INTERCREDITOR AGREEMENT
Exhibit
10.7
INTERCREDITOR
AGREEMENT, dated August 7, 2007, by
and among MORIAH CAPITAL, L.P., a Delaware limited partnership
with offices at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
(“Moriah”), ALEXANDRA GLOBAL MASTER FUND LTD.,
a British Virgin Islands international business company with the offices
of its
investment advisor at 000 Xxxxx Xxxxxx, 00xx Xxxxx,
Xxx Xxxx,
Xxx Xxxx 00000 (“Alexandra”), in its capacity as collateral
agent pursuant to the Noteholder Agreements (such capitalized term and all
other
capitalized terms used herein having the respective meanings provided in
this
Agreement) acting for and on behalf of the holders of Notes (in such capacity,
the “Notes Collateral Agent” as hereinafter further defined)
and EMAGIN CORPORATION, a Delaware corporation, with its
principal place of business located at 00000 X.X. 0xx Xxxxxx,
Xxxxx
0000, Xxxxxxxx, Xxxxxxxxxx 00000 (the “Borrower”).
R
E C I T A L S:
A. The
Notes Collateral Agent is the collateral agent under the Pledge and Security
Agreement, dated as of July 21, 2006, made by the Borrower to the Notes
Collateral Agent, as amended by Amendment No. 1 to Pledge and Security
Agreement, dated as of July 23, 2007 by and between the Borrower and the
Notes
Collateral Agent (the “Note Pledge Agreement”) for the benefit
of the holders (the “Noteholders”) from time to time of the
Amended and Restated 8% Senior Secured Convertible Notes Due 2008 issued
by the
Borrower (the “Notes”) pursuant to the several Note Purchase
Agreements, dated as of July 21, 2006, by and between the Borrower and the
several investors named therein, as amended by the several Amendment Agreements,
dated as of July 23, 2007, by and between the Borrower and the several investors
named therein (the “Note Purchase Agreements”) and, to secure
the Borrower’s obligations to the Noteholders, the Notes Collateral Agent and
the holders of Series A Senior Secured Convertible Preferred Stock, par value
$0.001 per share, of the Borrower issued or issuable upon conversion of the
Notes, the Borrower granted to the Notes Collateral Agent a security interest
in
and to the property of the Borrower described on Schedule 2 annexed
hereto (collectively, the “Notes Collateral”).
B. Pursuant
to a Loan and Security Agreement, of even date herewith, between Moriah and
Borrower (as the same may hereafter be amended, the “Moriah Loan
Agreement;” the term “Moriah Loan Agreements” shall
include all of the Loan Documents, as that term is defined in the Moriah
Loan
Agreement), Moriah is providing an accounts receivable and inventory based
credit facility to Borrower that is secured by all now owned and hereafter
acquired property (including, without limitation, real property) and assets
of
Borrower and the proceeds and products thereof, as more particularly described
in Schedule 1 annexed hereto (collectively, the “Moriah
Collateral”).
C. It
is a condition to the consummation of the transactions contemplated by the
Moriah Loan Agreements that the Notes Collateral Agent subordinate its liens
in
the Accounts and Inventory as the same may be included in the Notes Collateral
on terms satisfactory to Moriah.
D. The
Notes Collateral Agent and Moriah have each filed or may hereafter file
financing statements under the Uniform Commercial Code, as may be amended
from
time to time (“UCC”) with respect to the Notes Collateral and
the Moriah Collateral, respectively, in connection with the
foregoing.
E. The
Notes Collateral Agent and Moriah desire to agree on the relative priority
of
their respective security interests in, and liens on, their respective
collateral.
In
consideration of the foregoing, the mutual covenants and agreements herein
contained and other good and valuable consideration, the Notes Collateral
Agent
and Moriah mutually covenant, warrant and agree as follows:
1. Definitions. All
the agreements or instruments herein defined shall mean such agreements or
instruments as the same may from time to time be supplemented or amended
or the
terms thereof waived or modified to the extent permitted by, and in accordance
with the terms thereof. The following terms (including both the
singular and plurals thereof) shall have the following meanings unless the
context indicates otherwise:
1.1
“Bankruptcy
Code”
means the United States Bankruptcy Code (11 U.S.C. §§101
etseq.).
1.2
“Claim”
or
“Claims” means, as applicable, the Moriah Claim and/or the
Noteholder Claim.
1.3
“Collateral”
means
all property and interests in property now owned or hereafter acquired by
any
Loan Party in or upon which a security interest or mortgage lien is granted
to
Moriah or the Notes Collateral Agent under the Security Documents.
1.4
“Creditors”
shall
mean Moriah, the Noteholders and the Notes Collateral Agent and their respective
successors and assigns.
1.5
“Enforcement
Action” means with respect to a Claim, the demand for payment or
acceleration of such Claim, the repossession of any Collateral, the commencement
or prosecution of enforcement of any of the rights and remedies under, as
applicable, the Noteholder Agreements, the Moriah Loan Agreements, or applicable
law with respect to such Claim, including, but not limited to, judicial or
UCC
foreclosure, provided that Enforcement Action shall not include the filing
of a
claim in an Insolvency Proceeding.
1.6
“Enforcement
Notice” means a written notice delivered by the Enforcing Party to the
other Party stating that an "Event of Default" (as defined in the Noteholder
Agreements or the Moriah Loan Agreements, respectively) has occurred and
is
continuing and that an Enforcement Period has commenced.
1.7
“Enforcement Period” means the period of time
following the receipt by either the Notes Collateral Agent or Moriah of an
Enforcement Notice until (a) the Noteholder Claim is Paid in Full (if the
Notes
Collateral Agent is the Enforcing Party) or the Moriah Claim is Paid in Full
(if
Moriah is the Enforcing Party), or (b) the Creditors agree in writing to
terminate such Enforcement Period.
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1.8
“Enforcing
Party”
means Moriah in the case of an Enforcement Action with respect to
the Moriah
Claim, and the Notes Collateral Agent in the case of an Enforcement Action
with
respect to the Noteholder Claim.
1.9
“Insolvency
Proceeding” means any voluntary or involuntary insolvency, bankruptcy,
receivership, custodianship, liquidation, dissolution, reorganization,
assignment for the benefit of creditors, appointment of a custodian, receiver,
trustee or other officer with similar powers or any other proceeding for
the
liquidation, dissolution or other winding up of any Loan Party.
1.10 “Loan
Party” means Borrower and each subsidiary of
Borrower which is now or may hereafter become a party to the Noteholder
Agreements or the Moriah Loan Agreements.
1.10A
“Lockbox
Agreement” means the Lockbox Agreement, dated as of July 21, 2006, by
and between the Borrower and the Notes Collateral Agent, as amended by Amendment
No. 1 to Lockbox Agreement, dated as of July 23, 2007, by and between the
Borrower and the Notes Collateral Agent.
1.11
“Maximum
Moriah
Debt” means the sum of (a) $2,500,000, plus (b) such other indebtedness
that may be permitted to be incurred from time to time on or after the date
hereof under the terms of the Notes as Permitted Indebtedness as such term
is
defined in the Notes.
1.12
“Moriah Claim” means all of the obligations of the Loan Parties
to Moriah as set forth in the Moriah Loan Agreements.
1.13
“Moriah
Senior
Collateral” means the Collateral described in Section 2.1(a) in
which Moriah has a senior lien or security interest.
1.14
“Noteholder
Agreements” means the Note Purchase Agreements, the Notes, the Note
Pledge Agreement, the Patent and Trademark Security Agreement, dated as of
July
21, 2006, by and between the Borrower and the Notes Collateral Agent, as
amended
by Amendment No. 1 to Patent and Trademark Security Agreement dated as of
July
23, 2007, by and between the Borrower and the Notes Collateral Agent, the
Lockbox Agreement, the Certificate of Designations of Series A Senior Secured
Convertible Preferred Stock of the Borrower, the Amended and Restated Common
Stock Purchase Warrants issued by the Borrower to the holders of Notes pursuant
to the Note Purchase Agreements and the other agreements, instruments and
documents contemplated thereby.
1.15
“Noteholder Claim” means all obligations of the Loan Parties to
the Notes Collateral Agent and the Noteholders as set forth in the Noteholder
Agreements.
1.16
“Noteholder
Senior
Collateral” means the Collateral described in Section 2.1(b) in
which the Notes Collateral Agent has a senior lien or security
interest.
1.17
“Notes
Collateral
Agent” means Alexandra in its capacity as collateral agent pursuant to
the Note Pledge Agreement and the other applicable Noteholder Agreements,
and
its successors and assigns including any replacement or successor trustee
or
agent or any additional trustee or agent.
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1.18
“Paid in Full” means, in the case of the Moriah Claim, the
aggregate outstanding, unpaid amount of the Moriah Claim has been paid in
full
in cash and all commitments to make loans or extend other financial
accommodations have terminated and, in the case of the Noteholder Claim,
the
aggregate outstanding unpaid amount of the Noteholder Claim has been paid
in
full in cash and all commitments to make loans or extend other financial
accommodations have terminated. If after receipt of any payment of,
or proceeds of collateral applied to the payment of, either any Moriah Claim
or
Noteholder Claim, as the case may be, any of the Creditors is required to
surrender or return such payment or proceeds to any person for any reason,
then
the Moriah Claim or Noteholder Claim as applicable, intended to be satisfied
by
such payment or proceeds shall be reinstated and continue as if such payment
or
proceeds had not been received by such Creditor, as the case may
be. Notwithstanding anything to the contrary contained herein, for
purposes of this definition, the Moriah Claim shall not include any amount
of
the Moriah Claim in excess of the Maximum Moriah Debt.
1.19
“Party” means Moriah or the Notes Collateral
Agent.
1.20
“Person”
or
“person” means, as applicable, any individual, sole
proprietorship, partnership, corporation, limited liability company, limited
liability partnership, partnership, business trust, unincorporated association,
joint stock corporation, trust, joint venture or other entity or any government
or any agency or instrumentality or political subdivision thereof.
1.21
“Post-Petition Interest” means interest at the contract rate
under the Moriah Loan Agreements or the Noteholder Agreements, as applicable,
accruing subsequent to the filing of any Insolvency Proceeding as to any
Loan
Party whether or not such interest is an allowable claim in any such Insolvency
Proceeding.
1.22
“Security Documents” means, collectively, the Noteholder
Agreements and the Moriah Loan Agreements.
2.1. Lien
Priorities. Notwithstanding (a) the date, manner or order of
filing, recordation, or perfection of the security interests or liens granted
in
favor of Moriah and the Notes Collateral Agent, (b) any provisions of the
UCC,
or any applicable law or decision, (c) the provisions of the Moriah Loan
Agreements, Noteholder Agreements or any contract between any of the Creditors
on one hand, and the Borrower or any affiliate thereof, on the other hand,
or
(d) whether either Moriah or the Notes Collateral Agent holds possession
of all
or any part of the Collateral, the following, as between Moriah and the Notes
Collateral Agent, shall be the relative priority of the security interests
and
liens of Moriah and the Notes Collateral Agent in the Collateral:
(a) Moriah
shall have a first and prior security interest to the extent set forth herein
in
all Accounts and Inventory as defined in the Section 9-102 of the
UCC. The Notes Collateral Agent shall have a second and subordinate
security interest in the foregoing property and interests in such property;
provided, that, any amount of the Moriah Claim in excess of the Maximum
Moriah Debt at any time outstanding (together with the interest on such excess)
shall not be entitled to the benefit of the priority of the security interest
of
Moriah provided for in this Section 2.1(a).
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(b) The
Notes Collateral Agent shall have a first and prior security interest in
the
remainder of the Collateral that is the subject of the Noteholder Agreements
and
Moriah shall have a second and subordinate security interest in such Notes
Collateral whether now owned or hereafter created by any Loan
Party.
Neither
Moriah nor the Notes Collateral Agent shall contest the validity, perfection,
priority or enforceability of any lien or security interest heretofore granted
to the other Party or granted in connection herewith or contemplated
hereby. Notwithstanding any failure of a Party to perfect its
security interests in any Collateral or any other defect in any security
interests or obligations owing to such Party, the priority and rights as
between
the parties hereto shall be as set forth herein.
2.2. Distribution
of Proceeds of Collateral.
(a) No
Enforcement Period: Except as provided in Section 2.2(b)
below (with respect to distribution of proceeds of Collateral during an
Enforcement Period):
(i) All
realizations upon and proceeds of Moriah Senior Collateral shall be paid
to
Moriah for application to the Moriah Claim, with any residual proceeds after
satisfaction of the Moriah Claim being paid to the Notes Collateral Agent
for
the benefit of the Noteholders.
(ii) All
realizations upon and proceeds of Noteholder Senior Collateral shall be paid
to
the Notes Collateral Agent for application to the Noteholder Claim, with
any
residual proceeds after satisfaction of the Noteholder Claim being paid to
Moriah.
(b) During
Enforcement Period: During any Enforcement Period, all proceeds
of Collateral shall be distributed in accordance with the following
procedure:
(i) All
realizations upon and proceeds of Moriah Senior Collateral shall be applied
to
the Moriah Claim. After the Moriah Claim is Paid in Full and the
Moriah Loan Agreements are terminated and fully paid or otherwise satisfied,
any
remaining proceeds of the Moriah Senior Collateral shall be applied to the
Noteholder Claim.
(ii) All
realizations upon and proceeds of Noteholder Senior Collateral shall be applied
to the Noteholder Claim. After the Noteholder Claim is Paid in Full
and the Noteholder Agreements are terminated and fully paid or otherwise
satisfied, any remaining proceeds of the Noteholder Senior Collateral shall
be
applied to the Moriah Claim.
(iii) After
the Moriah Claim and the Noteholder Claim have been paid in full in cash
and all
commitments to make loans or extend other financial accommodations have
terminated, the balance of the realizations upon and proceeds of the Collateral,
if any, shall be paid to the respective Loan Party or as otherwise required
by
applicable law.
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(c) Payments
Held in Trust. Should any payment or distribution be received by
a Party that is not permitted to receive and retain such payment or distribution
pursuant to the terms hereof, such Party shall receive and hold the same
in
trust, as trustee, for the Party entitled to receive and retain such payment,
and shall forthwith deliver the same to such Party in precisely the form
received (except for endorsement or assignment where necessary), for application
to the Claim of such Party and, until so delivered, the recipient shall hold
the
same in trust as the property of such Party entitled to the same. If
a Party obligated to make an endorsement or assignment pursuant to the
provisions of this Section fails to make any such endorsement or assignment,
the
permitted recipient of such payment or distribution, or any of its officers
or
employees, is hereby irrevocably authorized to make the same.
2.3. Enforcement
Actions. Each of Moriah and the Notes Collateral Agent
agrees not to commence or take any Enforcement Action until an Enforcement
Notice has been given by such Enforcing Party to the other
Party. Subject to the foregoing, Moriah and the Notes Collateral
Agent agree that during an Enforcement Period:
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(a)
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Moriah
may, at its option, take and continue any Enforcement Action with
respect
to Moriah Senior Collateral and realize thereon, without the prior
written
consent of the Notes Collateral Agent, provided that during any
Enforcement Period with respect to the Noteholder Senior Collateral,
Moriah shall not commence or take any Enforcement Action or realize
upon
the Noteholder Senior Collateral without the Notes Collateral Agent's
prior written consent.
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(b)
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Subject
to the standstill period described in Section 2.3(e) below, the
Notes
Collateral Agent may, at its option, take and continue any Enforcement
Action with respect to the Noteholder Senior Collateral and realize
thereon without the prior written consent of Moriah, provided that
during
any Enforcement Period with respect to the Moriah Senior Collateral,
the
Notes Collateral Agent shall not commence or take any Enforcement
Action
or realize upon any of the Moriah Senior Collateral without Moriah's
prior
written consent. In furtherance and not in limitation of the foregoing,
during an Enforcement Period, the Notes Collateral Agent shall
not take
any action to enforce its rights under the Lockbox Agreement, whether
pursuant to Section 2 thereof or
otherwise.
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(c)
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If
both Moriah and the Notes Collateral Agent elect to proceed with
Enforcement Actions, then each shall proceed with the Enforcement
Action
of any security interests in or liens on any Collateral in which
it has a
senior lien or security interest, as described in and provided
by
Section 2.1, without prejudice to the other Party to join in any
proceedings.
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(d)
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Each
Enforcing Party shall so notify the other Party at such time as
the
Enforcing Party's Claim is Paid in
Full.
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(e)
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Notwithstanding
anything herein to the contrary, but subject to the proviso at
the end of
this paragraph, the Notes Collateral Agent agrees that, during
the first
five (5) days of an Enforcement Period (the “Standstill Period”), it shall
not take any action to realize on the Noteholder Senior Collateral,
so as
not to impair the collection by Moriah of Borrower’s outstanding accounts
receivable during that period; provided, however, that the
Notes Collateral Agent shall be entitled to take such action as
it deems
necessary in its sole discretion to (i) protect its secured position
during the Standstill Period, (ii) protect its interest from claims
or
liens of third parties or governmental authorities, or (iii) preserve
the
Noteholder Senior Collateral from deterioration or
diminishment.
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2.4. Accountings. Each
of Moriah and the Notes Collateral Agent agree upon the occurrence of any
Enforcement Action, to render accountings to the other, upon reasonable request
of the other, giving effect to the application of realizations upon and proceeds
of Collateral as hereinbefore provided.
2.5. Notices
of Defaults. Moriah and the Notes Collateral Agent agree to
give to the other copies of any notice of the occurrence of an Event of Default,
respectively, simultaneously with the sending of such notice to the applicable
Loan Party, but the failure to give or forward any such notice shall not
affect
the validity of such notice, create a cause of action against the Party failing
to give such notice, or create any claim or right on behalf of the other
Party
or any third party. The sending or receipt of such notice shall not
obligate the recipient to cure such Event of Default.
2.6. Agency
for Perfection. Moriah and the Notes Collateral Agent each
hereby appoint each other as agent for purposes of perfecting their respective
security interests and liens in the Collateral. To the extent that
either Party obtains possession of Collateral in which the other Party has
a
senior priority under the terms hereof, the Party having possession shall
notify
the other Party of such fact and shall deliver such Collateral to the Party
having the senior priority upon request of such Party. Each Party
shall be a bailee for the other Party with respect to Collateral in such
Party's
possession. If directed by a Loan Party, the bailee Party shall,
after the Claim of such bailee Party has been Paid in Full, deliver the
Collateral in its possession to the other Party.
2.7. UCC
Notices. In the event that Moriah or the Notes Collateral
Agent shall be required by the UCC or any other applicable law to give notice
to
the other of intended disposition of Collateral, such notice shall be given
in
accordance with Section 3.8 hereof, and five (5) days' notice shall be
deemed to be commercially reasonable.
2.8. Information
Sharing. Upon the occurrence and continuance of an Enforcement Period,
in the event that either Moriah or the Notes Collateral Agent shall, in
connection with any Enforcement Action, receive possession or control of
any
books and records which contain information identifying or pertaining to
any of
the property of any Loan Party in which the other Party has been granted
a lien,
it shall notify the other Party that it has received such books and records
and
shall, as promptly as practicable thereafter, make available to the other
Party
duplicate copies of such books and records in the same form as the
original. All reasonable expenses incurred by either Moriah or the
Notes Collateral Agent in performing its obligations under this paragraph
shall
be borne by the Loan Parties and shall constitute indebtedness under the
respective Party's agreements with the Loan Parties. The failure of
either Party to share information shall not create a cause of action against
the
Party failing to share information or create any claim on behalf of any Loan
Party or any third party.
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2.9. Obligations
of the Loan Parties Unconditional. Nothing contained herein
is intended to or shall increase or impair the obligations, liabilities and
indebtedness of the Loan Parties to pay the Claims as and when the same shall
become due and payable in accordance with the terms of the Moriah Loan
Agreements and the Noteholder Agreements, as applicable, or to affect the
relative rights of the Loan Parties and creditors of the Loan Parties other
than
the Creditors.
2.10. Continuing
Obligations. This Agreement shall be irrevocable and shall
continue in effect until each Claim has been Paid In Full. This is a
continuing agreement and each Party may continue, at any time and without
notice
to the other Party, to extend credit to or for the benefit of the Loan Parties
on the faith hereof.
2.11. Certain
Waivers.
(a) The
Notes Collateral Agent acknowledges that Moriah has not made any warranties
or
representations with respect to the due execution, legality, validity,
completeness or enforceability of the Moriah Loan Agreements or the
collectibility of the Moriah Claim.
(b) Each
of the Notes Collateral Agent and Moriah shall be entitled to manage and
supervise its financial arrangements with each Loan Party in accordance with
its
usual practices, modified from time to time as it deems appropriate under
the
circumstances, without affecting the validity or enforceability of this
Agreement.
(c) Moriah
shall have no liability to the Notes Collateral Agent for, and the Notes
Collateral Agent hereby waives any claim which the Notes Collateral Agent
may
now or hereafter have against Moriah arising out of any and all actions which
Moriah, in good faith, takes or omits to take (including, without limitation,
actions with respect to the creation, perfection or continuation of liens
or
security interests in any existing or future Collateral, actions with respect
to
the occurrence of a default or event of default, actions with respect to
the
foreclosure upon, sale, release, or depreciation of, or failure to realize
upon,
any of the Collateral and actions with respect to the collection of any claim
for all or any part of the Noteholder Claim from any account debtor, guarantor
or any other person) with respect to and in accordance with any Moriah Loan
Agreements or any other agreement related thereto or to the collection of
the
Moriah Claim or the valuation, use, protection or release of the Collateral,
so
long as any such actions are taken in a manner consistent with the terms
of this
Agreement or any election of the application of Section 1111(b)(2) of the
Bankruptcy Code.
(d) Moriah
acknowledges that the Notes Collateral Agent has made no warranties or
representations with respect to the due execution, legality, validity,
completeness or enforceability of the Noteholder Agreements or the
collectibility of the Noteholder Claim.
(e) The
Notes Collateral Agent shall have no liability to Moriah for, and Moriah
hereby
waives any claim which Moriah may now or hereafter have against the Notes
Collateral Agent arising out of any and all actions which the Notes Collateral
Agent, in good faith, takes or omits to take (including, without limitation,
actions with respect to the creation, perfection or continuation of liens
or
security interests in any existing or future Collateral, actions with respect
to
the occurrence of a default or event of default, actions with respect to
the
foreclosure upon, sale, release, or depreciation of, or failure to realize
upon,
any of the Collateral and actions with respect to the collection of any claim
for all or any part of the Moriah Claim from any account debtor, guarantor
or
any other person) with respect to and in accordance with the Noteholder
Agreements or any other agreement related thereto or to the
collection of the Noteholder Claim or the valuation, use, protection or release
of the Collateral, so long as any such actions are taken in a manner consistent
with the terms of this Agreement or any election of the application of Section
1111(b)(2) of the Bankruptcy Code.
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2.12. Modifications
and Waivers. Any modification or waiver of any provision of
this Agreement, or any consent to any departure by either Party from the
terms
hereof, shall not be effective in any event unless the same is in writing
and
signed by Moriah and the Notes Collateral Agent, and then such modification,
waiver or consent shall be effective only in the specific instance and for
the
specific purpose given. Any notice to or demand on any Party in any
event not specifically required hereunder shall not entitle the Party receiving
such notice or demand to any other or further notice or demand in the same,
similar or other circumstances unless specifically required
hereunder. Each Loan Party hereby acknowledges and agrees that this
Agreement may be amended or otherwise modified without notice to or consent
by
any Loan Party.
2.13. Insurance. The
Party having a senior security interest or lien in the Collateral shall have,
subject to such Party’s rights under its agreements with the Loan Parties, the
sole and exclusive right, as against the other Party, to adjust settlement
of
such insurance policy in the event of any loss.
2.14 Effect
of Bankruptcy. This Agreement shall be and remain
enforceable notwithstanding any Insolvency Proceeding by or against the
Borrower.
3. Miscellaneous.
3.1. Representations,
Warranties and Covenants. Each Party represents, warrants
and covenants to the other that:
(a) except
as set forth herein, it has not subordinated, and agrees that it will not
subordinate at any time while this Agreement remain in effect, any right,
claim
or interest of any kind in or to the Collateral as to which such Party has
a
senior lien or security interest, and any subordination in violation of this
sub-paragraph shall be null and void;
(b) it
has not assigned or transferred any right, claim or interest of any kind
in or
to its Claim; and
(c) the
execution, delivery and performance by or on behalf of such Party has been
duly
authorized by all necessary action, corporate or otherwise, does not violate
any
provision of law, governmental regulation, or any agreement or instrument
by
which such Party is bound, and requires no governmental or other consent
that
has not been obtained.
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3.2. No
Benefit to Third Parties. The terms and provisions of this
Agreement shall be for the sole benefit of the Creditors and their respective
successors and assigns, and no other Person shall have any right, benefit,
priority or interest under or because of this Agreement.
3.3. Independent
Credit Investigations. Neither Party nor any of their
respective directors, officers, agents or employees shall be responsible
to any
other person for the solvency, financial condition or ability of any Loan
Party
to repay the Moriah Claim or the Noteholder Claim, or for statements of any
Loan
Party, oral or written, or for the validity, sufficiency or enforceability
of
the Moriah Claim or the Noteholder Claim, the Moriah Loan Agreements, the
Noteholder Agreements, or any liens or security interests granted by any
Loan
Party in connection therewith. Each of the Creditors has entered into
its respective financing agreements with Loan Parties based upon its own
independent investigation and makes no warranty or representation to the
other
Party with respect to matters identified or referred to in this
paragraph. If either Party, in its sole discretion, undertakes, at
any time or from time to time, to provide any such information to the other
Party, such information shall be given with no representation or warranty
of any
kind from such Person and such Person shall be under no obligation (a) to
provide any such information to any other Person at that time or to any Person
on any subsequent occasion or (b) to undertake any investigation not a part
of
its regular business routine.
3.4 Amendments
to Financing Arrangements or to this Agreement. Moriah and
the Notes Collateral Agent shall each endeavor to notify the other Party
of any
material amendment or modification of the Moriah Loan Agreement or the
Noteholder Agreements, respectively, but the failure to do so shall not create
a
cause of action against the Party failing to give such notice or create any
claim or right on behalf of the other Party. Moriah and the Notes
Collateral Agent shall, upon request of the other Party, provide copies of
all
such modifications or amendments and copies of all other documentation relevant
to the Collateral.
3.5. Marshaling
of Assets. The Notes Collateral Agent hereby waives any and
all rights to have the Moriah Senior Collateral, or any part thereof, marshaled
upon any foreclosure of any of Moriah's liens thereon or with respect to
any
other Enforcement Action by Moriah. Moriah hereby waives any and all
rights to have the Noteholder Senior Collateral, or any part thereof, marshaled
upon any foreclosure of the Notes Collateral Agent's liens thereon or with
respect to any other Enforcement Action by the Notes Collateral
Agent. If any Claim is now or hereafter secured by collateral other
than the Collateral described hereunder, the Party holding such collateral
shall
have no obligation to marshal such collateral before enforcing its rights
in the
Collateral hereunder, and the other Party shall have no rights hereunder
to
share or participate in any proceeds of such other collateral. Each
Party shall have the right, subject to Section 2.3, to take Enforcement
Action against Collateral in such order, or in whole or in part, and subject
to
such conditions as such Enforcing Party determines in its sole
discretion.
3.6. Successors
and Assigns. This Agreement shall be binding upon and inure
to the benefit of the respective successors and assigns of each of the Parties,
but does not otherwise create, and shall not be construed as creating, any
rights enforceable by any Loan Party or any other person not a party to this
Agreement.
10
3.7. Agreement
Absolute. This Agreement shall be and remain absolute and
unconditional under any and all circumstances, and no act or omission on
the
part of any Party to this Agreement shall affect or impair the agreement
of the
other Party hereunder. Each of the Parties hereby authorizes the
other Party to (a) change any terms relating to such obligations of and Loan
Party to such Party or the loan agreements relating thereto as such other
Party
in its discretion may deem advisable and with Borrower’s agreement; (b) grant
renewals, increases or extensions of the time for payment of the Claim of
such
Party; (c) receive notes or other evidences of the obligations of the Loan
Parties to such other Party or renewals, increases or extensions thereof;
and
(d) take or omit to take any action for the enforcement of, or waive any
rights
with respect to, any obligation of the Loan Parties to such other Party without
invalidating or impairing any provision hereof. The Parties hereby
acknowledge and agree that this Agreement does not increase or expand the
obligations of Borrower under the respective Security Documents to which
the
Parties are party. Further, the Parties acknowledge that if Borrower,
in good faith, shall make a payment of Claims in a manner that is inconsistent
with the terms hereof, it shall have no liability to either Party therefor
as
long as Borrower cooperates with the Parties to rectify such
mistake.
3.8. Notice. All
notices, requests and demands to or upon the respective parties shall be
given
in writing and shall be deemed to have been duly given or made upon receipt
by
the receiving party. All notices, requests and demands are to be
given or made to the respective parties at the following addresses (or to
such
other addresses as either party may designate by notice in accordance with
the
provisions of this paragraph):
If
to
Moriah:
Moriah Capital, L.P.
000
Xxxxx Xxxxxx
Xxx
Xxxx, Xxx Xxxx
00000
Attention:
Xxxx
Xxxxxxxxxxx
With
a copy
to: Xxxxx
Xxxxxx Xxxxxxxx & Xxxxxx LLP
000
Xxxxxxxxx Xxxxxx
Xxxxx
0000
Xxx
Xxxx, Xxx Xxxx
00000
Attention:
Xxxx Xxxxx,
Esq.
If
to the Notes
Collateral
Agent: Alexandra
Global Master Fund Ltd.
c/o
Alexandra Investment
Management, LLC
000
Xxxxx Xxxxxx
00xx
Xxxxx
Xxx
Xxxx, Xxx Xxxx
00000
Attention:
Chief Legal
Officer
3.9. Relationship
of Parties. This Agreement is entered into solely for the
purposes set forth herein, and except as expressly provided herein, neither
Party assumes any other duties or responsibilities to the other regarding
the
financial condition of the Borrower or any other Party, or regarding any
collateral, or regarding any other circumstance bearing upon the risk of
nonpayment of the obligations of the Borrower under any of the agreements
hereinabove referred to. Each Party shall be responsible for managing
its banking investments and/or business relationships with the Borrower,
and
neither Party shall be deemed to be the agent of the other for any purpose
(except for the limited purpose set forth in Section 2.6) nor shall any party
hereto be deemed to be acting in concert with, or at the direction of, any
other
party.
11
3.10. Governing
Law. This Agreement shall be construed in accordance with,
and shall be governed by, the laws of the State of New York (without giving
effect to choice of law or conflict of law rules).
3.11. Consent
to Jurisdiction. Each Party hereby (a) irrevocably
submits and consents to the exclusive jurisdiction of the Supreme Court for
New
York County, State of New York, and the United State District Court for the
Southern District of New York with respect to any action or proceeding arising
out of this Agreement or any matter arising therefrom or relating thereto
and
(b) waives any objection based on venue or
forumnonconveniens with respect thereto.
3.12. Counterparts. This
Agreement may be executed in counterparts and by facsimile or other electronic
transmission, each of which when so executed, shall be deemed an original,
but
all of which together shall constitute but one and the same
instrument.
3.13 Headings. The
headings, captions and footers of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.
3.14 Severability. If
any provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement or the validity or
enforceability of this Agreement in any other jurisdiction.
3.15 Entire
Agreement; Benefit. This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter
hereof. There are no restrictions, promises, warranties, or
undertakings, other than those set forth or referred to herein. This
Agreement supersedes all prior agreements and understandings, whether written
or
oral, between the parties hereto with respect to the subject matter
hereof. This Agreement and the terms and provisions hereof are for
the sole benefit of only the Notes Collateral Agent, for the benefit of the
Noteholders, and Moriah and their respective successors and permitted
assigns.
3.16 Waiver. Failure
of any party to exercise any right or remedy under this Agreement or otherwise,
or delay by a party in exercising such right or remedy, or any course of
dealing
between the parties, shall not operate as a waiver thereof or an amendment
hereof, nor shall any single or partial exercise of any such right or power,
or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or exercise of any other right
or
power.
3.17 Construction.
The language used in this Agreement will be deemed to be the language chosen
by
the parties to express their mutual intent, and no rules of strict construction
will be applied against any party.
12
[Remainder
of this Page Intentionally Left Blank]
13
IN
WITNESS WHEREOF,
this Intercreditor Agreement has been duly executed as of the day and year
first
above written.
|
ALEXANDRA
GLOBAL MASTER FUND LTD.,
As
Notes Collateral Agent
|
|||
| By: ALEXANDRA INVESTMENT MANAGEMENT, LLC,As Investment Advisor | |||
|
|
By:
|
/s/ Xxxxxxx Xxxxxxxxx | |
| Name: Xxxxxxx Xxxxxxxxx | |||
| Title: Chairman and Chief Executive Office | |||
|
MORIAH
CAPITAL, L.P.
|
|||
|
By: Moriah
Capital Management, L.P.,
General
Partner
|
|||
|
By: Moriah
Capital Management, GP, LLC,
General
Partner
|
|||
|
|
By:
|
/s/ Alexandre Speaker | |
| Name: Alexandre Speaker | |||
| Title: General Partner | |||
Acknowledged
and agreed to by:
| EMAGIN CORPORATION | |||
|
|
By:
|
/s/ K.C. Park | |
|
Name:
K.C. Park
|
|||
|
Title: Interim
CEO
|
|||
14
ACKNOWLEDGMENT
The
undersigned hereby acknowledges and agrees to the foregoing terms and
provisions. By executing this Agreement, the undersigned agrees that
it will, together with its successors and assigns, be bound by the provisions
hereof as they relate to the relative rights of the Notes Collateral Agent
and
Moriah as between them. The undersigned further agrees that: (i) the terms
of
this Agreement shall not give the undersigned any substantive rights vis-a-vis
either the Notes Collateral Agent, the Noteholders or Moriah, (ii) it does
not
and will not receive any right, benefit, priority or interest under or because
of the existence of this Agreement, (iii) it will execute and deliver such
additional documents and take such additional action as may be necessary
or
desirable in the opinion of any Creditor to effectuate the provisions and
purposes of this Agreement and (iv) this Agreement may be amended or
supplemented from time to time without notice to, or the consent of, the
undersigned.
If
either
Moriah or the Notes Collateral Agent shall enforce its rights or remedies
in
violation of the terms of this Agreement, the undersigned agrees that it
shall
not use such violation as a defense to any Enforcement Action by either Moriah
or the Notes Collateral Agent nor assert such violation as a counterclaim
or
basis for set-off or recoupment against either Moriah, the Noteholders or
the
Notes Collateral Agent.
| EMAGIN CORPORATION | |||
|
Dated:
August 7,
2007
|
By:
|
/s/ K.C. Park | |
|
Name:
K.C. Park
|
|||
|
Title: Interim
CEO
|
|||
15
