WARRANT ISSUANCE AGREEMENT
Exhibit
10.2
THIS
WARRANT ISSUANCE AGREEMENT (this “Agreement”) is made
and entered into as of January 30, 2008, 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, dated as of August 7, 2007 (as amended form time to time, the
“Loan
Agreement”).
RECITALS
WHEREAS,
the Company and the Lender are parties to a Loan Conversion Agreement, dated as
of August 7, 2007 (the “Loan Conversion
Agreement”), with respect to conversion of the Loan Indebtedness defined
therein;
WHEREAS,
the Company has requested that the Lender consent to the termination of the Loan
Conversion Agreement in consideration for, among other things, the issuance by
the Company to the Lender of the Warrant (as defined herein); and
WHEREAS,
the Warrant Shares (as defined herein) shall be subject to registration under
the Registration Rights Agreement, dated as of August 7, 2007, between the
Company and the Lender (as amended hereby, the “Registration Rights
Agreement”);
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 of Warrants; Termination of
Loan Conversion Agreement.
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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 is hereby issuing to Lender, and Lender agrees to acquire from
the Company, a five-year warrant to acquire 750,000 shares of
the Company’s common stock at an exercise price of $1.50 per share, in the
form annexed hereto as Exhibit A (the
“Warrant”).
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1.2
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The
parties hereby confirm that the Loan Conversion Agreement is terminated
effective as of the date hereof and is of no further force or effect, and
neither party shall have any further liability
thereunder.
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2. Closing;
Delivery.
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2.1
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Closing Obligations of
Company. On or prior to the date hereof, the Company shall have
taken and shall take all actions necessary to issue the Warrants to Lender
and to consummate the transactions contemplated hereby, including, without
limitation, delivery or causing to be delivered to Lender on the date
hereof the following:
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(i)
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The Warrant,
duly executed and delivered by the
Company;
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(ii)
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An
amendment to the Registration Rights Agreement described below;
and
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(iii)
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such
other certificates, documents, receipts and instruments as Lender or its
legal counsel may reasonably
request.
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2.2
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Closing Obligations of
Lender. On or prior to the date hereof, Lender shall
have taken and shall take all actions necessary for consummation by Lender
of the transactions contemplated
hereby.
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3. Registration of Warrant
Shares. The parties hereby agree that the Registration Rights Agreement
shall be deemed amended to the extent set forth below as the context indicates,
but shall otherwise shall remain in full force and effect as
follows:
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3.1
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Registrable
Securities. The Warrant Shares shall be “Registrable Securities”,
as defined in the Registration Rights
Agreement.
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3.2
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Registration Statement
–Warrant Shares. The Company shall file a Registration
Statement (as defined in the Registration Rights Agreement) for
the hares of common stock underlying the Warrant (the “Warrant
Shares”) no later than thirty (30) days from the date hereof (such
deadline referred to as the “Warrant Shares Filing Date”), with an
Effectiveness Date (as defined in the Registration Rights Agreement) no
later than one hundred twenty (120) days from the Warrant Shares Filing
Date.
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3.3
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Cut
Back Provision. Notwithstanding anything contained herein
to the contrary, in the event that the Securities and Exchange Commission
(the “Commission”) limits the amount of (i) Registrable Securities (as
defined in the Registration Rights Agreement) or (ii) the number of
Warrant Shares that may be sold by selling security holders in a
particular Registration Statement, or the Commission takes the position
that the all or a portion of the Registrable Securities or Warrant Shares
cannot be registered, the Company may exclude from such registration
statement the minimum number of Registrable Securities and/or Warrant
Shares on behalf of the Lender as is necessary to comply with such
limitation by the Commission; provided that any such cutback shall be on a
ratable basis with other selling securityholders under such registration
statement to the extent not prohibited by any agreement to which the
Company is a presently a party. In such event the Company shall give the
Lender prompt notice of the number of the shares so
excluded. Further, and in addition to the foregoing, the Company will
not be liable for payment of any damages or penalties for any delay in
registration of the Registrable Securities and/or Warrant Shares in the
event that such delay is due to the fact that the Commission has limited
the amount of Registrable Securities and/or Warrant Shares that may be
included and sold by selling security holders in the Registration
Statement pursuant to Rule 415 promulgated under the 1933 Act or any other
basis.
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Without
limiting Lender’s rights under the Registration Rights Agreement, in the event
of any such cutback, the Company shall use its reasonable best efforts to
register the securities that were the subject of such cutback in accordance with
Section 7(e) (“Piggy-Back Registrations”) of the Registration Rights
Agreement.
4. Representations and
Warranties of the Company. The Company hereby represents and
warrants to Lender as follows:
4.1 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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4.2
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Capitalization; Voting
Rights.
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(i) 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”).
(ii) 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 Warrants, 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.
(iii) 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.
(iv) The
Warrant Shares have been duly and validly reserved for issuance. When
issued in compliance with the provisions of this Agreement and the Warrants, the
Warrant 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”.
4.3 Authorization; Binding
Obligations. All corporate action on the part of the Company
necessary for the authorization of the Warrants, and the performance of the
same, has been taken. The Warrants, when executed and delivered, will
be valid and binding obligations of the Company, enforceable against it in
accordance with their terms.
4.4 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.
4.5 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 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.
4.6 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.
4.7 Valid
Offering. Assuming the accuracy of the representations and
warranties of Lender contained in this Agreement, the offer, sale and issuance
of the Warrants and the Warrant 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.
4.8 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.
5. 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 taken, (c) upon execution and delivery, this Agreement
is the valid and binding obligation of Lender, enforceable in accordance with
its terms.
6. Covenants of the
Company. The Company covenants and agrees with Lender as
follows:
6.1 Reporting
Requirements. So long as the Warrant has not been exercised or
terminated, 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.
6.2 SEC
Reporting. So long as the Warrant has not been exercised or
terminated, 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.
6.3 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.
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.
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.
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]
IN
WITNESS WHEREOF, the parties hereto have executed this Warrant 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/ 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 | |||
EXHIBIT
A
FORM
OF WARRANT
[ATTACHED]
