FIRST AMENDMENT TO NOTE PURCHASE AGREEMENT
Exhibit 10.1
FIRST
AMENDMENT TO NOTE PURCHASE AGREEMENT
This
First Amendment (“First
Amendment”),
dated
as of March 28, 2007 (the “Amendment
Date”),
is to
the Note Purchase Agreement, dated July 21, 2006 (including the Annexes,
Schedules and Exhibits thereto, the “Stillwater
NPA”),
between eMagin Corporation, a Delaware corporation with headquarters located
at
00000 X.X. 0xx Xxxxxx, Xxxxx 0000, Xxxxxxxx, Xxxxxxxxxx 00000 (the “Company”),
and
Stillwater LLC, a Delaware limited liability company having its place of
business at 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (“Stillwater”
or
“Buyer”).
W
I T N E S S E T H :
WHEREAS,
the Company and Stillwater have entered into the Stillwater NPA;
WHEREAS,
pursuant to Section 2(a)(ii) of the Stillwater NPA, Stillwater is irrevocably
bound to purchase the Note and December Closing Date Warrant so long as the
conditions to closing set forth in Section 7 of the Stillwater NPA have been
satisfied by the Company; and
WHEREAS,
due to the Company’s failure to satisfy the closing condition set forth in
Section 7(b) of the Stillwater NPA because of the Company’s inability to satisfy
Sections 4(c) and 4(o) of the Stillwater NPA, the Company and Stillwater desire
to amend the Stillwater NPA by this First Amendment.
NOW,
THEREFORE, in consideration of the mutual covenants herein contained and for
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the Parties hereto hereby agree as follows:
A. Definitions.
All
capitalized terms used herein without definition will have the same respective
meanings as provided in the Stillwater NPA.
B. Amendment.
The
Stillwater NPA is hereby amended as follows:
1. Section
1(c).
The
definition of “Closing Date” contained in Section 1(c) of the Stillwater
NPA is hereby deleted in its entirety and replaced by the following new
definition:
“
“Closing Date” means five (5) Business Days after the Amendment
Date.”
2. Section
4(o).
Section
4(o) of the Stillwater NPA is hereby deleted in its entirety and replaced by
the
following new Section 4(o) of the Stillwater NPA:
“(o) Conduct
of Business; Regulatory Permits.
Neither
the Company nor any Subsidiary is in violation of any term of or in default
under its Certificate of Incorporation, or its Bylaws. Neither the Company
nor
any Subsidiary is in violation of any judgment, decree or order or any statute,
ordinance, rule or regulation applicable to the Company or any Subsidiary which
violation could have a Material Adverse Effect, and neither the Company nor
any
Subsidiary will conduct its business in violation of any of the foregoing,
except for possible violations which could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. Without
limiting the generality of the foregoing and except as set forth on Schedule
4(c), the Company is not in violation of any of the rules, regulations or
requirements of the AMEX and has no knowledge of any facts or circumstances
that
would be likely to lead to delisting or suspension of the Common Stock by the
AMEX in the future. Since December 31, 2005, (i) the Common Stock has been
listed on the AMEX, (ii) trading in the Common Stock has not been suspended
by
the SEC or the AMEX and (iii) the Company has received no communication, written
or oral, from the SEC or the AMEX regarding the suspension or delisting of
the
Common Stock from the AMEX. The Company and the Subsidiaries possess all
certificates, authorizations and permits issued by the appropriate federal,
state or foreign regulatory authorities necessary to conduct their respective
businesses, except where the failure to possess such certificates,
authorizations or permits could not reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect, and neither the Company nor
any
Subsidiary has received any notice of proceedings relating to the revocation
or
modification of any such certificate, authorization or permit.
3. Section
7(i).
Section
7(i) of the Stillwater NPA is hereby deleted in its entirety and replaced by
the
following new Section 7(i) of the Stillwater NPA:
“(i) On
the
Closing Date, (i) trading in securities on the New York Stock Exchange, Inc.,
the AMEX, Nasdaq, the Nasdaq Capital Market, the Over-The-Counter Bulletin
Board, the Pink Sheets, LLC or any similar organization shall not have been
suspended or materially limited, (ii) a general moratorium on commercial banking
activities in the State of New York shall not have been declared by either
federal or state authorities, and (iii) the Company has obtained waivers from
all the noteholders of the Other Notes or has executed an additional Allonge
with the Majority Holders to amend Section 3.2 of the Note and Other Notes
to
provide that the Company maintain Cash and Cash Equivalents Balances of at
least
equal to $200,000 from April 1, 2007 through and including
May 15, 2007 and that subsequent to May 15, 2007 the Company
maintain Cash and Cash Equivalents Balances of at least equal to
$600,000.”
4. New
Schedule 4(c).
New
Schedule 4(c) of the Stillwater NPA, a copy of which is attached to and made
a
part of this First Amendment, is hereby added to the Stillwater
NPA.
5. Section
1.1(b) of Annex I.
The
definition of “Conversion Price” contained in Section 1.1(b) of Annex I of the
Stillwater NPA is hereby deleted in its entirety and replaced by the following
new definition “
“Conversion Price” means
$0.35, subject to adjustment as provided in Section 6.3.”
6. Section
1.1(b) of Annex I.
Subsection (a) of the definition of “Repurchase Event” contained in Section
1.1(b) of Annex I of the Stillwater NPA is hereby deleted in its entirety and
replaced by the following new subsection:
“(a) The
Common Stock ceases to be traded on the AMEX and is not listed for trading
on
the Nasdaq, the Nasdaq Capital Market, the NYSE, the Over-The-Counter Bulletin
Board, the Pink Sheets, LLC or any similar organization;”
7. Section
3.2 of Annex I.
The
first sentence of Section 3.2 of Annex I of the Stillwater NPA is hereby
deleted in its entirety and replaced in its entirety by the following new
sentence:
“The
Company shall at all times maintain Cash and Cash Equivalents Balances at least
equal to $600,000; provided that the Company must maintain Cash and Cash
Equivalent Balances of $200,000 from April 1, 2007 through and
including May 15, 2007. Subsequent
to May 15, 2007,
the
Company must maintain Cash and Cash Equivalents Balances of at least equal
to
$600,000.”
8. Section
4.1(j) of Annex I.
Section
4.1(j) of Annex I to the Stillwater NPA is hereby deleted in its entirety and
replaced by the following new Section 4.1(j) of Annex I to the Stillwater
NPA:
“(j) Delisting
of Common Stock.
The
Common Stock shall cease to be listed on any of Nasdaq Capital Market, Nasdaq,
the NYSE, the AMEX, the Over-The-Counter Bulletin Board, the Pink Sheets, LLC
or
any similar organization;”
9. Section
1(c) of Annex II.
The
definition of “Purchase Price” contained in Section 1(c) of Annex II of the
Stillwater NPA is hereby deleted in its entirety and replaced by the following
new definition:
“
“Purchase Price” means $0.48.”
C. Continuing
Rights.
Except
as expressly provided in this First Amendment, the Stillwater NPA and all
provisions thereof in effect as of the date hereof will continue in full force
and effect without any modification or amendment, including, without limitation,
the following rights:
1. The
Collateral Agent will have a first priority perfected security interest in
the
Collateral for the ratable benefit of the holders of the Other Notes and, when
issued by the Company to the Buyer, this Note;
2. The
obligations of the Company under the Note shall rank in right of payment on
parity with all the Other Notes;
3. The
Note
is entitled to the benefits of the Security Agreements and the Lockbox
Agreement; and
4. The
Conversion Shares and Warrant Shares have the registration rights set forth
in
Section 8 of the Stillwater NPA.
D. Company
Representation.
In
addition to the representations and warranties of the Company contained in
the
Transaction Documents, the Company represents and warrants that the below
representations are true and correct as of the date hereof and shall be true
and
correct on the Closing Date as if given on and as of the Closing
Date:
1. No
event
has occurred that (1) would constitute an Event of Default in the Other
Notes or which, with the giving of notice or the passage of time, or both,
would
constitute an Event of Default shall have occurred and be continuing or
(2) would constitute a Repurchase Event in the Other Notes or which, with
the giving of notice or the passage of time, or both, would constitute a
Repurchase Event shall have occurred and be continuing.
2. The
Company anticipates that as of the Closing Date and until May 15, 2007
it will be able to maintain Cash and Cash Equivalents Balances of at least
equal
to $200,000.
3. The
Company has executed an additional Allonge with the Majority Holders to amend
Section 3.2 of the Note and Other Notes to provide that the Company maintain
Cash and Cash Equivalents Balances of at least equal to $200,000 from
April 1, 2007 through and including May 15, 2007 and that
subsequent to May 15, 2007 the Company maintain Cash and Cash Equivalents
Balances of at least equal to $600,000.
E. Miscellaneous.
1. On
and
after the date hereof, each reference in the Stillwater NPA to “this Agreement”,
“hereof”, “herein”, “herewith”, “hereunder” and words of similar import will,
unless otherwise stated, be construed to refer to the Stillwater NPA as amended
hereby. No reference to this First Amendment need be made in any instrument
or
document at any time referring to the Stillwater NPA, a reference to the
Stillwater NPA in any such instrument or document to be deemed to be a reference
to the Stillwater NPA as amended hereby.
2. This
First Amendment may be executed in counterparts, each of which when so executed
and delivered will constitute an original, and all of which together will
constitute one and the same instrument. A telephone line facsimile transmission
of this Stillwater NPA bearing a signature on behalf of a party hereto shall
be
legal and binding on such party.
3. In
the
event of any conflict between this First Amendment and (i) the Stillwater
NPA,(ii) the Note, or (iii) the Warrant, the terms of this First Amendment
will
control in all cases.
4. This
First Amendment will come into force immediately upon the Amendment
Date.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
IN
WITNESS WHEREOF, the Parties have executed this First Amendment by their duly
authorized representatives effective the date first written above.
|
EMAGIN
CORPORATION
|
STILLWATER
LLC
|
|
By:Xx.
X.X. Xxxx
Name:
Xx. X.X. Xxxx
Title:
Interim Chief Executive Officer and
President
|
By:
Xxxxxxxx X.X. Xxxxxxx
Name:
Xxxxxxxx X.X. Xxxxxxx
Title:
President
|
Acknowledged
and Consented to By:
ALEXANDRA
GLOBAL MASTER FUND LTD.,
as
Collateral Agent and holder of $3,000,000 of Other Notes
By: ALEXANDRA
INVESTMENT MANAGEMENT, LLC,
ALEXANDRA INVESTMENT MANAGEMENT, LLC,
as
Investment Manager
By:
Xxxxxxx Xxxxxxxxx
Name:
Xxxxxxx Xxxxxxxxx
Title:
President
RAINBOW
GATE CORPORATION,
as
holder
of $700,000 of Other Notes
By:
Xxxxxxxx X.X. Xxxxxxx
Name:
Xxxxxxxx X.X. Xxxxxxx
Title:
Investment Manager
GINOLA
LIMITED,
as
holder
of $800,000 of Other Notes
By:
/s/
Xxxxxx X. Xxxxxxxxxx
Name:
Xxxxxx X. Xxxxxxxxxx
Title:
Director
Schedule
4(c)
Representations,
Warranties, Covenants, Etc. of the Company
1. On
October 9, 2006, the Company received a notice letter from AMEX stating that
the
Company does not meet certain of the AMEX’s continued listing standards as set
forth in Part 10 of the AMEX Company Guide (“AMEX Guide”) and that the Company
has become subject to the continued listing evaluation and follow-up procedures
and requirements of Section 1009 of the AMEX Guide. Additionally, pursuant
to a
review by AMEX of the Company’s 10-Q for the three and six months ended June 30,
2006, AMEX determined that the Company is not in compliance with Sections
1003(a)(ii) and 1003(a)(iii) of the AMEX Guide.
2. On
January 8, 2007, the Company received notice from the staff of the AMEX
indicating that it intends to strike the Company’s common stock from listing on
AMEX by filing a delisting application with the Securities and Exchange
Commission. In its letter, AMEX stated that it has determined that the Company
has failed to comply with certain continued listing standards in that it does
not meet the exchange’s stockholders equity requirements as set forth above. In
addition, the Company failed to pay certain listing fees. The Company intends
to
appeal AMEX’s determination by requesting a hearing in accordance with
appropriate procedures as outlined by the AMEX Guide, and will request AMEX’s
approval to continue trading during the appeal process. If unsuccessful on
appeal, the Company intends to continue to trade on the Over-the-Counter
Bulletin Board.
3. On
March
1, 2007, the Company received notice from the AMEX indicating that the AMEX
will
initiate the delisting process with respect to the Company’s common stock and
will suspend trading on March 12, 2007, in accordance with Part 12 of the
Company Guide. The Company is taking the necessary steps to have its common
stock traded on the Over-the-Counter Bulletin Board.
4. As
disclosed in the Company’s filings with the SEC, effective March 12, 2007,
the AMEX struck the Common Stock from listing on AMEX by filing a delisting
application with the SEC. As of March 12, 2007, the Company is trading on the
Over-the Counter Bulletin Board.
