July 27, 2005 8k Ex 4.1


    SUBLEASE
      AGREEMENT

    


    


    This
      Sublease Agreement (the "Sublease")
      is
      made as of July 14, 2005 by and between CAPGEMINI
      U.S. LLC,
      a
      Delaware limited liability company, (the "Sublessor"),
      and
EMAGIN
      CORPORATION,
      a
      Delaware corporation (the "Sublessee").

    


    RECITALS:

    


    A. Bellevue
      Place Office Building Limited Partnership, a Washington limited partnership
      (the
      "Landlord")
      and
      Ernst & Young U.S. LLP, a Delaware limited liability partnership
      ("E&Y"),
      entered into that certain Bank of America Office Lease and First Lease Addendum,
      both dated April 20, 2000 (the "Office
      Lease"),
      for
      certain space on the fourteenth (14th)
      floor
      in the Bank of America Building at Bellevue Place, 10500 NE 8th
      Street,
      Bellevue, Washington (the "Building"),
      which
      leased space is more specifically described in the Office Lease. The Office
      Lease was subsequently assigned to Sublessor, formerly known as Cap Gemini
      Ernst
& Young U.S. LLC, pursuant to that certain Assignment of Lease dated
      February 26, 2002 (the "Assignment").

    


    B. The
      Office Lease was further amended by that certain Second Lease Addendum dated
      October 23, 2003 (the "Second
      Addendum").
      The
      Office Lease, as amended by the Second Addendum, is hereinafter referred to
      as
      the "Prime
      Lease".
      

    


    C. Sublessor
      desires to sublet the Subleased Premises (as defined herein) located in the
      Building to Sublessee, and Sublessee desires to sublease the Subleased Premises
      from Sublessor, for the term and upon the conditions set forth
      herein.

    


    NOW,
      THEREFORE, in consideration of the rent and other payments hereinafter set
      forth, the covenants and agreements of the parties contained herein, and other
      good and valuable consideration, the receipt and sufficiency of which is hereby
      acknowledged, the parties hereby agree as follows:

    


    1. Demise.
      Subject
      to Section
      23
      hereof,
      Sublessor does hereby agree to sublease the Subleased Premises to Sublessee,
      and
      Sublessee does hereby accept and sublease the Subleased Premises from Sublessor,
      for the term and upon the conditions set forth herein.

    


    2. Term.
      Provided Landlord has consented to this Sublease pursuant to Section
      23
      the term
      of the sublease of the Subleased Premises shall commence on July 1, 2005 (the
      "Commencement
      Date").
      This
      Sublease shall expire at 11:59 p.m. on August 31, 2009, but in no event later
      than the expiration date of the Prime Lease, unless sooner terminated in
      accordance with the provisions of this Sublease.

    


    Notwithstanding
      the foregoing, if the Landlord has not consented to this Sublease on or before
      July 1, 2005, then Sublessor and Sublessee agree that the Commencement Date
      may
      be moved forward for up to an additional 31 days (i.e.
      August
      1, 2005) in order to further pursue such request and to accommodate the
      Landlord’s requirements in connection with its review and approval thereof;
      whereupon the Rent Commencement Date and the Base Rent adjustment dates
      referenced in Section 5 (a) below shall also be moved forward by the same number
      of days. Sublessor and Sublessee agree to use their best efforts to obtain
      the
      Landlord’s consent as soon as reasonably possible following the date of
      execution of this Sublease. 

    


    
      
        
        

      

      
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    Notwithstanding
      the Commencement Date, upon execution of this Sublease, and Landlord’s consent
      to the Sublease, Sublessee shall have the right to access the Subleased Premises
      prior to the Commencement Date, rent-free and without any other consideration
      to
      Sublessor, for the purpose of installing Tenant’s fixtures and equipment.


    


    3. Subleased
      Premises.
      The
      "Subleased
      Premises"
      shall
      mean approximately 18,961 rentable square feet on the 14th
      floor of
      the Building, as more specifically depicted on Exhibit
      A
      attached
      hereto and made a part hereof. The Subleased Premises include all of the Leased
      Premises identified in the Prime Lease.

    


    4. Use.
      The
      Sublessee may use the Subleased Premises under the trade name “eMagin” solely
      for general office purposes (including incidental light assembly of electronic
      equipment, if and to the extent permitted in the Prime Lease or consented to
      by
      the Landlord), in accordance with all applicable laws, ordinances and
      regulations and subject to the Incorporated Provisions (defined in Section
      6
      below) of the Prime Lease and this Sublease.

     

    5. Payment
      of Rent.

    


    (a)
       Beginning
      on September 1, 2005 (the
      "Rent
      Commencement Date"),
      Sublessee shall pay base rent as follows (the "Base
      Rent"):

     

     

    

      
        	
                 

                Dates

              	
                 

                Monthly
                  Base Rent

              	
                 

                Annual
                  Base Rent Per RSF

              
	
                Rent
                  Commencement Date - June 30, 2006

              	
                $22,561.39

              	
                $14.28
                  / RSF

              
	
                July
                  1, 2006 - June 30, 2007

              	
                $39,028.06

              	
                $24.70
                  / RSF

              
	
                July
                  1, 2007 - August 31, 2009

              	
                $40,608.14

              	
                $25.70
                  / RSF

              


      

    

    


    


    Sublessor
      hereby directs Sublessee, and Sublessee does hereby agree, that such payment
      of
      Base Rent and payment of all other amounts due and payable to Sublessor under
      this Sublease shall be made to (and to the order of) Capgemini U.S. LLC,
      Corporate Real Estate Services, One Panorama Center, 7701 Las Colinas Ridge,
      Suite 600, Irving, Texas 75063 (or at such other place as the Sublessor
      subsequently shall designate in writing) and shall be paid in lawful money
      of
      the United States of America without notice or demand, and without abatement,
      deduction, counter-claim or setoff. Any installment of Base Rent that is
      received by Sublessor after the fifth (5th) day of the calendar month shall,
      at
      Sublessor's option, be subject to a late charge of ten percent (10%) of the
      amount thereof and such charge shall be paid by Sublessee upon demand by
      Sublessor, it being understood that the late fee described herein shall not
      be
      deemed a liquidated damages calculation and shall not preclude any other remedy
      of Sublessor under this Sublease or at law. To the extent that this Sublease
      shall commence on a day other than the first day of any calendar month, or
      terminate on a day other than the last day of any calendar month, the Base
      Rent
      under this Sublease shall be prorated on a per diem basis for that particular
      month.

    


    
      
        
        

      

      
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    (b) In
      addition to payment of Base Rent as aforesaid, Sublessee shall pay to Sublessor
      Operating Costs and Maintenance Expenses, as such term is defined in the Prime
      Lease, with respect to the Subleased Premises, to the extent that such Operating
      Costs and Maintenance Expenses exceed that which Sublessor must pay for the
      calendar year 2005 (the “Base Year”). For example, if the Operating Costs and
      Maintenance Expenses required to be paid by Sublessor for the Base Year are
      determined to be $9.70 per foot (the “Base Year Rate”), and the Operating Costs
      and Maintenance Expenses required to be paid by Sublessor for calendar year
      2006
      are estimated by the Landlord to be $10.70 per foot as determined pursuant
      to
      the Prime Lease, then Sublessee shall pay said $1.00 increase in the Base Year
      Rate to Sublessor as additional rent at the same times and in the same manner
      as
      specified in the Prime Lease. Furthermore, to the extent that Landlord charges
      Sublessor for any
      service, act or utility provided to the Subleased Premises beyond the basic
      services, acts and utilities that are required to be supplied by the Prime
      Lease
      without charge, including, without limitation, heating, air conditioning,
      utilities and additional cleaning, Sublessee shall pay for such charges as
      additional rent, immediately upon demand therefor to the extent such charges
      relate to the Subleased Premises (the
      "Additional
      Rent").

    


    (c) All
      payments referenced in this Section
      5,
      including, without limitation, Base Rent and Additional Rent are hereinafter
      referred to collectively as "Rent".

    


    (d) Notwithstanding
      the provisions of this Section 5 regarding Sublessee’s obligation to pay Rent to
      Sublessor, Sublessor and Sublessee understand, acknowledge and agree that the
      Base Rent and Additional Rent required to be paid by Sublessor to Landlord
      under
      the Prime Lease is more than the Rent required to be paid by Sublessee pursuant
      to this Sublease, and that Sublessor shall continue to be obligated to pay
      such
      Base Rent and Additional Rent (except to the extent that Sublessee is required
      to pay the excess Operating Costs and Maintenance Expenses as provided in
      Section 5 (b) above) to the Landlord at the times and in the manner specified
      in
      the Prime Lease. 

     

    6. Certain
      Provisions of Lease Incorporated.
      The
      following provisions of the Prime
      Lease
      (the "Incorporated
      Provisions")
      are
      explicitly incorporated herein by reference and made a part hereof: Paragraphs
      2.2, 6.5, Article 9, Paragraphs 10.2, 10.3, 11.2, 11.3, 12.1, 12.2, Article
      13,
      Article 14, Article 15, Article 16, Article 19, Article 21, Article 22, Article
      23, Article 26, Paragraph 34.2, Article 37 (excluding Paragraphs 37.7 and
      37.14). No consent, waiver, amendment, or other change by Landlord as permitted
      under the Prime Lease of Sublessor's obligations and liabilities as tenant
      under
      the Prime
      Lease
      shall reduce or limit Sublessee's obligations and liabilities to Sublessor
      hereunder unless Sublessor shall have agreed in writing that such consent,
      waiver, amendment or change shall be effective hereunder. Unless the context
      requires otherwise, for the period during the term of this Sublease only, (i)
      references in the Incorporated Provisions to Landlord shall refer to Sublessor
      (subject to the provisions of this Sublease which relieve Sublessor of any
      obligation or responsibility for the performance of the obligations of Landlord
      under the Prime
      Lease),
      (ii) references in such provisions to Tenant shall refer to Sublessee, and
      (iii)
      references in such provisions to the Premises shall refer to the Subleased
      Premises hereunder. Sublessee expressly assumes toward Sublessor and agrees
      to
      perform all of the obligations, responsibilities and covenants that Sublessor
      has assumed as Tenant under the Incorporated Provisions in respect of the
      Subleased Premises. Sublessee acknowledges that it has received a copy of the
      Prime Lease, and agrees not to do, or cause to be done, any act (whether of
      omission or commission) which would result in a default under or breach of
      any
      term, covenant, provision or condition of the Prime Lease. Sublessee shall
      not
      have any expansion, contraction or similar rights (including without limitation
      any rights of first offer or rights of first refusal) under the Prime Lease,
      or
      any rights to cancel, terminate, extend or renew the term of the Prime
      Lease.

    


    Notwithstanding
      the incorporation herein of the Incorporated Provisions or anything otherwise
      contained in this Sublease to the contrary,

    


    (a) Sublessor
      shall not be obligated to render or provide any of the services required to
      be
      provided by Landlord under the Prime Lease or the Incorporated Provisions,
      respectively, and Sublessor shall not be obligated to satisfy any obligations
      of
      the Landlord thereunder; and

    


    (b) Sublessor
      shall not have any responsibility or liability to Sublessee (i) on account
      of
      any act or omission of Landlord, any default by Landlord, or breach by Landlord
      of any term, covenant or condition of the Prime
      Lease,
      or any failure by Landlord to perform any of its obligations under the
Prime
      Lease,
      or (ii) by reason of any condition of or in the Building or the Subleased
      Premises now or hereafter existing;

    


    provided,
      however, that Sublessor shall, at Sublessee's request and expense, take all
      such
      reasonable actions as Sublessee shall direct to enforce Sublessor's rights
      and
      remedies under the Prime
      Lease
      with respect to the Subleased Premises or, at Sublessor’s option, authorize
      Sublessee to enforce the same in Sublessor's name. Sublessee shall indemnify
      and
      hold harmless Sublessor against any loss, liability, claim, cost or expense
      arising out of or in connection with any actions taken pursuant to the preceding
      sentence, and Sublessee shall be entitled to receive and retain any recovery
      allocable to the Subleased Premises during the term of this Sublease resulting
      from such actions, after recovery by Sublessor of all loss, liability, claim,
      cost and expense due to Sublessor by Sublessee hereunder. 

    


    7. Net
      Return.
      The
      payments of Sublessee hereunder to Sublessor are intended to constitute an
      absolutely net return to Sublessor with respect to the Subleased Premises,
      and
      except to the extent of (i) the difference between the Base Rent payable
      hereunder and the Base Rent payable under the Prime
      Lease,
      and (ii) excluding the cost of Operating Costs and Maintenance Expenses to
      be
      paid by Sublessor for the Subleased Premises, all costs of any kind relating
      to
      the Incorporated Provisions (with respect to the Subleased Premises), this
      Sublease, or the use and operation of the Subleased Premises shall be the
      responsibility of the Sublessee. Without limiting the generality of the
      foregoing, (i) whenever Sublessee requires Landlord to furnish any service
      or
      perform any act for which Landlord is entitled to make a separate charge under
      the Prime
      Lease,
      including, without limitation, heating, air conditioning and utilities,
      Sublessee shall pay the same, and (ii) Sublessee shall pay to Sublessor any
      charges billed to Sublessor from time to time, to the extent any such charges
      are allocable, as determined by Sublessor, for services provided to the
      Subleased Premises.

     

    
      
        
        

      

      
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    8. Property
      Located in or about the Subleased Premises.
      All
      improvements, fixtures, equipment and personal property in or about the
      Subleased Premises shall be in or about the Subleased Premises at the sole
      risk
      of Sublessee. The improvements, fixtures, equipment and personal property in
      or
      about the Subleased Premises as of the Commencement Date (as more particularly
      described on Exhibit
      B
      attached
      hereto and made a part hereof, the "Sublessor's
      Property"),
      other
      than the equipment, trade fixtures and personal property of Sublessee or anyone
      claiming by, through or under Sublessee shall be and remain the property of
      Sublessor and shall be kept by Sublessee in good condition and repair (subject
      to normal wear and tear) and shall not be removed from the Subleased Premises.
      Sublessor makes no warranties of any kind or nature, whether express or implied
      (including without limitation warranties of merchantability or fitness for
      a
      particular purpose), with respect to the Sublessor’s Property, and Sublessee
      accepts the Sublessor’s Property for use during the term hereof in its "as is"
      and "where is" condition. Sublessee shall insure the Sublessor's Property in
      the
      name of Sublessor as part of the property insurance required hereunder.
      Sublessor shall have the right to enter the Subleased Premises at all reasonable
      times and after giving Sublessee reasonable notice, for the purpose of, among
      other things, inspecting the Subleased Premises and the Sublessor's Property.
      In
      consideration of the Rent payable to Sublessor, and provided that Sublessee
      shall not then be in default under this Sublease, upon the end of the term
      of
      this Sublease (or if, this Sublease is terminated by Landlord on account of
      Sublessor’s default of its obligations under the Prime Lease excluding any such
      termination on account of Sublessee’s default of its obligations under this
      Sublease) Sublessor shall transfer the Sublessor's Property to Sublessee in
      its
      "as is" and "where is" condition, with all representations and warranties
      (including without limitation warranties of merchantability or fitness for
      a
      particular purpose) hereby waived by Sublessee. Any applicable sales, use or
      similar tax or charge which may be imposed or due by reason of such use or
      transfer of Sublessor’s Property shall be the sole responsibility of Sublessee,
      and Sublessee agrees to pay such taxes or charges to Sublessor at any time
      upon
      demand (including after the termination or expiration of this Sublease).
      Sublessee hereby acknowledges that it has inspected the Sublessor's Property
      and
      waives any and all claims against Sublessor arising out of any damage, defect
      or
      condition relating to the Sublessor's Property. 

    


    9. Surrender.
      At the
      termination of this Sublease, by lapse of time or otherwise, Sublessee shall
      surrender possession of the Subleased Premises to Sublessor and deliver all
      keys
      to the Subleased Premises and all locks therein to Sublessor and make known
      to
      Sublessor the combination of all combination locks in the Subleased Premises
      and
      shall return the Subleased Premises and the Sublessor's Property (to the extent
      the Sublessor’s Property has not been transferred to Sublessee pursuant to the
      terms of Section
      8
      of this
      Sublease) to Sublessor in broom clean condition and in as good condition as
      Sublessee originally took possession, normal wear and tear excepted, failing
      which Sublessor may restore the Subleased Premises and the Sublessor’s Property
      to such condition and the Sublessee shall pay the cost thereof to Sublessor
      on
      demand. Upon or prior to such termination of this Sublease, Sublessee shall
      remove all of Sublessee's personal property (but not Landlord's personal
      property) and only those improvements, alterations and additions, which as
      a
      condition to Sublessor's or Landlord's consent to the installation thereof,
      are
      required to be removed and restored upon termination hereof. 

    


    
      
        
        

      

      
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    10. Assignment
      and Subletting. Sublessee
      shall have no right to sublet the Subleased Premises or any portion thereof
      or
      assign or otherwise transfer its interest in this Sublease, whether expressly
      or
      by operation of law, without the prior written consent of Sublessor and all
      other consents and approvals that may be required under the Prime
      Lease.

    


    11. Representations
      and Warranties of Sublessor.
      As of
      the date hereof, Sublessor represents and warrants to Sublessee, and agrees,
      as
      follows: (i) the Prime Lease which is identified by the documents referenced
      above in Recital Paragraphs A and B represents a true, correct and complete
      copy
      of the Prime Lease; (ii) the Prime Lease has not been modified or amended except
      as set forth in the documents referenced above in Rectal Paragraphs A and B;
      (iii) Sublessor has received no written notice from Landlord of default still
      outstanding; (iv) Sublessor will not, from the date hereof through the date
      of
      termination of this Sublease, trigger an Event of Default (as
      defined in the Prime Lease) (excluding those caused by breach of this Sublease
      by Sublessee or any acts or omissions of Sublessee) which results in Landlord
      rightfully terminating and retaking possession of the Subleased Premises from
      Sublessee prior to the end of the term of this Sublease;
      (v) no
      liens exist, nor will be permitted by Sublessor to exist, against the Subleased
      Premises in violation of Section 22 of the Prime Lease for work performed,
      materials furnished, equipment supplied or obligations incurred by or on behalf
      of Sublessor; (vi) if any rent is abated pursuant to paragraph 16 of the Prime
      Lease, the Rent owed by Sublessee pursuant to this Sublease shall also be abated
      proportionately and for the same time, and (vi) any award which may be sought
      by
      Sublessor pursuant to Section 28.4 of the Prime Lease will be prorated between
      Sublessor and Sublessee based upon their respective interests in the Subleased
      Premises..

    


    12. Indemnification
      By Sublessee.
      Sublessee agrees, to the extent not expressly prohibited by law, to pay, and
      to
      protect, defend, indemnify and save harmless Sublessor and Landlord and their
      respective past, present and future employees, officers and agents (each an
      "Indemnified
      Party"
      and
      collectively, the "Indemnified
      Parties"),
      from
      and against any liabilities, losses, damages, costs or expenses (including,
      but
      not limited to, attorneys' fees and expenses) of any nature whatsoever which
      may
      be imposed upon, incurred by, or asserted against any Indemnified Party by
      reason of or in connection with (i) any accident, injury to, or death of any
      person or any damage to property or any other events occurring on or about
      the
      Subleased Premises, or (ii) any breach by Sublessee (excluding any breach caused
      by Sublessor) of any term or condition of the Incorporated Provisions or the
      Prime Lease, with respect to the Subleased Premises, or this Sublease or any
      failure by Sublessee to perform or comply with (x) any of the terms of the
      Incorporated Provisions, with respect to the Subleased Premises or (y) this
      Sublease, or (z) any restrictions, statutes, laws, ordinances or regulations
      affecting the Subleased Premises or any part thereof or Sublessee’s use of the
      Subleased Premises.

    


    13. Indemnification
      by Sublessor.
      Subject
      to the limitations on Sublessor’s liabilities as specified in Section 24 below,
      Sublessor agrees, to the extent not expressly prohibited by law, to pay, and
      to
      protect, defend, indemnify and save harmless Sublessee and Sublessee’s past,
      present and future employees, officers and agents (each an "Indemnified
      Party"
      and
      collectively, the "Indemnified
      Parties"),
      from
      and against any liabilities, losses, damages, costs or expenses (including,
      but
      not limited to, attorneys' fees and expenses) of any nature whatsoever which
      may
      be imposed upon, incurred by, or asserted against any Indemnified Party which
      result from Sublessor’s breach of the Prime Lease (except to the extent such
      breach arises out of Sublessee’s breach of this Sublease). 

    


    
      
        
        

      

      
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    14. Insurance.
      As
      pursuant to the Incorporated Provisions, Sublessee shall obtain all insurance
      policies (and in such amounts) required under the Prime Lease, including, but
      not limited to, personal property insurance covering the Sublessee's personal
      property. Sublessee shall include Sublessor and Landlord as additional insureds
      under all liability-related insurance policies required under the terms of
      the
Prime
      Lease
      and under all liability related insurance policies which Sublessee may carry
      with respect to the Subleased Premises, any property located thereon, or with
      respect to any claim or accident arising on or about the Subleased Premises.
      Prior to the commencement of the term of this Sublease or any occupancy of
      or
      access to the Subleased Premises by Sublessee, Sublessee shall deliver to
      Sublessor certificates of insurance showing such policies to be valid and in
      effect. Any rights of settlement allocated to Sublessor as Tenant under the
      Prime
      Lease
      shall continue to be the rights of Sublessor hereunder. 

    


    Sublessee
      hereby releases Sublessor and Landlord, and their respective officers,
      employees, agents and representatives, from any and all claims or demands of
      damage, liability, loss, expense or injury to the Subleased Premises or to
      the
      furnishings, fixtures, equipment, inventory or other property of Sublessee
      in,
      about or upon the Subleased Premises, which is caused by or results from perils,
      events or happenings which are the subject of insurance carried by Sublessee
      which is required under this Sublease or otherwise in force at the time of
      any
      such loss, whether or not due to the negligence of Sublessor or Landlord or
      their respective officers, employees, agents and representatives, and regardless
      of cause or origin. Any insurance carried by Sublessee with respect to the
      Buildings or the Subleased Premises (or property therein or occurrences thereon)
      shall include a clause or endorsement denying to the insurer rights of
      subrogation against Sublessor and Landlord and their respective officers,
      employees, agents and representatives.

    


    15. Defaults.
      It
      shall be an Event of Default hereunder if:

    


    (a) Sublessee
      shall fail to pay Rent when due; or

    


    (b) Sublessee
      shall fail to pay when due any payments required to be made by Sublessee as
      described in this Sublease other than Rent (after, in the case of the first
      such
      failure, ten (10) business days’ written notice from Sublessor, and thereafter
      without requirement of such notice and grace period; or

    


    (c) Sublessee
      shall fail to keep or perform any one or more of the other terms, conditions,
      covenants or agreements of this Sublease or the Incorporated Provisions, and
      such failure shall continue for ten (10) days after notice of such failure
      to
      Sublessee; or

    


    (d) Sublessee
      shall cause or permit to occur a default under the Incorporated Provisions
      which
      is not cured prior to five (5) days before the expiration of any cure period
      applicable thereto pursuant to the Incorporated Provisions or the Prime
      Lease.

    


    
      
        
        

      

      
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    16. Remedies.
      In the
      event of an Event of Default by Sublessee hereunder, Sublessor may exercise
      any
      remedies available to Landlord under the Incorporated Provisions, and, in
      addition to or, at its option, in lieu of, any or all other remedies provided
      for herein or in the Incorporated Provisions or available to Sublessor at law
      or
      in equity, Sublessor shall be entitled to enjoin such breach or a threatened
      breach, or to perform such obligation or cure such breach on behalf of Sublessee
      and recover the cost of such performance or cure from Sublessee upon demand.
      Notwithstanding anything to the contrary contained in the Prime Lease, Sublessor
      shall have the right to terminate this Sublease immediately upon an Event of
      Default by Sublessee and, at Sublessor's sole option, Sublessor shall have
      the
      right to retain all equipment and fixtures located on the Subleased Premises
      as
      security for the outstanding obligations of Sublessee. 

    


    17. Tenant
      Improvements.
      Sublessor has not made any warranty or representation as to the condition of
      the
      Subleased Premises or any agreement or promise to decorate, alter, repair or
      improve the Subleased Premises and Sublessee hereby waives any and all rights
      it
      may have, express or implied, against Sublessor in connection therewith. The
      Subleased Premises are to be leased to Sublessee in "as-is" condition.


    


    18. Alterations.
      Sublessee shall make no alterations or improvements to the Subleased Premises
      except in accordance with the requirements of the Prime
      Lease
      and with the prior written consent of Sublessor which consent shall not be
      unreasonably withheld or delayed, and, to the extent such consent is required
      under the Prime Lease, the prior written consent of Landlord. Such alteration
      shall be completed in accordance with a schedule and plans and specifications
      submitted to and approved by the Landlord and Sublessor. Sublessee hereby
      indemnifies and holds harmless Sublessor against any loss, liability, cost,
      damage or claim arising out of or relating to any alteration or improvements
      made by or on behalf of Sublessee to the Subleased Premises, whether or not
      approved by Sublessor.

    


    19. Notices.
      All
      notices and demands hereunder shall be in writing and shall be served in person,
      by prepaid certified United States Mail, return receipt requested, or by
      nationally recognized overnight courier, as follows:

    


    If
      to
      Sublessor:

    


    Corporate
      Real Estate Services

    Capgemini
      U.S. LLC

    One
      Panorama Center

    7701
      Las
      Colinas Ridge, Suite 600

    Irving,
      Texas 75063

    


    With
      a
      copy to:

    


    Office
      of
      the General Counsel

    Capgemini
      U.S. LLC

    750
      Seventh Avenue, 18th
      Floor

    New
      York,
      New York 10019 

    


    


    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

    If
      to
      Sublessee:

    


    eMagin
      Corporation

    Bellevue
      Place

    10500
      NE
      8th
      Street,
      14th
      Floor

    Bellevue,
      Washington 

    


    Tel:
      (425) 882-7878 

    Fax:
      (425) 882-7373

    Attn:
      John Atherly

    


    Such
      notices shall be deemed served when delivered, if served in person, or by
      certified mail, or on the next business day after delivery to a nationally
      recognized overnight courier service. Any party may change the address for
      notices to it by a notice given as described herein.

    


    20. Brokers.
      Sublessor and Sublessee represent and warrant that they have not dealt with
      any
      brokers in connection with the sublease of the Subleased Premises other than
      Trammell Crow Company and Washington Partners Corporate Real Estate. Sublessor
      and Sublessee do hereby indemnify, defend and agree to hold each other harmless
      from and against any and all loss, cost, liability or obligations (including
      reasonable attorneys' fees) related to any fees or commissions claimed by any
      parties, to the extent such claims are based on the acts or agreements of the
      indemnifying party.

    


    21.  Security
      Deposit.
      In
      order to secure Sublessee's performance hereunder, Sublessee hereby agrees
      that
      within three days of the Sublease Approval date, it shall deposit with Sublessor
      a security deposit in the amount of EIGHTY-ONE THOUSAND TWO HUNDRED SIXTEEN
      Dollars and 00/100 Dollars ($81,216.00) (the "Security
      Deposit").
      Such
      Security Deposit shall be held by Sublessor, without interest, and upon the
      occurrence of any default of the Sublessee's obligations hereunder, may be
      applied or retained for the payment or performance of such obligations. The
      use,
      application or retention of the Security Deposit, or any portion thereof, by
      Sublessor shall not prevent Sublessor from exercising any other right or remedy
      provided by this Sublease or by law (it being intended that Sublessor shall
      not
      first be required to proceed against the Security Deposit) and shall not operate
      as a limitation on any recovery to which Sublessor may otherwise be entitled.
      If
      any portion of the Security Deposit is used, applied or retained by Sublessor
      for the purposes set forth above, Sublessee agrees, within ten (10) days after
      the written demand therefor is made by Sublessor, to deposit cash with the
      Sublessor in an amount sufficient to restore the Security Deposit to its
      original amount.
      Notwithstanding the foregoing, provided no Sublessee default has occurred,
      Sublessor will apply two (2) months of such deposit toward Sublessee’s Base Rent
      otherwise due for the last two months of the Sublease Term.

    


    22. Miscellaneous.

    


    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

    (a) Sublessor
      and Landlord and their agents shall have the right of access to the Subleased
      Premises at all reasonable times on reasonable notice to Sublessee (except
      in
      the event of an emergency, in which case no notice is necessary) in order to
      inspect or exhibit the Subleased Premises. 

    


    (b) This
      Sublease contains the entire agreement between the parties hereto, and shall
      not
      be modified in any manner except by a writing signed by the party against which
      such modification is sought to be enforced.

    


    (c) The
      agreements, terms, covenants, and condi-tions herein shall bind and inure to
      the
      benefit of Sublessor and Sublessee and their respective heirs, personal
      representatives, successors, and permitted assigns.

    


    (d) Each
      of
      the indemnifications contained in this Sublease shall survive the expiration
      or
      earlier termination of this Sublease.  In addition, Section
      24 shall
      survive the expiration or earlier termination of this Sublease.

    


    (e) The
      Recitals to this Agreement are incorporated herein by this reference as if
      set
      forth in full including, but not limited to, the terms, conditions and
      provisions of the Office Lease and the Prime Lease as described in Recital
      Paragraphs A and B.

     

    23. Landlord's
      Consent.
      Sublessor and Sublessee acknowledge that this Sublease is subject to Sublessor's
      receipt of the written approval of and consent by the Landlord to the sublease
      transaction described herein.

     

    24. Limitation
      on Liability of Sublessor.
      In no
      event will Sublessor be liable for consequential, incidental, indirect, punitive
      or special damages (including loss of profits or business) regardless of whether
      such liability is based on breach of contract, tort, strict liability, breach
      of
      warranties, failure of essential purpose or otherwise, and even if advised
      of
      the likelihood of such damages.

    


    25. Security.
      Sublessee shall contract directly with security providers for any services
      it
      deems reasonably appropriate, and Sublessee acknowledges that Sublessor shall
      have no liability or responsibility for security of the Subleased
      Premises.

    


    26. Parking.
      Subject
      to the terms of the Prime Sublease, Sublessor hereby assigns to Sublessee
      effective upon the Commencement Date any and all rights which the Sublessor
      has
      under the Prime Lease to the number of parking spaces in the parking lot(s)
      in
      or adjacent to the Building equal to the ratio allocated to Sublessor under
      the
      Prime Lease, provided that (i) Sublessor shall not be a party to any lease
      of
      parking spaces by Sublessee, as any lease shall be solely between Sublessee
      and
      Landlord (or its parking garage operators), and Sublessor shall not have any
      responsibility (or make any warranty) to Sublessee with respect to such spaces,
      (ii) any such lease of parking spaces shall be at Sublessee's sole cost and
      expense, which shall be paid in accordance with the prevailing parking rates
      charged by the Landlord (or its parking garage operators), and (iii) this
      assignment of rights to any parking spaces shall be conditioned on Sublessee’s
      agreement to lease such spaces from Landlord (or its parking garage operators),
      and (iv) Sublessor shall not be required to assign any parking spaces to the
      extent Sublessor would continue to have any payment or other obligations to
      the
      Landlord (or its parking garage operators) relating to any such spaces.).
      Sublessee agrees to indemnify and save harmless Sublessor from and against
      any
      liabilities, losses, damages, costs or expenses (including, but not limited
      to,
      attorneys' fees and expenses) of any nature whatsoever which may be imposed
      upon, incurred by, or asserted against Sublessor by reason of or in connection
      with Sublessee’s use of the parking garage or such parking spaces.

    


    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

    27. Subordination
      and Attornment.
      This
      Sublease shall be subject and subordinate to the Prime Lease and all mortgages,
      deeds of trust, ground leases and security agreements now or hereafter
      encumbering the Building. In the event of termination of the Prime Lease for
      any
      reason, or in the event of any reentry or repossession of the Subleased Premises
      by Landlord, Landlord may at its option, either (i) terminate this Sublease,
      or
      (ii) take over all of the right, title and interests of Sublessor under this
      Sublease, in which case the Sublessee will attorn to Landlord, but nevertheless
      Landlord will not (1) be liable for any previous act or omission of Sublessor
      under this Sublease, (2) be subject to any defense or offset previously accrued
      in favor of the Sublessee against Sublessor, or (3) be bound by any previous
      modification of this Sublease made without Landlord's written consent, or by
      any
      previous prepayment by Sublessee of more than one month's rent.

    


    28. No
      Presumption Against Draftor.
      Sublessor and Sublessee acknowledge that both parties have been represented
      by
      counsel and are fully aware of the contents of this Sublease. Therefore,
      Sublessee hereby waives any presumption that may exist under law or equity
      against the Sublessor by virtue of Sublessor creating the initial draft of
      this
      Sublease.

    


    [Signature
      Page Follows]

    



    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    


    IN
      WITNESS WHEREOF, the parties have executed this Sublease as of the day and
      year
      first above written.

        

    
 

    
      
        	SUBLESSOR: 	 	 	SUBLESSEE: 
	 	 	 	 
	CAPGEMINI U.S. LLC, a	 	 	EMAGIN CORPORATION, a 
	Delaware limited liability company 	 	 	Delaware corporation 
	 	 	 	 
	 	 	 	 
	/s/ Thierry
                Delaporte	 	 	/s/ John
                Atherly
	
                
Thierry
                Delaporte	 	 	
                
John
                Atherly
	Its:
                Chief Financial Officer	 	 	Its:
                Chief Financial
                Officer


      

 

    


    


     

    
      
        
        

        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    


    


     

    EXHIBIT
      A

    


    


    SUBLEASED
      PREMISES

    


    



    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    


    EXHIBIT
      B

    


    


    SUBLESSOR'S
      PROPERTY