SECURITIES ISSUANCE AGREEMENT
Exhibit
10.83
THIS
SECURITIES ISSUANCE AGREEMENT (this “Agreement”) is made
and entered into as of August 7, 2007, by and between eMagin Corporation, a
Delaware corporation (the “Company”), and Moriah
Capital, L.P., a Delaware limited partnership (the “Lender”).
Capitalized
terms not otherwise defined herein have the meaning set forth in that certain
Loan and Security Agreement by and between Lender, as lender, and the Company,
as borrower, of even date herewith (the “Loan
Agreement”).
RECITALS
WHEREAS,
the Company has authorized the issuance to Lender on the date hereof of shares
of the Company’s common stock, $0.001 par value per share (“Common Stock”), with
an aggregate market value on the Closing Date of $195,000, based on the closing
price of the Common Stock on the OTC Bulletin Board on the Closing Date (the
“Initial Issued
Shares”);
WHEREAS,
the Company wishes to issue the Issued Shares (as defined below) to
Lender;
WHEREAS,
the Company has authorized the issuance to Lender, pursuant to the terms of the
Loan Agreement, on the effective date of extension of the initial term of the
Loan (if so extended), Common Stock with an aggregate market value of $195,000
based on the average closing price of the Common Stock on the OTC Bulletin Board
or such other trading market which such Common Stock is then listed or traded,
for the ten (10) trading days preceding such effective date(the “Contingent Issued
Shares”) (the Contingent Shares, together with the Initial Issued Shares,
are referred to herein as the “Issued Shares”);
and
WHEREAS,
the issuances and other obligations and transactions described and contemplated
hereby are in partial consideration for Lender agreeing to enter into, perform
or accept, as applicable, the Loan Agreement and the other Loan
Documents;
NOW,
THEREFORE, in consideration of the foregoing recitals and the mutual promises,
representations, warranties and covenants set forth herein, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Issuance.
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1.1
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On
the date of execution of this Agreement, also known as the Closing Date,
the Company agrees to issue to Lender, and Lender agrees to acquire from
the Company, the Initial Issued
Shares.
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1.2
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On
the date of extension of the initial term of the Loan, also known as the
Extension Date, the Company agrees to issue to Lender, and Lender agrees
to acquire from the Company, the Contingent Issued Shares, the certificate
for which shares shall be delivered to Lender within five (5) days of such
date.
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2. Closing;
Delivery. (a) Closing Obligations of
Company. At the Closing Date, except as set forth below, the Company
shall have taken and shall take all actions necessary to issue the Issued Shares
to Lender and to consummate the transactions contemplated hereby, including,
without limitation, delivery or causing to be delivered to Lender the
following:
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(a)
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A
certificate for the Initial Issued Shares within five (5) days of the
Closing Date;
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(b)
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executed
originals, and delivery of, all of the Loan Documents;
and
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(c)
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such
other certificates, documents, receipts and instruments as Lender or its
legal counsel may request.
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(b) Closing Obligations of
Lender. At the Closing Date, Lender shall have taken and shall
take all actions necessary for its acquisition of the Initial Issued Shares, and
to consummate the transactions contemplated hereby.
3. Representations and
Warranties of the Company. The Company hereby represents and
warrants to Lender as follows:
3.1 Organization, Good Standing
and Qualification. Each of the Company and its Subsidiaries is
a corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization. Each of the Company and its
Subsidiaries has the corporate power and authority to own and operate its
properties and assets; to execute, deliver and perform or cause to be executed,
delivered and performed this Agreement ; and to carry on its business as
presently conducted.
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3.2
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Capitalization; Voting
Rights.
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(a) The
authorized and issued capital stock of the Company as of the date hereof is as
disclosed in the Company’s filings that are required by the Securities Act of
1933, as amended (the “Securities Act”) and
the Securities Exchange Act of 1934, as amended (the “Securities Exchange
Act”) (the “SEC
Reports”) to be filed with the Securities and Exchange Commission (“SEC”).
(b) Except as
disclosed in the SEC Reports, other than: (i) Common Stock reserved for issuance
under the Company’s stock option plans and (ii) the Issued Shares, there are no
outstanding options, warrants, rights (including, but not limited to, conversion
or preemptive rights and rights of first refusal), proxy or stockholder
agreements, or other arrangements or agreements of any kind for the purchase or
acquisition from the Company or its Subsidiaries, of any of their
securities. Neither the offer, issuance or sale of any of, or the
issuance of any of, the Issued Shares, nor the consummation of any transactions
contemplated hereby, will result in a change in the price or number of any
securities of the Company or its Subsidiaries authorized or issued.
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(c) All
issued and outstanding securities: (i) have been duly authorized and validly
issued and are fully paid and nonassessable and (ii) were issued in compliance
with all applicable state and federal laws.
(d) The
Issued Shares have been duly and validly reserved for issuance. When
issued in compliance with the provisions of this Agreement, the Issued Shares
will be validly issued, fully paid and nonassessable, and will be free of any
liens, charges, encumbrances, options, rights of first refusal, security
interests, claims, mortgages, pledges, charges, easements, covenants,
restrictions, (except as contained herein) obligations, or any other
encumbrances (including, without limitation, any conditional sale or other title
retention agreement or any lease in the nature thereof and any agreement to
grant or to permit or suffer to exist any of the foregoing) or third party
rights or equitable interests of any nature whatsoever or any Liens all of the
above shall be referred to herein as a “Lien”.
3.3 Authorization; Binding
Obligations. All corporate action on the part of the Company
necessary for the authorization of the Loan Documents, and the performance of
the same, has been taken or will be taken prior to the Closing
Date. The Loan Documents, when executed and delivered, will be valid
and binding obligations of the Company, enforceable against it in accordance
with their terms.
3.4 Title to Properties and
Assets; Liens, Etc. Except for Permitted Encumbrances, each of
the Company and each of its Subsidiaries has good and marketable title to its
properties and assets, and good title to its leasehold estates, in each case not
subject to any Liens.
3.5 No
Conflicts. Neither the Company nor any of its Subsidiaries is
in violation or default of (a) any term of its formation documents or by-laws or
(b) of any provision of any indebtedness for borrowed money, Contract any
mortgage, indenture, lease, license, agreement or contract (collectively, “Contracts”) or
judgment, order, writ, injunction, or decree (“Orders”). The
execution, delivery and performance of this Agreement and the Loan Documents
will not, with or without the passage of time or giving of notice, result in any
violation, or be in conflict with, or constitute a default under, any such term
or provision of indebtedness for borrowed money, Contract or Order, or result in
the creation of any Lien upon any of the securities, properties or assets of the
Company or any of its Subsidiaries, or the suspension, revocation, impairment,
forfeiture or nonrenewal of any licenses, permits, franchises, approvals,
consents, waiver, notices, authorizations, qualifications, concessions, or the
like.
3.6 Registration Rights and
Voting Rights. Except as disclosed in the Registration Rights
Agreement, neither the Company nor any of its Subsidiaries is presently under
any obligation, and neither the Company nor any of its Subsidiaries has granted
any rights, to register any of the Company’s or its Subsidiaries’
securities. Except as disclosed in any SEC Reports, to the Company’s
best knowledge, no stockholder of the Company or any of its Subsidiaries has
entered into any agreement with respect to the voting of equity securities of
the Company or any of its Subsidiaries.
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3.7 Valid
Offering. Assuming the accuracy of the representations and
warranties of Lender contained in this Agreement, the offer, sale and issuance
of the Issued Shares will be exempt from the registration requirements of the
Securities Act, and will have been registered or qualified (or are exempt from
registration and qualification) under the registration, permit or qualification
requirements of all applicable state securities laws.
3.8 SEC
Reports. The Company’s SEC Reports do not contain
any untrue statement of a material fact nor omit to state a material fact
necessary in order to make the statements contained herein or therein, in light
of the circumstances in which they are made, not misleading.
3.9 Fees; Brokers;
Finders. There are no fees, commissions or other compensation
due to any third party in connection with the Loan Documents. All
negotiations relative to the Loan Documents, and the transactions contemplated
thereby, have been carried on by the Company with Lender and without the
intervention of any other person or entity acting on behalf of the Company, and
in such manner as not to give rise to any claim against the Company or Lender
for any finder's fee, brokerage commission or like payment, and if any such fee,
commission or payment is payable, it shall be the sole responsibility of the
Company and the Company shall pay, and indemnify Lender for, the
same.
4. Representations and
Warranties of Lender. The Lender hereby represents and
warrants to the Company that (a) the Lender has the power and authority to
execute, deliver and perform this Agreement, (b) all partnership or corporate
action on Lender’s part required for the execution, delivery and performance of
this Agreement has been or will be taken on or prior to the Closing Date, (c)
upon execution and delivery, this Agreement will be valid and binding
obligations of Lender, enforceable in accordance with its terms, and (d) the
Lender will not engage in “short sales” of the issued and outstanding Common
Stock during the Term.
5. Covenants of the
Company. The Company covenants and agrees with Lender as
follows:
5.1 Reporting
Requirements. The Company and its Subsidiaries will timely
file with the SEC and state regulatory authorities all reports, documents,
information and other material required to be filed or disclosed
thereto.
5.2 Confidentiality. The
Company agrees that it will not disclose, and will not include in any public
announcement, the name of Lender or the terms of this Agreement other than as
permitted under the Loan Agreement or as required by law.
5.3 SEC
Reporting. The Company shall comply with all reporting
requirements under the Securities Exchange Act, including, but not limited to,
making available all required current information regarding the Company under
Rule 144(c) under the Securities Act, so as to enable Lender to effect resales
of the Issued Shares under Rule 144. The Company shall cooperate with
Lender in connection with all resales pursuant to Rule 144(d) and Rule 144(k)
and provide legal opinions necessary to allow such resales, provided the Company
and its counsel receive reasonably requested representations from Lender and
broker, if any.
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5.4 Indemnification. The
Company and its Subsidiaries agree, jointly and severally, to indemnify, hold
harmless, reimburse and defend Lender, and Lender’s partners, officers,
directors, agents, representatives, affiliates, members, managers, and
employees, against any claim, cost, expense, liability, obligation, loss or
damage (including, without limitations, reasonable legal fees) of any nature,
incurred by or imposed upon them which results, arises out of, or is based upon:
(a) any misrepresentation by the Company or any of its Subsidiaries, or breach
of any warranty by the Company or any of its Subsidiaries in this Agreement, or
in any exhibits or schedules attached hereto, and (b) any breach or default in
performance by Company or any of its Subsidiaries of the their obligations
hereunder.
6. Put
Option. The Company hereby grants to Lender an option (the
“Put Option”)
to sell all or any portion of the Issued Shares (the “Put Shares”) to the
Company for a total purchase price of $195,000, pro-rated for any portion
thereof (the “Put
Price”). The Put Option may be exercised with respect to any
amount that is equal to or less than the entire balance of the outstanding Put
Shares, at any time during the earlier to occur of the following Put Option
exercise periods (the “Put Period”): (a) the ten (10) Business Day period
commencing on the first anniversary hereof, or (b) the ten
(10) Business Day period commencing on the date which is nine (9) months after
the date that the registration statement for the registration of the Issued
Shares is declared effective by the SEC . If not exercised during the
Put Period, the Put Option shall terminate and shall be of no further force or
effect. The Put Option shall be exercisable by Lender’s delivery of
written notice to the Company (the “Put
Notice”). The Put Notice shall specify the date on which the
closing of the purchase of the Put Shares shall take place (the “Put Closing Date”),
which such date shall be no earlier than ten (10) days but no later than thirty
(30) days from the date of the Put Notice. On or before the Put
Closing Date, Lender will deliver to the Company the certificate(s) representing
the Put Shares (duly endorsed for transfer by Lender or accompanied by duly
executed stock powers in blank) and the Company shall tender to Lender the Put
Price in cash by wire transfer of immediately available funds to an account at a
bank designated by Lender. The Company and Lender acknowledge and
agree that the Company’s obligation to purchase the Issued Shares from Lender
pursuant to the Put Option is an Obligation secured by the Collateral and any
related guarantees under the Loan Documents, and for so long as the Put Option
is outstanding and, if exercised, the Put Price is not yet tendered, the
Lender’s right to receive the Put Price shall be secured by the
Collateral and any related guarantees under the Loan Documents.
Lender’s right to exercise the Put Option shall not be transferred or assigned
to any third party.
6.1 Notwithstanding
the foregoing, Lender shall have the right, but not the obligation, to
accelerate the exercise of the Put Option upon a Fundamental
Transaction (as defined in the Loan Agreement), as follows: The Company shall
send written notice of the proposed Fundamental Transaction (“Fundamental Transaction Notice”)
no later than thirty (30) days prior to the date of the proposed consummation of
the Fundamental Transaction, together with all relevant information relating
thereto, in form sufficient to enable Lender to make an informed decision as to
whether it should accelerate the Put Option. Within fifteen (15) days
of Lender’s receipt of the Fundamental Transaction Notice, Lender shall advise
the Company whether the Lender has elected to accelerate the exercise of the Put
Option. Lender’s failure to timely notify the Company of Lender’s
intention to accelerate the Put Option shall be deemed an intention to decline
to accelerate the Put Option.
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6.2 In
addition, notwithstanding the foregoing, Lender shall have the right, but not
the obligation, to accelerate the exercise of the Put Option following an Event
of Default under the Loan Documents (which acceleration right shall not be
waived if not exercised following a prior Event of Default), in which event the
Put Price shall be added to the Obligations under the Loan Agreement and secured
by the Collateral thereunder, and shall be immediately due and payable to
Lender.
6.3 If
any portion of the Note is converted into Common Stock pursuant to the Loan
Documents, the Put Option set forth hereinabove, if not terminated by its terms
herein, shall terminate.
7. Miscellaneous.
7.1 Notices. All
notices, requests and demands to or upon the respective parties hereto 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 the Company:
00000
X.X. 0xx
Xxxxxx
Xxxxx
0000
Xxxxxxxx,
Xxxxxxxxxx 00000
Attention: Xxxx Xxxxxxx
With a copy to:
Sichenzia Xxxx Xxxxxxxx Xxxxxxx
LLP
00 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X.
Xxxxxxxx, Esq.
If to Lender:
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.
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7.2 Amendment. Any
modification or amendment shall be in writing and signed by the parties hereto,
and any waiver of, or consent to any departure from, any representation,
warranty, covenant or other term or provision shall be in writing and signed by
each affected party hereto or thereto, as applicable.
7.3 Construction. No
provision of this Agreement shall be construed against or interpreted to the
disadvantage of any party hereto by reason of such party or its counsel having,
or being deemed to have, structured or drafted such provision.
7.4 Entire
Agreement. This Agreement contains the entire agreement of the
parties with respect to the subject matter hereof and supersedes all other
negotiations, representations, warranties, agreements and understandings, oral
or otherwise, between the parties with respect to the matters contained
herein.
7.5 Headings. Section
and paragraph headings are for convenience only and shall not be construed as
part of this Agreement.
7.6 Severability. Every
provision of this Agreement is intended to be severable. If, in any
jurisdiction, any term or provision hereof is determined to be invalid or
unenforceable, (a) the remaining terms and provisions hereof shall be
unimpaired, (b) any such invalidity or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such term or provision in any other
jurisdiction, and (c) the invalid or unenforceable term or provision shall, for
purposes of such jurisdiction, be deemed replaced by a term or provision that is
valid and enforceable and that comes closest to expressing the intention of the
invalid or unenforceable term or provision. If a court of competent
jurisdiction determines that any covenant or restriction, by the length of time
or any other restriction, or portion thereof, set forth in this Agreement is
unreasonable or unenforceable, the court shall reduce or modify such covenants
or restrictions to those which it deems reasonable and enforceable under the
circumstances and, as so reduced or modified, the parties hereto agree that such
covenants and restrictions shall remain in full force and effect as so
modified. In the event a court of competent jurisdiction determines
that any provision of this Agreement is invalid or against public policy and
cannot be so reduced or modified so as to be made enforceable, the remaining
provisions of this Agreement shall not be affected thereby, and shall remain in
full force and effect.
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7.7 Successors and
Assigns. All covenants, promises and agreements by or on
behalf of the parties contained in this Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and permitted assigns; provided, however, that nothing
in this Agreement, express or implied, shall confer on the Company the right to
assign any of its rights or obligations hereunder at any time.
7.8 Survival. All
covenants, agreements, representations and warranties made by the Company herein
or in any certificate, report or instrument contemplated hereby shall survive
any independent investigation made by Lender and the execution and delivery of
this Agreement, and such certificates, reports or instruments and shall continue
so long as any Obligations are outstanding and unsatisfied, applicable statutes
of limitations to the contrary notwithstanding.
7.9 No Waiver; Rights and
Remedies. A waiver of a breach of any term, covenant or
condition of this Agreement shall not operate or be construed as a continuing
waiver of such term, covenant or condition, or breach, or of any other term,
covenant or condition, or breach by such party. No failure to
exercise and no delay in exercising any right, remedy, or power hereunder shall
preclude any other or further exercise of any other right, remedy or power
provided herein or by law or in equity. Lender is entitled to
exercise all rights and remedies available to it at law or in equity in
connection with this Agreement. The rights and remedies of Lender
hereunder are several and cumulative at Lender’s discretion and may be exercised
at Lender’s discretion.
7.10 Governing Law;
Jurisdiction. This Agreement shall be governed by and
construed in accordance with the applicable laws pertaining in the State of New
York (without giving effect to New York's principles of conflicts of
law). The parties hereby (a) irrevocably submit and consent 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 and (b)
waive any objection based on venue or forum non conveniens with
respect hereto. In any such action or proceeding, the Company waives
personal service of the summons and complaint or other process and papers
therein and agrees that the service thereof may be made by mail directed to the
Company at its office set forth herein or other address thereof of which Lender
has received notice as provided herein, service to be deemed complete as
permitted under the rules of either of said Courts. Any such action
or proceeding commenced by the Company against Lender will be litigated only in
the New York Supreme Court for New York County, State of New York, and the
United States District Court for the Southern District of New York.
7.11 Counterparts. This
Agreement may be executed in counterparts and by facsimile or electronic
signature, each of which when so executed, shall be deemed an original, but all
of which shall constitute but one and the same instrument.
[SIGNATURE
PAGE FOLLOWS]
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IN
WITNESS WHEREOF, the parties hereto have executed this Securities Issuance
Agreement as of the date set forth in the first paragraph hereof.
| EMAGIN CORPORATION | |||
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By:
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/s/ | |
| Name | |||
| Title | |||
| MORIAH CAPITAL, L.P. | |||
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By:
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Moriah Capital Management, L.P., | |
| General Partner | |||
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By:
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Moriah Capital Management, GP, LLC, | |
| General Partner | |||
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By:
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/s/ | |
| Name | |||
| Title | |||
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