AMENDMENT NO. 1 – LOAN AND SECURITY AGREEMENT
Exhibit
10.1
AMENDMENT
NO. 1 –
Amendment
No. 1, dated as of January 30, 2008 (“Amendment”), to
the Loan and Security Agreement, dated August 7, 2007 (the “Original Agreement” and, as
amended hereby, the “Agreement”) by and between
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"), and MORIAH CAPITAL, L.P., a
Delaware limited partnership with offices at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 (as further defined below, the "Lender"). Capitalized terms
used but not defined herein have the meanings given to them in the Original
Agreement.
R E C I T A L
S:
A. Borrower
has requested that Lender consent to certain changes in the Borrowing
Base.
B. Lender
has agreed to accommodate Borrower’s request on the terms set forth
herein.
The
parties agree as follows:
SECTION
1. AMENDMENTS
Section
1.1 Amendment to Section 1.9 of Original
Agreement. Section 1.9 of the Original Agreement (“Borrowing Base”) is hereby
amended and restated in its entirety as follows:
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“1.9
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“Borrowing Base” shall be
calculated at any time as the sum of (i) the product obtained by
multiplying the outstanding amount of Eligible Accounts, net of all taxes,
discounts, allowances and credits given or claimed, by ninety percent
(90%), plus (ii) the
product obtained by multiplying the outstanding amount of Eligible Foreign
Accounts, net of all taxes, discounts, allowances and credits given or
claimed, by seventy percent (70%), plus (iii) the lesser of (A) Six
Hundred Thousand Dollars ($600,000) or (B) the product(s) obtained by
multiplying fifty percent (50%) by the values of Eligible Inventory as
determined by Lender in good faith in its reasonably commercial judgment,
based on the lower of cost or
market.”
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Section
1.2 Amendment
to Section 1.22 of Loan Agreement. Section 1.22 of
the Loan Agreement (“Eligible
Accounts”) is hereby amended and restated in its entirety as
follows:
“1.22 “Eligible
Accounts” are accounts created by Borrower in the ordinary course of its
business which satisfy the following criteria:
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(1) such
accounts arise from bona fide completed transactions and have not remained
unpaid for more than ninety (90) days after the invoice date
thereof;
(2)
the amounts of the accounts reported to Lender are absolutely owing to Borrower
and do not arise from sales on consignment, guaranteed sales or other terms
under which payment by the account debtors may be conditional or
contingent;
(3) the
account debtor’s chief executive office or principal place of business is
located in the United States, unless payment of any such account debtor’s
accounts is backed by a letter of credit or credit insurance acceptable to, and
approved by, Lender in its sole discretion); provided, however, that,
notwithstanding the foregoing, as of a particular date (“Determination Date”), Eligible
Accounts shall include accounts created by Borrower in the ordinary course of
its business to an account debtor located outside the United States with whom
Borrower has conducted business on a regular basis prior to January 1, 2007 on
the condition that no account of such account debtor has remained unpaid for a
period exceeding ninety (90) days from the invoice date thereof during the
twenty-four (24) -month period immediately preceding the Determination Date, and
that otherwise satisfy the criteria of this Section 1.22 (such accounts referred
to as “Eligible Foreign
Accounts”);
(4) such
accounts do not arise from any unearned portions of fees derived from progress
xxxxxxxx, as determined by Lender in its sole and absolute discretion, or from
any retainages or xxxx and hold sales;
(5)
there are no contra relationships, setoffs, counterclaims or disputes existing
with respect thereto;
(6) the
goods giving rise thereto were not at the time of the sale subject to any Liens
except for Permitted Encumbrances, and such accounts are free and clear of all
Liens except for Permitted Encumbrances;
(7) such
accounts are not accounts with respect to which the account debtor or any
officer or employee thereof is an officer, employee or agent of or is affiliated
with Borrower, directly or indirectly, whether by virtue of family membership,
ownership, control, management or otherwise;
(8) such
accounts are not accounts with respect to which the account debtor is the United
States or any state or political subdivision thereof or any department, agency
or instrumentality of the United States, any state or political subdivision,
unless there has been compliance with the Assignment of Claims Act or any
similar state or local law, if applicable;
(9) Borrower
has delivered to Lender or Lender’s representative such documents as Lender may
have requested in connection with such accounts and Lender shall have received a
verification of such account, satisfactory to it, if sent to the account debtor
or any other obligor or any bailee;
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(10) there
are no facts existing or threatened which might result in any material adverse
change in the account debtor’s financial condition, except for the state of
facts in existence on March 27, 2007 that caused Borrower’s accountants, Xxxxxx
LLP, to issue a “going concern” qualification in their opinion of that date to
Borrower, as set forth in Borrower’s Annual Report on Form 10-K for the year
ended December 31, 2006;
(11) such
accounts owed by a single account debtor or its affiliates do not represent more
than thirty percent
(30%) of all otherwise Eligible Accounts (accounts excluded from Eligible
Accounts solely by reason of this subsection (11) shall nevertheless be
considered Eligible Accounts to the extent of the amount of such accounts which
does not exceed such percentage of all otherwise Eligible Accounts);
and
(12) such
accounts are not owed by an account debtor who is or whose affiliates are past
due upon other accounts owed to Borrower comprising more than fifty percent
(50%) of the accounts of such account debtor or its affiliates owed to
Borrower.”
SECTION
2. MISCELLANEOUS
Section 2.1 Prior
Agreements. This Amendment
shall completely and fully supersede all other and prior agreements and
correspondence (both written and oral) by and between Borrower and Lender
concerning the subject matter of this Amendment. Except as expressly
amended hereby, the Agreement shall remain in full force and
effect.
Section 2.2 Counterparts. This Amendment
may be executed in any number of counterparts, with the same effect as if all
the signatures on such counterparts appeared on one document. Each
such counterpart shall be deemed to be an original, but all such counterparts
together shall constitute one and the same instrument.
Section 2.3 Amendments. This
Amendment may not be amended, waived, modified, supplemented or terminated in
any manner whatsoever except by a written instrument signed by Borrower and
Lender.
Section 2.4 Binding
on Successors. This Amendment shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
permitted assigns, except that Borrower may not assign any of its rights or
obligations under this Amendment or the other Loan Documents to any Person
without the prior written consent of Lender.
Section 2.5 Invalidity. Any
provision of this Amendment that may be determined by a court of competent
jurisdiction to be prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
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Section 2.6 Section
or Paragraph Headings. Section and paragraph headings used
herein are for convenience only and shall not be construed as part of this
Amendment.
Section 2.7 Governing
Law. This Amendment shall be construed in accordance with, and
shall be governed by, the laws of the State of New York, including Section
5-1401 of the New York General Obligations Law.
Section 2.8 Construction. The
language in all parts of this Amendment and the other Loan Documents shall be
construed as a whole according to its fair meaning.
[SIGNATURE PAGE
FOLLOWS]
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IN WITNESS WHEREOF, this
Amendment No. 1 has been duly executed as of the day and year first above
written.
| EMAGIN CORPORATION | |||
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By:
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/s/ Xxxxxxx X. Xxxxxx | |
| Name: Xxxxxxx X. Xxxxxx | |||
| Title: Interim Chief Financial Officer | |||
| MORIAH CAPITAL, L.P. | |||
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By:
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Moriah Capital Management, L.P., General Partner | |
| By | Moriah Capital Management, GP, LLC,General Partner | ||
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By:
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/s/ Alexandre Speaker | |
| Name: Alexandre Speaker | |||
| Title: Managing Member | |||
[SIGNATURE
PAGE – AMENDMENT NO. 1 – LOAN AGREEMENT]
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