EXHIBIT 10.3
REGISTRATION RIGHTS AGREEMENT DATED AS OF APRIL 25, 2003 BY AND AMONG EMAGIN AND
CERTAIN INITIAL INVESTORS IDENTIFIED ON THE SIGNATURE PAGES THERETO.
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT, dated as of April 25, 2003
(this "Agreement"), by and among eMagin Corporation, a Delaware corporation,
with principal executive offices located at ▇▇▇▇ ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇ (the "Company"), and each of the undersigned investors, from time to time,
a signatory hereto pursuant to the terms of this Agreement (each an "Initial
Investor" or collectively, the "Initial Investors").
WHEREAS, upon the terms and subject to the conditions of the
Global Restructuring and Secured Note Purchase Agreement dated as of April 25,
2003, by and between the Initial Investors and the Company (the "Note Purchase
Agreement"), the Company has agreed to issue to each Initial Investor (i)
certain secured convertible Notes in the Company (the "Notes"), which, upon the
terms and subject to the conditions thereof, are convertible into shares of the
Company's common stock, par value $.001 per share (the "Common Stock"), and (ii)
three year Warrants (the "Warrants") to purchase shares of Common Stock, in the
amounts set forth in Schedule 2 of the Note Purchase Agreement; and
WHEREAS, to induce each of the Initial Investors as of the
date of this Agreement, and such additional Initial Investors as may become a
party to this Agreement, from time to time, to execute and deliver the Note
Purchase Agreement, the Company has agreed to provide with respect to the Common
Stock issued or issuable in lieu of cash interest payments on the Notes, upon
conversion of the Notes and/or exercise of the Warrants, certain registration
rights under the Securities Act;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained herein, the parties hereto, intending to be legally
bound, hereby agree as follows:
1. Definitions
(a) As used in this Agreement, the following terms shall have the
meanings:
(i) "Affiliate," of any specified Person means any other
Person who directly, or indirectly through one or more intermediaries,
is in control of, is controlled by, or is under common control with,
such specified Person. For purposes of this definition, control of a
Person means the power, directly or indirectly, to direct or cause the
direction of the management and policies of such Person whether by
contract, securities, ownership or otherwise; and the terms
"controlling" and "controlled" have the respective meanings correlative
to the foregoing.
(ii) "Closing Date" means the date and time of the issuance
and sale of the Notes and the Warrants.
(iii) "Commission" means the Securities and Exchange
Commission.
(iv) "Current Market Price" on any date of determination means
the closing price of a share of the Common Stock in the regular day
session on such day as reported on the American Stock Exchange
("Amex"); provided, if such security is not listed or admitted to
trading on the Amex, as reported on the principal national security
exchange or quotation system on which such security is quoted or listed
or admitted to trading, or, if not quoted or listed or admitted to
trading on any national securities exchange or quotation system, the
closing price of such security on the over-the-counter market in the
regular day session on the day in question as reported by the Wall
Street Journal, New York City edition, or a similar generally accepted
reporting service, as the case may be. If such security has no quotes
or listing as defined in this section 1 (iv), then the Current Market
Price shall be the price per Common Share on any date of determination
as determined by an independent third party appointed by mutual
agreement of the Company and the Investor.
(v) "Exchange Act" means the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission thereunder,
or any similar successor statute.
(vi) "Investor" means each of the Initial Investors as of the
date of this Agreement, and such additional Initial Investors as may
become a party to this Agreement, from time to time, and any transferee
or assignee of Registrable Securities which agrees to become bound by
all of the terms and provisions of this Agreement in accordance with
Section 9 hereof.
(vii) "Person" means any individual, partnership, corporation,
limited liability company, joint stock company, association, trust,
unincorporated organization, or a government or agency or political
subdivision thereof.
(viii) "Prospectus" means the prospectus (including, without
limitation, any preliminary prospectus and any final prospectus filed
pursuant to Rule 424(b) under the Securities Act, including any
prospectus that discloses information previously omitted from a
prospectus filed as part of an effective registration statement in
reliance on Rule 430A under the Securities Act) included in the
Registration Statement, as amended or supplemented by any prospectus
supplement with respect to the terms of the offering of any portion of
the Registrable Securities covered by the Registration Statement and by
all other amendments and supplements to such prospectus, including all
material incorporated by reference in such prospectus and all documents
filed after the date of such prospectus by the Company under the
Exchange Act and incorporated by reference therein.
(ix) "Public Offering" means an offer registered with the
Commission and the appropriate state securities commissions by the
Company of its Common Stock and made pursuant to the Securities Act.
(x) "Registrable Securities" means the Common Stock issued or
issuable (i) in lieu of cash interest payments on the Notes, (ii) upon
conversion, redemption or prepayment of the Notes, and (iii) upon
exercise of the Warrants and any other warrants issued by the Company
and currently held by the Investors or their permitted assignees, until
(x) the Registration Statement has been declared effective by the
Commission and all such securities have been disposed of pursuant to
the Registration Statement, (y) all such securities have been sold
under circumstances under which all of the applicable conditions of
Rule 144 (or any similar provision then in force) under the Securities
Act ("Rule 144") are met, or (z) such time as, in the opinion of
counsel to the Company reasonably satisfactory to the Investors and
upon delivery to the Investors of such executed opinion, all such
securities may be sold without any time, volume or manner limitations
pursuant to Rule 144(k) (or any similar provision then in effect) under
the Securities Act. In the event of any merger, reorganization,
consolidation, recapitalization or other change in corporate structure
affecting the Common Stock, such adjustment shall be deemed to be made
in the definition of "Registrable Security" as is appropriate in order
to prevent any dilution or enlargement of the rights granted pursuant
to this Agreement.
(xi) "Registration Statement" means a registration statement
of the Company filed on Form S-2 and/or Form S-3, or if then
unavailable, another appropriate form under the Securities Act
providing for the registration of, and the resale on a continuous or
delayed basis by the holders of, all of the Registrable Securities
pursuant to Rule 415 under the Securities Act, including the Prospectus
contained therein and forming a part thereof, any amendments to such
registration statement and supplements to such Prospectus, and all
exhibits to and other material incorporated by reference in such
registration statement and Prospectus.
(xii) "Securities Act" means the Securities Act of 1933, as
amended, and the rules and regulations of the Commission thereunder, or
any similar successor statute.
(b) All capitalized terms used and not defined herein have the
respective meaning assigned to them in the Note Purchase Agreement.
2. Registration
(a) Filing and Effectiveness of Registration Statement. The Company
shall use its reasonable best efforts to prepare and file with the Commission
not later than 30 calendar days after the Closing Date, a Registration Statement
relating to the offer and sale of the Registrable Securities and shall use its
reasonable best efforts to cause the Commission to declare such
Registration Statement effective under the Securities Act as promptly as
practicable but in no event later than 90 calendar days (150 calendar days in
the event of a "full review" by the Commission) after the Closing Date. The
number of Shares designated in the Registration Statement to be registered shall
include all the Registrable Securities and shall include appropriate language
regarding reliance upon Rule 416 under the Securities Act to the extent
permitted by the Commission. The Company shall promptly (and, in any event, no
more than 48 hours after it receives comments from the Commission), notify each
of the Investors when and if it receives any comments from the Commission on the
Registration Statement and promptly forward a copy of such comments, if they are
in writing, to the Investors. At such time after the filing of the Registration
Statement pursuant to this Section 2(a) as the Commission indicates, either
orally or in writing, that it has no further comments with respect to such
Registration Statement or that it is willing to entertain appropriate requests
for acceleration of effectiveness of such Registration Statement, the Company
shall promptly, and in no event later than five (5) days after receipt of such
indication from the Commission, request that the effectiveness of such
Registration Statement be accelerated within 48 hours of the Commission's
receipt of such request. The Company shall notify the Investors by written
notice that such Registration Statement has been declared effective by the
Commission within 24 hours of such declaration by the Commission.
(b) Piggyback Rights.
(i) Subject to Section 2(b)(ii), if the Company at any time
proposes to file any other registration statement under the Securities
Act with respect to an offering of securities for its own account or
for the account of another person (other than a registration statement
on Form S-4 or S-8 (or any substitute form that may be adopted by the
Commission) or any registration statement associated with any equity
line of credit and other than a registration pursuant to Section 2(a)
hereunder), the Company shall give written notice of such proposed
filing to each of the Investors at the address set forth in the
register of the Company as soon as reasonably practicable (but in no
event less than fourteen (14) days before the anticipated date on which
such registration will be first filed with the Commission), undertaking
to provide each Investor the opportunity to register on the same terms
and conditions such number and type of Registrable Securities as such
Investor may request (a "Piggyback Registration"). Such written notice
shall be clearly marked and the Company shall take reasonable steps to
confirm receipt thereof from each such Investor. Each Investor will
have five (5) business days after receipt of any such notice to notify
the Company as to whether it wishes to participate in a Piggyback
Registration; provided that should an Investor fail to provide timely
notice to the Company, such Investor will forfeit any rights to
participate in the Piggyback Registration with respect to such proposed
offering. In the event that the registration statement is filed on
behalf of a person other than the Company, the Company will, subject to
Section 2(b)(ii), use its best efforts to have the shares of
Registrable Securities that the Investors wish to sell included in the
Registration Statement. If the Company shall determine in its sole
discretion not to register or to delay the proposed offering, the
Company shall provide written notice of such determination to the
Investors and (i) in the case of a determination not to effect the
proposed offering, shall thereupon be relieved of the obligation to
register such Registrable Securities in connection therewith, and (ii)
in the case of a determination to delay a proposed offering, shall
thereupon be permitted to delay registering such Registrable Securities
for the same period as the delay in respect of the proposed offering.
(ii) If a registration pursuant to this Section 2(b) involves
an underwritten offering, and the managing underwriter shall advise the
Company in writing, that, in its opinion, the number of securities
requested and otherwise proposed to be included in such registration
exceeds the number which can be sold in such offering within a price
range acceptable to the Company, or that the kind of securities
requested or otherwise proposed to be included in such registration
statement would materially and adversely effect the success of such
offering, the Company will include in such registration, to the extent
of the number which the Company is so advised can be sold in such
offering, (A) if the registration is a primary registration on behalf
of the Company, (x) first, the securities proposed to be registered by
the Company, (y) second, the securities and Registrable Securities
which have been requested to be included in such registration by the
Investors and any other persons having the right to include securities
in such registration statement pro rata in accordance with the
aggregate number of securities requested to be included by the
Investors and such other persons; and (z) third, securities of other
persons, if any, requested to be included in such registration pro rata
in accordance with the number of other securities proposed to be
registered by such other persons, and (B) if the registration is a
secondary registration on behalf of other persons, (x) first, the
securities proposed to be registered by such other persons, (y) second,
the securities and Registrable Securities which have been requested to
be included in such registration by the Investors and any other persons
having the right to include securities in such registration statement
pro rata in accordance with the aggregate number of securities
requested to be included by the Investors and such other persons; and
(z) third, securities which have been requested to be included in such
registration by the Company and by other persons, if any, pro rata in
accordance with the aggregate number of other securities proposed to be
registered by the Company and such other persons. In the event a
contemplated distribution does not involve an underwritten public
offering, the determinations contemplated by this Section 2(b)(ii)
shall be made by the Company's Board of Directors.
3. Obligations of the Company
In connection with the registration of the Registrable
Securities, the Company shall, subject to the Investors assistance and
cooperation, as reasonably requested:
(a) (i) Prepare and file with the Commission such amendments (including
post-effective amendments) to the Registration Statement and supplements to the
Prospectus as may be necessary to keep the Registration Statement continuously
effective and in compliance with the provisions of the Securities Act applicable
thereto so as to permit the Prospectus forming part thereof to be current and
useable by Investors for resales of the Registrable Securities for a period of
three (3) years from the date on which the Registration Statement is first
declared effective by the Commission (the "Effective Time") or such shorter
period that will terminate upon the earlier of there ceasing to be any
Registrable Securities outstanding or when all the Registrable Securities
covered by the Registration Statement have been sold pursuant thereto in
accordance with the plan of distribution provided in the Prospectus, transferred
pursuant to Rule 144 under the Securities Act or otherwise transferred in a
manner that results in the delivery of new securities not subject to transfer
restrictions under the Securities Act (the "Registration Period") and (ii) take
all lawful action such that each of (A) the Registration Statement and any
amendment thereto does not, when it becomes effective, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, not misleading and
(B) the Prospectus forming part of the Registration Statement, and any amendment
or supplement thereto, does not at any time during the Registration Period
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
(b) During the Registration Period, use its reasonable best efforts to
comply with the provisions of the Securities Act with respect to the Registrable
Securities of the Company covered by the Registration Statement until such time
as all of such Registrable Securities have been disposed of in accordance with
the intended methods of disposition by the Investors as set forth in the
Prospectus forming part of the Registration Statement;
(c) (i) Prior to the filing with the Commission of any Registration
Statement (including any amendments thereto) and the distribution or delivery of
any Prospectus (including any supplements thereto), provide (A) draft copies
thereof to the Investors and give reasonable consideration to all such comments
as the Investors (and their counsel) reasonably may propose and (B) to the
Investors a copy of the accountant's consent letter to be included in the filing
and (ii) furnish to each Investor whose Registrable Securities are included in
the Registration Statement and its legal counsel identified to the Company, (A)
promptly after the same is prepared and publicly distributed, filed with the
Commission, or received by the Company, one copy of the Registration Statement,
each Prospectus, and each amendment or supplement thereto, and (B) such number
of copies of the Prospectus and all amendments and supplements thereto and such
other documents, as such Investor may reasonably request in order to facilitate
the disposition of the Registrable Securities owned by such Investor;
(d) (i) Use its reasonable best efforts to register or qualify the
Registrable Securities covered by the Registration Statement under such
securities or "blue sky" laws of such jurisdictions as the Investors reasonably
request, (ii) prepare and file in such jurisdictions such amendments (including
post-effective amendments) and supplements to such registrations and
qualifications as may be necessary to maintain the effectiveness thereof at all
times during the Registration Period, (iii) take all such other lawful actions
as may be necessary to maintain such registrations and qualifications in effect
at all times during the Registration Period, and (iv) take all such other lawful
actions reasonably necessary or advisable to qualify the Registrable Securities
for sale in such jurisdictions; provided, however, that the Company shall not be
required in connection therewith or as a condition thereto to (A) qualify to do
business in any jurisdiction where it would not otherwise be required to qualify
but for this Section 3(d), (B) subject itself to general taxation in any such
jurisdiction or (C) file a general consent to service of process in any such
jurisdiction;
(e) As promptly as practicable after becoming aware of such event,
notify each Investor of the occurrence of any event, as a result of which the
Prospectus included in the Registration Statement, as then in effect, includes
an untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, and
promptly prepare an amendment to the Registration Statement and supplement to
the Prospectus to correct such untrue statement or omission, and deliver a
number of copies of such supplement and amendment to each Investor as such
Investor may reasonably request;
(f) As promptly as practicable after becoming aware of such event,
notify each Investor who holds Registrable Securities being sold (or, in the
event of an underwritten offering, the managing underwriters) of the issuance by
the Commission of any stop order or other suspension of the effectiveness of the
Registration Statement at the earliest possible time and take all lawful action
to effect the withdrawal, recession or removal of such stop order or other
suspension;
(g) Use its reasonable best efforts to cause all the Registrable
Securities covered by the Registration Statement to be listed on the principal
national securities exchange, and included in an inter-dealer quotation system
of a registered national securities association, on or in which securities of
the same class or series issued by the Company are then listed or included;
(h) Use its reasonable best efforts to maintain a transfer agent and
registrar, which may be a single entity, for the Registrable Securities not
later than the effective date of the Registration Statement and to cause such
transfer agent to remove restrictive legends on the Registered Securities, as
may be appropriate and in compliance with the Securities Act;
(i) Use its reasonable best efforts to take all such other lawful
actions reasonably necessary to expedite and facilitate the disposition by the
Investors of their Registrable Securities in accordance with the intended
methods therefor provided in the Prospectus which are customary under the
circumstances;
(j) Make generally available to its security holders as soon as
practicable, but in any event not later than three (3) months after (i) the
effective date (as defined in Rule 158(c) under the Securities Act) of the
Registration Statement, and (ii) the effective date of each post-effective
amendment to the Registration Statement, as the case may be, an earnings
statement of the Company and its subsidiaries complying with Section 11(a) of
the Securities Act and the rules and regulations of the Commission thereunder
(including, at the option of the Company, Rule 158 under the Securities Act);
and
(k) (i) Make reasonably available for inspection by Investors, and any
attorney, accountant or other agent retained by such Investors all relevant
financial and other records, pertinent corporate documents and properties of the
Company and its subsidiaries, and (ii) use reasonable best efforts to cause the
Company's officers, directors and employees to supply all information reasonably
requested by such Investors or any such attorney, accountant or agent in
connection with the Registration Statement, in each case, as is customary for
similar due diligence examinations; provided, however, that all records,
information and documents that are designated in writing by the Company, in good
faith, as confidential, proprietary or containing any material nonpublic
information shall be kept confidential by such Investors and any such attorney,
accountant or agent (pursuant to an appropriate confidentiality agreement in the
case of any such holder or agent), unless such disclosure is made pursuant to
judicial process in a court proceeding (after first giving the Company an
opportunity promptly to seek a protective order or otherwise limit the scope of
the information sought to be disclosed) or is required by law, or such records,
information or documents become available to the public generally or through a
third party not in violation of an accompanying obligation of confidentiality;
and provided, further, that, if the foregoing inspection and information
gathering would otherwise disrupt the Company's conduct of its business, such
inspection and information gathering shall, to the maximum extent possible, be
coordinated on behalf of the Investors and the other parties entitled thereto by
one firm of counsel designed by and on behalf of the majority in interest of
Investors and other parties.
4. Obligations of the Investors
In connection with the registration of the Registrable Securities, the
Investors shall have the following obligations:
(a) As long as the Company complies with the notice procedures herein,
it shall be a condition precedent to the obligations of the Company to complete
the registration pursuant to this Agreement with respect to the Registrable
Securities of a particular Investor that such Investor shall furnish to the
Company such information regarding itself, the Registrable Securities held by it
and the intended method of disposition of the Registrable Securities held by it
as shall be reasonably required to effect the registration of such Registrable
Securities and shall execute such documents in connection with such registration
as the Company may reasonably request. Unless otherwise required by the
Commission or any applicable law, nothing in this Agreement shall obligate any
Investor to consent to be named as an underwriter in any Registration Statement
pertaining to the Registrable Securities. At least twenty-one (21) days prior to
the first anticipated filing date of the Registration Statement, the Company
shall notify each Investor of the information the Company reasonably requires
from each such Investor (the "Requested Information") if such Investor elects to
have any of its Registrable Securities included in the Registration Statement.
Such notice shall be clearly marked (on the envelope containing such notice,
upon the facsimile cover sheet, or as may otherwise be required) as follows:
"URGENT ATTENTION REQUIRED". If at least two (2) business days prior to the
anticipated filing date the Company has not received the Requested Information
from an Investor (a "Non-Responsive Investor"), then the Company may file the
Registration Statement without including Registrable Securities of such
Non-Responsive Investor and have no further obligations to the Non-Responsive
Investor;
(b) Each Investor by its acceptance of the Registrable Securities
agrees to use its reasonable best efforts to cooperate with the Company in
connection with the preparation and filing of the Registration Statement
hereunder, unless such Investor has notified the Company in writing of its
election to exclude all of its Registrable Securities from the Registration
Statement; and
(c) Each Investor agrees that, upon receipt of any notice from the
Company of the occurrence of any event of the kind described in Section 3(e) or
3(f), it shall immediately discontinue its disposition of Registrable Securities
pursuant to the Registration Statement covering such Registrable Securities
until such Investor's receipt of the copies of the supplemented or amended
Prospectus contemplated by Section 3(e) and, if so directed by the Company, such
Investor shall deliver to the Company (at the expense of the Company) or destroy
(and deliver to the Company a certificate of destruction) all copies in such
Investor's possession, of the Prospectus covering such Registrable Securities
current at the time of receipt of such notice.
5. Right to Suspend Registration Statement
So long as the Company has maintained the initial registration for a
minimum period of 90 days, the Company shall have the right at any time for up
to 120 calendar days to suspend any Registration Statement in the event that the
Company determines, in good faith, that it is in the best interests of the
Company for the Company to proceed with its own offering of equity securities;
provided, that, the Company shall use its commercially reasonable efforts to
continue to proceed forward in good faith with such Registration Statement
during the period of such suspension. The Company may so proceed by delivering
written notice of such intention to the Investors. The Company may exercise the
right to suspend a Registration Statement no more than twice in any 360-day
period, provided that the aggregate period of such suspensions shall not exceed
120 days, in the aggregate, in any 360-day period.
6. Expenses of Registration
All expenses, other than underwriting discounts and commissions or
similar fees relating to the Registrable Securities, incurred in connection with
registrations, filings or qualifications pursuant to Section 3, but including,
without limitation, all registration, listing, and qualifications fees, printing
and engraving fees, accounting fees, and the fees and disbursements of counsel
for the Company (but not of the Investors) shall be borne by the Company.
7. Indemnification and Contribution
(a) The Company shall indemnify and hold harmless each Investor and
each of their respective officers and directors and each person who controls
such Investor within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act (each such person being sometimes hereinafter referred to
as an "Indemnified Person") from and against any losses, claims, damages or
liabilities, joint or several, to which such Indemnified Person may become
subject under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement or an omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein, not misleading, or arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Prospectus or an omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading; and
the Company hereby agrees to reimburse such Indemnified Person for all
reasonable legal and other expenses incurred by them in connection with
investigating or defending any such action or claim as and when such expenses
are incurred; provided, however, that the Company shall not be liable to any
such Indemnified Person in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon (i) an untrue
statement or alleged untrue statement made in, or an omission or alleged
omission from, such Registration Statement or Prospectus in reliance upon and in
conformity with written information furnished to the Company by such Indemnified
Person expressly for use therein or (ii) in the case of the occurrence of an
event of the type specified in Section 3(e), the use by the Indemnified Person
of an outdated or defective Prospectus after the Company has provided to such
Indemnified Person an updated Prospectus correcting the untrue statement or
alleged untrue statement or omission or alleged omission giving rise to such
loss, claim, damage or liability.
(b) Indemnification by the Investors. Each Investor agrees, severally
and not jointly, as a consequence of the inclusion of any of its Registrable
Securities in a Registration Statement, to (i) indemnify and hold harmless the
Company, its directors (including any person who, with his or her consent, is
named in the Registration Statement as a director nominee of the Company), its
officers who sign any Registration Statement and each person, if any, who
controls the Company within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act, against any losses, claims, damages or
liabilities to which the Company or such other persons may become subject, under
the Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in
such Registration Statement or Prospectus or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein (in light of the
circumstances under which they were made, in the case of the Prospectus), not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with written information furnished to the
Company by or on behalf of such Investor expressly for use therein; provided,
however, no Investor shall be liable under this Section 7(b) for any amount in
excess of the net proceeds paid to such Investor in respect of shares sold by
it. The indemnity provided for in this Section 7(b) shall not apply to amounts
paid in settlement of any losses, claims, damages or liabilities if such
settlement is effected without the consent of the Investors, which consent shall
not be unreasonably withheld.
(c) Notice of Claims, etc. Promptly after receipt by a party seeking
indemnification pursuant to this Section 7 (an "Indemnified Party") of written
notice of any investigation, claim, proceeding or other action in respect of
which indemnification is being sought (each, a "Claim"), the Indemnified Party
promptly shall notify the party against whom indemnification pursuant to this
Section 7 is being sought (the "Indemnifying Party") of the commencement
thereof; but the omission to so notify the Indemnifying Party shall not relieve
it from any liability that it otherwise may have to the Indemnified Party,
except to the extent that the Indemnifying Party is actually prejudiced by
reason of such failure. In connection with any Claim as to which both the
Indemnifying Party and the Indemnified Party are parties, the Indemnifying Party
shall be entitled to assume the defense thereof. Notwithstanding the assumption
of the defense of any Claim by the Indemnifying Party, the Indemnified Party
shall have the right to employ separate legal counsel and to participate in the
defense of such Claim, and the Indemnifying Party shall bear the reasonable
fees, out-of-pocket costs and expenses of one such separate legal counsel for
all Indemnified Parties in connection with any one action or series of
substantially related actions if (and only if): (x) the Indemnifying Party shall
have agreed in writing to pay such fees, costs and expenses, (y) the named
parties to any such action (including any impleaded parties) include both the
Indemnified Party and the Indemnifying Party and the Indemnified Party shall
have been advised by such counsel in writing that there may be one or more legal
defenses available to the Indemnifying party different from or in conflict with
any legal defenses which may be available to the Indemnified Party (in which
case the Indemnifying party shall not have the right to assume the defense of
such action on behalf of the Indemnified party, or (z) the Indemnifying Party
shall have failed to employ legal counsel reasonably satisfactory to the
Indemnified Party within a reasonable period of time after notice of the
commencement of such Claim. If the Indemnified Party employs separate legal
counsel in circumstances other than as described in clauses (x), (y) or (z)
above, the fees, costs and expenses of such legal counsel shall be borne
exclusively by the Indemnified Party. Except as provided above, the Indemnifying
Party shall not, in connection with any Claim in the same jurisdiction, be
liable for the fees and expenses of more than one firm of counsel for the
Indemnified Party (together with appropriate local counsel). The Indemnified
Party shall not, without the prior written consent of the Indemnifying Party
(which consent shall not unreasonably be withheld), settle or compromise any
Claim or consent to the entry of any judgment that does not include an
unconditional release of the Indemnifying Party from all liabilities with
respect to such Claim or judgment.
(d) Contribution. If the indemnification provided for in this Section 7
is unavailable to or insufficient to hold harmless an Indemnified Person under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
Indemnifying Party shall contribute to the amount paid or payable by such
Indemnified Party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party and the Indemnified Party in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative fault of such Indemnifying Party and
Indemnified Party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by
such Indemnifying Party or by such Indemnified Party, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The parties hereto agree that it would not be just
and equitable if contribution pursuant to this Section 7(d) were determined by
pro rata allocation (even if the Investors were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in this Section 7(d). The amount paid or
payable by an Indemnified Party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above shall be deemed to
include any legal or other fees or expenses reasonably incurred by such
Indemnified Party in connection with investigating or defending any such action
or claim. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
(e) Notwithstanding any other provision of this Section 7, in no event
shall any Investor be required to undertake liability to any person under this
Section 7 for any amounts in excess of the dollar amount of the proceeds to be
received by such Investor from the sale of such Investor's Registrable
Securities pursuant to any Registration Statement under which such Registrable
Securities are to be registered under the Securities Act.
(f) The obligations of the Company under this Section 7 shall be in
addition to any liability which the Company may otherwise have to any
Indemnified Person and the obligations of any Indemnified Person under this
Section 7 shall be in addition to any liability which such Indemnified Person
may otherwise have to the Company. The remedies provided in this Section 7 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to an indemnified party at law or in equity.
8. Rule 144
With a view to making available to the Investors the benefits of Rule
144 under the Securities Act or any other similar rule or regulation of the
Commission that may at any time permit the Investors to sell securities of the
Company to the public without registration ("Rule 144"), the Company agrees to
use its reasonable best efforts to:
(a) comply with the provisions of paragraph (c) (1) of Rule 144;
(b) file with the Commission in a timely manner all reports and other
documents required to be filed by the Company pursuant to Section 13 or 15(d)
under the Exchange Act; and, if at any time it is not required to file such
reports but in the past had been required to or did file such reports, it will,
upon the request of any Investor, make available other information as required
by, and so long as necessary to permit sales of, its Registrable Securities
pursuant to Rule 144; and
(c) provide within a reasonable period of time of a written request of
the Investor and at the Company's expense, a legal opinion addressed to the
Company's transfer agent verifying the transferability of the Shares in
accordance with Rule 144.
9. Assignment
The rights to have the Company register Registrable Securities
pursuant to this Agreement shall be automatically assigned by the Investors to
any permitted transferee of all or a portion (which portion shall exceed 10% of
the Registrable Securities on an as-converted basis) of such Registrable
Securities (or all or a portion (which portion shall exceed 10% of the
Registrable Securities on an as-converted basis) of any Notes or Warrant of the
Company which is convertible into such securities) only if: (a) the Investor
agrees in writing with the transferee or assignee to assign such rights, and a
copy of such agreement is furnished to the Company within a reasonable time
after such assignment, (b) the Company is, within ten (10) business days of such
transfer or assignment, furnished with written notice of (i) the name and
address of such transferee or assignee and (ii) the securities with respect to
which such registration rights are being transferred or assigned, (c)
immediately following such transfer or assignment, the securities so transferred
or assigned to the transferee or assignee constitute Restricted Securities, and
(d) at or before the time the Company receives the written notice contemplated
by clause (b) of this sentence the transferee or assignee agrees in writing with
the Company to be bound by all of the provisions contained herein.
10. Amendment and Waiver
Any provision of this Agreement may be amended and the
observance thereof may be waived (either generally or in a particular instance
and either retroactively or prospectively), only with the written consent of the
Company and Investors who hold at least a majority in interest of the
Registrable Securities. Any amendment or waiver effected in accordance with this
Section 10 shall be binding upon each Investor and the Company.
11. Changes in Common Stock
If, and as often as, there are any changes in the Common Stock
by way of stock split, stock dividend, reverse split, combination or
reclassification, or through merger, consolidation, reorganization or
recapitalization, or by any other means, appropriate adjustment shall be made in
the provisions hereof, as may be required, so that the rights and privileges
granted hereby shall continue with respect to the Common Stock as so changed.
12. Miscellaneous
(a) A person or entity shall be deemed to be a holder of Registrable
Securities whenever such person or entity owns of record such Registrable
Securities. If the Company receives conflicting instructions, notices or
elections from two or more persons or entities with respect to the same
Registrable Securities, the Company shall act upon the basis of instructions,
notice or election received from the registered owner of such Registrable
Securities.
(b) If, after the date hereof and prior to the Commission declaring the
Registration Statement to be filed pursuant to Section 2 effective under the
Securities Act, the Company grants to any Person any registration rights with
respect to any Company securities which are more favorable to such other Person
than those provided in this Agreement, then the Company forthwith shall grant
(by means of an amendment to this Agreement or otherwise) identical registration
rights to all Investors hereunder.
(c) Except as may be otherwise provided herein, any notice or other
communication or delivery required or permitted hereunder shall be in writing
and shall be delivered personally or sent by certified mail, postage prepaid, or
by a nationally recognized overnight courier service, and shall be deemed given
when so delivered personally or by overnight courier service, or, if mailed,
three days after the date of deposit in the United States mails, as follows:
(i) if to the Company, to:
eMagin Corporation ▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇ Attention: ▇▇▇▇ ▇. ▇▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇ (845)
▇▇▇-▇▇▇▇ (Fax)
(ii) if to an Initial Investor, to the address set out for
such Initial Investor on the signature pages attached
hereto; and
(iii)if to any other Investor, at such address as such
Investor shall have provided in writing to the Company.
The Company, the Initial Investors or any Investor may change the foregoing
address by notice given pursuant to this Section 12(c).
(d) Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.
(e) This Agreement shall be governed by and interpreted in accordance
with the laws of the State of New York. Each of the parties consents to the
jurisdiction of the federal courts whose districts encompass any part of the
City of New York or the state courts of the State of New York sitting in the
City of New York in connection with any dispute arising under this Agreement and
hereby waives, to the maximum extent permitted by law, any objection including
any objection based on forum non conveniens, to the bringing of any such
proceeding in such jurisdictions.
(f) The remedies provided in this Agreement are cumulative and not
exclusive of any remedies provided by law. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their best efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.
(g) The Company agrees with the Investors that irreparable damage would
occur in the event that any of the material provisions of this Agreement were
not performed in accordance with their terms or were otherwise materially
breached by the Company. Accordingly, the Investors shall be entitled to an
injunction or injunctions to prevent material breaches of this Agreement and to
enforce specifically the material terms and provisions of this Agreement, this
being in addition to any other remedy to which they are entitled at law or in
equity and that the Company shall reimburse the Investors for all reasonable
costs relating thereto. In addition to the injunctive relief provided pursuant
to the immediately preceding sentence, if the Registration Statement relating to
the offer and sale of the Registrable Securities shall not be declared effective
by the Commission within 150 days of the Closing Date and the Company shall have
been shown to have failed to use its reasonable best efforts to cause the
Commission to declare such Registration Statement effective, the Company shall
be entitled to liquidated damages at a rate of five percent (5%) per month
(calculated to the nearest calendar day) of the value of the Registrable
Securities not so declared effective until, and to the extent, such Registrable
Securities shall be declared effective. The value of the Registrable Securities
pursuant to the preceding sentence shall be determined by the average closing
price of the Common Stock on its principal exchange (in terms of volume) at the
time of determination for the twenty (20) consecutive trading days commencing on
the first trading day occurring 150 days after the Closing Date. The liquidated
damages may at the option of the Investor be paid in Common Stock of the Company
which shall be subject to the same registration rights as the Registrable
Securities.
(h) The Company shall not enter into any agreement with respect to its
securities that is inconsistent with the rights granted to the holders of
Registrable Securities in this Agreement or otherwise conflicts with the
provisions hereof.
(i) This Agreement, the Note Purchase Agreement and the Warrants
constitute the entire agreement among the parties hereto with respect to the
subject matter hereof. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein. This Agreement,
the Note Purchase Agreement and the Warrants supersede all prior agreements and
undertakings among the parties hereto with respect to the subject matter hereof.
(j) Subject to the requirements of Section 9 hereof, this Agreement
shall inure to the benefit of and be binding upon the successors and assigns of
each of the parties hereto.
(k) All pronouns and any variations thereof refer to the masculine,
feminine or neuter, singular or plural, as the context may require.
(l) The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning thereof.
(m) This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but all of which shall constitute one and the
same agreement. A facsimile transmission of this signed Agreement shall be legal
and binding on all parties hereto.
(remainder of this page intentionally left blank)
In witness whereof, the parties have caused this Agreement to
be duly executed and delivered as of the date first above written.
EMAGIN CORPORATION
By/s/▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Executive Officer
/s/▇▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇. ▇▇▇▇▇▇▇
Address: ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
GINOLA LIMITED
By: /s/▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Director
/s/▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
Address:
STILLWATER LLC
By: ▇▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇, its sole member
/s/▇▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇. ▇▇▇▇▇▇▇
Address: ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
/s/▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Address:
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Exhibit B
EMERALD ADVANTAGE FUND LP
By:/s/ ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇
Title: Managing Member
Address:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇. 19406
EMERALD ADVANTAGE OFFSHORE FUND LTD
By: /s/ ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇
Title: Managing Member
Address:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇. 19406
EMERALD VENTURE CAPITAL I LP
By: /s/ ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
Address:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇
/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Address:
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇
