ex1049.htm


    
      


       

      Exhibit
10.49

       

      
        	 
      	
                Annex
      VII

                to

                Note
      Purchase

                Agreement

              


      

       

      [Letterhead
of Company Counsel]

       

       

      [Closing
Date]

       

       

      The
Buyers listed on

      Exhibit A
Hereto

      Re:
eMagin Corporation

      Ladies
and Gentlemen:

       

      We have
acted as counsel to eMagin Corporation, a Delaware corporation (the "Company"),
in connection with the issuance by the Company of $[7,000,000] aggregate
principal amount of 6% Senior Secured Convertible Note due 2007-2008 (the
-"Notes"), and related Common Stock Purchase Warrants (the "Warrants"), pursuant
to the several Note Purchase Agreements, dated as of July , 2006 (the
"Agreements"), by and between the Company and the several Buyers named therein
(the "Buyers"). Capitalized terms used herein and not otherwise defined herein
shall have the respective meanings assigned to such terms in the Agreements.
This opinion is being delivered to you pursuant to Section 7(n) of the
Agreements.

       

      In so
acting, we have examined originals or copies (certified or otherwise identified
to our satisfaction) of the Agreements, the Notes, the Warrants, the Pledge and
Security Agreement, dated as of July , 2006, by and between the Company and the
Collateral Agent named therein (the "Security Agreement"), the Patent and
Trademark Security Agreement, dated as of July , 2006, by and between the
Company and the Collateral Agent named therein (the "Patent and Trademark
Security Agreement"), the Lockbox Agreement, dated as of July 2006, by and
between the Company and the Lockbox Agent named therein (the "Lockbox
Agreement"), and such corporate records, agreements, documents and other
instruments, and such certificates or comparable' documents of public officials
and of officers and representatives of the Company, and have made such inquiries
of such officers and representatives, as we have deemed relevant and necessary
as a basis for the opinions hereinafter set forth. The Agreements, the Notes,
the Warrants, the Security Agreement, the Patent and Trademark Security
Agreement and the Lockbox Agreement are hereinafter referred to collectively as
the "Transaction Documents."

       

      


      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

       

       

      In
rendering the opinions set forth in this opinion letter, we assume the
following:

       

      (a) - the
legal capacity of each natural person;

       

      (b) the
legal existence of all parties to the transactions referred to in the
Transaction Documents excluding the Company;

       

      (c) the
power and authority of each person other than the Company or person(s) acting on
behalf of the Company to execute, deliver and perform each document executed and
delivered and to do each other act done or to be done by such
person;

       

      (d) the
authorization, execution and delivery by each person other than the Company or
person(s) acting on behalf of the Company of each document executed and
delivered or to be executed and delivered by such person;

       

      (e) the
legality, validity, binding effect and enforceability as to each person other
than the Company or person(s) acting on behalf of the Company of each document
executed and delivered or to be executed or delivered and of each other act done
or to be done by such person;

       

      (f) the
transactions referred to in the Transaction Documents have been
consummated;

       

      (g) the
payment of all the required documentary stamps taxes and fees imposed upon the
execution, filing or recording of the Transaction Documents;

       

      (h) that
there have been no undisclosed modifications of any provision of any document
reviewed by us in connection with the rendering of the opinions set forth in
this opinion letter and no undisclosed prior waiver of any right or remedy
contained in the Transaction Documents;

       

      (i) the
genuineness of each signature (other than the signatures of the officers of the
Company), the completeness of each document submitted to us, the authenticity of
each document reviewed by us as an original, the conformity to the original of
each document reviewed by us as a copy and the authenticity of the original of
each document received by us as a copy;

       

      (j) the
truthfulness of each statement as to all factual matters otherwise not known to
us to be untruthful contained in any document encompassed within the due
diligence review undertaken by us;

       

      (k) the
accuracy on the date of this letter as well as on the date stated in all
governmental certifications of each statement as to each factual matter
contained in such governmental certifications;

       

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

       

      (l) that
the addressee has acted in good faith, without notice of adverse claims, and has
complied with all laws applicable to it that affect the transactions referred to
in the Transaction Documents;

       

      (m) that
the transactions referred to in the Transaction Documents comply with all tests
of good faith, fairness and conscionability required by law;

       

      (n) that
routine procedural matters such as service of process or qualification to do
business in the relevant jurisdictions will be satisfied by the parties seeking
to enforce the Transaction Documents;

       

      (o) that
all statutes, judicial and administrative decisions, and rules and regulations
of governmental agencies constituting the law for which we are assuming
responsibility are published (e.g., reported court decisions and the specialized
reporting services of BNA, CCH and Prentice-Hall) or otherwise generally
accessible (e.g., LEXIS or WESTLAW) in each case in a manner generally available
(i.e., in terms of access and distribution following publication) to lawyers
practicing in our judicial circuit;

       

      (p) that
other agreements related to the transactions referred to in the Transaction
Documents will be enforced as written;

       

      (q) that
no action, discretionary or otherwise, will be taken by or on behalf of the
Company in the future that might result in a violation of law;

       

      (r) that
there are no other agreements or understandings among the parties that would
modify the terms of the Transaction Documents or the respective rights or
obligations of the parties to the Transaction Documents;

       

      (s) that
with respect to the Transaction Documents and to the transactions referred to
therein, there has been no mutual mistake of fact and there exists no fraud or
duress; and

       

      (t) the
constitutionality and validity of all relevant laws, regulations and agency
actions unless a reported case has otherwise held or widespread concern has been
expressed by commentators as reflected in materials which lawyers routinely
consult.

       

      As to
certain questions of fact material to this opinion, we have relied upon
statements or certificates of public officials and officers of the
Company.

       

      Whenever
a statement herein is qualified by "to our knowledge" or similar phrase, it
means that, during the course of our representation of the Company for the
purposes of this opinion letter, (1) no information that would give those
lawyers who participated in the preparation of the letter (collectively, the
"Opinion Letter Participants") current actual knowledge of the inaccuracy of
such statement has come to their attention; (2) we have not undertaken any
independent investigation or inquiry to determine the accuracy of such
statement; (3) any limited investigation or inquiry otherwise undertaken by the
Opinion Letter Participants during the preparation of this opinion letter
should–not be regarded as such an investigation or inquiry; and (4) no inference
as to our knowledge of any matters bearing on the accuracy of any such statement
should be drawn from the fact of our representation of the Company. We also call
to your attention to the fact that we are not general counsel to the Company and
we are not familiar with all aspects of the Company's business affairs. We have
not conducted an independent audit of the Company or its files.

       

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

       

      The
validity, binding effect and enforceability of Transaction Documents may be
limited or otherwise affected by (a) bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other similar statutes, rules, regulations
or other laws affecting the enforcement of creditors' rights and remedies
generally and (b) the unavailability of, or limitation on the availability of, a
particular right or remedy (whether in a proceeding in equity or at law) because
of an equitable principle or a requirement as to commercial reasonableness,
conscionability or good faith. In addition, certain remedies, waivers and other
provisions contained in the Transaction Documents might not be enforceable;
nevertheless, such unenforceability will not render such agreements invalid as a
whole or preclude the practical realization of the benefits to the Secured Party
thereunder. We express no opinions as to the application of the laws of usury to
the Transaction Documents.

       

      Based on
the foregoing, and subject to the qualifications stated herein, we are of the
opinion that:

       

      1. The
Company and each Subsidiary is a corporation duly organized, validly existing
and in good standing under the laws of its jurisdiction of incorporation and has
all requisite corporate power and authority to own, lease and operate its
properties and to carry on its business as now being conducted.

       

      2. The
Company has all necessary corporate power and authority to execute, deliver and
perform its obligations under each of the the Transaction Documents and to
consummate the transactions contemplated thereby.

       

      3. The
Transaction Documents have been duly and validly authorized, executed and
delivered by the Company and (assuming the due authorization, execution and
delivery thereof by the other parties thereto) constitute the legal, valid and
binding obligations of the Company, enforceable against it in accordance with
there respective terms, subject, as to enforceability, to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally and subject to general
principles of equity, whether enforcement is sought in a proceeding at law or in
equity.

       

      4. The
Shares have been duly authorized and, when issued upon conversion of the Notes
in accordance with the terms of the Notes or upon exercise of the Warrants in
accordance with the tern-is of the Warrants, as the case may be, will be validly
issued, fully-paid and non-assessable.

       

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

       

      5.
Assuming the representations and warranties of the Buyers in Section 3 of the
Agreements are true and correct, the Notes and the Warrants may be offered and
issued to the Buyers pursuant to the Agreements, the Conversion Shares may be
offered and issued to the Buyers upon conversion of the Notes, and the Warrant
Shares may be offered and issued to the Buyers upon exercise of the Warrants, in
each such case, without registration under the 1933 Act.

       

      6. The
execution and delivery of the Transaction Documents by the Company, and the
consummation by the Company of the issuance of the Securities and the other
transactions contemplated by the 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 term of the Certificate of Incorporation or by-laws of the
Company or any Subsidiary, (ii) 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 or (iii) 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 businesses or the
ability of the Company or any Subsidiary to make use thereof.

       

      7.
Assuming the representations and warranties of the Buyers in Section 3 of the
Agreements are true and correct, 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
required to be obtained or made by the Company for the offer, issuance and sale
of the Notes and the offer and issuance of the Warrants as contemplated by the
Agreements or the offer and issuance of the Conversion Shares upon conversion of
the Notes in accordance with the terms thereof or the offer and issuance of the
Warrant Shares upon exercise of the Warrants in accordance with the terms
thereof except such as have been obtained or made and other than (a) the filing
pursuant to the Agreements of a Registration Statement with the SEC covering the
resale of the Shares (b) such as may be required under the securities or "blue
sky" laws of certain jurisdictions (as to which we express no opinion) and (c)
the Form D to be filed by the Company with the SEC.

       

      8. The
Security Agreement is effective to create in favor of the Collateral Agent, for
the benefit of the holders from time to time of the Notes, as secured party,
valid security interests in the Collateral (as defined in the Security
Agreement) including, without limitation, the funds and proceeds from time to
time deposited or held in the Collateral Account (as defined in the Lockbox
Agreement), as security for the Obligations (as defined in the Security
Agreement), financing statements in proper form covering such security interests
will be duly filed in the offices listed on Schedule I hereto, and when filed,
such security interests in the Collateral will be perfected to the extent that
security interests in such Collateral may be perfected by the filing of
financing statements under the Uniform Commercial Code. Our opinions expressed
above are specifically subject to the following limitations, exceptions,
qualifications and assumptions:

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

       

      A. The
effect of bankruptcy, insolvency, reorganization, moratorium and other similar
laws relating to or affecting the relief of debtors or the rights and remedies
of creditors generally, including without limitation the effect of statutory or
other law regarding fraudulent conveyances and preferential
transfers.

       

      B.
Limitations imposed by state law, federal law or general equitable principles
upon the specific enforceability of any of the remedies, covenants or other
provisions of any applicable agreement and upon the availability of injunctive
relief or other equitable remedies, regardless of whether enforcement of any
such agreement is considered in a proceeding in equity or at law.

       

      We are
counsel admitted to practice in the State of New York and we do not express any
opinion with respect to the effect or applicability of the laws of any
jurisdiction, other than the laws of the State of New York, Delaware General
Corporation Law and the federal laws of the United States of America. In
furnishing the opinion regarding the valid existence and good standing of the
Company, we have relied solely upon a good standing certificate issued by the
Secretary of State of Delaware on June 27, 2006.

       

      This
opinion is rendered as of the date first written above, is solely for your
benefit in connection with the Agreements and may not be relief upon or used by,
circulated, quoted, or referred to nor may any copies hereof by delivered to any
other person without our prior written consent. We disclaim any obligation to
update this opinion letter or to advise you of facts, circumstances, events or
developments which hereafter may be brought to our attention and which may
alter, affect or modify the opinions expressed herein.

       

      
        	 
      	
                Very
      truly yours,

              	 
      
	 
      	 
      	 
      	 
      
	 
      	
                By:

              	
                /s/

              	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      


      

      


      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

       

      Exhibit
A

       

       

      Alexandra
Global Master Fund Ltd.

      do
Alexandra Investnient Management, LLC

      767 Third
Avenue

      39th
Floor

      New York,
New York 10017

       

       

      [NAME]

      [ADDRESS]

       

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      


       

       

      Schedule
II

       

       

      [Secretary
of State of the State of Delaware]

       

       

      


      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

       

      Schedule
II

       

       

      [Secretary
of State of the State of Delaware]

       

      [Department
of State of the State of New York]

       

      


       

      
        	 
      


      

       

       

       

       

      9