Exhibit 10.1

 

 

AMENDMENT AGREEMENT

Dated as of July 23, 2007

 

by and between

EMAGIN CORPORATION

and

[NAME OF INVESTOR]

 

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EMAGIN CORPORATION

AMENDMENT AGREEMENT

TABLE OF CONTENTS

     Page 1. Definitions.
1
 
2.
Amendments; Exchange.
1
 
(a)
Amendments.
1
 
(b)
Exchange.
1
3.
Amendments to Note Purchase Agreement.
1
4.
Representations and Warranties of the Company.
1
 
(a)
Organization and Authority.
1
 
(b)
Qualifications.
1
 
(c)
Agreement, Amended Transaction Documents.
1
 
(d)
Concerning the Shares and the Common Stock.
1
 
(e)
Non-contravention.
1
 
(f)
Approvals.
1
 
(g)
Absence of Certain Proceedings.
1
 
(h)
Information Provided.
1
 
(i)
Absence of Certain Changes.
1
 
(j)
Dilutive Effect.
1
 
(k)
No Undisclosed Events, Liabilities, Developments or Circumstances.
1
 
(l)
Absence of Rights Agreement.
1
 
(m)
Absence of Brokers, Finders, Etc.
1
 
(n)
SEC Filings.
1
5. Representations and Warranties of the Holder.
1
 
(a)
Authorization.
1
 
(b)
Acquisition Entirely for Own Account.
1
 
(c)
Accredited Investor.
1
6. Certain Covenants.
1
 
(a)
Press Releases.
1
 
(b)
Form 8-K; Limitation on Information and Holder Obligations.
1
 
(c)
SEC Registration Matters.
1
 
(d)
Certificate of Designations.
1
 
(e)
Certain Waivers.
1
 
(f)
Certain Acknowledgments.
1
7.
Effectiveness.
1
8.
Confirmation of Agreements; Entire Agreement.
1
9.
Miscellaneous.
1
 
(a)
Governing Law.
1
 
(b)
Counterparts.
1
 
(c)
Headings, etc.
1
 
(d)
Severability.
1
 
(e)
Amendments.
1
 
(f)
Waivers.
1
 
(g)
Notices.
1
 
(h)
Certain Expenses and Fees.
1
 
(i)
Survival.
1
 
(j)
Further Assurances.
1
 
(k)
Construction; Holder Status.
1

ANNEXES
         
Annex I
 
Form of Amended and Restated 8% Senior Secured Convertible Note due 2008
Annex II
 
Form of Amended and Restated Common Stock Purchase Warrant
Annex III
 
Form of Amendment No. 1 to Patent and Trademark Security Agreement
Annex IV
 
Form of Amendment No. 1 to Pledge and Security Agreement
Annex V
 
Form of Amendment No. 1 to Lockbox Agreement
Annex VI
 
Form of Certificate of Designation of Series A Senior Secured Convertible
Preferred Stock
Annex VII
 
Form of Press Release

2

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AMENDMENT AGREEMENT

THIS AMENDMENT AGREEMENT, dated as of July 23, 2007 (this “Agreement”), by and
between EMAGIN CORPORATION, INC., a Delaware corporation with headquarters
located at 10500 N.E. 8th Street, Suite 1400, Bellevue, Washington 98004 (the
“Company”), and [NAME OF HOLDER], a                                     located
at                   (the “Holder”).

W I T N E S S E T H:

WHEREAS, the Holder is the registered holder of one or more Notes (such
capitalized term and all other capitalized terms used herein have the respective
meanings provided in this Agreement) issued by the Company pursuant to the Note
Purchase Agreement;

WHEREAS, the Holder and the Company wish to amend and restate the Notes and the
Warrants, upon the terms and subject to the conditions of this Agreement; and

WHEREAS, the Holder and the Company wish to amend certain terms of the Note
Purchase Agreement, Pledge and Security Agreement, Patent and Trademark
Agreement and Lockbox Agreement as provided in this Agreement;

NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

1. Definitions.

(a) As used in this Agreement, the terms “Agreement”, “Company” and “Holder”
shall have the respective meanings assigned to such terms in the introductory
paragraph of this Agreement. Capitalized terms used in this Agreement and not
defined in this Agreement shall have the respective meanings provided in the
Note Purchase Agreement.

(b) 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 and of this Agreement.

(c) The following terms shall have the following meanings (such meanings to be
equally applicable to both the singular and plural forms of the terms defined):

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“AGMF” means Alexandra Global Master Fund Ltd., a British Virgin Islands
international business company.

“Amended Lockbox Agreement” means the Lockbox Agreement, as amended by Amendment
No. 1 to Lockbox Agreement.

“Amended Note” means the Amended and Restated 8% Senior Secured Convertible Note
due 2008 of the Company in the form of Annex I to this Agreement.

“Amended Patent and Trademark Security Agreement” means the Patent and Trademark
Security Agreement, as amended by Amendment No. 1 to Patent and Trademark
Security Agreement.

“Amended Pledge and Security Agreement” means the Pledge and Security Agreement,
as amended by Amendment No. 1 to Pledge and Security Agreement.

“Amended Security Agreements” means the Amended Pledge and Security Agreement,
the Amended Patent and Trademark Security Agreement and the Amended Lockbox
Agreement.

“Amended Warrant” means the Amended and Restated Common Stock Purchase Warrant
in the form of Annex II to this Agreement.

“Amendment Effective Date” means 5 p.m., New York City time, on July 23, 2007,
or such other date as mutually agreed by the parties hereto.

“Amendment No. 1 to Lockbox Agreement” means the Amendment No. 1 to Lockbox
Agreement by and between the Company, the Lockbox Agent and the Collateral Agent
in the form of Annex V to this Agreement.

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“Amendment No. 1 to Patent and Trademark Security Agreement” means the Amendment
No. 1 to Patent and Trademark Security Agreement by and between the Company and
the Collateral Agent in the form of Annex III to this Agreement.

“Amendment No. 1 to Pledge and Security Agreement” means the Amendment No. 1 to
Pledge and Security Agreement by and between the Company and the Collateral
Agent in the form of Annex IV to this Agreement.

“Amendment Transaction Documents” means the Note Purchase Agreement as amended
by this Agreement, this Agreement, the Amended Note, the Amended Warrant, the
Certificate Designations, the Amended Security Agreements and the other
agreements, instruments and documents contemplated hereby and thereby.

“Certificate of Designations” means the Certificate of Designations of Series A
Senior Secured Convertible Preferred Stock in the form of Annex VI to this
Agreement, as the same is filed with the Secretary of State of the State of
Delaware.

“Collateral Agent” shall have the meaning provided or to be provided in each
Amended Security Agreement.

“Effective Time” shall have the meaning provided in Section 7.

“Existing Registration Statement” means the Company’s Registration Statement on
Form S-3 (Registration No. 333-136748) ordered effective by the SEC on August
30, 2006.

“Note Purchase Agreement” means the Note Purchase Agreement (including the
Annexes, Schedules and Exhibits thereto), dated as of July 21, 2006, [as amended
on March 28, 2007] [Add to Stillwater Amendment Agreement only] (including the
Annexes, Schedules and Exhibits thereto) by and between the Company and the
original holder of the Note, including, without limitation, the Stillwater Note
Purchase Agreement.

“OTCBB” means the Over-The-Counter Bulletin Board.

“Other Amendment Agreements” shall have the meaning provided in Section 7(k).

“Other Amendment Transaction Documents” means the Other Note Purchase Agreement
as amended by the Other Amendment Agreements, the Other Amended Note, the Other
Amended Warrant, the Certificate Designations, the Amended Security
Agreements and the other agreements, instruments and documents contemplated
hereby and thereby.

“Other Amended Notes” shall have the meaning provided in the Amended Note.

“Other Amended Warrants” shall have the meaning provided in the Amended Note.

“Preferred Shares” means the shares of Series A Preferred Stock issued or
issuable upon conversion of up to 50% of the outstanding principal amount of the
Amended Notes.

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“SEC Reports” means the Company’s (1) Annual Report on Form 10-K for the fiscal
year ended December 31, 2006 (2) Quarterly Report on Form 10-Q for the quarter
ended March 31, 2007 and (3) Current Reports on Form 8-K filed with the SEC on
May 16, 2007, May 23, 2007 and June 8, 2007.

“Securities” shall have the meaning provided in the Note Purchase Agreement.

“Series A Preferred Stock” means the Series A Senior Secured Convertible
Preferred Stock, par value $0.001 per share, of the Company.

“Transaction Form 8-K” shall have the meaning provided in Section 6(b).

“Underlying Shares” means the shares of Common Stock issued or issuable upon
conversion of the Series A Preferred Stock.

2. Amendments; Exchange.

(a) Amendments. 
Upon the terms and subject to the conditions of this Agreement, the Holder and
the Company hereby agree that:

(1) At the Effective Time, the Note shall be amended and restated to read in its
entirety as set forth in the Amended Note and have an outstanding principal
amount equal to the principal amount of the Note outstanding immediately prior
to the Effective Time.

(2) At the Effective Time, the Warrant shall be amended to read in its entirety
as set forth in the Amended Warrant.

(3) At the Effective Time, the Pledge and Security Agreement shall be amended to
read in its entirety as set forth in the Amended Pledge and Security Agreement.

(4) At the Effective Time, the Patent and Trademark Security Agreement shall be
amended to read in its entirety as set forth in the Amended Patent and Trademark
Security Agreement.

(5) At the Effective Time, the Lockbox Agreement shall be amended to read in its
entirety as set forth in the Amended Lockbox Agreement.

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(6) At and after the Effective Time, the Amendment Effective Date, all
references in the Transaction Documents to “Note”, “Warrant”, “Pledge and
Security Agreement”, “Patent and Trademark Agreement” and “Lockbox Agreement”,
as the case may be, shall be deemed references to the Amended Note, the Amended
Warrant, the Amended Pledge and Security Agreement, the Amended Patent and
Trademark Agreement and the Amended Lockbox Agreement, as the case may be.

(b) Exchange.
  At the Effective Time, or as promptly as practicable thereafter, upon the
terms and subject to the conditions of this Agreement,

(1) the Company shall issue and deliver to the Holder (i) the Amended Note, duly
executed by the Company, against surrender of the Note to the Company; and (ii)
the Amended Warrant, duly executed by the Company, against surrender of the
Warrant to the Company; and

(2) the Holder shall surrender to the Company (i)the Note, against issuance and
delivery by the Company to the Holder of the Amended Note, duly executed by the
Company; and (ii) the Warrant, against issuance and delivery by the Company to
the Holder of the Amended Warrant, duly executed by the Company.

3. Amendments to Note Purchase Agreement.
 The Note Purchase Agreement is hereby amended as follows:

(a) Section 1(c) of the Note Purchase Agreement is hereby amended by deleting
the following terms “Lockbox Agreement”, “Note”, “Patent and Trademark Security
Agreement”, “Pledge and Security Agreement”, “Shares”, “Trading Market” and
“Warrant” and their definitions.

(b) Section 1(c) of the Note Purchase Agreement is hereby amended by adding the
following terms and definitions in appropriate alphabetical order:

“Amendment Agreement” means the Amendment Agreement, dated as of July 23, 2007,
by and between the Company and the Buyer.

“Amendment Effective Date” shall have the meaning provided in the Amendment
Agreement.

“Certificate of Designations” means the Certificate of Designations of Series A
Senior Secured Convertible Preferred Stock as filed with the Secretary of State
of the State of Delaware.

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“Effective Time” shall have the meaning provided in the Amendment Agreement.

“Lockbox Agreement” means the Lockbox Agreement by and between the Company and
the Lockbox Agent in the form attached as Annex V, and with respect to any time
at or after the Effective Time on the Amendment Effective Date, the Lockbox
Agreement as amended by Amendment No. 1 to the Lockbox Agreement by and between
the Company and the Lockbox Agent in the form attached as Annex V to the
Amendment Agreement.

“Non-Registered Shares” shall have the meaning provided in Section 8(a)(4).

“Note” means the 6% Senior Secured Convertible Note due 2007-2008 of the Company
in the form attached as Annex I, and with respect to any time at or after the
Effective Time on the Amendment Effective Date, the Amended and Restated 8%
Senior Secured Convertible Note due 2008 as amended and restated pursuant to the
Amendment Agreement in the form attached as Annex I to the Amendment Agreement.

“Patent and Trademark Security Agreement” means the Patent and Trademark
Security Agreement from the Company to the Collateral Agent in the form attached
as Annex III, and with respect to any time at or after the Effective Time on the
Amendment Effective Date, the Patent and Trademark Security Agreement as amended
by Amendment No. 1 to the Patent and Trademark Security Agreement from the
Company to the Collateral Agent in the form attached as Annex III to the
Amendment Agreement.

“Pledge and Security Agreement” means the Pledge and Security Agreement from the
Company to the Collateral Agent in the form attached as Annex IV, and with
respect to any time at or after the Effective Time on the Amendment Effective
Date, the Pledge and Security Agreement as amended by Amendment No. 1 to the
Pledge and Security Agreement from the Company to the Collateral Agent in the
form attached as Annex IV to the Amendment Agreement.

“Preferred Shares” means the shares of Series A Preferred Stock issued or
issuable pursuant to the terms of the Notes.

“Series A Preferred Stock” means the Series A Senior Secured Convertible
Preferred Stock, $0.001 par value, of the Company.

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“Shares” means the Conversion Shares, the Warrant Shares, the Preferred Shares
and the Underlying Shares.

“Trading Market” means the AMEX, the Nasdaq, the Nasdaq Capital Market, the New
York Stock Exchange, Inc. or the Over-The-Counter Bulletin Board.

“Underlying Shares” means the shares of Common Stock issued or issuable upon
conversion of the Preferred Shares.

“Warrant” means the Common Stock Purchase Warrant in the form attached hereto as
Annex II, and with respect to any time after the Effective Time on the Amendment
Effective Date, the Amended and Restated Common Stock Purchase Warrant as
amended and restated pursuant to the Amendment Agreement in the form attached as
Annex II to the Amendment Agreement.

(c) Section 8(a)(3) is hereby amended by adding the following to the end
thereof:

Notwithstanding anything contained herein to the contrary, in the event that the
SEC limits the amount of Registrable Securities that may be sold by selling
security holders in a particular Registration Statement, the Company may scale
back from such registration statement such number of Registrable Securities on
behalf of all the selling security holders on a pro-rata basis based on the
total number of Registrable Securities held by such selling security holders. In
such event the Company shall give the Holder prompt notice of the number of the
Registrable Securities excluded. Further, and in addition to the foregoing, the
Company will not be liable for payment of partial liquidated damages described
in Section 8(a)(4) of this Agreement for any delay in registration of the
Registrable Securities in the event that such delay is due to the fact that the
SEC has limited the amount of Registrable Securities 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. Finally, in the event of
any such delay, the Company shall use its best efforts to register such excluded
Registrable Securities as promptly as practicable, but in any event no later
than 30 days after the first opportunity that is permitted by the SEC to
register for resale the Registrable Securities that have been cut back from
being registered.

(d) Section 8(a)(4) is hereby amended by adding the following to the end
thereof:

Notwithstanding anything to the contrary contained in this Section 8(a)(4), to
the extent that registration of any shares underlying the Notes, the Series A
Preferred Stock or the Warrants is prohibited (the “Non-Registered Shares”) as a
result of rules, regulations, positions or releases issued or actions taken by
the SEC pursuant to its authority with respect to Rule 415 and the Company has
sought to register at such time the maximum number of Registrable Securities
permissible upon consultation with the SEC, then the partial liquidated damages
described in the this Section 8(a)(4) shall not be applicable to such
Non-Registered Shares.

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4. Representations and Warranties of the Company.
The Company hereby represents and warrants to, and covenants and agrees with,
the Holder that:

(a) Organization and Authority.
The Company and each of the Subsidiaries is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation, and (i) each of the Company and the Subsidiaries has all
requisite corporate power and authority to own, lease and operate its properties
and to carry on its business as described in the SEC Reports and as currently
conducted, and (ii) the Company has all requisite corporate power and authority
to execute, deliver and perform its obligations under the Amendment Transaction
Documents to be executed and delivered by the Company in connection herewith,
and to consummate the transactions contemplated hereby and thereby; and the
Company does not have any equity investment in any other Person other than (x)
the Subsidiaries listed in the SEC Reports and (y) Subsidiaries which do not,
individually or in the aggregate, have any material revenue, assets or
liabilities.

(b) Qualifications.
The Company and each of the Subsidiaries are duly qualified to do business as
foreign corporations and are in good standing in all jurisdictions where such
qualification is necessary and where failure so to qualify could have a Material
Adverse Effect.

(c) Amendment Transaction Documents.
The Amendment Transaction Documents have been duly and validly authorized by the
Company; this Agreement has been duly executed and delivered by the Company and,
assuming due execution and delivery by the Holder, this Agreement is, and the
Amended Security Agreements will be, when duly executed and delivered by the
Company, and the Amended Note and Amended Warrant will be, when executed and
delivered by the Company, valid and binding obligations of the Company
enforceable in accordance with their respective terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other similar laws now or hereafter in
effect relating to or affecting creditors' rights generally and general
principles of equity, regardless of whether enforcement is considered in a
proceeding in equity or at law.

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 (d) Concerning the Shares and the Common Stock.
The Shares have been duly authorized and the Conversion Shares and the Preferred
Shares, if any, when issued upon conversion of the Amended Note, and the Warrant
Shares, when issued upon exercise of the Amended Warrant and the Underlying
Shares when issued upon conversion of the Preferred Shares, in each such case
will be duly and validly issued, fully paid and non-assessable and will not
subject the holder thereof to personal liability by reason of being such holder.
The Company has duly reserved 13,207,564 shares of Common Stock exclusively for
issuance upon conversion of the Amended Note and the Other Amended Notes or the
Preferred Shares, as the case may be, and exercise of the Amended Warrant and
the Other Amended Warrants, and such shares shall remain so reserved, and the
Company shall from time to time reserve such additional shares of Common Stock
as shall be required to be reserved pursuant to the Amended Note, the Other
Amended Notes, the Certificate of Designations, and the Amended Warrant, so long
as the Amended Note, the Other Amended Notes or the Amended Warrant are
outstanding. The Common Stock is trading on the OTCBB. The Company knows of no
reason that the Shares will not be eligible for quotation on the OTCBB. The
Company acknowledges that the Securities may be pledged in connection with a
bona fide margin account or other loan or financing arrangement secured by the
Securities and such pledge of Securities shall not be deemed to be a transfer,
sale or assignment of the Securities hereunder, and the Holder shall not be
required to provide the Company with any notice thereof or otherwise make any
delivery to the Company pursuant to the Amendment Transaction Documents;
provided, however, that in order to make any sale, transfer or assignment of
Securities in connection with a foreclosure or realization on such pledge, the
Holder or its pledgee shall make such disposition in accordance with, or
pursuant to a registration statement or an exemption under, the 1933 Act.

(e) Non-contravention.
The execution and delivery of the Amendment Transaction Documents by the Company
and the consummation by the Company of the issuance of the Securities and the
other transactions contemplated by the Amendment Transaction Documents do not
and will not, with or without the giving of notice or the lapse of time, or
both, (i) result in any violation of any provision of the certificate of
incorporation or by-laws of the Company or any subsidiary, (ii) conflict with or
result in a breach by the Company or any Subsidiary of any of the terms or
provisions of, or constitute a default under, or result in the modification of,
or result in the creation or imposition of any lien, security interest, charge
or encumbrance (other than pursuant to the Security Agreements) upon any of the
properties or assets of the Company or any Subsidiary pursuant to, any
indenture, mortgage, deed of trust or other agreement or instrument to which the
Company or any Subsidiary is a party or by which the Company or any Subsidiary
or any of their respective properties or assets are bound or affected, in any
such case which would be reasonably likely to have a Material Adverse Effect,
(iii) violate or contravene any applicable law, rule or regulation or any
applicable decree, judgment or order of any court, United States federal or
state regulatory body, administrative agency or other governmental body having
jurisdiction over the Company or any Subsidiary or any of their respective
properties or assets, in any such case which could have a Material Adverse
Effect, or (iv) have any material adverse effect on any permit, certification,
registration, approval, consent, license or franchise necessary for the Company
or any Subsidiary to own or lease and operate any of its properties and to
conduct any of its business or the ability of the Company or any Subsidiary to
make use thereof.

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(f) Approvals.
No authorization, approval or consent of, or filing with, any court,
governmental body, regulatory agency, self-regulatory organization, or stock
exchange or market or the stockholders of the Company is necessary to be
obtained or made by the Company in connection with the execution, delivery and
performance of the Amendment Transaction Documents and the consummation of the
other transactions contemplated by the Amendment Transaction Documents other
than (1) such as have been obtained and are in effect, (2) the requirement for
the SEC to declare effective any registration statement required to be filed
pursuant to this Agreement, (3) the filing of the Certificate of Designations
with the Secretary of State of the State of Delaware and (4) the filing of the
Transaction Form 8-K.

(g) Absence of Certain Proceedings.
Except as described in the SEC Reports, there is no action, suit, proceeding,
inquiry or investigation before or by the OTCBB, any court, public board or body
pending or, to the knowledge of the Company, threatened against or affecting the
Company, the Common Stock or any of the Subsidiary or any of the Company’s or
Subsidiary’s officers or directors in their capacity as such wherein an
unfavorable decision, ruling or finding would have a material adverse effect on
the business, properties, operations, financial condition or results of
operations of the Company or the transactions contemplated by the Amendment
Transaction Documents or which could adversely affect the validity or
enforceability of, or the authority or ability of the Company to perform its
obligations under, this Agreement or any of the other Amendment Transaction
Documents.

(h) Information Provided.
The information provided by or on behalf of the Company to the Holder in
connection with the transactions contemplated by this Agreement does not contain
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances in which they were made, not misleading.

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(i) Absence of Certain Changes.
Except as disclosed in the SEC Reports, since December 31, 2006, there has been
no material adverse change and no material adverse development in the business,
properties, operations, condition (financial or otherwise), results of
operations or prospects of the Company and the Subsidiaries taken as a whole.
Except as disclosed in the SEC Reports, since December 31, 2006, neither the
Company nor any Subsidiary has (i) declared or paid any dividends, (ii) sold any
assets, individually or in the aggregate, outside of the ordinary course of
business, (iii) had capital expenditures outside of the ordinary course of
business, (iv) engaged in any transaction with any Affiliate except as set forth
in the SEC Reports or (v) engaged in any other transaction outside of the
ordinary course of business. The Company has not taken any steps to seek
protection pursuant to any bankruptcy law nor does the Company have any
knowledge or reason to believe that its creditors intend to initiate involuntary
bankruptcy proceedings or any actual knowledge of any fact that would reasonably
lead a creditor to do so. The Company is not as of the date hereof, after giving
effect to the transactions contemplated hereby to occur on the Amendment
Effective Date and the transactions contemplated by the Amendment Transaction
Documents and the Other Amendment Transaction Documents, Insolvent.

(j) Dilutive Effect.
  The Company understands and acknowledges that the number of Shares issuable
upon conversion of the Note and the Other Notes and the Preferred Shares, as the
case may be, and upon exercise of the Warrant and the Other Warrants will be
substantial and may increase in certain circumstances. The Company further
acknowledges that, subject to the terms and conditions of the Amendment
Transaction Documents, its obligation to issue Shares upon conversion of the
Note and the Preferred Shares, as the case may be, and upon exercise of the
Warrant in accordance with this Agreement, the Note Purchase Agreement, the
Note, the Certificate of Designations and the Warrant is, in each case, absolute
and unconditional regardless of the dilutive effect that such issuance may have
on the ownership interests of other stockholders of the Company.

(k) No Undisclosed Events, Liabilities, Developments or Circumstances.
No event, liability, development, circumstance or transaction has occurred or
exists, with respect to the Company or any Subsidiary or their respective
business, properties, operations, condition (financial or other), results of
operations or prospects, that would be required to be disclosed by the Company
under applicable securities laws (including pursuant to the anti-fraud
provisions thereof) on a registration statement on Form S-3 filed with the SEC
relating to an issuance and sale by the Company of its Common Stock and which
has not been publicly disclosed.

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(l) Absence of Rights Agreement.
The Company has not adopted a shareholder rights plan or similar arrangement
relating to accumulations of beneficial ownership of Common Stock or a change of
control in the Company.

(m) Absence of Brokers, Finders, Etc.
No broker, finder or similar Person is entitled to any commission, fee or other
compensation by reason of action taken by or on behalf of the Company in
connection with the transactions contemplated by this Agreement other than the
Placement Agent (whose commissions, fees and compensation shall be payable
solely by the Company in accordance with a written agreement between the Company
and the Placement Agent), and the Company shall pay, and indemnify and hold
harmless the Buyer from, any claim made against the Buyer by any Person for any
such commission, fee or other compensation.

(n) SEC Filings.
The Company has filed all required forms, reports and other documents with the
SEC since December 31, 2005. All of such forms, reports and other documents
complied, when filed, in all material respects, with all applicable requirements
of the 1933 Act and the 1934 Act.

5. Representations and Warranties of the Holder.
The Holder represents and warrants to, and covenants and agrees with, the
Company as follows:

(a) Authorization.
The Holder has full power and authority to enter into this Agreement. This
Agreement constitutes such Investor’s legal, valid and binding obligation,
enforceable against such Investor in accordance with its terms except as the
enforceability hereof may be limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other similar laws now or hereafter in
effect relating to or affecting creditors’ rights generally and general
principles of equity, regardless of whether enforcement is considered in a
proceeding in equity or at law.

(b) Acquisition Entirely for Own Account.
The Preferred Shares which may be acquired by the Holder upon conversion of the
Amended Notes, will be acquired for the Holder’s own account and not with a view
towards the public resale or distribution thereof within the meaning of the 1933
Act; and the Holder will acquire any Shares issued to the Holder prior to the
SEC Effective Date of a Registration Statement covering the resale of such
Shares by the Holder for its own account and not with a view towards the public
resale or distribution thereof within the meaning of the 1933 Act prior to such
SEC Effective Date; and the Holder has no intention of making any distribution,
within the meaning of the 1933 Act, of the Shares except in compliance with the
registration requirements of the 1933 Act or pursuant to an exemption therefrom.

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(c) Accredited Investor.
The Holder is an “accredited investor” as that term is defined in Rule 501(a) of
Regulation D under the 1933 Act.

6. Certain Covenants.

(a) Press Releases.
  Any press release or other publicity concerning this Agreement or the
transactions contemplated by this Agreement shall be submitted to the Holder for
comment at least one Business Day prior to issuance, unless the release is
required to be issued within a shorter period of time pursuant to this Agreement
or by law or pursuant to the rules of the securities exchange or market which at
the time constitutes the principal market for the Common Stock.  The Company
shall, contemporaneously with the Effective Time on the Amendment Effective Date
or as promptly as possible thereafter on the Amendment Effective Date, issue a
press release, in the form of Annex VII hereto, concerning the transactions
contemplated hereby. The Company's other press releases and other public
information, to the extent concerning the Amendment Transaction Documents, shall
contain such information as reasonably requested by the Holder and be reasonably
approved by the Holder prior to issuance.

(b) Form 8-K; Limitation on Information and Holder Obligations.
(1) Within two Business Days after the Amendment Effective Date, the Company
will publicly report the transaction contemplated by this Agreement and the
Other Amendment Agreements entered into on or before the Amendment Effective
Date by filing with the SEC a Current Report on Form 8-K under the 1934 Act,
which report shall describe the material terms of the transactions contemplated
hereby and thereby and include copies of the forms of the Transaction Documents
as exhibits to such report (the “Transaction Form 8-K”). The Company
acknowledges and agrees that, upon the filing of the Transaction Form 8-K with
the SEC, the Holder shall not be in possession of any material nonpublic
information received from the Company, or, to its knowledge, from any Subsidiary
or any of their respective officers, directors, employees or agents.

(2) The Company shall not provide, and shall cause each Subsidiary and the
respective officers, directors, employees and agents of the Company and the
Subsidiaries not to provide, the Holder any material nonpublic information
regarding the Company or any Subsidiary from and after the date the Company
files, or is required by this Agreement to file, the Transaction Form 8-K with
the SEC without the prior express written consent of the Holder.

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(c) SEC Registration Matters.
(1) The Company shall, not later than August 31, 2007, file with the SEC a
Registration Statement covering the resale by the Holder of a number of shares
of Common Stock equal to 100% of the sum of (A) the number of Conversion Shares
issuable upon conversion of the Amended Notes and Underlying Shares issuable
upon conversion of the Preferred Shares, as the case may be, and one
quarter-year of accrued and unpaid interest and dividends thereon at the rate
specified in the Note or the Certificate of Designations, as the case may be,
plus (B) the number of Warrant Shares issuable upon exercise of the Amended
Warrant (determined without regard to any limitation on the number of shares of
Common Stock issuable upon such conversion or exercise) to the extent such
number of shares are not available for resale under the Existing Registration
Statement (the “Additional Registration Statement”). The Additional Registration
Statement shall be prepared, filed and otherwise treated for purposes of the
Note Purchase Agreement as a “Registration Statement” under and as defined in
the Note Purchase Agreement, as amended by this Agreement.

(2) The Company shall, as promptly as practicable, prepare and file with the SEC
pursuant to Rule 424 under the 1933 Act a prospectus supplement or amended
prospectus for the prospectus forming part of the Existing Registration
Statement that includes all information relating to this Agreement and the
transactions contemplated hereby that is required to be disclosed in such
prospectus.

(d) Certificate of Designations.
The Company shall, as promptly as practicable but in no event later than five
Business Days after the Amendment Effective Date, file the Certificate of
Designations with the Secretary of State of the State of Delaware and provide
confirmation of such filing to the Holder.

(e) Certain Waivers.
 The Holder and the holders of the Other Notes have previously delivered to the
Company certain waivers with respect to certain Events of Default and Repurchase
Events that may otherwise have arisen by reason of the delisting of the
Company’s Common Stock from trading on the AMEX, the obligation to maintain
certain Cash and Cash Equivalent Balances under the Notes and the transfer of
patent number 6,337,492 to Kodak Corporation. Although such previously granted
waivers remain in full force and effect, at the request of the Company, the
Holder agrees to reconfirm such waivers hereunder. In order to reconfirm such
waivers, to the extent not otherwise already waived, the Holder hereby waives:

(1) any Event of Default or Repurchase Event under the Notes or any of the other
Transaction Documents that have arisen or may arise by reason of the delisting
of the Company’s Common Stock from trading on the AMEX;

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(2) the accrual and payment of any partial liquidated damages required to be
paid by the Company to the Holder under Section 8(a)(4) of the Note Purchase
Agreement arising by reason of the delisting of the Company’s Common Stock from
trading on the AMEX;

(3) any Event of Default or Repurchase Event under the Notes or any of the other
Transaction Documents that have arisen or may arise by reason of the Company’s
failure to maintain Cash and Cash Equivalents Balances of $600,000.00 under the
Notes; and

(4) any Event of Default or Repurchase Event under the Notes or any of the other
Transaction Documents that have arisen or may arise by reason of the Company
entering into that certain Royalty Agreement with Kodak Corporation (“Kodak”),
the transfer of patent number 6,337,492 related to Serially-connected organic
light emitting diode stack having conductors sandwiching each light emitting
layer (the “Kodak Patent”), the release of the Kodak Patent from the Collateral
(as defined in the Security Agreements) and the removal of the Lien (as defined
in the Security Agreements) on the Kodak Patent.

(f) Certain Acknowledgments.
 The Company acknowledges that, for purposes of determining the holding period
under Rule 144 under the 1933 Act (1) for the Amended Note, the holding period
of the Amended Note shall be tacked to the holding period of the Note, and (2)
for the Amended Warrant, the holding period of the Amended Warrant shall be
tacked to the holding period of the Warrant. The Company agrees not to take a
position contrary thereto unless the SEC or its staff by rule or interpretation
changes its rules and interpretations thereof in effect on the date of this
Agreement or such rules or interpretations are held invalid or incorrect by a
court of competent jurisdiction. Nothing in this Section 6(f) shall affect the
requirement in Section 5(a) of the Note Purchase Agreement for delivery of an
opinion of counsel as and when required thereby.

7. Effectiveness.

The amendment of the Note and the Warrant pursuant to this Agreement shall only
become effective at the time (the “Effective Time”) on the Amendment Effective
Date when all of the following conditions are satisfied:

(a) No legal action, suit or proceeding shall be pending or threatened which
seeks to restrain or prohibit the transactions contemplated by this Agreement;

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(b) The representations and warranties of the Company contained in this
Agreement and the other Amendment Transaction Documents shall be true and
correct as of the date of this Agreement and as of the Amendment Effective Date,
as though made on and as of the Amendment Effective Date (except for
representations given as of a specific date, which representations shall be true
and correct as of such date), and on or before the Amendment Effective Date the
Company shall have performed all covenants and agreements of the Company
contained herein and in the other Amendment Transaction Documents that are
required to be performed by the Company on or before the Amendment Effective
Date;

(c) No event which would constitute an Event of Default under the Note or the
Amended Note or which, with the giving of notice or the passage of time, or
both, would constitute such an Event of Default, that has not been waived by the
Holders in writing, shall have occurred and be continuing; and no event which
would constitute a Repurchase Event under the Note or the Amended Note or which,
with the giving of notice or passage of time, or both, would constitute such a
Repurchase Event, that has not been waived by the Holders in writing, shall have
occurred and be continuing;

(d) The Company shall have delivered to the Holder a certificate, dated the
Amendment Effective Date, duly executed by its Chief Executive Officer to the
effect set forth in subparagraphs (a), (b), and (c) of this Section 7;

(e) The Holder shall have received a certificate, dated the Amendment Effective
Date, of the Secretary of the Company certifying (1) the Certificate of
Incorporation and By-Laws of the Company as in effect on such date, (2) all
resolutions of the Board of Directors (and committees thereof) of the Company
relating to this Agreement and the transactions contemplated hereby and (3) such
other matters as reasonably requested by the Holder;

(f) All approvals of the Company’s Board of Directors and Stockholders necessary
for performance of the transactions contemplated by this Agreement shall have
been obtained;

(g) The Collateral Agent shall have received Acknowledgment and Consents, in the
forms attached as Exhibit A to each of Amendment No. 1 to Pledge and Security
Agreement, Amendment No. 1 to Patent and Trademark Security Agreement and
Amendment No. 1 to Lockbox Agreement, from each of the holders of Notes;

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(h) The Collateral Agent shall have executed and delivered to the Company the
Amended Pledge and Security Agreement and a copy thereof duly executed and
delivered by the Company, shall have been furnished to the Holder;

(i) The Collateral Agent shall have executed and delivered to the Company the
Amended Patent and Trademark Security Agreement and a copy thereof duly executed
and delivered by the Company, shall have been furnished to the Holder;

(j) The Lockbox Agent shall have executed and delivered to the Company the
Amended Lockbox Agreement and a copy thereof duly executed and delivered by the
Company shall have been furnished to the Holder;

(k) The Company and each holder of Notes shall have executed and delivered, one
to the other, an amendment agreement substantially in the form of this Agreement
(the “Other Amendment Agreements”); and

(l) The “Effective Time” under all of the Other Amendment Agreements shall have
occurred simultaneously with the Effective Time under this Agreement.

8. Confirmation of Agreements; Entire Agreement.

On and after the Effective Time, each reference in the Note Purchase Agreement
to “this Agreement”, “hereof”, “herein”, “herewith”, “hereunder” and words of
similar import will, unless otherwise stated, be construed to refer to the Note
Purchase Agreement as amended by this Agreement. No reference to this Agreement
need be made in any instrument or document at any time referring to the Note
Purchase Agreement, a reference to the Note Purchase Agreement in any such
instrument or document to be deemed to be a reference to the Note Purchase
Agreement as amended by this Agreement. Additionally, except as amended by this
Agreement, the Amendment No. 1 to Pledge and Security Agreement, the Amendment
No. 1 to Patent and Trademark Security Agreement and the Amendment No. 1 to
Lockbox Agreement, the Transaction Documents shall remain in full force and
effect in accordance with their respective terms. This Agreement and the annexes
attached hereto set forth the entire agreement between the parties with respect
to the subject matter hereof. The execution, delivery and effectiveness of this
Agreement shall not, except as expressly provided herein, operate as a waiver of
any right, power or remedy of the Company or the Holders under the Transaction
Documents, nor constitute a waiver or amendment of any other provision of the
Transaction Documents or for any purpose except as expressly set forth herein.

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9. Miscellaneous.

(a) Governing Law.
This Agreement shall be governed by and interpreted in accordance with the laws
of the State of New York.

(b) Counterparts.
This Agreement may be executed in two or more counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument. An electronic or telephone line facsimile copy of this
Agreement bearing a signature on behalf of a party hereto shall be legal and
binding on such party.

(c) Headings, etc.
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.

(d) 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.

(e) Amendments.
  No amendment, modification, waiver, discharge or termination of any provision
of this Agreement nor consent to any departure by the Holder or the Company
therefrom shall in any event be effective unless the same shall be in writing
and signed by the party to be charged with enforcement, and then shall be
effective only in the specific instance and for the purpose for which given. No
course of dealing between the parties hereto shall operate as an amendment of
this Agreement.

(f) Waivers.
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 dealings 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.

(g) Notices.
Any notices required or permitted to be given under the terms of this Agreement
shall be delivered in accordance with the notice provisions of the Note Purchase
Agreement.

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(h) Certain Expenses and Fees.
The Company shall be responsible for its expenses (including, without
limitation, the legal fees and expenses of its counsel), incurred by it in
connection with the negotiation and execution of, and closing under, and
performance of, this Agreement. Whether or not the Effective Time on the
Amendment Effective Date occurs, the Company shall be obligated to pay or
reimburse the legal fees and expenses and out-of-pocket due diligence expenses
of AGMF, not in excess of $40,000, in connection with the negotiation and
execution of, and transactions contemplated by, this Agreement.

(i) Survival.
  The respective representations, warranties, covenants, and agreements of the
Holder and the Company contained in this Agreement or made by or on behalf of
them, respectively, pursuant to this Agreement shall survive the Amendment
Effective Date and the transactions contemplated hereby and shall remain in full
force and effect regardless of any investigation made by or on behalf of them or
any person controlling or advising any of them.

(j) Further Assurances.
Each party to this Agreement will perform any and all acts and execute any and
all documents as may be necessary and proper under the circumstances in order to
accomplish the intents and purposes of this Agreement and to carry out its
provisions.

(k) Construction; Holder Status.
  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. The Holder is not acting as part
of a “group” (as that term is used in Section 13(d) of the 1934 Act) with any
other Person who is a party to any Note Purchase Agreement or Amendment
Agreement, or who holds any Notes or Warrants, in negotiating and entering into
this Agreement or acquiring, disposing of or voting any of the Shares. The
Company hereby confirms that it understands and agrees that the Holder is not
acting as part of any such group. If the Holder is other than AGMF, such Holder
acknowledges and agrees that such Holder is not relying on AGMF or AGMF’s legal
counsel in making a decision to enter into this Agreement or otherwise in
connection with the Amendment Transaction Documents, and such legal counsel are
not acting as the Holder’s legal counsel in connection therewith.

[Signature Pages Follow]
 
 
 
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
by their respective officers or other representatives thereunto duly authorized
as of the date first set forth above.

        EMAGIN CORPORATION  
   
   
    By:   /s/   

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Name:
Title:
   

       
HOLDER
 
   
   
    By:   /s/   

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Name:
  Title:   Address:   Facsimile No.:    

 
 
 

 

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