Document:

EX-10.1

Exhibit 10.1

SEVENTH AMENDMENT TO

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

          SEVENTH AMENDMENT, dated as of July 31, 2008, to the Second Amended and Restated Credit
Agreement referred to below (this “Amendment”), by and among DICK’S SPORTING GOODS, INC., a
Delaware corporation (“Borrower”), GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware
corporation, as Agent for the Lenders (in such capacity “Agent”), and the Lenders signatory
hereto.

W I T N E S S E T H:

          WHEREAS, Borrower, the other Loan Parties signatory thereto, Agent and Lenders are parties to
that certain Second Amended and Restated Credit Agreement, dated as of July 28, 2004 (as amended,
restated, supplemented or otherwise modified from time to time, the “Credit Agreement”);
and

          WHEREAS, Borrower, Agent and Required Lenders have agreed to amend certain provisions of the
Credit Agreement, in the manner, and on the terms and conditions, provided for herein;

          NOW THEREFORE, in consideration of the premises and for other good and valuable consideration,
the receipt, adequacy and sufficiency of which are hereby acknowledged, Borrower, Agent and
Required Lenders hereby agree as follows:

          1. Definitions. Capitalized terms not otherwise defined herein (including in the
Recitals hereto) shall have the meanings ascribed to them in the Credit Agreement as amended hereby
(the “Amended Credit Agreement”).

          2. Amendment to Section 6.3 of the Credit Agreement. Section 6.3 of the
Credit Agreement is hereby amended as of the Effective Date by deleting the word “and” before
clause (n) therein and inserting a new clause (o) at the end of clause (n) to read as follows:

“; (o) Capital Lease Obligations incurred by Borrower in connection with the
construction of a new corporate headquarters to be located in the Township of
Findlay, Allegheny County, Pennsylvania, containing 116 acres, with Horizon DSG
Associates, LP as Landlord (the “New Dick’s HQ”), in a maximum outstanding
aggregate amount not to exceed $150,000,000.”

          3. Amendment to Section 6.7 of the Credit Agreement. Section 6.7 of the
Credit Agreement is hereby amended as of the Effective Date by deleting clause (c) therein in its
entirety and inserting in lieu thereof a new clause (c) to read as follows:

 

 

“(c) purchase money Liens or purchase money security interests upon or in Equipment
acquired by any Loan Party in the ordinary course of business to secure the
purchase price of such Equipment or to secure Capital Lease Obligations, in each
case, permitted under (i) clause (c) of Section 6.3 incurred solely for the
purpose of financing the acquisition of such Equipment or (ii) clause (o) of
Section 6.3 incurred solely for the purpose of financing the construction of the
New Dick’s HQ, and Liens granted pursuant to the Bank of America Lease and the
Collateral Assignment of Purchase Agreement, in each case as in effect on February
28, 2007, to secure, among other things, the obligations evidenced by the Progress
Payment Promissory Note;”

          4. Representations and Warranties. To induce Required Lenders and Agent to enter into
this Amendment, Borrower hereby represents and warrants that, after giving effect to this
Amendment:

	 	(a)	 	Each of the execution, delivery and performance by Borrower and each other
Loan Party which is party to the Guaranty of this Amendment and the performance of the
Amended Credit Agreement are (i) within Borrower’s and each such Loan Party’s
corporate power and have been duly authorized by all necessary corporate and
shareholder action; (ii) do not contravene any provision of any Loan Party’s charter
or bylaws or equivalent organizational or charter or other constituent documents;
(iii) do not violate any law or regulation, or any order or decree of any court or
Governmental Authority; (iv) do not conflict with or result in the breach or
termination of, constitute a default under or accelerate or permit the acceleration of
any performance required by, any indenture, mortgage, deed of trust, lease, agreement
or other instrument to which any Loan Party is a party or by which any Loan Party or
any of its property is bound; (v) do not result in the creation or imposition of any
Lien upon any of the property of any Loan Party other than those in favor of Agent, on
behalf of itself and the Lenders, pursuant to the Loan Documents; and (vi) do not
require the consent or approval of any Governmental Authority or any other Person.
	 
	 	(b)	 	This Amendment has been duly executed and delivered by or on behalf of
Borrower and each other Loan Party which is party to the Guaranty.
	 
	 	(c)	 	Each of this Amendment and the Amended Credit Agreement constitutes a legal,
valid and binding obligation of Borrower and each such Loan Party enforceable against
Borrower and such Loan Party in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors’

2

 

	 	 	 	rights generally and by general equitable principles (whether enforcement is sought
by proceedings in equity or at law).
	 
	 	(d)	 	No Default or Event of Default has occurred and is continuing both before and
after giving effect to this Amendment.
	 
	 	(e)	 	No action, claim or proceeding is now pending or, to the knowledge of any
Loan Party signatory hereto, threatened against such Loan Party, at law, in equity or
otherwise, before any court, board, commission, agency or instrumentality of any
federal, state, or local government or of any agency or subdivision thereof, or before
any arbitrator or panel of arbitrators, which challenges such Loan Party’s right,
power, or competence to enter into this Amendment or, to the extent applicable,
perform any of its obligations under this Amendment, the Amended Credit Agreement or
any other Loan Document, or the validity or enforceability of this Amendment, the
Amended Credit Agreement or any other Loan Document or any action taken under this
Amendment, the Amended Credit Agreement or any other Loan Document or which if
determined adversely could have or result in a Material Adverse Effect. To the
knowledge of each Loan Party, there does not exist a state of facts which is
reasonably likely to give rise to such proceedings.
	 
	 	(f)	 	All representations and warranties of the Loan Parties contained in the
Credit Agreement and the other Loan Documents are true and correct as of the date
hereof with the same effect as though such representations and warranties had been
made on and as of the date hereof, except to the extent that any such representation
or warranty expressly relates to an earlier date.

          5. Remedies. This Amendment shall constitute a Loan Document. The breach by any Loan
Party of any representation, warranty, covenant or agreement in this Amendment shall constitute an
immediate Event of Default hereunder and under the other Loan Documents.

          6. No Other Amendments/Waivers. Except as expressly provided for herein, the Credit
Agreement and the other Loan Documents shall be unmodified and shall continue to be in full force
and effect in accordance with their terms. In addition, this Amendment shall not be deemed a
waiver of any term or condition of any Loan Document by the Agent or the Lenders with respect to
any right or remedy which the Agent or the Lenders may now or in the future have under the Loan
Documents, at law or in equity or otherwise or be deemed to prejudice any rights or remedies which
the Agent or the Lenders may now have or may have in the future under or in connection with any
Loan Document or under or in connection with any Default or Event of Default which may now exist or
which may occur after the date hereof. The Credit Agreement and all other Loan Documents are
hereby in all respects ratified and confirmed.

3

 

          7. Waiver of Claims. Borrower hereby waives, releases, remises and forever discharges
Agent, Lenders and each other Indemnified Person from any and all Claims of any kind or character,
known or unknown, which Borrower ever had, now has or might hereafter have against Agent or any
Indemnified Person which relates, directly or indirectly, to any acts or omissions of Agent or such
Lender or any other Indemnified Person on or prior to the Effective Date.

          8. Fees and Expenses. Borrower hereby reconfirms its obligations pursuant to
Section 11.2 of the Credit Agreement to pay and reimburse Agent for all reasonable
out-of-pocket expenses (including, without limitation, reasonable fees of counsel) incurred in
connection with the negotiation, preparation, execution and delivery of this Amendment and all
other documents and instruments delivered in connection herewith.

          9. Effectiveness. This Amendment shall become effective as of July 31, 2008 (the
“Effective Date”) only upon satisfaction in full in the judgment of the Agent of each of
the following conditions:

	 	(a)	 	Amendment. Agent shall have received eight (8) original copies of
this Amendment duly executed and delivered by Agent, Lenders and Borrower and
acknowledged by the other Loan Parties.
	 
	 	(b)	 	Representations and Warranties. All representations and warranties
contained in this Amendment shall be true and correct on and as of the Effective Date.

          10. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK. THIS AGREEMENT AND EACH OTHER LOAN DOCUMENT SHALL BE
DEEMED TO BE A CONTRACT UNDER THE LAWS OF THE STATE OF NEW YORK AND SHALL, PURSUANT TO NEW YORK
GENERAL OBLIGATIONS LAW 5-1401, FOR ALL PURPOSES BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

          11. Counterparts. This Amendment may be executed by the parties hereto on any number
of separate counterparts and all of said counterparts taken together shall be deemed to constitute
one and the same instrument.

[SIGNATURE PAGES FOLLOW]

4

 

          IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and
delivered as of the day and year first above written.

	 	 	 	 	 	 	 
	 	 	BORROWER:	 	 
	 
	 	 	 	 	 	 
	 	 	DICK’S SPORTING GOODS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Timothy E. Kullman
 

Timothy E. Kullman
	 	 
	 

	 	Title:
	 	Executive Vice President, Finance	 	 
	 

	 	 	 	Administration	 	 
	 

	 	 	 	Chief Financial Officer	 	 

[Signature Page to Seventh Amendment to Credit Agreement]

 

 

	 	 	 	 	 	 	 
	 	 	AGENT:	 	 
	 
	 	 	 	 	 	 
	 	 	GENERAL ELECTRIC CAPITAL	 	 
	 	 	CORPORATION, as Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Charles Chiodo
 

Charles Chiodo
	 	 
	 

	 	Its:
	 	Duly Authorized Signatory	 	 

[Signature Page to Seventh Amendment to Credit Agreement]

 

 

	 	 	 	 	 	 	 
	 	 	LENDERS:	 	 
	 
	 	 	 	 	 	 
	 	 	GENERAL ELECTRIC CAPITAL	 	 
	 	 	CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Charles Chiodo
 

Charles Chiodo
	 	 
	 

	 	Its:
	 	Duly Authorized Signatory	 	 

[Signature Page to Seventh Amendment to Credit Agreement]

 

 

	 	 	 	 	 	 	 
	 	 	BANK OF AMERICA, N.A.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Andrew Cerusi
 

Andrew Cerusi
	 	 
	 

	 	Title:
	 	Vice President	 	 

[Signature Page to Seventh Amendment to Credit Agreement]

 

 

	 	 	 	 	 	 	 
	 	 	NATIONAL CITY BUSINESS CREDIT, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Daniel O’Rourke
 

Daniel O’Rourke
	 	 
	 

	 	Title:
	 	Director	 	 

[Signature Page to Seventh Amendment to Credit Agreement]

 

 

	 	 	 	 	 	 	 
	 	 	WACHOVIA BANK, NATIONAL ASSOCIATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	W. Scott Degler
 

W. Scott Degler
	 	 
	 

	 	Title:
	 	Vice President	 	 

[Signature Page to Seventh Amendment to Credit Agreement]

 

 

	 	 	 	 	 	 	 
	 	 	CITIZEN’S BANK OF PENNSYLVANIA	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Don Cmar
 

Don Cmar
	 	 
	 

	 	Title:
	 	Vice President	 	 

[Signature Page to Seventh Amendment to Credit Agreement]

 

 

	 	 	 	 	 	 	 
	 	 	JPMORGAN CHASE BANK, N.A.	 	 
	 	 	formerly known as JP MORGAN	 	 
	 	 	CHASE BANK	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ James M. Barbato
 

James M. Barbato
	 	 
	 

	 	Title:
	 	Vice President	 	 

[Signature Page to Seventh Amendment to Credit Agreement]

 

 

Each of the undersigned Loan Parties hereby (i) acknowledges each of the amendments and waivers to
the Credit Agreement effected by this Amendment and (ii) confirms and agrees that its obligations
under its Guaranty shall continue without any diminution thereof and shall remain in full force and
effect on and after the effectiveness of this Amendment.

	 	 	 	 	 
	ACKNOWLEDGED, CONSENTED and
	AGREED to as of the date first written
	above.
	 
	 	 	 	 
	AMERICAN SPORTS LICENSING, INC.
	 
	 	 	 	 
	By: 

Name:

	 	/s/ John T. Wolfe
 

John T. Wolfe
	 	 
	Title:

	 	Treasurer	 	 
	 
	 	 	 	 
	DSG OF VIRGINIA, LLC
	 
	 	 	 	 
	By: 

Name:

	 	/s/ Jeffrey R. Hennion
 

Jeffrey R. Hennion
	 	 
	Title:

	 	President	 	 
	 
	 	 	 	 
	GALYAN’S TRADING COMPANY, INC.
	 
	 	 	 	 
	By: 

Name:

	 	/s/ Timothy E. Kullman
 

Timothy E. Kullman
	 	 
	Title:

	 	Vice President, Secretary and Treasurer	 	 
	 
	 	 	 	 
	GALYAN’S NEVADA, INC.
	 
	 	 	 	 
	By: 

Name:

	 	/s/ Timothy E. Kullman
 

Timothy E. Kullman
	 	 
	Title:

	 	Secretary/Treasurer	 	 
	 
	 	 	 	 
	GALYAN’S OF VIRGINIA, INC.
	 
	 	 	 	 
	By: 

Name:

	 	/s/ Timothy E. Kullman
 

Timothy E. Kullman
	 	 
	Title:

	 	Secretary/Treasurer	 	 

[Signature Page to Seventh Amendment to Credit Agreement]

 

 

	 	 	 	 	 
	GOLF GALAXY, INC.
	 
	 	 	 	 
	By: 

Name:

	 	/s/ John T. Wolfe
 

John T. Wolfe
	 	 
	Title:

	 	Vice President/Secretary	 	 
	 
	 	 	 	 
	GOLF GALAXY GOLFWORKS, INC.
	 
	 	 	 	 
	By: 

Name:
Title:

	 	/s/ John T. Wolfe
 

John T. Wolfe

Vice President/Assistant Secretary
	 	 
	 
	 	 	 	 
	CHICK’S SPORTING GOODS, INC.
	 
	 	 	 	 
	By: 

Name:

	 	/s/ John T. Wolfe
 

John T. Wolfe
	 	 
	Title:

	 	Vice President/Assistant Treasurer	 	 

[Signature Page to Seventh Amendment to Credit Agreement]Unassociated Document

    THIS
WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
STATE SECURITIES LAWS. THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE
OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS WARRANT UNDER SAID
ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO EMAGIN CORPORATION THAT SUCH REGISTRATION IS NOT
REQUIRED.

     

    Right to
Purchase up to 370,000 Shares of Common Stock of

     

    eMagin
Corporation

     

    (subject
to adjustment as provided herein)

     

    COMMON
STOCK PURCHASE WARRANT

     

    
      	 
      	
              Issue
      Date:  As of August 7,
2008

            

    

    

    EMAGIN
CORPORATION, a corporation organized under the laws of the State of Delaware
(“eMagin”), hereby certifies that, for value received, MORIAH CAPITAL, L.P., or
assigns (the "Holder"), is entitled, subject to the terms set forth below, to
purchase from the Company (as defined herein) from and after the Issue Date of
this Warrant and at any time or from time to time before 5:00 p.m., New York
time, on August 7, 2013 (the "Expiration Date"), up to Three Hundred Seventy
Thousand (370,000) fully paid and nonassessable shares of Common Stock (as
hereinafter defined), $0.001 par value per share, at the applicable Exercise
Price per share (as defined below).  The number and character of such
shares of Common Stock and the applicable Exercise Price per share are subject
to adjustment as provided herein.

     

    As used
herein the following terms, unless the context otherwise requires, have the
following respective meanings:

     

    (a)           The
term "Company" shall include eMagin and any corporation which shall succeed, or
assume the obligations of, eMagin hereunder.

     

    (b)           The
term "Common Stock" includes (i) the Company's Common Stock, par value $0.001
per share; and (ii) any other securities into which or for which any of the
securities described in the preceding clause (i) may be converted or exchanged
pursuant to a plan of recapitalization, reorganization, merger, sale of assets
or otherwise.

     

    (c)           The
term "Other Securities" refers to any stock (other than Common Stock) and other
securities of the Company or any other person (corporate or otherwise) which the
holder of the Warrant at any time shall be entitled to receive, or shall have
received, on the exercise of the Warrant, in lieu of or in addition to Common
Stock, or which at any time shall be issuable or shall have been issued in
exchange for or in replacement of Common Stock or Other Securities pursuant to
Section 4 or otherwise.

     

    (d)           The
"Exercise Price" applicable under this Warrant shall be One Dollar and Thirty
Cents ($1.30) per share.

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    1. Exercise of
Warrant.

     

    1.1 Number of Shares Issuable
upon Exercise.  From and after the date hereof through and
including the Expiration Date but not thereafter, the Holder shall be entitled
to receive, upon exercise of this Warrant in whole or in part, by delivery of an
original or fax copy of an exercise notice in the form attached hereto as Exhibit A (the
"Exercise Notice"), shares of Common Stock of the Company, subject to adjustment
pursuant to Sections 4 and 5.

     

    1.2 “Current Fair Market Value”
when used with respect to the Common Stock as of a specified date (sometimes
referred to herein as a “Determination Date”) means, with respect to a share of
Common Stock, the average of the closing prices of the Common Stock sold on all
securities exchanges including the NASD OTCBB, NASDAQ Capital Market, the Nasdaq
National Market, the American Stock Exchange or the New York Stock Exchange
(each, a “Trading
Market”) on which the Common Stock may at the time be listed, or, if
there have been no sales on any such exchange on such day, the average of the
highest bid and lowest asked prices on all such exchanges at the end of regular
trading such day, or, if on such day the Common Stock is not so listed, the
average of the representative bid and asked prices quoted in the NASDAQ System
as of 4:00 p.m., New York City time, or, if on such day the Common Stock is not
quoted in the NASDAQ System, the average of the highest bid and lowest asked
price on such day in the domestic over-the-counter market as reported by the
Pink Sheets, LLC, or any similar successor organization, in each such case
averaged over a period of five (5) Trading Days consisting of the day as of
which the Current Fair Market Value of Common Stock is being determined (or if
such day is not a Trading Day, the Trading Day next preceding such day) and
the four (4)
consecutive Trading Days prior to such day.  If on the date for which
Current Fair Market Value is to be determined the Common Stock is not listed on
any securities exchange or quoted in the NASDAQ System or the over-the-counter
market, the Current Fair Market Value of Common Stock shall be the price per
share of Common Stock as of the most recent date on which eMagin has sold shares
of Common Stock or Common Stock Equivalents to one or more unaffiliated third
parties in a bona fide financing round during the 365 days prior to the date of
such determination.  If no such sales were made during the 365 days
prior to the date of such determination, the Current Fair Market Value of Common
Stock shall be the price per share which eMagin could then obtain from a willing
buyer on an arms’-length basis (not an affiliate, employee or director of eMagin
at the time of determination) for shares of Common Stock sold by eMagin, from
authorized but unissued shares, as determined in by an independent appraiser
mutually acceptable to, and unaffiliated with, eMagin and Holder, whose
appraisal costs shall be paid by eMagin.

     

    1.3 “Common Stock
Equivalent” means any warrant, option, subscription or purchase right
with respect to shares of Common Stock, any security or property rights
convertible into, exchangeable for, or otherwise entitling the holder thereof to
acquire, shares of Common Stock or any warrant, option, subscription or purchase
right with respect to any such convertible, exchangeable or other
security.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    1.4 “Trading Day” means at
any time a day on which the Trading Market on which the Common Stock may be
listed is open for general trading of securities.

     

    1.5 Company
Acknowledgment.  The Company will, at the time of the exercise
of the Warrant, upon the request of the holder hereof acknowledge in writing its
continuing obligation to afford to such holder any rights to which such holder
shall continue to be entitled after such exercise in accordance with the
provisions of this Warrant. If the holder shall fail to make any such request,
such failure shall not affect the continuing obligation of the Company to afford
to such holder any such rights.

     

    1.6 Trustee for Warrant
Holders.  In the event that a bank or trust company shall have
been appointed as trustee for the holders of the Warrant pursuant to Subsection
3.2, such bank or trust company shall have all the powers and duties of a
warrant agent (as hereinafter described) and shall accept, in its own name for
the account of the Company or such successor person as may be entitled thereto,
all amounts otherwise payable to the Company or such successor, as the case may
be, on exercise of this Warrant pursuant to this Section 1.

     

    2. Procedure for
Exercise.

     

    2.1 Delivery of Stock
Certificates, Etc., on Exercise.  The Company agrees that the
shares of Common Stock purchased upon exercise of this Warrant shall be deemed
to be issued to the Holder as the record owner of such shares as of the close of
business on the date on which this Warrant shall have been surrendered and
payment made for such shares in accordance herewith.  As soon as
practicable after the exercise of this Warrant in full or in part, and in any
event within three (3) business days thereafter, the Company at its expense
(including the payment by it of any applicable issue taxes) will cause to be
issued in the name of and delivered to the Holder, or as such Holder (upon
payment by such Holder of any applicable transfer taxes) may direct in
compliance with applicable securities laws, a certificate or certificates for
the number of duly and validly issued, fully paid and nonassessable shares of
Common Stock (or Other Securities) to which such Holder shall be entitled on
such exercise, plus, in lieu of any fractional share to which such holder would
otherwise be entitled, cash equal to such fraction multiplied by the then
Current Fair Market Value of one full share, together with any other stock or
other securities and property (including cash, where applicable) to which such
Holder is entitled upon such exercise pursuant to Section 1 or
otherwise.

     

    2.2 Exercise.  Payment
may be made either (i) in cash or by certified or official bank check payable to
the order of the Company equal to the applicable aggregate Exercise Price, (ii)
if there is no effective registration statement covering the shares issuable
upon exercise of this Warrant at that time, by delivery of the Warrant, or
shares of Common Stock and/or Common Stock receivable upon exercise of the
Warrant in accordance with the formula set forth below in this Section 2.2, or
(iii) if there is no effective registration statement covering the shares
issuable upon exercise of this Warrant at that time, by a combination of any of
the foregoing methods, for the number of Common Shares specified in such
Exercise Notice (as such exercise number shall be adjusted to reflect any
adjustment in the total number of shares of Common Stock issuable to the Holder
per the terms of this Warrant) and the Holder shall thereupon be entitled to
receive the number of duly authorized, validly issued, fully-paid and
non-assessable shares of Common Stock (or Other Securities) determined as
provided herein.  Notwithstanding any provisions herein to the
contrary, if the Current Fair Market Value of one share of Common Stock is
greater than the Exercise Price (at the date of calculation as set forth below),
in lieu of exercising this Warrant for cash, the Holder may elect to receive
shares equal to the value (as determined below) of this Warrant (or the portion
thereof being exercised) by surrender of this Warrant at the principal office of
the Company together with the properly endorsed Exercise Notice in which event
the Company shall issue to the Holder a number of shares of Common Stock
computed using the following formula:

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

     

    
      	
              X=Y

            	
              (A-B)

            
	 
      	
              A

            

    

    

    
      	
              Where
      X =

            	
              the
      number of shares of Common Stock to be issued to the
  Holder

            

    

     

    
      	
               
      

            	
              Y
      =

            	
              the
      number of shares of Common Stock purchasable under the Warrant or, if only
      a portion of the Warrant is being exercised, the portion of the Warrant
      being exercised (at the date of such
  calculation)

            

    

     

    
      	
               
      

            	
              A
      =

            	
              the
      Current Fair Market Value of one share of the Company's Common Stock (at
      the date of such calculation)

            

    

     

    
      	
               
      

            	
              B
      =

            	
              Exercise
      Price (as adjusted to the date of such
  calculation)

            

    

     

     

    2.3 4.99% and 9.99%
Limitations.

     

    

    (1)           Notwithstanding
anything contained herein to the contrary, Holder shall not be entitled to
purchase pursuant to the terms hereof a number of shares of Common Stock that
would exceed the difference between 4.99% of the issued and outstanding shares
of Common Stock and the number of shares of Common Stock beneficially owned by
Holder (the “4.99%
Limitation”).  For the purposes of the immediately preceding
sentence, beneficial ownership shall be determined in accordance with Section
13(d) of the 1934 Act and Regulation 13d-3 thereunder. Holder may void the 4.99%
Limitation upon 75 days prior notice to the Company.

     

    (2)           In
the event that Holder voids the 4.99% Limitation, Holder shall not be entitled
to purchase pursuant to the hereof an amount that would be convertible into that
number of shares of Common Stock that would exceed the difference between 9.99%
of the issued and outstanding shares of Common Stock and the number of shares of
Common Stock beneficially owned by Holder (the “9.99%
Limitation”).  For the purposes of the immediately preceding
sentence, beneficial ownership shall be determined in accordance with Section
13(d) of the 1934 Act and Regulation 13d-3 thereunder. Holder may void the 9.99%
Limitation upon 75 days prior notice to the Company.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

     

    3. Effect of Reorganization,
Etc.; Adjustment of Exercise Price.

     

    3.1 Reorganization,
Consolidation, Merger, Etc.  In case at any time or from time
to time, the Company shall (a) effect a reorganization, (b) consolidate with or
merge into any other person, or (c) transfer all or substantially all of its
properties or assets to any other person under any plan or arrangement
contemplating the dissolution of the Company, then, in each such case, as a
condition to the consummation of such a transaction, proper and adequate
provision shall be made by the Company whereby the Holder of this Warrant, on
the exercise hereof as provided in Section 1 at any time after the consummation
of such reorganization, consolidation or merger or the effective date of such
dissolution, as the case may be, shall receive, in lieu of the Common Stock (or
Other Securities) issuable on such exercise prior to such consummation or such
effective date, the stock and other securities and property (including cash) to
which such Holder would have been entitled upon such consummation or in
connection with such dissolution, as the case may be, if such Holder had so
exercised this Warrant, immediately prior thereto, all subject to further
adjustment thereafter as provided in Section 4.

     

    3.2 Dissolution.  In
the event of any dissolution of the Company following the transfer of all or
substantially all of its properties or assets, the Company, concurrently with
any distributions made to holders of its Common Stock, shall at its expense
deliver or cause to be delivered to the Holder the stock and other securities
and property (including cash, where applicable) receivable by the Holder of the
Warrant pursuant to Section 3.1, or, if the Holder shall so instruct the
Company, to a bank or trust company specified by the Holder and having its
principal office in New York, NY as trustee for the Holder of the Warrant (the
“Trustee”).

     

    3.3 Continuation of
Terms.  Upon any reorganization, consolidation, merger or
transfer (and any dissolution following any transfer) referred to in this
Section 3, this Warrant shall continue in full force and effect and the terms
hereof shall be applicable to the shares of stock and other securities and
property receivable on the exercise of this Warrant after the consummation of
such reorganization, consolidation or merger or the effective date of
dissolution following any such transfer, as the case may be, and shall be
binding upon the issuer of any such stock or other securities, including, in the
case of any such transfer, the person acquiring all or substantially all of the
properties or assets of the Company, whether or not such person shall have
expressly assumed the terms of this Warrant as provided in Section
4.  In the event this Warrant does not continue in full force and
effect after the consummation of the transactions described in this Section 3,
then the Company's securities and property (including cash, where applicable)
receivable by the Holders of the Warrant will be delivered to Holder or the
Trustee as contemplated by Section 3.2.

     

    4. Extraordinary Events
Regarding Common Stock.  In the event that the Company shall
(a) issue additional shares of the Common Stock as a dividend or other
distribution on outstanding Common Stock, (b) subdivide its outstanding shares
of Common Stock, or (c) combine its outstanding shares of the Common Stock into
a smaller number of shares of the Common Stock, then, in each such event, the
Exercise Price shall, simultaneously with the happening of such event, be
adjusted by multiplying the then Exercise Price by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding immediately
prior to such event and the denominator of which shall be the number of shares
of Common Stock outstanding immediately after such event, and the product so
obtained shall thereafter be the Exercise Price then in effect. The Exercise
Price, as so adjusted, shall be readjusted in the same manner upon the happening
of any successive event or events described herein in this Section
4.  The number of shares of Common Stock that the holder of this
Warrant shall thereafter, on the exercise hereof as provided in Section 1, be
entitled to receive shall be increased to a number determined by multiplying the
number of shares of Common Stock that would otherwise (but for the provisions of
this Section 4) be issuable on such exercise by a fraction of which (a) the
numerator is the Exercise Price that would otherwise (but for the provisions of
this Section 4) be in effect, and (b) the denominator is the Exercise Price in
effect on the date of such exercise.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    5. Adjustments for Certain
Issuances of Common Stock or Securities Convertible into or Exchangeable for
Common Stock.   If the Company shall issue any Common
Stock or securities exercisable for or convertible into Common Stock other than
Excluded Stock (as defined below), and (i) such issuance is for a consideration
per share less than the Current Fair Market Value thereof in effect immediately
prior to the issuance of such Common Stock (excluding stock dividends,
subdivisions and other transactions which are covered by Section 4), or (ii)
such issuance is for a consideration per share less than the Exercise Price in
effect immediately prior to such issuance (excluding stock dividends,
subdivisions and other transactions which are covered by Section
4),

     

    then, in each such case,
the Exercise Price in effect immediately after each such issuance shall
forthwith (except as provided in this Section 5) be adjusted to a price equal to
the quotient obtained by dividing:

     

    a. an amount
equal to the sum of

     

    (x)           the
total number of shares of Common Stock outstanding on a Fully-Diluted Basis (as
defined below) immediately prior to such issuance multiplied by the Exercise
Price  in effect immediately prior to such issuance, plus

     

    (y)           the
consideration received by the Company upon such issuance, by

     

    b. the total
number of shares of Common Stock outstanding on a Fully-Diluted Basis
immediately prior to such issuance plus the number of shares of Common Stock so
issued (or the number of shares of Common Stock issuable upon exercise or
conversion of the other securities so issued).

     

    Notwithstanding
the foregoing, in no event shall the Exercise Price be increased on account of
any adjustment pursuant to this Section 5.

     

     

    For
purposes of this Section 5, the following provisions shall be
applicable:

     

    (1)           In
the case of the issuance of Common Stock for cash, the consideration shall be
deemed to be the amount of cash paid therefor after deducting any discounts or
commissions paid or incurred by the Company in connection with the issuance and
sale thereof.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    (2)           In
the case of the issuance of Common Stock for a consideration in whole or in part
other than cash, the consideration other than cash shall be deemed to be the
fair market value thereof as determined in good faith by the board of directors
of the Company, in accordance with generally accepted accounting principles,
which determination and the basis therefore shall be provided to the Holder at
the time of the foregoing issuance or deemed issuance of Common Stock; provided, however, that if the
Holder objects to such valuation within twenty (20) days of receipt of notice
thereof, the Holder may request the Company to obtain the opinion of a mutually
acceptable investment banking firm to determine the fair market value thereof,
the costs of which shall be borne by the Company, in which event the
consideration shall be as determined by such investment banking
firm;

     

    (3)           In
the case of the issuance of (i) options to purchase or rights to subscribe for
Common Stock (other than Excluded Stock), (ii) securities by their terms
convertible into or exchangeable for Common Stock (other than Excluded Stock),
or (iii) options to purchase or rights to subscribe for such convertible or
exchangeable securities (other than Excluded Stock):

     

    (A)           the
aggregate maximum number of shares of Common Stock deliverable upon exercise of
such options to purchase or rights to subscribe for Common Stock shall be deemed
to have been issued at the time such options or rights were issued and for a
consideration equal to the consideration (determined in the manner provided in
subdivisions (1) and (2) above), if any, received by the Company upon the
issuance of such options or rights plus the minimum purchase price provided in
such options or rights for the Common Stock covered thereby;

     

    (B)           the
aggregate maximum number of shares of Common Stock deliverable upon conversion
of or in exchange for any such convertible or exchangeable securities, or upon
the exercise of options to purchase or rights to subscribe for such convertible
or exchangeable securities and subsequent conversion or exchange thereof, shall
be deemed to have been issued at the time such securities were issued or such
options or rights were issued and for a consideration equal to the consideration
received by the Company for any such securities and related options or rights
(excluding any cash received on account of accrued interest or accrued
dividends), plus the minimum additional consideration, if any, to be received by
the Company upon the conversion or exchange of such securities or the exercise
of any related options or rights (the consideration in each case to be
determined in the manner provided in subdivisions (1) and (2)
above);

     

    (C)           on
any change in the number of shares of Common Stock deliverable upon exercise of
any such options or rights or conversion of or exchange for such convertible or
exchangeable securities, or on any change in the minimum purchase price of such
options, rights or securities, the Exercise Price shall forthwith be readjusted
to such Exercise Price as would have obtained had the adjustment made upon (x)
the issuance of such options, rights or securities not exercised, converted or
exchanged prior to such change, as the case may be, been made upon the basis of
such change or (y) the options or rights related to such securities not
converted or exchanged prior to such change, as the case may be, been made upon
the basis of such change; and

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    (D)           on
the expiration of any such options or rights, the termination of any such rights
to convert or exchange or the expiration of any options or rights related to
such convertible or exchangeable securities, the Exercise Price shall forthwith
be readjusted to such Exercise Price as would have obtained had the adjustment
made upon the issuance of such options, rights, convertible or exchangeable
securities or options or rights related to such convertible or exchangeable
securities, as the case may be, been made upon the basis of the issuance of only
the number of shares of Common Stock actually issued upon the exercise of such
options or rights, upon the conversion or exchange of such convertible or
exchangeable securities or upon the exercise of the options or rights related to
such convertible or exchangeable securities, as the case may be.

     

    For purposes of this Section 5, the
following definitions shall apply:

     

    “Excluded Stock” means
(i) all shares of Common Stock issued and outstanding on the date of issuance of
this Warrant; or (ii) shares of Common Stock or other securities exercisable
therefor (1) issued or issuable to officers, directors, consultants or employees
of the Company pursuant to any employee stock option plan, stock bonus plan,
stock purchase plan or other similar plan approved by the Board or (2) otherwise
issued or issuable to any officer, director, consultant or employee of the
Company if approved by the Board.

     

    “Fully-Diluted Basis”
means, as of any date, the number of shares of Common Stock actually issued and
outstanding, plus an amount equal to the number of shares of Common Stock that
would be outstanding after giving effect to the exercise or conversion of all
options, warrants or other convertible securities.

    

    6. Certificate as to
Adjustments.  In each case of any adjustment or readjustment in
the shares of Common Stock (or Other Securities) issuable on the exercise of the
Warrant, the Company at its expense will promptly cause its Chief Financial
Officer or other appropriate designee to compute such adjustment or readjustment
in accordance with the terms of the Warrant and prepare a certificate setting
forth such adjustment or readjustment and showing in detail the facts upon which
such adjustment or readjustment is based, including a statement of (a) the
consideration received or receivable by the Company for any additional shares of
Common Stock (or Other Securities) issued or sold or deemed to have been issued
or sold, (b) the number of shares of Common Stock (or Other Securities)
outstanding or deemed to be outstanding, and (c) the Exercise Price and the
number of shares of Common Stock to be received upon exercise of this Warrant,
in effect immediately prior to such adjustment or readjustment and as adjusted
or readjusted as provided in this Warrant.  The Company will forthwith
mail a copy of each such certificate to the holder of the Warrant and any
Warrant agent of the Company (appointed pursuant to Section 10
hereof).

     

    7. Reservation of Stock, Etc.,
Issuable on Exercise of Warrant.  The Company will at all times
reserve and keep available, solely for issuance and delivery on the exercise of
the Warrant, shares of Common Stock (or Other Securities) from time to time
issuable on the exercise of the Warrant.

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    8. Assignment; Exchange of
Warrant.  Subject to compliance with applicable securities
laws, this Warrant, and the rights evidenced hereby, may be transferred by any
registered holder hereof (a "Transferor") in whole or in part.  On the
surrender for exchange of this Warrant, with the Transferor's endorsement in the
form of Exhibit B attached hereto (the "Transferor Endorsement Form") and
together with evidence reasonably satisfactory to the Company demonstrating
compliance with applicable securities laws, which shall include, without
limitation, the provision of a legal opinion from the Transferor's counsel (at
the Company’s expense) that such transfer is exempt from the registration
requirements of applicable securities laws, and with payment by the Transferor
of any applicable transfer taxes) will issue and deliver to or on the order of
the Transferor thereof a new Warrant of like tenor, in the name of the
Transferor and/or the transferee(s) specified in such Transferor Endorsement
Form (each a "Transferee"), calling in the aggregate on the face or faces
thereof for the number of shares of Common Stock called for on the face or faces
of the Warrant so surrendered by the Transferor.

     

    9. Replacement of
Warrant.  On receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant and, in
the case of any such loss, theft or destruction of this Warrant, on delivery of
an indemnity agreement or security reasonably satisfactory in form and amount to
the Company or, in the case of any such mutilation, on surrender and
cancellation of this Warrant, the Company at its expense will execute and
deliver, in lieu thereof, a new Warrant of like tenor.

     

    10. Warrant
Agent.  The Company may, by written notice to the each Holder
of the Warrant, appoint an agent for the purpose of issuing Common Stock (or
Other Securities) on the exercise of this Warrant pursuant to Section 1,
exchanging this Warrant pursuant to Section 8, and replacing this Warrant
pursuant to Section 9, or any of the foregoing, and thereafter any such
issuance, exchange or replacement, as the case may be, shall be made at such
office by such agent.

     

    11. Transfer on the Company's
Books.  Until this Warrant is transferred on the books of the
Company, the Company may treat the registered holder hereof as the absolute
owner hereof for all purposes, notwithstanding any notice to the
contrary.

     

    12. Notices,
Etc.  All notices and other communications from the Company to
the Holder of this Warrant shall be mailed by first class registered or
certified mail, postage prepaid, at such address as may have been furnished to
the Company in writing by such Holder or, until any such Holder furnishes to the
Company an address, then to, and at the address of, the last Holder of this
Warrant who has so furnished an address to the Company.

     

    13. Miscellaneous.  This
Warrant and any term hereof may be changed, waived, discharged or terminated
only by an instrument in writing signed by the party against which enforcement
of such change, waiver, discharge or termination is sought. This Warrant shall
be governed by and construed in accordance with the laws of State of New York
without regard to principles of conflicts of laws.  Any action brought
concerning the transactions contemplated by this Warrant shall be brought only
in the state courts of New York or in the federal courts located in the state of
New York; provided, however, that the Holder may choose to waive this provision
and bring an action outside the state of New York.  The individuals
executing this Warrant on behalf of the Company agree to submit to the
jurisdiction of such courts and waive trial by jury.  The prevailing
party shall be entitled to recover from the other party its reasonable
attorney's fees and costs.  In the event that any provision of this
Warrant is invalid or unenforceable under any applicable statute or rule of law,
then such provision shall be deemed inoperative to the extent that it may
conflict therewith and shall be deemed modified to conform with such statute or
rule of law.  Any such provision which may prove invalid or
unenforceable under any law shall not affect the validity or enforceability of
any other provision of this Warrant.  The headings in this Warrant are
for purposes of reference only, and shall not limit or otherwise affect any of
the terms hereof.  The invalidity or unenforceability of any provision
hereof shall in no way affect the validity or enforceability of any other
provision hereof.  The Company acknowledges that legal counsel
participated in the preparation of this Warrant and, therefore, stipulates that
the rule of construction that ambiguities are to be resolved against the
drafting party shall not be applied in the interpretation of this Warrant to
favor any party against the other party.

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

     

    14.           Registration Rights
Agreement. The shares of Common Stock underlying this Warrant are
“Registrable Securities” under the terms of the Registration Rights Agreement,
dated as of August 7, 2007, as amended by the Warrant Issuance Agreement, dated
January 30, 2008, as amended, and as subsequently amended, between the Company
and Moriah Capital, L.P., and the Holder is entitled to the benefits
thereof.

     

    

     

    IN
WITNESS WHEREOF, the Company has executed this Warrant as of the date first
written above.

     

     

    
      
      

       

      
        
          	 	      
                  EMAGIN
      CORPORATION

                	 
	 	 	 	 
	
                   

                	
                  By:
      

                	/s/ 	 
	 	 	Name 	 
	 	 	Title 	 
	 	 	 	 

        

      

       

    

     

    
 

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    EXHIBIT
A

     

    FORM
OF SUBSCRIPTION

     

    (To Be
Signed Only On Exercise Of Warrant)

     

    

    TO:           EMAGIN
CORPORATION

    

    

    

    Attention:                                Chief
Financial Officer

    

    The
undersigned, pursuant to the provisions set forth in the attached Warrant
(No.____), hereby irrevocably elects to purchase (check applicable
box):

     

    
      	 
      	 
      	
              ________
      shares of the Common Stock covered by such Warrant; or

            
	 
      	 
      	 
      
	 
      	 
      	
              the
      maximum number of shares of Common Stock covered by such Warrant pursuant
      to the cashless exercise procedure set forth in Section
  2.

            
	 
      

    

    

    The
undersigned herewith makes payment of the full Exercise Price for such shares at
the price per share provided for in such Warrant, which is
$___________.  Such payment takes the form of (check applicable box or
boxes):

     

    
      	 
      	 
      	
              $__________
      in lawful money of the United States; and/or

            
	 
      	 
      	 
      
	 
      	 
      	
              the
      cancellation of such portion of the attached Warrant as is exercisable for
      a total of _______ shares of Common Stock (using a Current Fair Market
      Value of $_______ per share for purposes of this calculation);
      and/or

            
	 
      
	 
      	 
      	 
      
	 
      	 
      	
              the
      cancellation of such number of shares of Common Stock as is necessary, in
      accordance with the formula set forth in Section 2.2, to exercise this
      Warrant with respect to the maximum number of shares of Common Stock
      purchasable pursuant to the cashless exercise procedure set forth in
      Section 2.

            
	 
      
	 
      

    

    

    The
undersigned requests that the certificates for such shares be issued in the name
of, and delivered to ______________________________________________ whose
address is
___________________________________________________________________________.

     

    The
undersigned represents and warrants that all offers and sales by the undersigned
of the securities issuable upon exercise of the within Warrant shall be made
pursuant to registration of the Common Stock under the Securities Act of 1933,
as amended (the "Securities Act") or pursuant to an exemption from registration
under the Securities Act.

     

    
      	
              Dated:

            	 
      	 
      	 
      
	 
      	 
      	
              (Signature
      must conform to name of holder as specified on the face of the
      Warrant)

            
	 
      	 
      	 
      
	 
      	 
      	
              Address:

            	 
      
	 
      	 
      	 
      	 
      

    

    

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    EXHIBIT
B

     

    FORM
OF TRANSFEROR ENDORSEMENT

     

    (To Be
Signed Only On Transfer Of Warrant)

     

    For value
received, the undersigned hereby sells, assigns, and transfers unto the
person(s) named below under the heading "Transferees" the right represented by
the within Warrant to purchase the percentage and number of shares of Common
Stock of eMagin Corporation into which the within Warrant relates specified
under the headings "Percentage Transferred" and "Number Transferred,"
respectively, opposite the name(s) of such person(s) and appoints each such
person Attorney to transfer its respective right on the books of eMagin
Corporation with full power of substitution in the premises.

     

    
      	
               

              Transferees

            	 
      	
               

              Address

            	 
      	
              Percentage

              Transferred

            	 
      	
              Number
      Transferred

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      

    

    

    

    
      	
              Dated:

            	 
      	 
      	 
      
	 
      	 
      	
              (Signature
      must conform to name of holder as specified on the face of the
      Warrant)

            
	 
      	 
      	 
      
	 
      	 
      	
              Address:

            	 
      
	 
      	 
      	 
      	 
      

    

    

    

    
      	 
      	
              SIGNED
      IN THE PRESENCE OF:

            
	 
      	 
      
	 
      	 
      
	 
      	
              (Name)

            
	
              ACCEPTED
      AND AGREED:

            	 
      
	
              [TRANSFEREE]

            	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	
              (Name)

            	 
      

    

    

    
 

     

     

    12

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