Document:

Unassociated Document

    ALLONGE
      TO 6%
      SENIOR SECURED CONVERTIBLE NOTES DUE 2007-2008 DATED
      JULY 21, 2006

    

    Reference
      is hereby made to the 6% Senior Secured Convertible Notes Due 2007-2008 of
      eMagin Corporation dated July 21, 2006 (the “Notes”). Terms used herein and not
      otherwise defined herein shall have the meaning set forth in the
      Notes.

    

    The
      Company and the holder set forth on the signature page attached hereto hereby
      agree to amend the terms of the Notes in accordance with the following
      terms:

    

    	1.  	
            Subsection
              (a) under the definition of “Repurchase Event” as set forth in Section
              1.1(b) of the Notes shall
              be amended
              in its entirety to provide as follows:

          

    

    “(a)
      The
      Common Stock ceases to be traded on the AMEX and is not listed for trading
      on
      the Nasdaq, the Nasdaq Capital Market, the NYSE, the Over-The-Counter Bulletin
      Board, the Pink Sheets, LLC or any similar organization;”

    

    	2.  	
            The
              first sentence of Section 3.2 of the Notes shall be amended in its
              entirety to provide as follows:

          

    

    “The
      Company shall at all times maintain Cash and Cash Equivalents Balances at least
      equal to $600,000; provided that the Company must maintain Cash and Cash
      Equivalents Balances of $200,000 from February 26, 2007 through and including
      March 31, 2007. Subsequent to March 31, 2007, the Company must maintain Cash
      and
      Cash Equivalents Balances of at least equal to $600,000.” 

    

    	3.  	
            Subsection
              (c) of Section 4.1 of the Notes shall be amended in its
              entirety to provide as follows:

          

    

    “(c) Breach
      of Covenant.
      The
      Company (1) fails to comply with Sections 3.1, 3.2, 3.8, 3.9, 3.12, 3.13, 3.15,
      3.16 or 3.17(a) (2) fails to comply in any material respect with any provision
      of Article III of this Note (other than Sections 3.1, 3.2, 3.8, 3.9, 3.12,
      3.13,
      3.15, 3.16 or 3.17(a)) or breaches any other material covenant or other material
      term or condition of this Note or any of the other Transaction Documents (other
      than as specifically provided in clauses (a), (b) or (c)(1) of this Section
      4.1), and in the case of this clause (2) of this Section 4.1(c) only, such
      breach continues for a period of ten days after written notice thereof to the
      Company from the Holder; provided,
      however, that,
      it
      shall not be deemed an Event of Default pursuant to this Section 4.1(c) if
      the
      Company breaches the covenants set forth in Sections 4(c) or 4(o) of the Note
      Purchase Agreement or the Other Note Purchase Agreements in the event that
      the
      Common Stock ceases to be listed on any of Nasdaq Capital Market, Nasdaq, the
      NYSE or the AMEX; or”

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
 

    	4.  	
            Subsection
              (j) of Section 4.1 of the Notes shall be amended in its
              entirety to provide as follows:

          

    

    “(j) Delisting
      of Common Stock.
      The
      Common Stock shall cease to be listed on any of Nasdaq Capital Market, Nasdaq,
      the NYSE, the AMEX, the Over-The-Counter Bulletin Board, the Pink Sheets, LLC
      or
      any similar organization;

    

    	5.  	
            The
              parties hereto acknowledge and agree that the breach of this Allonge
              would
              cause irreparable damage to the non-breaching parties and that the
              non-breaching parties will not have an adequate remedy at law. Therefore,
              the obligations of each of the parties under this Allonge, shall be
              enforceable by a decree of specific performance issued by any court
              of
              competent jurisdiction, and appropriate injunctive relief may be applied
              for and granted in connection therewith. Such remedies shall, however,
              be
              cumulative and not exclusive and shall be in addition to any other
              remedies which any party may have under this Allonge or
              otherwise.

          

    

    	6.  	
            This
              Allonge may be executed in counterparts, each of which when executed
              by
              any party will be deemed to be an original and all of which counterparts
              will together constitute one and the same agreement. Delivery of executed
              copies of this Allonge by telecopier will constitute proper
              delivery.

          

    

    	7.  	
            This
              Allonge is irrevocable and shall be binding upon and inure to the benefit
              of the parties and their respective successors and permitted assigns.
              Except
              as set forth herein, all other provisions of the Notes shall remain
              in
              full force and effect.

          

    

    	8.  	
            This
              Allonge will come into force immediately upon the date set forth
              below.

          

    

     

     

     

    [SIGNATURE
      PAGE FOLLOWS]

     

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

           

    
      	 	 	 
	 	EMAGIN
              CORPORATION
	 
 	 
 	 
 
	Date: 
March
              9, 2007	By:  	/s/ K.C.
              Park
	 	
              
Name:
              Dr. K.C. Park
	 	Title:
              Interim Chief Executive Officer

    

     

     

    
AGREED
      AND ACCEPTED: 

    ALEXANDRA
      GLOBAL MASTER FUND LTD.

    

    By:
      Alexandra Investment Management, LLC,

    as
      Investment Advisor       

    

    

    By:
      /s/
      Mikhail Filimonov

    
      
        

      
Name:
      Mikhail Filimonov

    Title:
      Chairman and Chief Executive Officer 

    

    

    RAINBOW
      GATE CORPORATION

     

    

    By:
      /s/
      Mortimer D.A. Sackler

    
      
        

      
Name:
      Mortimer D.A. Sackler

    Title:
      Investment Manager

    

    

    GINOLA
      LIMITED

     

    

    By:
      /s/
      Joerg Fischer

    
      
        

      
Name:
      Joerg Fischer

    Title:
      DirectorExhibit 10.1

                               STEVEN MADDEN, LTD.
                              52-16 BARNETT AVENUE
                           LONG ISLAND CITY, NY 11104
                                T (718) 308-2292
                                F (718) 308-8992

--------------------------------------------------------------------------------

                                                        March 9, 2007

Dear Mr. Schmertz:

Set forth below are the terms of your employment with Steven Madden, Ltd.:

1.       Term of Agreement: March 9, 2007 through December 31, 2009.

2.       Position: Brand Director.

3.       Salary: $600,000 per annum, less any deductions as shall be required to
         be withheld by any applicable laws and regulations.

4.       Signing Bonus: Upon your execution and delivery of this Agreement you
         shall receive a signing bonus of $500,000, less any deductions as shall
         be required to be withheld by any applicable laws and regulations.

5.       Bonus: The Company may pay you a bonus in such amount, if any, and at
         such time or times, as the Board of Directors may determine in its
         absolute discretion subject to the Company's ordinary payroll practice.

6.       Restricted Stock: You shall receive 100,000 shares of restricted stock
         as provided for in the Restricted Stock Agreement attached hereto.

7.       Expenses: The Company shall pay for all reasonable and necessary
         business-related expenses, including a cellular phone.

8.       Car Allowance: You shall receive a car allowance of $1,250 per month.

9.       Vacations: You shall be entitled to vacations, sick days and personal
         days in accordance with the Company's policy for executives.

10.      Death: This Agreement shall terminate upon your death; provided,
         however, that the Company shall continue to pay to your estate 50% of
         the Base Salary as set forth in paragraph 3 hereof for the twelve
         (12)-month period immediately subsequent to the date of your death.

11.      Change of Control: If, during the period commencing 30 days prior to a
         Change of Control and ending 180 days after a Change of Control, you
         are terminated by the Company other than For Cause, you are entitled to
         receive an amount equal to the lesser of (i) the average amount of
         total compensation actually received by you for the preceding three
         calendar years multiplied by 3 or (ii) the maximum amount which is tax
         deductible to the Company under Internal Revenue Code Section 280G.
         "Change of Control" shall mean when any person or group (excluding the
         Company or any of its affiliates) becomes the beneficial owner of
         securities representing 50% or more of the combined voting power of the
         Company's then outstanding securities. "For Cause" shall mean (i) your
<PAGE>

         repeated failure to perform the duties and responsibilities assigned to
         you by the Company, (ii) your conviction of a crime involving moral
         turpitude, or (iii) your willfully and knowingly engaging in any
         conduct materially detrimental to the business, goodwill or reputation
         of the Company.

12.      Non-Solicitation/Non-Competition Agreement: You recognize that the
         services to be performed by you hereunder are special and unique. In
         consideration of the compensation granted herein, you agree that, in
         the event you either terminate your employment of your own accord or
         are terminated by the Company For Cause prior to the expiration of this
         agreement, for a period of 12 months following such termination, you
         shall not (i) become employed by or otherwise affiliated with, nor
         furnish services to, any business that competes with, or otherwise
         furnishes goods or services to, the Company, (ii) solicit any business
         from any customers of the Company, or (iii) hire, offer to hire, entice
         away, or in any manner persuade or attempt to persuade any employee of
         the Company to discontinue his/her employment with the Company.

Signature:                                        /s/ JAMIESON A. KARSON
                                                  ------------------------------
                                                  Jamieson Karson, CEO

Counter-signature:                                /s/ ROBERT SCHMERTZ
                                                  ------------------------------
                                                  Robert Schmertz

                                       2

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