WARRANT ISSUANCE AGREEMENT NO.
2
THIS WARRANT ISSUANCE AGREEMENT NO. 2 (this
“ Agreement ”) is made and entered into on
August 20, effective as of August 7, 2008, by and between eMagin
Corporation, a Delaware corporation (the “ Company
”), and Moriah Capital, L.P., a Delaware limited partnership
(the “ Lender ”).
Capitalized terms not otherwise defined herein
have the meaning set forth in that certain Loan and Security
Agreement by and between Lender, as lender, and the Company, as
borrower, dated as of August 7, 2007, as amended through the date
hereof (as so amended and as amended form time to time, the “
Loan Agreement ”).
RECITALS
WHEREAS, the Company has requested that the
Lender consent to the amendment of the Loan Agreement in
consideration for, among other things, the issuance by the Company
to the Lender of the Warrant (as defined herein); and
NOW, THEREFORE, in consideration of the
foregoing recitals and the mutual promises, representations,
warranties and covenants set forth herein, and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as
follows:
1. Issuance of
Warrant; Termination of Loan Conversion Agreement .
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On the date of
execution of this Agreement, also known as the Closing Date, the
Company is hereby issuing to Lender, and Lender agrees to acquire
from the Company, a five-year warrant to acquire 370,000 shares of
the Company’s common stock at an exercise price of $1.30 per
share, in the form annexed hereto as Exhibit A (the “
Warrant ”).
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Closing
Obligations of Company .
On or prior to the date hereof, the Company shall have taken and
shall take all actions necessary to issue the Warrant to Lender and
to consummate the transactions contemplated hereby, including,
without limitation, delivery or causing to be delivered to Lender
on the date hereof the following:
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The Warrant, duly executed and
delivered by the Company; and
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such other
certificates, documents, receipts and instruments as Lender or its
legal counsel may reasonably request.
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Closing
Obligations of Lender . On or prior to the date hereof,
Lender shall have taken and shall take all actions necessary for
consummation by Lender of the transactions contemplated
hereby.
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3. No
Increase in Warrant Exercise Price. For the avoidance of doubt, the
parties acknowledge and agree that, n otwithstanding anything
to the contrary in the warrants issued by the Company to Lender
prior to the date hereof, in no event shall the Exercise Price (as
defined therein) be increased on account of any adjustment pursuant
to Section 5 thereof.
4.
Representations and Warranties of the Company
. The Company hereby represents and warrants to Lender
as follows:
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Organization, Good Standing and
Qualification. Each of the Company and its Subsidiaries
is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of
organization. Each of the Company and its Subsidiaries
has the corporate power and authority to own and operate its
properties and assets; to execute, deliver and perform or cause to
be executed, delivered and performed this Agreement ; and to carry
on its business as presently conducted.
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Capitalization; Voting Rights
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(a) The authorized and
issued capital stock of the Company as of the date hereof is as
disclosed in the Company’s filings that are required by the
Securities Act of 1933, as amended (the “ Securities
Act ”) and the Securities Exchange Act of 1934, as
amended (the “ Securities Exchange Act ”) (the
“ SEC Reports ”) to be filed with the Securities
and Exchange Commission (“ SEC ”).
(b) Except as
disclosed in the SEC Reports, other than: (i) Common Stock reserved
for issuance under the Company’s stock option plans and (ii)
the Warrant, there are no outstanding options, warrants, rights
(including, but not limited to, conversion or preemptive rights and
rights of first refusal), proxy or stockholder agreements, or other
arrangements or agreements of any kind for the purchase or
acquisition from the Company or its Subsidiaries, of any of their
securities. Neither the offer, issuance or sale of any
of, or the issuance of any of, the Issued Shares, nor the
consummation of any transactions contemplated hereby, will result
in a change in the price or number of any securities of the Company
or its Subsidiaries authorized or issued.
(c) All issued and
outstanding securities: (i) have been duly authorized and validly
issued and are fully paid and nonassessable and (ii) were issued in
compliance with all applicable state and federal laws.
(d) The Warrant Shares
have been duly and validly reserved for issuance. When
issued in compliance with the provisions of this Agreement and the
Warrant, the Warrant Shares will be validly issued, fully paid and
nonassessable, and will be free of any liens, charges,
encumbrances, options, rights of first refusal, security interests,
claims, mortgages, pledges, charges, easements, covenants,
restrictions, (except as contained herein) obligations, or any
other encumbrances (including, without limitation, any conditional
sale or other title retention agreement or any lease in the nature
thereof and any agreement to grant or to permit or suffer to exist
any of the foregoing) or third party rights or equitable interests
of any nature whatsoever or any Liens all of the above shall be
referred to herein as a “ Lien ”.
4.3 Authorization;
Binding Obligations . All corporate action on the
part of the Company necessary for the authorization of the Warrant,
and the performance of the same, has been taken. The
Warrant, when executed and delivered, will be the valid and binding
obligation of the Company, enforceable against it in accordance
with their terms.
4.4 Title to
Properties and Assets; Liens, Etc . Except for
Permitted Encumbrances, each of the Company and each of its
Subsidiaries has good and marketable title to its properties and
assets, and good title to its leasehold estates, in each case not
subject to any Liens.
4.5 No
Conflicts . Neither the Company nor any of its
Subsidiaries is in violation or default of (a) any term of its
formation documents or by-laws or (b) other than with respect to
(i) any Event of Default arising out of the Company’s failure
to repay the Obligations under the Loan Agreement on August 7,
2008, which default has been waived by Lender, and (ii) any rights
to registration of shares of the Company’s common
stock, any provision of any indebtedness for
borrowed money, Contract any mortgage, indenture, lease, license,
agreement or contract (collectively, “ Contracts
”) or judgment, order, writ, injunction, or decree (“
Orders ”). The execution, delivery and
performance of this Agreement will not, with or without the passage
of time or giving of notice, result in a default under any such
term or provision of indebtedness for borrowed money, Contract or
Order, or result in the creation of any Lien upon any of the
securities, properties or assets of the Company or any of its
Subsidiaries, or the suspension, revocation, impairment, forfeiture
or nonrenewal of any licenses, permits, franchises, approvals,
consents, waiver, notices, authorizations, qualifications,
concessions, or the like.
4.6 Registration
Rights and Voting Rights . Except as disclosed in
the Registration Rights Agreement or the SEC Reports,
neithe
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