-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GChCKZjKeV3RST6oug80aGrN2BH7UujuR8y15obCeFUYv3l1+ocSWjK83ljSJGro WVZa+NHue9VcLqgtpaTmFg== 0000950127-02-000064.txt : 20020414 0000950127-02-000064.hdr.sgml : 20020414 ACCESSION NUMBER: 0000950127-02-000064 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20020114 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20020128 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMAGIN CORP CENTRAL INDEX KEY: 0001046995 STANDARD INDUSTRIAL CLASSIFICATION: SEMICONDUCTORS & RELATED DEVICES [3674] IRS NUMBER: 880378451 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-15751 FILM NUMBER: 02519522 BUSINESS ADDRESS: STREET 1: 1580 ROUTE 52 STREET 2: SUITE 2000 V6E 2K3 CITY: HOPEWELL JUNCTION STATE: NY ZIP: 12533 BUSINESS PHONE: 9148921900 MAIL ADDRESS: STREET 1: 1580 ROUTE 52 STREET 2: SUITE 2000 V6E 2K3 CITY: HOPEWELL JUNCITON STATE: NY ZIP: 12533 FORMER COMPANY: FORMER CONFORMED NAME: FASHION DYNAMICS CORP DATE OF NAME CHANGE: 19980805 8-K 1 a854123_8-k.txt CURRENT REPORT 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): January 14, 2002 eMagin Corporation - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 000-24757 56-1764501 - -------------------------------------- ------------------------------------- ---------------------------------- (State or Other Jurisdiction of (Commission File Number) (I.R.S. Employer Identification Incorporation) Number)
- -------------------------------------------------------------------------------- 2070 Route 52, Hopewell Junction, New York 12533 (Address of principal executive offices) (zip code) (845) 892-1900 - -------------------------------------------------------------------------------- (Registrant's telephone number, including area code) ITEM 5. OTHER EVENTS. On January 14, 2002 (the "Closing Date"), eMagin Corporation ("eMagin" or the "Company") entered into a series of transaction documents (collectively, the "Transactions") to facilitate: (i) an additional funding of $1,000,000 (the "Additional Funding") to eMagin by a private investor under the existing Secured Note Purchase Agreement, previously entered into by eMagin and an investor group named on Schedule A therein (the "Initial Investors") and dated as of November 27, 2001 and amended as described herein (the "Purchase Agreement"), (ii) the repayment (the "Repayment") in full using the proceeds of the Additional Funding of three secured convertible notes held by certain Initial Investors with an aggregate principal amount of $250,000, such notes previously issued under the Purchase Agreement and in default pursuant to a monthly expenditure requirement contained under Section 8(k) therein, and (iii) a repricing of the conversion rate of the outstanding secured convertible notes into common stock of the Company and the exercise price of the Warrants held by certain Initial Investors not subject to the Repayment (the "Continuing Investors") and the issuance of certain additional warrants to the Continuing Investors in return for the consent of the Continuing Investors to certain amendments to and waivers under (including a waiver to the default described above) such secured convertible notes and the Purchase Agreement. The terms of the existing Secured Note Purchase Agreement were amended to permit the Transactions. In return for the Additional Funding, the private investor referred to above received two secured convertible notes, with an aggregate principal amount of $300,000 and $700,000, respectively, and related warrants, with each such note and warrant issued pursuant to the terms of the Purchase Agreement. The full amount of the outstanding secured convertible notes, after giving effect to the Transactions described above, have an aggregate principal amount of $1,625,000, and are secured by a general security interest in the assets of eMagin pursuant to the terms of a Security Agreement (the "Security Agreement") dated November 20, 2001. The outstanding secured convertible notes (the "Notes") are due August 30, 2002 and bear interest at 9% per annum (payable at maturity or on the effective date of an early termination). Pursuant to the Transactions, the conversion terms of the Notes were adjusted so that the Notes are convertible into common stock of eMagin at a rate of $0.5264 per share. The conversion of the Notes into eMagin common stock is mandatory upon the issuance of a minimum of $10,000,000 of convertible debt or equity securities by the Company prior to the maturity of the secured notes and require registration under the Securities Act of 1933 of the underlying common stock to be issued pursuant to such conversion. The holders of the Notes may convert the Notes and accrued interest into common stock of eMagin at any time. Upon a change in control of eMagin, eMagin may call the Notes and purchase the entire aggregate principal amount thereof at a price equal to 250% of the principal amount plus accrued and unpaid interest. If eMagin does not call the Notes within thirty (30) days of a change in control, the holders may require the Company to purchase the Notes at a price equal to 250% of the aggregate principal amount of such Notes. Pursuant to the terms of the Transactions, the exercise price of the outstanding warrants held by the Continuing Investors (the "Warrants") issued in connection with the Notes was adjusted to $0.5469 per share and are exercisable for a period of three (3) years from the date of the Transactions. The Initial Investors whose secured convertible notes were cancelled pursuant to the Repayment retained the warrants previously issued to them under the Purchase Agreement. All of the outstanding warrants issued under the Purchase Agreement, including those issued pursuant to the Transactions described above, are exercisable for an aggregate of up to 1,954,944 shares of common stock of eMagin. The foregoing is not intended to be a full and complete description of the Transactions. Terms of the Transactions are more fully described in the copies of the Waiver Agreement; Omnibus Amendment, Waiver and Consent Agreement; and the two Subscription Agreements attached as exhibits to this Form 8-K. Reference is also made to the Secured Note Purchase Agreement, the form of Secured Convertible Promissory Note, the form of Stock Purchase Warrant, the Registration Rights Agreement, and the Security Agreement attached as exhibits to the Form 8-K previously filed by the Company on December 18, 2001. The Company disseminated the attached press release on January 15, 2002, announcing the Transactions and the rehiring of certain previously laid-off employees. It was further announced that Mr. Edward Flynn has been appointed as the new Chief Financial Officer of eMagin. Mr. Flynn has been with eMagin in senior management positions for over 8 years, most recently as Treasurer. Previously, Mr. Flynn was employed by the IBM Company for over 29 years. Mr. Flynn replaces Mr. Andrew Savadelis, who has ceased to be employed by the Company. ITEM 7. EXHIBITS. Exhibit Number Description 4.1 Waiver Agreement dated January 14, 2002. 4.2 Subscription Agreement for $300,000 investment dated January 14, 2002 by and between eMagin Company and Mr. Mortimer D.A. Sackler. 4.3 Omnibus Amendment, Waiver and Consent Agreement dated January 14, 2002. 4.4 Subscription Agreement for $700,000 investment dated January 14, 2002 by and between eMagin Company and Mr. Mortimer D.A. Sackler. 99.1 Press Release of the Company dated January 15, 2002, announcing an increase in the convertible financing and rehiring of certain previously laid-off employees. SIGNATURE Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. EMAGIN CORPORATION By:/s/ Edward V. Flynn ------------------------------- Name: Edward V. Flynn Title: Chief Financial Officer Dated: January 28, 2002 EX-4 3 a849347_exh4-1.txt WAIVER AGREEMENT DATED JANUARY 14, 2002 WAIVER AGREEMENT WAIVER AGREEMENT (this "Agreement"), dated as of January 14, 2002, by and among eMAGIN CORPORATION, a Delaware corporation (the "Company"), and each of Mr. Mortimer D.A. Sackler, Rainbow Gate Corporation, and Mr. Jack Rivkin (collectively, the "Investors"), each such person a party as "Investors" to the Note Purchase Agreement (defined below) and current holders of (i) secured convertible promissory notes issued thereunder (the "Notes"), and (ii) the three year warrants issued thereunder (the "Warrants"). All capitalized terms used herein and not otherwise defined herein shall have the respective meanings provided to such terms in the Note Purchase Agreement. W I T N E S S E T H : WHEREAS, the Company and each of the Investors are parties to a Secured Note Purchase Agreement, dated as of November 27, 2001 (the "Note Purchase Agreement") and each Investor is the holder of the Notes and Warrants as issued thereunder; WHEREAS, pursuant to an Event of Default under Section 8(k) of each of the Notes issued at the Initial Closing, such Notes have become immediately due and payable, automatically and without presentment; WHEREAS, the Company has requested and each of the Investors have agreed to the waivers and consents provided herein on the terms and conditions provided herein; NOW, THEREFORE, in consideration of the forgoing and other benefits accruing to the Company and to the Investors, including, without limitation, the mutual covenants set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows: 1. Waiver of Event of Default. Each Investor hereby waives (the "Default Waiver") any Event of Default (as defined in the Notes) that has arisen, or may arise as a result of the Company failing to be in compliance with the requirements of Section 8(k) of any Note and such waiver shall be deemed to be a continuing waiver of such Event of Default. The preceding Default Waiver is not a waiver of compliance with any other provision of Section 8 or any other Event of Default (as defined in the Notes) and such waiver is expressly subject to satisfaction of the condition set forth in Section 3 of this Agreement. 2. Condition to Waivers. The Default Waiver set forth herein shall be contingent upon the closing of one or more additional subscriptions by Mr. Mortimer D. A. Sackler or his designees for additional Notes with a total aggregate principal amount of not less than One Million Dollars ($1,000,000) on or before 4:00 p.m. (New York time) on January 15, 2002. 3. Governing Law. This Waiver Agreement and the rights and obligations of the parties hereunder shall be construed in accordance with and be governed by the law of the State of New York, without regard to its principles of conflict of laws. 4. Counterparts. This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which counterparts when executed and delivered (including delivery by way of facsimile) shall be an original, but all of which shall together constitute one and the same instrument. A complete set of counterparts shall be lodged with the Company. 5. Effect of Waiver.This Agreement is limited as specified and shall not constitute a modification, amendment, acceptance or waiver of any other provision of the Note Purchase Agreement or any other document referenced therein. 6. Further Assurances. From and after the date of this Agreement, upon the request of the Investors on the one hand, or the Company on the other hand, each of the Company and the Investors shall execute and deliver such instruments, documents and other writings as may be reasonably necessary or desirable to confirm and carry out and to effectuate fully the intent and purposes of this Agreement. * * * * * -2- IN WITNESS WHEREOF, the parties hereto have caused this Waiver Agreement to be duly executed as of the date first above written. EMAGIN CORPORATION By ---------------------------------------------- Name: Title: INVESTORS: RAINBOW GATE CORPORATION By ---------------------------------------------- Name: Title: MORTIMER D.A. SACKLER ------------------------------------------------ Mortimer D. A. Sackler JACK RIVKIN ------------------------------------------------ Mr. Jack Rivkin -3- EX-4 4 a1stsubscagmt_exh4-2.txt SUBSCRIPTION AGREEMENT FOR $300,000 INVESTMENT SUBSCRIPTION AGREEMENT SUBSCRIPTION AGREEMENT (this "Agreement"), dated as of January 14, 2002, by and among eMAGIN CORPORATION, a Delaware corporation (the "Company"), and Mr. Mortimer D. A. Sackler (the "Purchaser"). All capitalized terms used herein and not otherwise defined herein shall have the respective meanings provided to such terms in the Note Purchase Agreement (defined below). W I T N E S S E T H : - - - - - - - - - - WHEREAS, the Company and each of the parties listed as "Investors" on Schedule A attached thereto (including, without limitation, the Purchaser hereunder) are parties to a Secured Note Purchase Agreement, dated as of November 27, 2001 (the "Note Purchase Agreement") and each such Investor is the holder of the Notes and Warrants as issued thereunder as listed on Schedule A attached thereto; WHEREAS, Section 1(e) of the Note Purchase Agreement permits Investors or additional Investors to subscribe for additional Notes and Warrants up to the Maximum Note Amount and the Maximum Warrant Amount, as the case may be; and WHEREAS, the Purchaser hereunder desires to subscribe for, and the Company has agreed to sell and issue to the Purchaser, the additional Notes and the additional Warrants as set forth herein; NOW, THEREFORE, in consideration of the mutual covenants set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows: ARTICLE One SALE AND PURCHASE SECTION 1.1 Sale and Purchase of Additional Notes and Warrants. Subject to the terms and conditions hereof and of the Note Purchase Agreement, the Company hereby agrees to sell to the Purchaser and the Purchaser hereby irrevocably subscribes for and agrees to purchase (a) additional Notes (the "Additional Notes") in a total aggregate principal amount of $300,000, and (b) additional Warrants (the "Additional Warrants") to purchase up to 123,288 shares, subject to adjustment, of the Company's common stock, par value $.001 per share, such Additional Notes and Additional Warrants to be substantially in the form Exhibits A and B, respectively, attached to the Note Purchase Agreement and to be dated as of the date hereof. SECTION 1.2 Closing. The closing (the "Closing") of the purchase and sale of the securities referred to herein shall take place concurrently with the execution of this Agreement. The Closing under this Agreement shall be deemed an "Additional Closing" as such term is defined and used under the Note Purchase Agreement. At the Closing, the Company shall deliver to the Purchaser (a) an executed counterpart to this Agreement, (b) an Additional Note in the respective principal amount set forth in Section 1.1(a), and (c) an Additional Warrant to purchase up to such amount of shares set forth in Section 1.1(b), in all cases against delivery to the Company by the Purchaser of (x) an executed counterpart to this Agreement and (y) the respective purchase price of the Additional Notes and the Additional Warrants, in the amount of $300,000 by bank wire transfer of immediately available funds to an account designated by the Company. SECTION 1.3 Delivery of Purchase Price. Notwithstanding anything to the contrary contained in this Agreement or in any Additional Notes or in Additional Warrants issued hereunder, if the Purchaser shall not have delivered to the Company wire directions or other evidence satisfactory to the Company, acting reasonably, of irrevocable instruction to its respective banking or financial institutions to transfer and deliver to the Company's account, by wire transfer or otherwise, the amounts due from the Purchaser at the Closing pursuant to Section 1.2(y) above (and amounting to, in the aggregate, $300,000, in immediately available funds), by the close of business on January 14, 2002, then this Agreement and any Additional Notes or Additional Warrants issued hereunder shall be null and void, and of no further force and effect, and any amounts, if any, received by the Company from the Purchaser pursuant to this Agreement or such Additional Notes or Additional Warrants shall be promptly (and in any case no later than the close of business on the immediately following business day) returned by the Company to the Purchaser in such amounts as may have transferred to the Company by such Purchaser; provided, that, any Additional Notes or Additional Warrants issuable hereunder to the Purchaser shall not be required to be released or issued by the Company to the Purchaser unless and until the respective amounts due in respect of such securities shall have been actually received by the Company. -2- ARTICLE TWO MISCELLANEOUS SECTION 2.1 Counterparts.This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which counterparts when executed and delivered (including delivery by way of facsimile) shall be an original, but all of which shall together constitute one and the same instrument. A complete set of counterparts shall be lodged with the Company. SECTION 2.2 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK. SECTION 2.3 Effective Date. This Agreement shall become effective as of the date first referenced above or on the date, if such date is later than the date first referenced above, the date when each of the Company and the Purchaser shall have signed a counterpart hereof (whether the same or different counterparts) and shall have delivered (including delivery by way of facsimile) the same to the Company or its legal counsel. SECTION 2.4 Effect of Waiver. This Agreement is limited as specified and shall not constitute a modification, amendment, acceptance or waiver of any other provision of the Note Purchase Agreement or any other document referenced therein. SECTION 2.5 Entire Agreement. This Agreement and the Note Purchase Agreement and the documents referred to herein and therein contain the entire understanding, whether oral or written, of the parties with respect to the matters covered hereby. Any amendment or change in this Agreement shall not be valid unless made in writing and signed by all of the parties hereto. This Agreement and the Additional Notes and Additional Warrants issued hereby are expressly subject to the terms of the Note Purchase Agreement and the Additional Notes and Additional Warrants shall be deemed to be issued pursuant to the Note Purchase Agreement. The Company hereby covenants to promptly make such additions to Schedule A of the Note Purchase Agreement as may be required to evidence the issuance of the Additional Notes and Additional Warrants issued hereunder. SECTION 2.6 Publicity. The Company and the Investors hereby agree that the Company may issue a press release within five (5) business days of the Effective Date describing this Agreement and the transactions contemplated hereby. Thereafter, any party may make a public statement or announcement or provide quotations in respect of a public statement or announcement with respect to this Agreement or the transactions contemplated hereby or the existence of this Agreement; provided, however, that prior to issuing or providing any such press release, making any such public statement or announcement or providing such quotation, such party must obtain the prior consent of each other party, which consent shall not be unreasonably withheld or delayed. SECTION 2.7 Severability. The provisions of this Agreement are severable and, in the event that any court shall determine that any one or more -3- of the provisions or part of the provisions contained in this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision or part of a provision of this Agreement and this Agreement shall be reformed and construed as if such invalid or illegal or unenforceable provision, or part of such provision, had never been contained herein, so that such provisions would be valid, legal and enforceable to the maximum extent possible, so long as such construction does not materially adversely effect the economic rights of either party hereto. SECTION 2.8 Notices. Any notice, demand, request, waiver or other communication required or permitted to be given hereunder shall be in writing and shall be effective (i) upon hand delivery, overnight mail or courier service at the address or number designated on the signature pages hereof (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (ii) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be as set forth on the signature pages hereof. Any party hereto may from time to time change its address for notices by giving written notice of such changed address to the other parties hereto in accordance herewith. SECTION 2.9 Waivers. No waiver by any party of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any other provisions, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right accruing to it thereafter. SECTION 2.10 Headings. The article, section and subsection headings in this Agreement are for convenience only and shall not constitute a part of this Agreement for any other purpose and shall not be deemed to limit or affect any of the provisions hereof. SECTION 2.11 No Third Party Beneficiaries; Assignment. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other person. The Investor may assign any of its rights under this Agreement. The Company may not assign any of its rights or obligations under this Agreement without the written consent of the Purchaser. SECTION 2.12 Fees and Expenses. Each party shall pay all of its own fees and expenses related to the transactions contemplated by this Agreement. SECTION 2.13 Survival. The covenants and agreements made herein shall survive the Effective Date. SECTION 2.14 Further Assurances. From and after the date of this Agreement, upon the request of the Purchaser or the Company, each of the parties hereto shall execute and deliver such instruments, documents and other writings -4- as may be reasonably necessary or desirable to confirm and carry out and to effectuate fully the intent and purposes of this Agreement. * * * * * -5- IN WITNESSES WHEREOF, the parties hereto have or have caused their duly authorized officers to execute and deliver this Agreement as of the date first above written. EMAGIN CORPORATION By --------------------------------------- Name: Title: MORTIMER D. A. SACKLER ----------------------------------------- EX-4 5 a848759_exh4-3.txt OMNIBUS AMENDMENT, WAIVER & CONSENT AGREEMENT OMNIBUS AMENDMENT, WAIVER AND CONSENT AGREEMENT OMNIBUS AMENDMENT, WAIVER AND CONSENT AGREEMENT (this "Agreement"), dated as of January 14, 2002, by and among eMAGIN CORPORATION, a Delaware corporation (the "Company"), each of the investors (the "Investors") party as "Investors" to the Note Purchase Agreement (defined below) and current holders of (i) the secured convertible promissory notes issued thereunder (such notes and the notes issued as described under this Agreement, the "Notes"), and (ii) the three year warrants issued thereunder (such warrants and any warrants issued as described under this Agreement, the "Warrants") and ALLIGATOR HOLDINGS, INC., a New York corporation ("AHI"). All capitalized terms used herein and not otherwise defined herein shall have the respective meanings provided to such terms in the Note Purchase Agreement. W I T N E S S E T H : WHEREAS, the Company and each of the Investors are parties to a Secured Note Purchase Agreement, dated as of November 27, 2001 (the "Note Purchase Agreement") and each Investor is the holder of the Notes and Warrants as issued thereunder; WHEREAS, in connection with the security granted under the Notes issued pursuant to the Note Purchase Agreement, the Company, each of the Investors, and Verus Support Services Inc., a Delaware corporation ("Verus"), entered a Security Agreement, dated as of November 20, 2001 (the "Security Agreement"); WHEREAS, pursuant to an Event of Default under Section 8(k) of each of the Notes issued at the Initial Closing, such Notes have become immediately due and payable, automatically and without presentment, and (i) the Company has made payment therefor to certain holders of the Notes for all amounts due and payable under the Notes held by such holders, and (ii) certain other holders of the Notes have waived such Event of Default pursuant to a Waiver Agreement entered into by and among the Company and such holders, dated as of January 14, 2002; WHEREAS, the Company has requested and each of the Investors have agreed to the amendments and waivers provided herein on the terms and conditions provided herein; WHEREAS, in exchange for the respective agreements of the Investors to consent to the applicable waivers and amendments contained herein, the Company has agreed to reprice and reissue the Warrants currently held by such Investors and to issue new warrants upon the terms and conditions set out herein; and WHEREAS, pursuant to Section 8.10 of the Security Agreement the Investors as "Secured Creditors" under such agreement desire that Verus resign its appointment as Collateral Agent under the Security Agreement and AHI desires to be appointed as successor Collateral Agent under the Security Agreement and the Investors consent to such appointment; NOW, THEREFORE, in consideration of the mutual covenants set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows: ARTICLE ONE AMENDMENTS AND WAIVER TO NOTE PURCHASE AGREEMENT SECTION 1.1 Amendments to Note Purchase Agreement. By executing this Agreement, the Company and each of the Investors hereto hereby agrees and acknowledges that the Note Purchase Agreement shall be amended as follows: (a) Section 1(a)(i) of the Note Purchase Agreement is hereby amended by deleting "$1,500,000" from the first sentence thereof and inserting in the place of such deletion "$1,625,000"; (b) Section 1(a)(ii) of the Note Purchase Agreement is hereby amended by deleting "652,176 shares" from the first sentence thereof and inserting in the place of such deletion "1,954,944 shares"; (c) Section 1(d) of the Note Purchase Agreement is hereby amended by deleting "for the trading day immediately preceding" and inserting in the place of such deletion "for the ten (10) trading days immediately preceding"; (d) Section 1(e) of the Note Purchase Agreement is hereby amended by (i) deleting "and subject to the last sentence of this Section 1(e)" from the first sentence thereto, (ii) deleting "(and provided that each such additional Note and Warrant, as the case may be, shall be issued on the same terms (other than recipient, date and amount) as the Notes and Warrants issued by the Company at the Initial Closing)" from the first sentence thereto, and (iii) deleting the last sentence of Section 1(e) in its entirety and inserting in the place of such deletion the following sentence: "For greater certainty and notwithstanding anything to the contrary contained in this Agreement, the parties hereby agree that any additional Warrants issued at an Additional Closing shall have an exercise price per share equal to 120% of the volume weighted average closing price of the Common Stock on the American Stock Exchange (or the over-the-counter market) for the ten (10) trading days immediately preceding January 8, 2002 (or such other date as the Board of Directors of the Company may in its discretion determine) as reported by the Wall Street Journal, New York City edition and any additional Notes issued hereunder shall have a Conversion Price (as such term is defined in Section 5 of the Notes) equal to 115.5% of the average of the volume weighted average closing price of the shares of the Common Stock of the Company as reported on The American Stock Exchange by the Wall Street Journal, New York City edition, for the ten (10) trading days immediately preceding January 8, 2002 (or such other date as the Board of Directors of the Company may in its discretion determine)."; -2- (e) Section 4(d) of the Note Purchase Agreement is hereby amended by deleting "the party against whom enforcement of any such amendment or waiver is sought" and inserting in place of such deletion "75% (in dollar terms of the principal amount) of the holders of Notes outstanding at the time of such waiver or amendment of this Agreement and which, for greater certainty, such amendment or waiver may include, without limitation, an amendment or waiver to any provision of the Security Agreement, Registration Rights Agreement or any Note or Warrant issued hereunder"; and (f) the Note Purchase Agreement is hereby amended by inserting the following Section 7: " 7. Grant of Preemptive Rights. (a) Subject to Section 7(c), the Company hereby grants to any Investor who holds Notes or Warrants as of the time of determination (the "Current Holders") preemptive rights to purchase a portion of New Securities (as defined below) that the Company may from time to time propose to issue in a transaction or series of related transactions after the date hereof to any third persons (collectively, the "Third Party Purchaser(s)"). In the event (and on each occasion) that the Company shall decide to undertake an issuance of New Securities to Third Party Purchaser(s), the Company will give to the Current Holders written notice therof (a "Preemptive Notice") of the Company's decision, describing the type of New Securities, the Preemptive Price (as such term is hereinafter defined), and the general terms upon which the Company has decided to issue the New Securities (including, without limitation, the expected timing of such issuance which will in no event exceed 90 days from the date of the Preemptive Notice). The Current Holders shall have fourteen (14) calendar days from the date on which they receive the Preemptive Notice to agree to purchase some or all of their pro rata portion of such New Securities for the Preemptive Price and upon the general terms specified in the Preemptive Notice by giving written notice to the Company thereof and stating therein the quantity of New Securities to be purchased by such Current Holders. If, in connection with such a proposed issuance of New Securities, any Current Holder shall for any reason fail or refuse to give such written notice to the Company within such 14-day period, such Current Holder shall, for all purposes of this Section 7(a), be deemed to have refused (in that particular instance only) to purchase any of such New Securities and to have waived (in that particular instance only) all of its rights under this Section 7(a) to purchase any of such New Securities. The "Preemptive Price" shall be the equivalent of a per share price equal to the fair market value of the New Securities as determined in good faith by the Board of Directors of the Company, and shall in any case be no greater than the equivalent per share price proposed to be paid by the Third Party Purchaser of the New Securities in consideration for the issuance of such New Securities for the transaction(s) to which the Preemptive Notice relates. For purposes of this Section 7(a), "pro rata portion" shall mean for each Current Holder agreeing to purchase New Securities pursuant to a Preemptive Notice a fraction, the numerator of which is the number of shares of Common Stock held by such Current Holder as a result of the conversion of the Notes or the exercise of the Warrants (assuming for this purpose, the conversion of all Notes and the exercise all Warrants) and the denominator of which is the total number of shares of Common Stock outstanding (assuming the conversion, exchange or exercise of all securities which are, directly or -3- indirectly, convertible into or exchangeable or exercisable for Common Stock, provided, that such assumption shall only include for the purposes of such determination only such securities that at the time of such determination are then "in-the-money" such that the exercise or strike price, if any, of all such convertible securities included in such determination shall be less than the closing price of the Common Stock on the American Stock Exchange (or over-the-counter market) on the date of such determination). (b) For purposes hereof, "New Securities" shall mean any common stock of the Company of any class or any preferred stock or other equity securities of the Company, whether authorized now or in the future, and any rights, options or warrants to purchase any such stock or securities, and securities (including without limitation, debt obligations) of any type whatsoever that are, or may become, convertible into or exchangeable for any such stock or securities; provided that "New Securities" shall not include (i) restricted shares of Common Stock or options granted pursuant to the Company's stock option plans, (ii) shares of Common Stock received upon the exercise of options granted pursuant to the Company's stock option plans, (iii) shares of Common Stock issued by the Company on or prior to January 14, 2002, (iv) shares of Common Stock issued upon the direct or indirect conversion or exercise of any securities (including, without limitation, any stock options of the Company) issued by the Company on or prior to January 14, 2002, (v) equity securities of the Company sold in a widely distributed sale of Common Stock in an underwritten public offering pursuant to an effective registration statement filed with the Securities and Exchange Commission; and (vi) equity securities issued as consideration in any merger or other business combination transaction, including the acquisition of substantially all of the assets of any entity. (c) The preemptive rights granted under this Section 7 shall expire and shall be of no further force and effect upon the earlier of (i) the date on which no Investor a party hereto holds any Note or Warrants or any shares of Common Stock issued as a result of the conversion of the Notes or the exercise of the Warrants, or (ii) January 31, 2005. " SECTION 1.2 Waiver. Each Investor hereby waives (the "Subscription Waiver") any prior breach by the Company or by any other party to the Note Purchase Agreement of the requirements set forth in the last sentence of Section 1(e) of the Note Purchase Agreement requiring that any additional subscriptions for Notes or Warrants under the Note Purchase Agreement be restricted to issuances to shareholders of record of the Company on the date of the Initial Closing unless such issuance is approved by 75% (in dollar terms of the principal amount) of the holders of Notes as of the Initial Closing date. The Subscription Waiver shall be deemed to be a continuing waiver of any such breach. -4- ARTICLE TWO AMENDMENT OF NOTES SECTION 2.1 Amendment to Note Documents. By executing this Agreement, the Company and each of the Investors hereto hereby agrees, acknowledges and consents that each of the outstanding Notes issued under the Note Purchase Agreement to such Investors and the Form of Promissory Note attached to the Note Purchase Agreement as Exhibit A (collectively, each such document the "Note Documents") shall be amended (collectively, the "Note Amendment") as follows: (a) the second sentence of Section 5 of the Form of Promissory Note attached to the Note Purchase Agreement as Exhibit A is hereby amended by deleting "the Closing Date" from such sentence and inserting in the place of such deletion "the date of the issuance of this Note (or such other date as the Board of Directors of the Company may in its discretion determine)"; (b) the second sentence of Section 5 of each of the outstanding Notes issued under the Note Purchase Agreement is hereby amended by deleting "the Closing Date" from such sentence and inserting in the place of such deletion "January 8, 2002"; (c) the second sentence of Section 5 of each of the Note Documents is hereby amended by (i) deleting "105%" from such sentence and inserting "115.5%", and (ii) deleting "average of the closing prices" and inserting in the place of such deletion "average of the volume weighted average closing prices"; (d) Section 8(k) of each of the Note Documents is hereby deleted in its entirety; (e) the first sentence of Section 8 of each of the Note Documents is hereby amended by deleting "paragraphs (d), (e), (f) and (k)" and inserting in the place of such deletion "paragraphs (d), (e) and (f)"; (f) Section 8(i) of each of the Note Documents is hereby amended by inserting "or" after the semi-colon appearing in such section; and (g) Section 8(j) of each of the Note Documents is hereby amended by deleting "; or" from such section and inserting in place of such deletion ".". SECTION 2.2 Evidence of Note Amendment. Each Investor and the Company hereby agree that the Note Amendment shall be evidenced by new Note certificates to be issued by the Company in substitution for the Note certificates issued at the Initial Closing under the Note Purchase Agreement, such issuance of new Note certificates to follow substantially the applicable procedures set out in Article Four of this Agreement. SECTION 2.3 Additional Warrants. In exchange for the amendments set out in -5- Section 2.1 hereof and the Subscription Waiver, the Company hereby agrees to issue to each of the Investors additional warrants (the "Amendment Warrants"), each such warrant to be substantially in the form of the Warrants issued in connection with the Initial Closing (the "Initial Warrants"), and provided that in any case the Exercise Price for each Amendment Warrant shall be $0.5469 (five four point six nine cents), to purchase up to the number of shares, subject to adjustment, of the Company's common stock, par value $.001 per share as set forth across from such Investor's name and address in Schedule A to this Agreement. Such Amendment Warrants shall be considered to be Initial Warrants for all purposes of the Note Purchase Agreement. ARTICLE Three AMENDMENT TO WARRANTS SECTION 3.1 Issuance of New Warrants. In consideration of the agreement of the Investors to enter into this Agreement, the Company hereby agrees to amend (the "Warrant Amendment") the outstanding Initial Warrants held by such Investors issued in connection with the Note Purchase Agreement by reducing the Exercise Price (as defined in the Initial Warrants) specified therein to the amount of $0.5469 (five four point six nine cents). SECTION 3.2 Evidence of Amendment. Each Investor and the Company hereby agree that the Warrant Amendment shall be evidenced by new Warrant certificates to be issued by the Company in substitution for the Initial Warrant certificates issued at the Initial Closing under the Note Purchase Agreement, such issuance of new Warrant certificates to follow substantially the applicable procedures set out in Article Four of this Agreement. ARTICLE FOUR EVIDENCE OF NOTE AND WARRANT AMENDMENTS SECTION 4.1 Evidence of Amendment of Certificates. Each Investor and the Company hereby agree that the issuance of new Note certificates and new Warrant certificates to evidence the amendments contemplated herein shall occur as follows: (a) At or subsequent to the Effective Date (as defined in Section 6.3), each Investor shall present or deliver to the Company or its legal counsel for cancellation the original Note certificates and the Initial Warrant certificates received by such Investor under the Note Purchase Agreement at the Initial Closing (collectively, the "Old Certificates"), such presentation or delivery to occur as soon as practicable after the Effective Date and in any case within seven (7) calendar days of the Effective Date. (b) Immediately upon receipt of the Old Certificates from an Investor pursuant to Section 4.1(a), the Company shall cancel such certificates (which shall be void and of no further force and effect) and issue in -6- substitution therefor to such Investor a new Note certificate and a new Warrant certificate, each such new certificate to be duly authorized for issuance and delivery by the Company and to contain all of the respective terms and provisions of the Old Certificates received from such Investor, but for the respective amendments set out herein which shall be included in such new certificates. ARTICLE FIVE APPOINTMENT OF COLLATERAL AGENT SECTION 5.1 Request for Resignation of Verus as Collateral Agent. Pursuant to Section 8.10 of the Security Agreement, each of the Investors by executing this Agreement, hereby irrevocably requests in their respective capacities as "Secured Creditors" under the Security Agreement that Verus use its best efforts to formally resign as Collateral Agent (as defined in the Security Agreement) as soon as practicable after the date hereof, with such resignation to be effective in any case upon the earlier of (such earlier date, the "Resignation Date") (i) thirty days notice thereof to Verus, or (ii) the receipt by the Company of the written resignation of Verus as Collateral Agent. SECTION 5.2 Additional Request of Investors to Collateral Agent. Each of the Investors by executing this Agreement, hereby irrevocably requests in their respective capacities as "Secured Creditors" under the Security Agreement that Verus take no further affirmative actions under the Security Agreement prior to the Resignation Date. SECTION 5.3 Appointment of AHI as Collateral Agent. By executing this Agreement, each of the Investors hereto hereby agree in their respective capacities as "Secured Creditors" under the Security Agreement to the irrevocable appointment and designation of AHI as the successor Collateral Agent to Verus, and in furtherance thereof, each such Investor hereby authorizes AHI to take such action on its behalf under the provisions of the Security Agreement and the Notes and to exercise such powers and perform such duties as are expressly delegated to it by the terms of the Security Agreement or the Notes, together with such powers as are reasonably incidental thereto, such appointment to be effective as of the Resignation Date. SECTION 5.4 Acceptance of AHI of Appointment as Collateral Agent. By executing this Agreement, AHI hereby accepts its appointment and designation as successor Collateral Agent under the Security Agreement as of the Resignation Date and acknowledges and agrees that it shall succeed to all the rights, powers and duties of the retiring Collateral Agent and AHI, the Company and the Investors each hereby acknowledge and agree, by executing this Agreement, that (i) the term "Collateral Agent" as used in the Security Agreement, the Note Purchase Agreement, and any Note shall be deemed to mean AHI as of the Resignation Date, and (ii) any reference to Verus in such documentation shall be deemed to mean AHI as of the Resignation Date. AHI hereby confirms that the notice address for AHI under Section 10.1(b) of the Security Agreement shall be: Alligator Holdings, Inc. -7- 444 Park Avenue South, 11th Floor New York, NY 10016 Attn: Mr. Steven W. Gold, President SECTION 5.5 Payment of Initial Fees to AHI. The Company hereby agrees to provide to AHI as consideration for its agreement to act as successor Collateral Agent hereunder a fee of $10,000.00 to be paid to AHI by wire transfer to the bank account designated in writing to the Company by AHI or its agents, such payment to be due and payable by the Company as of the Resignation Date. ARTICLE SIX MISCELLANEOUS SECTION 6.1 Counterparts.This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which counterparts when executed and delivered (including delivery by way of facsimile) shall be an original, but all of which shall together constitute one and the same instrument. A complete set of counterparts shall be lodged with the Company. SECTION 6.2 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK. SECTION 6.3 Effective Date. This Agreement shall become effective (the "Effective Date") as of the date first referenced above. SECTION 6.4 Effect of Amendment and Waiver. From and after the Effective Date, all references in the Note Purchase Agreement and the other documents referenced therein (including, without limitation, any Note or any Warrant held by the Investors party hereto) shall be deemed to be references to the Note Purchase Agreement as modified hereby. This Agreement is limited as specified and shall not constitute a modification, amendment, acceptance or waiver of any other provision of the Note Purchase Agreement or any other document referenced therein. For greater certainty, the parties hereby confirm that the addition of additional Investors to the Note Purchase Agreement as per Section 1(e) of such agreement as amended hereby and any requisite related amendments to Schedule A of such agreement may be effected by the Company without the consent of the Investors. SECTION 6.5 Entire Agreement. This Agreement and the Note Purchase Agreement and the documents referred to therein contain the entire understanding, whether oral or written, of the parties with respect to the matters covered hereby. Any amendment or change in this Agreement shall not be valid unless made in writing and signed by all of the parties hereto. SECTION 6.6 Publicity. The Company and the Investors hereby agree that the Company may issue a press release within five (5) business days of the Effective -8- Date describing this Agreement and the transactions contemplated hereby. Thereafter, any party may make a public statement or announcement or provide quotations in respect of a public statement or announcement with respect to this Agreement or the transactions contemplated hereby or the existence of this Agreement; provided, however, that prior to issuing or providing any such press release, making any such public statement or announcement or providing such quotation, such party must obtain the prior consent of each other party, which consent shall not be unreasonably withheld or delayed. SECTION 6.7 Severability. The provisions of this Agreement are severable and, in the event that any court shall determine that any one or more of the provisions or part of the provisions contained in this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision or part of a provision of this Agreement and this Agreement shall be reformed and construed as if such invalid or illegal or unenforceable provision, or part of such provision, had never been contained herein, so that such provisions would be valid, legal and enforceable to the maximum extent possible, so long as such construction does not materially adversely effect the economic rights of either party hereto. SECTION 6.8 Notices. Any notice, demand, request, waiver or other communication required or permitted to be given hereunder shall be in writing and shall be effective (i) upon hand delivery, overnight mail or courier service at the address or number designated on the signature pages hereof (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (ii) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be as set forth on the signature pages hereof. Any party hereto may from time to time change its address for notices by giving written notice of such changed address to the other parties hereto in accordance herewith. SECTION 6.9 Waivers. No waiver by any party of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any other provisions, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right accruing to it thereafter. SECTION 6.10 Headings. The article, section and subsection headings in this Agreement are for convenience only and shall not constitute a part of this Agreement for any other purpose and shall not be deemed to limit or affect any of the provisions hereof. SECTION 6.11 No Third Party Beneficiaries; Assignment. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other person. Each Investor may assign any of its -9- rights under this Agreement. The Company may not assign any of its rights or obligations under this Agreement without the written consent of each Investor. SECTION 6.12 Fees and Expenses. Each party shall pay all of its own fees and expenses related to the transactions contemplated by this Agreement. SECTION 6.13 Survival. The representations, covenants and agreements made herein shall survive the Effective Date. SECTION 6.14 Further Assurances. From and after the date of this Agreement, upon the request of the Investors on the one hand, or the Company on the other hand, each of the Company and the Investors shall execute and deliver such instruments, documents and other writings as may be reasonably necessary or desirable to confirm and carry out and to effectuate fully the intent and purposes of this Agreement. * * * * * -10- IN WITNESSES WHEREOF, the parties hereto have caused their duly authorized officers to execute and deliver this Agreement as of the date first above written. EMAGIN CORPORATION By -------------------------------------------- Name: Title: INVESTORS: RAINBOW GATE CORPORATION By -------------------------------------------- Name: Title: MORTIMER D.A. SACKLER ---------------------------------------------- Mortimer D. A. Sackler JACK RIVKIN ---------------------------------------------- Mr. Jack Rivkin SUCCESSOR COLLATERAL AGENT: ALLIGATOR HOLDINGS INC. By -------------------------------------------- Name: Title:
Schedule A - WAIVER WARRANTS Principal Amount of Warrant Amount Amendment Total Warrant Name and Address of Investor Notes Currently Held Currently Held Warrant Amount Amount - ----------------------------------------------------------------------------------------------------------------- Rainbow Gate Corporation $300,000 123,288 218,657 341,945 Mr. Mortimer D.A. Sackler $500,000 205,480 364,428 569,908 Mr. Jack Rivkin $125,000 51,370 91,107 142,477
EX-4 6 a2ndsubscagmt_exh4-4.txt SUBSCRIPTION AGREEMENT FOR $700,000 INVESTMENT SUBSCRIPTION AGREEMENT SUBSCRIPTION AGREEMENT (this "Agreement"), dated as of January 14, 2002, by and among eMAGIN CORPORATION, a Delaware corporation (the "Company"), and Mr. Mortimer D. A. Sackler (the "Purchaser"). All capitalized terms used herein and not otherwise defined herein shall have the respective meanings provided to such terms in the Note Purchase Agreement (defined below). W I T N E S S E T H : - - - - - - - - - - WHEREAS, the Company and each of the parties listed as "Investors" on Schedule A attached thereto (including, without limitation, the Purchaser hereunder) are parties to a Secured Note Purchase Agreement, dated as of November 27, 2001, (as amended by the Amendment Agreement (defined below), the "Note Purchase Agreement") and each such Investor is the holder of the Notes and Warrants as issued thereunder as listed on Schedule A attached thereto; WHEREAS, pursuant to an Event of Default under Section 8(k) of each of the Notes issued at the Initial Closing, such Notes became immediately due and payable, automatically and without presentment, and (i) the Company made payment therefor to certain holders of the Notes for all amounts due and payable under the Notes held by such holders, and (ii) certain other holders of the Notes have waived such Event of Default pursuant to a Waiver Agreement between the Company and such holders dated as of January 14, 2002; WHEREAS, the Company and each of the remaining holders of Notes entered into a Omnibus Amendment, Waiver and Consent Agreement, dated as of January 14, 2002, (the "Amendment Agreement") pursuant to which the parties consented to certain waivers and to certain amendments to the Note Purchase Agreement, the Notes and the Warrants and as consideration for the consent of such holders to such waivers and amendments, certain additional warrants were issued pursuant to the terms and conditions set out therein; WHEREAS, Section 1(e) of the Note Purchase Agreement permits Investors or additional Investors to subscribe for additional Notes and Warrants up to the Maximum Note Amount and the Maximum Warrant Amount, as the case may be; and WHEREAS, the Purchaser hereunder desires to subscribe for, and the Company has agreed to sell and issue to the Purchaser, the additional Notes and the additional Warrants as set forth herein; NOW, THEREFORE, in consideration of the mutual covenants set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows: ARTICLE One SALE AND PURCHASE SECTION 1.1 Sale and Purchase of Additional Notes and Warrants. Subject to the terms and conditions hereof and of the Note Purchase Agreement, the Company hereby agrees to sell to the Purchaser and the Purchaser hereby irrevocably subscribes for and agrees to purchase (a) additional Notes (the "Additional Notes") in a total aggregate principal amount of $700,000, and (b) additional Warrants (the "Additional Warrants") to purchase up to 797,873 shares, subject to adjustment, of the Company's common stock, par value $.001 per share, such Additional Notes and Additional Warrants to be substantially in the form Exhibits A and B, respectively, attached to the Note Purchase Agreement, as amended by the Amendment Agreement, and to be dated as of the date hereof. For greater certainty and notwithstanding anything to the contrary in the Note Purchase Agreement or the Amendment Agreement, the parties hereto hereby acknowledge, agree and confirm that the Board of Directors of the Company has in its discretion selected January 8, 2002 as the relevant date for the determination of the "Conversion Price" for the Additional Notes to be issued hereunder and that the resulting "Conversion Price" of the Additional Notes shall equal $0.5264 (five two point six four cents) and the "Exercise Price" of the Additional Warrants shall equal $0.5469 (five four point six nine cents). SECTION 1.2 Closing. The closing (the "Closing") of the purchase and sale of the securities referred to herein shall take place concurrently with the execution of this Agreement. The Closing under this Agreement shall be deemed an "Additional Closing" as such term is defined and used under the Note Purchase Agreement. At the Closing, the Company shall deliver to the Purchaser (a) an executed counterpart to this Agreement, (b) an Additional Note in the respective principal amount set forth in Section 1.1(a), and (c) an Additional Warrant to purchase up to such amount of shares set forth in Section 1.1(b), in all cases against delivery to the Company by the Purchaser of (x) an executed counterpart to this Agreement and (y) the respective purchase price of the Additional Notes and the Additional Warrants, in the amount of $700,000 by bank wire transfer of immediately available funds to an account designated by the Company. SECTION 1.3 Delivery of Purchase Price. Notwithstanding anything to the contrary contained in this Agreement or in any Additional Notes or in Additional Warrants issued hereunder, if the Purchaser shall not have delivered to the Company wire directions or other evidence satisfactory to the Company, acting reasonably, of irrevocable instruction to its respective banking or financial institutions to transfer and deliver to the Company's account, by wire transfer or otherwise, the amounts due from the Purchaser at the Closing pursuant to Section 1.2(y) above (and amounting to, in the aggregate, $700,000, in immediately available funds), by the close of business on January 15, 2002, then this Agreement and any Additional Notes or Additional Warrants issued hereunder shall be null and void, and of no further force and effect, and any amounts, if any, received by the Company from the Purchaser pursuant to this Agreement or such Additional Notes or Additional Warrants shall be promptly (and in any case no later than the close of business on the immediately following business day) returned by the Company to the Purchaser in such amounts as may have transferred to the Company by such Purchaser; provided, that, any Additional Notes or Additional Warrants issuable hereunder to the Purchaser shall not be required to be released or issued by the Company to the Purchaser unless and until the respective amounts due in respect of such securities shall have been actually received by the Company. -2- ARTICLE TWO MISCELLANEOUS SECTION 2.1 Counterparts.This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which counterparts when executed and delivered (including delivery by way of facsimile) shall be an original, but all of which shall together constitute one and the same instrument. A complete set of counterparts shall be lodged with the Company. SECTION 2.2 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK. SECTION 2.3 Effective Date. This Agreement shall become effective as of the date first referenced above. SECTION 2.4 Effect of Waiver. This Agreement is limited as specified and shall not constitute a modification, amendment, acceptance or waiver of any other provision of the Note Purchase Agreement or any other document referenced therein. SECTION 2.5 Entire Agreement. This Agreement and the Note Purchase Agreement (as amended by the Amendment Agreement) and the documents referred to herein and therein contain the entire understanding, whether oral or written, of the parties with respect to the matters covered hereby. Any amendment or change in this Agreement shall not be valid unless made in writing and signed by all of the parties hereto. This Agreement and the Additional Notes and Additional Warrants issued hereby are expressly subject to the terms of the Note Purchase Agreement (as amended by the Amendment Agreement) and the Additional Notes and Additional Warrants shall be deemed to be issued pursuant to the Note Purchase Agreement. The Company hereby covenants to promptly make such additions to Schedule A of the Note Purchase Agreement as may be required to evidence the issuance of the Additional Notes and Additional Warrants issued hereunder. SECTION 2.6 Publicity. The Company and the Investors hereby agree that the Company may issue a press release within five (5) business days of the Effective Date describing this Agreement and the transactions contemplated hereby. Thereafter, any party may make a public statement or announcement or provide quotations in respect of a public statement or announcement with respect to this Agreement or the transactions contemplated hereby or the existence of this Agreement; provided, however, that prior to issuing or providing any such press release, making any such public statement or announcement or providing such quotation, such party must obtain the prior consent of each other party, which consent shall not be unreasonably withheld or delayed. SECTION 2.7 Severability. The provisions of this Agreement are severable and, in the event that any court shall determine that any one or more -3- of the provisions or part of the provisions contained in this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision or part of a provision of this Agreement and this Agreement shall be reformed and construed as if such invalid or illegal or unenforceable provision, or part of such provision, had never been contained herein, so that such provisions would be valid, legal and enforceable to the maximum extent possible, so long as such construction does not materially adversely effect the economic rights of either party hereto. SECTION 2.8 Notices. Any notice, demand, request, waiver or other communication required or permitted to be given hereunder shall be in writing and shall be effective (i) upon hand delivery, overnight mail or courier service at the address or number designated on the signature pages hereof (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (ii) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be as set forth on the signature pages hereof. Any party hereto may from time to time change its address for notices by giving written notice of such changed address to the other parties hereto in accordance herewith. SECTION 2.9 Waivers. No waiver by any party of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any other provisions, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right accruing to it thereafter. SECTION 2.10 Headings. The article, section and subsection headings in this Agreement are for convenience only and shall not constitute a part of this Agreement for any other purpose and shall not be deemed to limit or affect any of the provisions hereof. SECTION 2.11 No Third Party Beneficiaries; Assignment. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other person. The Investor may assign any of its rights under this Agreement. The Company may not assign any of its rights or obligations under this Agreement without the written consent of the Purchaser. SECTION 2.12 Fees and Expenses. Each party shall pay all of its own fees and expenses related to the transactions contemplated by this Agreement. SECTION 2.13 Survival. The covenants and agreements made herein shall survive the Effective Date. SECTION 2.14 Further Assurances. From and after the date of this Agreement, upon the request of the Purchaser or the Company, each of the parties hereto shall execute and deliver such instruments, documents and other writings -4- as may be reasonably necessary or desirable to confirm and carry out and to effectuate fully the intent and purposes of this Agreement. * * * * * -5- IN WITNESSES WHEREOF, the parties hereto have or have caused their duly authorized officers to execute and deliver this Agreement as of the date first above written. EMAGIN CORPORATION By ------------------------------------------ Name: Title: MORTIMER D. A. SACKLER --------------------------------------------- EX-99 7 a854831_exh99-1.txt PRESS RELEASE eMagin Corporation Announces Increased Convertible Note Financing and Begins Rehiring Some Laid-Off Employees Hopewell Junction, N.Y., January 15, 2002 -- eMagin Corporation (AMEX:EMA) today announced an increase in its existing bridge financing in the form of a secured convertible loan. eMagin obtained an additional $1.0 million of financing from a private investor, increasing the amount of the secured convertible loan to $1,625,000, including amounts previously made available to eMagin in December 2001 and after repayments of certain note holders. The objective of this bridge loan is to permit eMagin to continue operations and increase production to support orders for its organic light emitting diode (OLED) microdisplays, while eMagin continues to seek sources of long-term financing. The secured convertible notes, which are due August 30, 2002, bear interest at 9.0 percent, and are convertible into common stock at $0.5264 per share. In addition, the secured convertible notes carry with them, 60% warrant coverage to purchase common stock at $0.5468 per share. Previous investors remaining in this bridge loan received reset conversion and warrant pricing with the same terms as the new investor. In addition, holders of $250,000 aggregate principal amount of convertible secured notes issued in December 2001 were repaid in full out of the proceeds of the new financing. eMagin also announced that it is making return to work offers to some of its laid-off employees associated with manufacturing, engineering, and marketing. Gary Jones, CEO of eMagin, stated "Much of the initial R&D needed for the company to create its initial products has been completed and the equipment set required for initial production is in place. We have been most pleased to see the potential for increased near term product orders." Jones continued, "To maintain customer relationships, create sales revenue, and provide the value required to justify future investment, we must supply our customers with sufficient quantities of displays so they can adopt these new microdisplays into their new products and can begin fielding products using our displays. Beginning this month, we plan to begin ramping production with a focus on cost effectiveness with a smaller management, administrative, and R&D staff, carefully controlling our burn rate going forward. However, we still expect to be in a difficult cash position until a larger financing can occur. We hope to be able to make rehiring offers to additional staff as soon as it is prudent to do so." It was further announced that Edward Flynn has been appointed as the new CFO of eMagin. Mr. Flynn has been with eMagin in senior management positions for over 8 years, most recently as Treasurer. Previously, Mr. Flynn was employed by the IBM Corporation for over 29 years in senior financial positions. About eMagin A leading developer of virtual imaging technology, eMagin combines integrated circuits, microdisplays, and optics to create a virtual image similar to the real image of a computer monitor or large screen TV. These miniature, high-performance, modules provide access to information-rich text, data, and video which can facilitate the opening of new mass markets for wearable personal computers, wireless Internet appliances, portable DVD-viewers, digital cameras, and other emerging applications including helmet-mounted virtual displays for the US Air Force's Joint Strike Fighter program as well as other military uses. Electronic Products Magazine recently named eMagin's SVGA OLED microdisplay a 2001 Product of the Year. eMagin has received a US Army Quality Award and last year was named Display of the Year by Society Information Display (SID) and Information Display Magazine. eMagin's intellectual property portfolio is leveraged by key OLED technology licensed from Eastman Kodak. OLEDs are emissive devices (i.e., they create light), as opposed to liquid crystal displays (LCDs) that require a separate light source. OLED devices use less power and are capable of high brightness and color. Because the light they emit appears equally bright from all directions, they are ideal for near to the eye applications since a small movement in the eye does not change the image. According to Stanford Resources, a leading market research firm focusing on the global electronic display industry, the worldwide market for OLED displays will grow to $1.6 billion in 2007, or 63% a year over that period. eMagin's corporate headquarters and microdisplay operations are co-located with IBM on its campus in East Fishkill, N.Y. Further information about eMagin and its virtual imaging solutions can be accessed at www.emagin.com and www. virtualvision.com. Forward Looking Statements This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential" or "continue," the negative of such terms, or other comparable terminology. These statements are only predictions. Actual events or results may differ materially from those in the forward-looking statements as a result of various important factors, including those described in the Company's most recent filings with the SEC. Although we believe that the expectations reflected in the forward-looking statements are reasonable, such statements should not be regarded as a representation by the Company, or any other person, that such forward-looking statements will be achieved. The business and operations of the Company are subject to substantial risks which increase the uncertainty inherent in forward-looking statements. We undertake no duty to update any of the forward-looking statements, whether as a result of new information, future events or otherwise. In light of the foregoing, readers are cautioned not to place undue reliance on such forward-looking statements. Note to editors: eMagin is properly spelled beginning with a lower case e. CONTACT: Rita Chaires, Corporate Communications email: info@emagin.com -----END PRIVACY-ENHANCED MESSAGE-----