Corporation.

     Junior  Securities:  Any class or series  of stock of the  Corporation  not
entitled to receive any assets upon  liquidation,  dissolution  or winding up of
the affairs of the Corporation until the Series C Preferred Stock shall have

#25441 v8
                                        2
received  the  entire   amount  to  which  such  stock  is  entitled  upon  such
liquidation, dissolution or winding up.

     Liquidation  Value:  $0.67 per Share,  plus the amount of any dividends not
previously paid on the Series C Preferred Stock in accordance with Section 4.

     Market Price:  The "Market  Price" of a share of Common Stock on any day is
the average of the Quoted  Prices of the Common  Stock  during the four  trading
weeks  before  the  date  in  question.  In the  absence  of one  or  more  such
quotations,  the  Corporation  shall  determine the current  market price on the
basis of such  quotations  as it  considers  appropriate.  As used  herein,  the
"Quoted  Price" of the Common Stock is the last reported sales price regular way
or, in case no such  reported  sale takes place on such day,  the average of the
closing  bid and asked  prices  regular  way for such  day,  in each case on the
principal national  securities  exchange on which the shares of Common Stock are
listed or admitted to trading or, if not listed or admitted to trading, the last
sale  price  regular  way for the  Common  Stock as  published  by the  National
Association of Securities Dealers Automated  Quotation System ("NASDAQ"),  or if
such last price is not so  published by NASDAQ or if no such sale takes place on
such day, the mean between the closing bid and asked prices for the Common Stock
as  published  by NASDAQ or in the  absence  of any of the  foregoing,  the fair
market value as determined by the Board of Directors (whose  determination shall
be conclusive).

     Parity Securities: Any class or series of stock of the Corporation entitled
to receive assets upon liquidation,  dissolution or winding up of the affairs of
the Corporation on a parity with the Series C Preferred Stock.

     Redemption Date: As to any Share, (i) the date fixed for redemption of such
Share as specified in the notice of redemption  given in accordance with Section
7(d) for  redemptions  pursuant to Section 7(a) or (ii) the date that is 15 days
after the date the  Corporation  receives the notice referred to in Section 7(b)
with respect to Shares to be redeemed pursuant to Section 7(b), provided that no
such date will be a Redemption  Date unless the applicable  Redemption  Price is
actually  paid on such  date or the  consideration  sufficient  for the  payment
thereof,  and for no other purpose,  has been irrevocably set apart in trust for
the benefit of the holders of Shares to be redeemed, and if the Redemption Price
is not so paid in full or the consideration  sufficient  therefor so irrevocably
set apart in trust for the benefit of the holders of Shares to be redeemed, then
the  Redemption  Date will be the date on which such  Redemption  Price is fully
paid or the consideration  sufficient for the payment thereof,  and for no other
purpose,  has been irrevocably set apart in trust for the benefit of the holders
of Shares to be redeemed.

#25441 v8
                                        3
Redemption  Price:  As to any  Share  that  is to be  redeemed  on any
     Redemption Date, the Liquidation Value, payable either in (i) cash, or (ii)
     at the option of the  Corporation,  shares of Common  Stock (the  number of
     which  shall be  determined  based on the then  Market  Price of the Common
     Stock), subject to the provisions of Section 7.

          Securities Act: The Securities Act of 1933, as amended.

          Securities  Exchange  Act: The  Securities  Exchange  Act of 1934,  as
     amended.

          Senior  Securities:  Any class or  series of stock of the  Corporation
     ranking  senior to the Series C Preferred  Stock in respect of the right to
     participate in any distribution upon liquidation, dissolution or winding up
     of the affairs of the Corporation.

          Share: A share of Series C Preferred Stock.

          Subsidiary:  With respect to any person or entity,  any corporation or
     partnership  more  than  50% of  whose  outstanding  voting  securities  or
     partnership interests, as the case may be, are directly or indirectly owned
     by such person or entity.

     3. Voting. The Series C Preferred Stock shall have no voting rights, except
as required by law.

     4. Dividends. The holders of the Series C Preferred Stock shall be entitled
to receive  when,  as and if  declared by the Board of  Directors,  out of funds
legally available therefor,  cash dividends, in one or more payments, but in the
aggregate of $0.83 per share (as adjusted for any stock dividends,  combinations
or splits with respect to such  shares).  Upon payment of dividends  aggregating
$0.83  per  share of Series C  Preferred  Stock,  the  holders  of the  Series C
Preferred  Stock shall have no further right to receive any dividends as holders
of such stock.  Dividends on the Series C Preferred  Stock,  including,  without
limitation,  liquidating  distributions,  shall be paid before any  dividends or
other  distributions  shall be  declared or paid or set aside for payment on the
Common Stock or any other stock.  No dividends will be paid on any other Capital
Stock until all dividends contemplated by this paragraph have been fully paid on
all outstanding Series C Preferred Stock.

     5.  Liquidation.  Upon any  liquidation,  dissolution  or winding up of the
Corporation, whether voluntary or involuntary, the holders of Series C Preferred
Stock  shall be  entitled  to be paid an amount in cash  equal to the  aggregate
Liquidation  Value at the date fixed for  liquidation of all Shares  outstanding
before any distribution or payment is made upon Common Stock or any other Junior
Securities, which payment shall be made pari passu with any such payment made to
the holders of any Parity  Securities.  The holders of Series C Preferred  Stock
shall be entitled to no other or further distribution of or participation in any

#25441 v8
                                        4
remaining  assets of the Corporation  after receiving the Liquidation  Value per
Share.  If upon such  liquidation,  dissolution or winding up, the assets of the
Corporation to be distributed  among the holders of Series C Preferred Stock and
to all holders of Parity  Securities are  insufficient to permit payment in full
to such holders of the aggregate preferential amounts which they are entitled to
be paid,  then the entire assets of the  Corporation  to be  distributed to such
holders shall be distributed ratably among them based upon the full preferential
amounts  to which  the  shares  of  Series C  Preferred  Stock  and such  Parity
Securities would otherwise respectively be entitled.  Upon any such liquidation,
dissolution  or winding up,  after the  holders of Series C Preferred  Stock and
Parity Securities have been paid in full the amounts to which they are entitled,
the remaining  assets of the Corporation may be distributed to holders of Common
Stock or other Junior  Securities.  The Corporation shall mail written notice of
such  liquidation,  dissolution  or winding up to each record holder of Series C
Preferred  Stock not less than 30 days prior to the payment  date stated in such
written notice.  Neither the  consolidation or merger of the Corporation into or
with any other corporation or corporations,  nor the sale,  transfer or lease by
the  Corporation  of all or any  part of its  assets,  shall be  deemed  to be a
liquidation,  dissolution or winding up of the Corporation within the meaning of
this Section 5.

     6. [Intentionally Omitted]

     7. Redemption.  (a) At any time, and from time to time, the Corporation may
elect to redeem some or all of the Series C  Preferred  Stock by giving a notice
of  redemption  pursuant  to  Section  7(d),  and then the  shares  of  Series C
Preferred  Stock may be redeemed out of funds  legally  available  therefor,  in
whole or in part,  at the  Redemption  Price.  If less than all the  shares  are
redeemed, they will be redeemed ratably among all the shareholders.

          (b)  Redemption  at the  Option of the  Holders.  (i)  Subject  to the
provisions  of Section  7(g),  at any time after payment in full of the Series C
Preferred Stock dividend preference pursuant to Section 4 hereof, the holders of
Series C Preferred Stock may elect to have the Corporation  redeem such holder's
Series C Preferred  Stock, by giving a notice of redemption,  which notice shall
be mailed,  first class, postage prepaid, not less than 10 days nor more than 30
days prior to the  Redemption  Date,  and then the shares of Series C  Preferred
Stock may be redeemed out of funds legally  available  therefor,  in whole or in
part, at the Redemption  Price per Share as of the Redemption Date. If less than
all  Shares are to be  redeemed,  Shares  shall be  redeemed  ratably  among the
holders thereof.

               (ii)  Subject  to the  rights of any  Parity  Securities,  and in
addition to its rights set forth in Section  7(b)(i) above,  at any time after a
Change of Control of the  Corporation,  any holder shall have the right, at such
holder's  option,  to require  redemption by the  Corporation  at the Redemption
Price per Share as of the Redemption Date of all (but not less than all) of such
holder's  Shares by  written  notice to the  Corporation  stating  the number of
Shares to be redeemed.  The Corporation  shall redeem the Shares so requested to
be redeemed on the applicable Redemption Date.

#25441 v8
                                        5
If the funds of the  Corporation  legally  available for redemption of
Shares and not otherwise  restricted are insufficient to redeem the total number
of shares  required to be redeemed  pursuant to this Section  7(b),  those funds
which are legally  available  for  redemption  of such Shares and not  otherwise
restricted  will be used to redeem the  maximum  possible  number of such Shares
ratably  among the holders who have  required  Shares to be redeemed  under this
Section 7(b). At any time thereafter  when  additional  funds of the Corporation
are legally  available and not so restricted  for such purpose,  such funds will
immediately  be used to redeem the Shares  the  Corporation  failed to redeem on
such Redemption Date until the balance of such Shares are redeemed.

          (c) Redemption by Issuance of Common Stock. Subject to compliance with
the conditions contained in this Section 7(c), in the event any holder of Series
C Preferred Stock elects to have the  Corporation  redeem such holder's Series C
Preferred  Stock pursuant to Section 7(b) above,  the  Corporation  may elect to
redeem all (but not less than all) of the Shares of Series C Preferred  Stock to
be redeemed pursuant to this Section 7 by issuance to such holder, in respect of
his shares to be redeemed (the "Redeemed Shares"),  a number of shares of Common
Stock equal to (i) the number of Redeemed Shares,  multiplied by a fraction, (A)
the numerator of which shall be the Redemption Price, and (B) the denominator of
which shall be the Market  Price per share of the Common Stock as of the date of
the notice from the Corporation  described in the next paragraph.  No fractional
shares of Common Stock or scrip shall be issued upon such redemption.  As to any
final fraction of a share of Common Stock that would  otherwise be issuable to a
holder  upon  redemption  of his  Shares  (determined  on the basis of the total
number of such  holder's  Shares in respect of which  shares of Common Stock are
issuable),  the Corporation shall pay an amount in cash or by its check equal to
the same fraction of the Market Price per share of a share of Common Stock.

          The  Corporation's  right  to elect to pay the  Redemption  Price  (or
designated  portion  thereof) of the Shares  through  the  issuance of shares of
Common Stock  pursuant to this Section 7(c) shall be  conditioned  upon: (i) the
Corporation's  having received the holder's election at least five Business Days
prior to the applicable  Redemption Date, (ii) the Corporation's having obtained
and filed,  on or before the  Redemption  Date, at the office of the  redemption
agent for the Series C Preferred  Stock (or with the books of the Corporation if
there  is no  redemption  agent)  an  opinion  of  counsel  satisfactory  to the
Corporation  to the effect that (A) the shares of Common Stock to be issued upon
such  redemption  have been duly  authorized  and,  when issued and delivered in
payment of the Redemption Price (or designated portion thereof) of the Shares to
be redeemed, will be validly issued, fully paid and non-assessable and free from
preemptive  rights, (B) the issuance and delivery of such shares of Common Stock
upon  such  redemption  of  Shares  will not  violate  the laws of the  state of
incorporation of the Corporation and (C) the issuance and delivery of the shares
of Common Stock upon such  redemption  of shares of Series C Preferred  Stock is
exempt from the registration or qualification requirements of the Securities Act
and applicable state securities laws or, if no such exemption is available, that
the issuance of the shares of Common Stock to be issued has been duly registered
or qualified under the Securities Act and such applicable state securities laws,
and (iii) the  Corporation's  having filed, on or before the Redemption Date, at

#25441 v8
                                        6
the office of such  redemption  agent (or with the books of the  Corporation  if
there is no  redemption  agent),  a  certificate  signed  by an  officer  of the
Corporation  setting  forth the number of shares of Common Stock to be issued in
payment of the Redemption Price (or designated portion thereof) of each share of
Series C Preferred Stock and the method of determining the same (consistent with
the  provisions  hereof).  If the foregoing  conditions  have not been satisfied
prior to or on the  Redemption  Date,  the  Redemption  Price for the  shares of
Series C Preferred  Stock (or portion  thereof  designated  to be paid in Common
Stock) shall be paid in cash.

          (d) Notice of Redemption. Notice of any redemption pursuant to Section
7(a) or 7(b) shall be mailed,  first class,  postage  prepaid,  not less than 10
days nor more than 30 days  prior to the  Redemption  Date,  to the  holders  of
record of the  shares  of  Series C  Preferred  Stock to be  redeemed,  at their
respective addresses as the same appear upon the books of the Corporation or are
supplied by them in writing to the  Corporation  for the purpose of such notice;
but no  accidental  failure to mail such notice or any defect  therein or in the
mailing  thereof shall affect the validity of the proceedings for the redemption
of any shares of the Series C Preferred Stock; provided that this sentence shall
not  prejudice  the right of any holder to receive such damages which may result
from any such  defective  notice.  Such  notice  shall set forth the  Redemption
Price,  the  Redemption  Date,  the  number  of Shares  to be  redeemed,  if the
Redemption  Price or a designated  portion thereof is to be paid in Common Stock
pursuant to Section 7(c), the  Corporation's  election to do so and the place at
which the Shares called for redemption will, upon  presentation and surrender of
the stock certificates  evidencing such Shares, be redeemed.  In case fewer than
the  total  number of shares of  Series C  Preferred  Stock  represented  by any
certificate  are  redeemed,  a  new  certificate   representing  the  number  of
unredeemed  Shares  will be issued to the holder  thereof  without  cost to such
holder.

          (e) Shares No Longer  Outstanding.  If notice of any redemption by the
Corporation  pursuant  to this  Section 7 shall have been  mailed as provided in
Section 7(d) and if on or before the  Redemption  Date  specified in such notice
the consideration  necessary for such redemption shall have been irrevocably set
apart in trust for the  benefit of the holders of Shares to be so redeemed so as
to be  available  therefor  and only  therefor,  then on and  after the close of
business  on  the   Redemption   Date,   the  Shares   called  for   redemption,
notwithstanding  that any certificate  therefor shall not have been  surrendered
for  cancellation,  shall no longer be deemed  outstanding,  and all rights with
respect to such Shares shall forthwith cease and terminate,  except the right of
the  holders  thereof  to  receive  upon  surrender  of their  certificates  the
consideration payable upon redemption thereof.

          (f)  Retirement  of  Shares.  All shares of Series C  Preferred  Stock
redeemed,  retired,  purchased or otherwise acquired by the Corporation shall be
retired and shall be restored to the status of authorized and unissued shares of
preferred  stock (and may be reissued as part of another series of the preferred
stock of the  Corporation,  but such  shares  shall not be  reissued as Series C
Preferred Stock).

          (g) Failure to Redeem.  The Corporation  shall not redeem or otherwise
acquire or  discharge  any sinking fund  obligation  with respect to, any Junior
Securities,  unless all then outstanding  shares of Series C Preferred Stock are
redeemed, and shall not purchase or otherwise acquire any shares of

#25441 v8
                                        7
Series C Preferred Stock (other than by way of redemption) or Junior Securities.
Nothing contained in this Section 7(g) shall prevent the purchase or acquisition
of shares of Series C Preferred  Stock  pursuant to a purchase or exchange offer
or offers made to holders of all outstanding shares of Series C Preferred Stock,
provided  that as to holders  of all  outstanding  shares of Series C  Preferred
Stock,  the terms of the  purchase  or  exchange  offer for all such  shares are
identical. The provisions of this Section 7(g) are for the benefit of holders of
Series C Preferred  Stock and  accordingly  the  provisions of this Section 7(g)
shall not  restrict  any  redemption  by the  Corporation  of Shares held by any
holder,  provided  that all other holders of Shares shall have waived in writing
the benefits of this provision with respect to such redemption.  The Corporation
shall not permit any Subsidiary thereof to take any action which the Corporation
is prohibited from taking pursuant to this Section 7(g).

     8.  Amendment.  No amendment or modification  of the  designation,  rights,
preferences,  and limitations of the Shares set forth herein shall be binding or
effective  without  the  prior  consent  (in  writing  or in a  meeting)  of the
Corporation  and the  holders of record of at least 50% of the then  outstanding
Shares at the time such action is taken. Any amendment for which such consent is
obtained  shall be valid except that no amendment  may (a) decrease the dividend
preference or liquidation value or (b) remove the requirement that any less than
total redemption be pro rata without the consent of each holder affected by such
amendment.

     9. Preemptive  Rights. The holders of the Series C Preferred Stock will not
have any  preemptive  right to subscribe  for or purchase any shares of stock or
any other securities which may be issued by the Corporation,  provided that this
Section 9 shall not limit the rights of holders of the Series C Preferred  Stock
pursuant to Section 7 hereof.

     10.  Parity or Senior  Securities.  The  Corporation  may not issue  Parity
Securities  (including any additional shares of Series C Preferred Stock) or any
Senior  Securities  without the consent of the holders of record of at least 50%
of the then outstanding Shares.

     11. No dividends or distributions will be paid or made on any capital stock
of the Company (other than dividends on the Shares or dividends or  distribution
of Junior Securities) while any Shares are outstanding.

     12.  Exclusion of Other Rights.  Except as may otherwise be required by law
and for the  equitable  rights and remedies  that may  otherwise be available to
holders of Series C  Preferred  Stock,  the shares of Series C  Preferred  Stock
shall not have any  designations,  preferences,  limitations or relative rights,
other  than  those   specifically  set  forth  in  these  resolutions  (as  such
resolutions  may, subject to Section 8, be amended from time to time) and in the
Restated Certificate of Incorporation of the Corporation.

     13. Headings.  The headings of the various sections and subsections  hereof
are for convenience of reference only and shall not affect the interpretation of
any of the provisions hereof.

#25441 v8
                                        8
FOURTH:  The Certificate of Designation and Determination of Preferences of
Series "A"  Convertible  Preferred  Stock of the Company is hereby  amended such
that the second sentence of Section 1  (Designation)  is deleted in its entirety
and the following is inserted in lieu thereof:

     "The Series A Stock shall have a par value of $.001 per share."

     FIFTH: Except as amended hereby, the provisions of the Amended and Restated
Articles of Incorporation, as heretofore amended, shall remain in full force and
effect until hereafter amended in accordance with applicable law.

Dated May 19, 1997
                                    ADVANCE DISPLAY TECHNOLOGIES, INC.,
                                    a Colorado corporation

                                    By:  /S/  DARRELL AVEY
                                        ----------------------------------------
                                         Name:    Darrell Avey
                                         Title:   Chairman

#25441 v8
                                        9