Exhibit 10.6

 

 
AMENDMENT NO. 1 TO LOCKBOX AGREEMENT

THIS AMENDMENT NO. 1 TO LOCKBOX AGREEMENT, dated as of July 23, 2007 (this
“Agreement”), by and between EMAGIN CORPORATION, a Delaware corporation (the
“Company”), and ALEXANDRA GLOBAL MASTER FUND LTD., a British Virgin Islands
international business company, as collateral agent (in such capacity, the
“Collateral Agent”) on behalf of the Holders (such capitalized term and all
other capitalized terms used herein having the respective meanings provided
herein), amends the LOCKBOX AGREEMENT, dated as of July 21, 2006 (the “Lockbox
Agreement”), made by the Company to the Collateral Agent.

W I T N E S S E T H:

WHEREAS, the Company and the Collateral Agent are parties to the Lockbox
Agreement;

WHEREAS, the Company and the Collateral Agent wish to amend the Lockbox
Agreement as provided in this Agreement; and

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

1. Definitions. 

1.1 As used in this Agreement, the terms “Agreement”, “Company”, “Collateral
Agent” and “Lockbox Agreement” shall have the respective meanings assigned to
such terms in the introductory paragraph of this Agreement.

1.2 Capitalized terms used in this Agreement and not defined in this Agreement
shall have the respective meanings provided in the Lockbox Agreement.

1.3 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.

1.4 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):

“Amended Lockbox Agreement” means the Lockbox Agreement, as amended by this
Agreement.

“Amended Notes” means the Amended and Restated 8% Senior Secured Convertible
Notes due 2008 issued by the Company upon amendment and restatement of the
Notes.

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“Amended Patent and Trademark Security Agreement” means the Patent and Trademark
Security Agreement dated as of July 21, 2006, by and between the Company and the
Collateral Agent, as amended by Amendment No. 1 to Patent and Trademark Security
Agreement, dated as of July 23, 2007, by and between the Company and the
Collateral Agent.

“Amended Pledge and Security Agreement” means the Pledge and Security Agreement,
dated as of July 21, 2006, by and between the Company and the Collateral Agent,
as amended by Amendment No. 1 to the Pledge and Security Agreement, dated as of
July 23, 2007 by and between the Company and the Collateral Agent.

“Amendment Agreements” means the several Amendment Agreements, dated as of July
23, 2007 by and between the Company and the Holders.

“Amendment Transaction Documents” means the Amended Notes, the Amended Warrants,
the Certificate Designations, the Amended Patent and Trademark Security
Agreement, the Amended Pledge and Security Agreement, the Amended Lockbox
Agreement 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 of the Company as filed with the
Secretary of State of the State of Delaware.

“Effective Date” shall have the meaning provided in Section 4.

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

“Holders” means with respect to any time prior to the Effective Time on the
Effective Date the holders of Notes and with respect to any time after the
Effective Time on the Effective Date, the holders from time to time of any
Amended Notes or shares of Series A Preferred Stock.

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

2. Amendments.
 
2.1 Amendments to Lockbox Agreement. Upon the terms and subject to the
conditions of this Agreement, the Lockbox Agreement is hereby amended as
follows:

(a) Amendment of Certain Definitions. Section 1(a) of the Lockbox Agreement
shall be amended by deleting the terms “Additional Note Purchase Agreement”,
“Event of Default”, “Holder”, “Note Purchase Agreements”, “Majority Holders”,
“Notes” and “Transaction Documents” and the accompanying definitions thereof and
substituting in lieu thereof in their respective alphabetical order the
following:

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“Additional Note Purchase Agreement” means the Note Purchase Agreement, dated as
of July 21, 2006, as amended on March 28, 2007, by and between the Company and
Stillwater LLC, as amended by the Amendment Agreement, pursuant to which the
Company issued the Additional Note.

“Event of Default” means:

(1) the failure by the Company to perform in any material respect any obligation
of the Company under this Agreement as and when required by this Agreement; or

(2) the failure by the Company to pay the Optional Redemption Price or the
Mandatory Redemption Price; or

(3) the breach by the Company of any other material covenant or other term or
condition of the Certificate of Designations; or

(4) any representation or warranty made by the Company pursuant to this
Agreement shall have been untrue in any material respect when made or deemed to
have been made; or

(5) the failure by the Company to perform in any material respect any obligation
of the Company under the Lockbox Agreement as and when required by the Lockbox
Agreement;

(6) any representation or warranty made by the Company pursuant to the Lockbox
Agreement shall have been untrue in any material respect when made or deemed to
have been made;

(7) any Event of Default, as that term is defined in any of the Notes.

“Holder” means any Buyer or any holder from time to time of any Note or any
Preferred Shares.

“Majority Holders” means at any time (i) such of the holders of Notes who hold
Notes which, based on the outstanding principal amounts thereof, represent a
majority of the aggregate outstanding principal amount of the Notes at such
time, and (ii) such of the holders of Preferred Shares which shares constitute a
majority of the outstanding Preferred Shares at such time.

“Note Purchase Agreements” means the several Note Purchase Agreements, dated as
of July 21, 2006, by and between the Company and the respective Buyer party
thereto, as amended by the Amendment Agreement, pursuant to which the Company
issued the Notes, including, without limitation, the Additional Note Purchase
Agreement.

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“Notes” means the Amended and Restated 8% Senior Secured Convertible Notes due
2008 issued by the Company upon amendment and restatement of the Company’s 6%
Senior Secured Convertible Notes due 2007-2008, as amended, originally issued
pursuant to the Note Purchase Agreements, including, without limitation, the
Additional Note.

(b) Additional Defined Terms. Section 1(a) of the Lockbox Agreement shall be
amended by adding new defined terms and definitions thereof, in the places
constituting their respective alphabetical orders, as follows:

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

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

“Mandatory Redemption Price” shall have the meaning assigned to such term in the
Certificate of Designations.

“Optional Redemption Price” shall have the meaning assigned to such term in the
Certificate of Designations.

“Preferred Shares” means shares of Series A Senior Secured Convertible Preferred
Stock issued by the Company.

3. Effect of Amendment; Confirmation.

(a) From and after the Effective Date, the rights and obligations of the
Company, the Collateral Agent and the Holders under the Lockbox Agreement and
the Transaction Documents and all other agreements, documents and instruments
contemplated hereby and thereby shall apply with full force and effect to the
Lockbox Agreement, as amended by this Agreement, and each reference to the
Lockbox Agreement in the Transaction Documents shall be deemed to be a reference
to the Lockbox Agreement, as amended by this Agreement and each reference in the
Lockbox Agreement to “this Agreement,” “hereunder,” “hereof,” “herein,” or words
of like import shall mean and be a reference to the Lockbox Agreement as amended
hereby, and this Agreement and the Lockbox Agreement shall be read together and
construed as a single instrument.

(b) Except as amended by this Agreement, the Lockbox Agreement shall remain in
full force and effect in accordance with its respective terms.

(c) 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 Collateral Agent, the Company or the Holders under the Lockbox
Agreement or any of the Transaction Documents, nor constitute a waiver or
amendment of any other provision of the Lockbox Agreement or any of the
Transaction Documents or for any purpose except as expressly set forth herein.

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(d) Nothing in this Agreement or in connection with the transactions
contemplated by this Agreement or otherwise shall be construed, directly or
indirectly, by implication or otherwise to impair the validity, enforceability,
priority, perfection or other attributes of the security interest granted
pursuant to the Lockbox Agreement.

4. Effectiveness.

The amendment of the Lockbox Agreement pursuant to this Agreement shall become
effective on the date (the “Effective Date”) when all of the following
conditions are satisfied:

(a) The Collateral Agent shall have received Acknowledgement and Consents, in
the form attached hereto as Exhibit A, from the Majority Holders; and

(b) On the Effective Date the Effective Time under all of the Amendment
Agreements shall have occurred.

5. Miscellaneous. 

5.1 Waiver and Amendments; Successors and Assigns.
The provisions of Section 15 of the Lockbox Agreement shall be applicable to
this Agreement as if this Agreement were the “Agreement” referred to in Section
15 of the Lockbox Agreement.

5.2 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.

5.3 Titles and Subtitles.
The titles and subtitles used in this Agreement are used for convenience only
and are not to be considered in construing or interpreting this Agreement.

5.4 Notices.
Any notice required or permitted under this Agreement shall be given as provided
in the Lockbox Agreement.

5.5 Severability.
If one or more provisions of this Agreement are held to be unenforceable under
applicable law, such provision shall be excluded from this Agreement and the
balance of this Agreement shall be interpreted as if such provision were so
excluded and shall be enforceable in accordance with its terms.

5.6 Entire Agreement.
This Agreement and the other Amendment Transaction Documents and other documents
contemplated hereby and thereby constitute the entire agreement among the
parties hereof with respect to the subject matter hereof and thereof and
supersede all prior agreements and understandings, both oral and written,
between the parties with respect to the subject matter hereof and thereof.

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5.7 Further Assurances.
The parties shall execute and deliver all such further instruments and documents
and take all such other actions as may reasonably be required to carry out the
transactions contemplated hereby and to evidence the fulfillment of the
agreements herein contained.

5.8 Applicable Law.
This Agreement shall be governed by, and construed in accordance with, the laws
of the State of New York without regard to principles of conflicts of laws,
except to the extent that under the New York Uniform Commercial Code the laws of
another jurisdiction govern matters of perfection and the effect of perfection
or non-perfection of any security interest granted under the Lockbox Agreement,
as amended by this Agreement.

5.9 Counterparts; Execution.
This Agreement may be executed in any number of counterparts and by the parties
hereto on separate counterparts, but all the counterparts taken together shall
be deemed to constitute one and the same instrument. This Agreement, once
executed by a party, may be delivered to the other party hereto by electronic or
telephone line facsimile transmission of a copy of this Agreement bearing the
signature of the party so delivering this Agreement.

5.10 Construction.
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.

[Signature Pages Follow]

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IN WITNESS WHEREOF, the Company and the Collateral Agent have caused this
Agreement to be duly executed and delivered by their respective officers or
other representatives thereunto duly authorized as of the date first above
written.
 
 

       
EMAGIN CORPORATION
 
   
   
    By:   /s/   

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Name:
Title:
   

       
ALEXANDRA GLOBAL MASTER FUND LTD., as Collateral Agent
 
By: ALEXANDRA INVESTMENT MANAGEMENT, LLC,
as Investment Advisor
 
   
   
    By:   /s/   

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Name:
Title:
   

 
 
 

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EXHIBIT A

ACKNOWLEDGEMENT AND CONSENT

To: ALEXANDRA GLOBAL MASTER FUND LTD.,
As Collateral Agent
c/o Alexandra Investment Management, LLC
767 Third Avenue, 39th Floor
New York, New York 10017

Re: eMagin Corporation

Reference is made to the Lockbox Agreement, dated as of July 21, 2006 (as
amended, supplemented or otherwise modified from time to time, the “Lockbox
Agreement”) by and between eMagin Corporation, a Delaware corporation (the
“Company”), to Alexandra Global Master Fund Ltd., a British Virgin Islands
international business company, as collateral agent (in such capacity, the
“Collateral Agent”) on behalf of the Holders. Capitalized terms used herein and
not otherwise defined herein are used herein as defined in the Lockbox
Agreement.

The Company has requested that the Holders consent to an Amendment to the
Lockbox Agreement on the terms described in that certain Amendment No. 1 to the
Lockbox Agreement (“Amendment No. 1 to Lockbox Agreement”), the form of which is
attached hereto.

Pursuant to Section 15 of the Lockbox Agreement, the undersigned Holder hereby
consents to the terms of Amendment No. 1 to Lockbox Agreement and authorizes the
Collateral Agent to execute and deliver Amendment No. 1 to Lockbox Agreement on
its behalf.
 
 

       
Very truly yours,

NAME OF HOLDER:
______________________________
 
   
   
 
Dated as of July 23, 2007
By:   /s/   

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Name:
Title:
   

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