AMENDMENT NO. 3 –
LOAN AND SECURITY AGREEMENT
Amendment No. 3, dated August 20, effective as
of August 7, 2008 (“ Amendment ”), to
the Loan and Security Agreement, dated August 7, 2007,
as amended as of January 30, 2008 by Amendment No. 1 and as further
amended as of March 18, 2008 by Amendment No. 2 (collectively, the
“ Original Agreement ” and, as amended hereby,
the “ Agreement ”), by and between EMAGIN
CORPORATION, a Delaware corporation with its principal place of
business located at 10500 N.E. 8 th Street, Suite 1400, Bellevue, Washington 98004
(the "Borrower" ), and MORIAH CAPITAL, L.P., a
Delaware limited partnership with offices at 685 Fifth Avenue, New
York, New York 10022 (as further defined below, the "Lender"
). Capitalized terms used but not defined herein have the meanings
given to them in the Original Agreement.
A. Borrower
has requested that Lender extend the Maturity Date, increase
Maximum Credit, consent to certain changes in the Borrowing Base
and consent to the other changes set forth herein.
B. Lender
has agreed to accommodate Borrower’s requests on the terms,
and subject to the satisfaction of the conditions, set forth
herein.
The parties agree as follows:
Section 1.1
Amendment to Section 1.9 of Original Agreement. Section 1.9
of the Original Agreement (“ Borrowing Base ”)
is hereby amended and restated in its entirety as
follows:
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“
Borrowing Base ” shall be calculated at any time as
the sum of (i) the product obtained by multiplying the
outstanding amount of Eligible Accounts, other than Eligible
Foreign Accounts, net of all taxes, discounts, allowances and
credits given or claimed, by ninety percent (90%), plus (ii)
the product obtained by multiplying the outstanding amount of
Eligible Foreign Accounts, net of all taxes, discounts, allowances
and credits given or claimed, by eighty percent (80%), plus (iii)
the lesser of (A) Eight Hundred Thousand Dollars ($800,000) or (B)
the product(s) obtained by multiplying seventy percent (70%) by the
values of Eligible Inventory as determined by Lender in good faith
in its reasonably commercial judgment, based on the lower of cost
or market.”
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Section 1.2
Amended and Restated Revolving Loan Note. References
in the Original Agreement to the “ Note ”
shall mean the Amended and Restated Secured Convertible Revolving
Loan Note, dated August 7, 2007, as amended and restated as of
August 7, 2008, in the form annexed hereto as Exhibit A
(“ Amended and Restated Revolving Loan Note
”).
Section 1.3
Delivery of Amended and Restated Revolving Loan Note
. Contemporaneously herewith, and as a condition to the
effectiveness hereof, the Borrower is executing and delivering to
Lender the Amended and Restated Revolving Loan Note.
Section 1.4
Amendment to Section 1.52 of Loan Agreement
. Section 1.52 of the Original Agreement is hereby
amended and restated in its entirety as follows:
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“Maturity Date”
shall mean August 7, 2009, or such
earlier date by which the maturity of the Obligations shall have
been accelerated pursuant to the terms hereof.”
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Section 1.5
Amendment to Section 1.51 of Loan Agreement
. Section 1.53 of the Original Agreement
is hereby amended and restated in its entirety as
follows:
“ 1.53. "Maximum
Credit" shall mean the amount of Three Million Dollars
($3,000,000.00).”
Section
1.6
Issuance of August 2008 Warrant; Warrant Issuance Agreement
.
(a) Contemporaneously
herewith, and as a condition to the effectiveness hereof, the
Borrower is executing and delivering to Lender a warrant to acquire
up to 370,000 shares of Common Stock at an initial exercise price
of $1.30 per share, in the form annexed hereto as Exhibit B
(“ August 2008 Warrant ”).
(b) In
connection with the issuance of the August 2008 Warrant,
contemporaneously herewith, and as a condition to the effectiveness
hereof, the parties are entering into Warrant Issuance Agreement
No. 2, in the form annexed hereto as Exhibit C (“
Warrant Issuance Agreement No. 2 ”).
Section 1.7
Share Issuance . Within three (3) Business Days
of the execution of this Amendment, the Borrower shall
deliver to Lender a certificate for 125,000 shares of Common Stock
(the “ New Shares ”).
Section 1.8
Amendment to Registration Rights Agreement . The
Registration Rights Agreement is hereby amended to provide that the
New Shares, the shares of Common Stock underlying the August 2008
Warrant and the 2008 Shares (as defined in the Amended and Restated
Securities Issuance Agreement (defined below)) are
“Registrable Shares”, as defined in the Registration
Rights Agreement, as amended, in the form annexed hereto as
Exhibit E (the “ Amended Registration Rights
Agreement ”).
Section 1.9
Amended and Restated Securities Issuance Agreement .
Contemporaneously herewith, and as a condition to the effectiveness
hereof, the parties are entering into the Amended and Restated
Securities Issuance Agreement in the form annexed hereto as
Exhibit D (“ Amended and Restated Securities
Issuance Agreement”).
Section 1.10
Fees . Borrower shall pay to Moriah Capital
Management, L.P. the various fees described in the letter agreement
to be executed contemporaneously herewith. Such fees shall be
deemed fully earned on the scheduled payment date and shall not be
subject to rebate or proration for any reason.
Section 1.11 Financial
Covenants . The
Original Agreement is hereby amended to add the following new
Section 9.19, to read in its entirety as follows:
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