LOCKBOX AGREEMENT
Exhibit
10.6
THIS
LOCKBOX AGREEMENT,
dated
as of July 21, 2006 (this “Agreement”), by and between EMAGIN
CORPORATION,
a
Delaware corporation (the “Company”), the bank or other financial institution
which may become a party hereto in accordance with Section 25, as lockbox
agent
(the “Lockbox Agent”), and ALEXANDRA
GLOBAL MASTER FUND LTD.,
a
British Virgin Islands international business company (the “Collateral
Agent”).
W I T N E S S E T H:
WHEREAS,
the
Company and the several Buyers (such capitalized term and all other capitalized
terms used in this Agreement having the meanings provided in Section 1) are
parties to the several Note Purchase Agreements, pursuant to which, among
other
things, the Buyers have agreed to purchase the Notes from the Company;
WHEREAS,
contemporaneously with the execution and delivery of this Agreement, the
Company
and the Collateral Agent are executing and delivering the Security Agreement
with the Collateral Agent pursuant to which, among other things, the Company
is
granting a security interest in the Collateral, including, without limitation,
all of the Company's right, title and interest in and to all Accounts and
Contracts arising thereunder and the Collateral Account to the Collateral
Agent
for the ratable benefit of the Holders;
WHEREAS,
in order
to give effect to and perfect the security interest in certain of the collateral
subject to the Security Agreement, this Agreement provides that all payments
to
the Company pursuant to the Security Agreement shall be paid into a lockbox
or a
Collateral Account controlled by the Lockbox Agent and disbursed from the
Collateral Account in accordance with the terms of this Agreement;
and
WHEREAS,
it
is a
condition precedent to the several obligations of the Buyers to purchase
their
respective Notes pursuant to the Note Purchase Agreements that the Company
and
the Collateral Agent shall have executed and delivered this Agreement for
the
ratable benefit of the Holders;
NOW
THEREFORE,
in
consideration of the premises and the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which
are
hereby acknowledged, the parties agree as follows:
1.
Definitions.
(a) As
used
in this Agreement, the terms “Agreement”, “Company”, “Collateral Agent”, and
“Lockbox Agent” shall have the respective meanings assigned to such terms in the
introductory paragraph of this Agreement.
(b) All
the
agreements or instruments herein defined shall mean such agreements or
instruments as the same may from time to time be supplemented or amended
or the
terms thereof waived or modified to the extent permitted by, and in accordance
with, the terms thereof and of this Agreement.
(c) Capitalized
terms used herein without definition shall have the respective meanings assigned
to such terms in the Notes.
(d) The
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms
defined):
“Accounts”
shall have the meaning given such term in the Security Agreement.
“Additional
Note” means the Note issued pursuant to the Additional Note Purchase
Agreement.
“Additional
Note Purchase Agreement” means the Note Purchase Agreement, dated as of July 21,
2006, by and between the Company and Stillwater LLC, which by its terms
contemplates the issuance of up to $500,000 aggregate principal amount of
Notes
on or after December 10, 2006.
“Agreement”
means this Lockbox Agreement, as amended, supplemented or otherwise modified
from time to time.
“Available
Specified Funds” means with respect to each Deposit Date the amount of the
Specified Funds less the Retained Amount.
“Buyer”
means any of the several buyers party to a Note Purchase Agreement.
“Collateral”
shall have the meaning given such term in the Security Agreement.
“Collateral
Account” means the account maintained at the Collateral Agent for the ratable
benefit of the Holders which is identified in clause (b) of Section 2 and
entitled “eMagin Noteholder Collateral Account”, and any successor or
replacement account.
“Deposit
Date” shall have the meaning given such term in Section 7(a).
“Event
of
Default” means:
(1) the
failure by the Company to perform in any material respect any obligation
of the
Company under this Agreement as and when required by this
Agreement;
(2) any
representation or warranty made by the Company pursuant to this Agreement
shall
have been untrue in any material respect when made or deemed to have been
made;
or
(3) any
Event
of Default, as that term is defined in the Security Agreement;
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(4) any
Event
of Default, as that term is defined in the Patent and Trademark Security
Agreement; or
(5) any
Event
of Default, as that term is defined in any of the Notes.
“Event
of
Default Notice” means a notice given by the Company, the Collateral Agent or a
Holder to the Lockbox Agent of the occurrence of an Event of
Default.
“Holder”
means any Buyer or any holder from time to time of any Note.
“Instruction”
shall have the meaning provided in Section 2(a).
“Lien”
shall mean any lien, mortgage, security interest, chattel mortgage, pledge
or
other encumbrance (statutory or otherwise) of any kind securing satisfaction or
performance of an obligation, including any agreement to give any of the
foregoing, any conditional sales or other title retention agreement, any
lease
in the nature thereof, and the filing of or the agreement to give any financing
statement under the Code of any jurisdiction or similar evidence of any
encumbrance, whether within or outside the United States.
“Lockbox”
means the lockbox administered by the Lockbox Agent for the ratable benefit
of
the Holders which is identified in clause (a) of Section 2, and any successor
or
replacement lockbox.
“Lockbox
Agent's Designees” shall have the meaning given such term in Section
10(a).
“Majority
Holders” means at any time such of the holders of Notes, which based on the
outstanding principal amount of the Notes, represents a majority of
the
aggregate outstanding principal amount of the Notes.
“Note
Purchase Agreements” means the several Note Purchase Agreements, dated as of
July 21, 2006, by and between the Company and the respective Buyer party
thereto
pursuant to which the Company issued the Notes, including, without limitation,
the Additional Note Purchase Agreement.
“Notes”
means the Company’s 6% Senior Secured Convertible Notes due 2007-2008 originally
issued pursuant to the Note Purchase Agreements, including, without limitation,
the Additional Note.
“Notice
Date” means the date on which the Company gives the Instruction in accordance
with Section 2.
“Obligations
Schedule” means a schedule prepared by the Company which for each Holder and
each Note held thereby states, as of the date thereof, the
following:
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(i) such
Holder's name, address, telephone line facsimile transmission number and
payment
instructions, including wire transfer instructions,
(ii) the
original principal amount, the outstanding principal amount and the and the
maturity date of the Note,
(iii) the
amount of accrued and unpaid interest on each Note,
(iv) the
amount of unpaid interest due on each Note as of the most recent Interest
Payment Date,
(v) the
amount of unpaid Default Interest, if any, due on each Note,
(vi) the
occurrence or continuation of any Event of Default with respect to each Note,
(vii) the
occurrence of any event which with notice or the passage of time, or both,
could
become an Event of Default,
(viii) the
amount, due date of, and reasons for any unpaid obligation due with respect
to
each Note by reason of (A) an Event of Default or (B) any other repurchase,
redemption or acceleration obligation, and
(ix) the
aggregate amount then due to the Holder with respect to each Note.
“Patent
and Trademark Security Agreement” means the Patent and Trademark Security
Agreement, dated as of July 21, 2006, between the Company and the Collateral
Agent.
“Person”
means any natural person, corporation, partnership, limited liability company,
trust, incorporated organization, unincorporated association or similar entity
or any government, governmental agency or political subdivision.
“Retained
Amount” means that portion, which may be all, of the Specified Funds for each
Deposit Date which equal (to the extent of the Specified Funds available)
the
sum of all amounts with respect to the Notes which are scheduled to accrue
or
which otherwise are expected to become due to the Holders during the Retention
Period for principal of and interest and Default Interest on the Notes or
for
costs and expenses arising under the Transaction Documents and payable by
the
Company.
“Retention
Period” means the 45-day period after each Deposit Date.
“Security
Agreement” means the Pledge and Security Agreement, dated as of July 21, 2006,
between the Company and the Collateral Agent.
“Specified
Funds” shall have the meaning given such term in Section 7(a).
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“Subsidiary”
means any corporation or other entity of which a majority of the capital
stock
or other ownership interests having ordinary voting power to elect a majority
of
the board of directors or other Persons performing similar functions are
at the
time directly or indirectly owned by the Company.
“Termination
Notice” means a notice given to the Lockbox Agent by and signed by the Company,
the Majority Holders and the Collateral Agent, which notice states that a
particular Event of Default has terminated or has been satisfied or waived
and
no Holder has any continuing rights with respect thereto.
“Transaction
Documents” means the Notes, the Note Purchase Agreements, this Agreement, the
Security Agreement, the Patent and Trademark Security Agreement, the Warrants
and the other agreements, instruments and documents contemplated hereby and
thereby.
2. Payments.
(a) The
Company agrees, that, upon the direction of the Collateral Agent given at
any
time that an Event of Default has occurred and is continuing, in accordance
with
Section 3(b) of the Security Agreement the Company shall irrevocably instruct
in
writing (the “Instruction”) all the account debtors on the Accounts that
constitute part of the Collateral and all of the parties (other than the
Company) who are parties to Contracts that constitute part of the Collateral
that such Accounts and Contracts have been assigned to the Collateral Agent
for
the ratable benefit of the Holders and that payments in respect thereof shall
be
shall be made either
(i) by
check
or money order to the address of the Lockbox, which address shall be identified
to the Company by the Collateral Agent or if the Lockbox Agent is a bank
shall
be the address of the office of the Lockbox Agent, or
(ii)
by
wire
transfer of funds to the Collateral Account, which account shall be identified
to the Company by the Collateral Agent.
If
the
Company fails to give the Instruction in accordance with Section 3(b) of
the
Security Agreement, the Collateral Agent may, in its own name or in the name
of
the Company, give the Instruction directly to the account debtors on the
Accounts that constitute part of the Collateral and to all of the parties
to
Contracts that constitute part of the Collateral.
(b) If
the
Collateral Agent shall so require, at or prior to the time any Person who
has
not already received the Instruction is to become an account debtor on Accounts
that constitute part of the Collateral or a party to Contracts that constitute
part of the Collateral, the Company shall instruct such Person that such
Accounts and Contracts have been assigned to the Collateral Agent for the
ratable benefit of the Holders and that payments in respect thereof shall
be
made in the manner set forth in Section 2(a). If the Company fails to give
the
instructions in accordance with this Section 2(b), the Collateral Agent may,
in
its own name or in the name of the Company, give such instructions directly
to
such Person.
3.
No
Contrary Instructions. Without
the prior written consent of the Collateral Agent and the Majority Holders,
the
Company shall not revoke, rescind or modify the Instruction or take any other
action which is contrary to or inconsistent with this Agreement or the Security
Agreement. If for any reason the Company receives any payment from an account
debtor or party to a Contract on or after the Notice Date, the Company shall
immediately deposit such payment, and any interest or proceeds thereon, in
the
Collateral Account. Prior to such deposit, the Company shall hold all such
funds
in trust for the exclusive benefit of the Collateral Agent and the Holders
pursuant to this Agreement.
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4. Lockbox.
The
Lockbox shall be under the sole and exclusive control of the Lockbox Agent,
as
agent for the Collateral Agent only. On each Business Day on or after the
date
the Company gives or is required to give the Instruction, the Lockbox Agent
will
remove all items from the Lockbox and promptly deposit all checks, money
orders
and other payments included in such items in the Collateral Account. The
Company
irrevocably authorizes and directs the Lockbox Agent to endorse and deposit
all
such checks and money orders in the Collateral Account on the Business Day
of
receipt by the Lockbox.
5. Collateral
Account.
The
Collateral Account shall be under the sole and exclusive control of the Lockbox
Agent, as agent for the Collateral Agent only. All cash deposited in the
Collateral Account pursuant to this Agreement, and all interest earned thereon,
shall be held in the Collateral Account and shall at all times be segregated
from the funds and property of any other Person. The Collateral Account shall
be
an interest-bearing account which pays interest at the rate determined from
time
to time by the Lockbox Agent for comparable, fully liquid commercial accounts.
Without the prior consent of the Company, the Collateral Agent and the Majority
Holders, the assets in the Collateral Account shall be held in cash only
and
shall not be invested in any securities. Funds may be withdrawn from the
Collateral Account only as expressly provided in this Agreement.
6. Events
of Default.
Upon the
occurrence of an Event of Default, the Company shall immediately, and the
Collateral Agent may at any time, notify the Lockbox Agent thereof by giving
an
Event of Default Notice. If an Event of Default Notice is so given to the
Lockbox Agent by the Company or the Collateral Agent, then thereafter the
Lockbox Agent shall deem an Event of Default to have occurred and be continuing
for all purposes unless and until the Lockbox Agent receives a Termination
Notice executed by the Company, the Majority Holders and the Collateral
Agent.
7. Release
of Funds. (a)
Three
Business Days after the Business Day on which funds received from any person
are
deposited into the Collateral Account in a minimum amount of $100,000
(or
which
would increase the balance in the Collateral Account to at least $100,000)
(the
“Deposit Date”), the Lockbox Agent shall disburse the amount of funds, including
interest received, held in the Collateral Account on such Deposit Date (the
“Specified Funds”) as follows:
(i) First,
to
pay each Holder on a pro rata basis the amount of all accrued and unpaid
interest and Default Interest, if any, then due each Holder in accordance
with
the terms of their respective Notes through the most recent Interest Payment
Date;
(ii) Second,
to pay each Holder on a pro rata basis the unpaid amount, if any, then due
such
Holder pursuant to Article II of the Notes for any Determination Period ended
at
least 45 days prior to the date of such payment;
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(iii) Third,
to
pay each Holder on a pro rata basis the amount, if any, of unpaid principal
then
due on the maturity date of any installment of principal of such Holder's
Notes;
(iv) Fourth,
to the Holders and the Collateral Agent to pay or reimburse them for their
respective amounts of costs and expenses payable by the Company pursuant
to the
Transaction Documents and not theretofore paid or reimbursed by the Company
(including under this Section 7(a)); and
(v) Fifth,
if
no Event of Default shall have occurred and be deemed continuing pursuant
to
Section 6, to pay the Available Specified Funds remaining in the Collateral
Account to the Company.
(b) During
each Retention Period, the Lockbox Agent shall hold the Retained Amount in
the
Lockbox Account. On the Business Day following the end of such Retention
Period,
the Lockbox Agent shall (1) pay each Holder, on a pro rata basis, from the
Retained Amount any unpaid amounts due to the Holders for interest, Default
Interest and principal as described in clauses (i)-(iii) of Section 7(a)
which
have accrued and become due during the Retention Period and then (2) pay
costs
and expenses of the Holders and the Collateral Agent as described in clause
(iv)
of Section 7(a) and then (3) provided no Event of Default shall have occurred
and be continuing, pay the remaining Retained Amount to the
Company.
(c) If
an
Event of Default shall have occurred and be continuing, after disbursing
the
Specified Funds in the Collateral Account pursuant to clauses (i) through
(iv)
of Section 7(a), the Lockbox Agent shall disburse the remaining Specified
Funds
to pay each Holder, on a pro rata basis, the amount of unpaid principal then
due
upon acceleration, if any, pursuant to Article IV of such Holder's Note(s);
provided,
however, that
if
the amount of such Specified Funds is insufficient to pay all amounts due
to the
Holders, then the amount paid to the Holders pursuant to this Section 7(c)
shall
be prorated among the Holders in proportion to the respective amounts due
each
Holder.
(d) For
each
Deposit Date, after making the payments to the Holders required by Sections
7(b)
and 7(c) and after the Company shall have paid the Holders any other amounts
then due under the Notes, the Lockbox Agent shall pay to the Company all
Specified Funds remaining in the Collateral Account. Funds received in the
Collateral Account and interest received thereon after any Deposit Date shall
be
deemed new Specified Funds to be disbursed, three Business Days after the
next
Deposit Date to occur, in accordance with all of the provisions and priorities
of this Section 7 before being paid to the Company.
8. Reporting
Requirements; Payment Instructions.
(a) On
or before the Notice Date, on the first Business Day of each calendar month
thereafter, and at such other times as requested by the Lockbox Agent in
order
to comply with its obligations under this Agreement or by the Collateral
Agent,
the Company shall furnish to the Lockbox Agent and the Collateral Agent an
updated Obligations Schedule. The Company shall promptly correct any errors
in
any Obligations Schedule and furnish copies of such corrected Obligations
Schedule to the Lockbox Agent and the Collateral Agent. If the Collateral
Agent
or any Holder shall notify the Lockbox Agent and the Company of any error
in or
dispute concerning an Obligations Schedule, the Lockbox Agent shall not release
any funds from the Collateral Account which are the subject of such error
or
dispute until such error is corrected or such dispute is resolved with the
consent of the affected Holders and the Company. The Lockbox Agent may release
from the Collateral Account, in accordance with this Agreement, funds which
are
not subject to such error or dispute.
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(b) All
payments by the Lockbox Agent to the Holders under this Agreement shall be
made
by wire transfer of immediately available funds to the applicable account,
or if
no wire transfer instructions are given to the address, specified for each
Holder in the Obligations Schedule or in a superseding notice given by a
Holder
to the Lockbox Agent. All payments by the Lockbox Agent to the Company under
this Agreement shall be deposited in the Company's separate account maintained
at the Lockbox Agent or shall be sent by wire transfer of immediately available
funds to such other account as the Company shall have specified by notice
to the
Lockbox Agent.
9. Representations
and Warranties.
The
Company hereby represents and warrants to and for the benefit of the Lockbox
Agent, the Collateral Agent and the Holders that:
(a) Power
and Authority.
The
Company has full power, authority and legal right to enter into this
Agreement.
(b) Binding
Obligation.
This
Agreement has been duly authorized by the Company and has been duly executed
and
delivered by the Company and constitutes a legal, valid and binding obligation
of the Company enforceable against the Company in accordance with its
terms.
(c) Non-Contravention.
The
execution, delivery and performance of this Agreement will not violate any
provision of any applicable law or regulation or of any order, judgment,
writ,
award or decree of any court, arbitrator or governmental authority, domestic
or
foreign, or of any securities issued by the Company or any Subsidiary, or
of any
mortgage, indenture, lease, contract or other agreement, instrument or
undertaking to which the Company or any Subsidiary is a party or which purports
to be binding upon the Company or any Subsidiary or upon any of their respective
assets and will not result in the creation or imposition of any Lien on any
of
the assets of the Company or any Subsidiary except as expressly permitted
by
this Agreement and the other Transaction Documents.
(d) Consents.
No
consent (other than consents which have been obtained) of any party, and
no
filing, approval, registration, recording or other action is required in
connection with the execution, delivery or performance of this Agreement
by the
Company.
10. Limitation
of Liability. The
Lockbox Agent's liability in connection with the performance of the transactions
covered by this Agreement shall be strictly limited as follows:
(a) The
Lockbox Agent shall exercise ordinary care in selecting agents and independent
contractors, adequately bonded, to pick up and deliver the contents of the
Lockbox (“Lockbox Agent's Designees”) but shall not be liable for loss caused by
Lockbox Agent's Designees' negligence or misconduct. In the event of such
loss,
the Lockbox Agent will exercise its commercially reasonable best efforts,
at the
Company's cost and expense, to assist the Company in obtaining redress from
the
responsible party.
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(b) The
Lockbox Agent shall exercise its commercially reasonable best efforts in
determining the optimum time to pick up mail at the Lockbox and the best
carrier
to deliver that mail to the Lockbox Agent’s designated processing facility.
However, the Lockbox Agent shall not be liable if the chosen pickup time
and
carrier prove not to result in the earliest possible availability of
funds.
(c) In
performing it duties hereunder, the Lockbox Agent will exercise ordinary
care
and will act in good faith. The Lockbox Agent will not be accountable for
its
failure to perform any of its obligations hereunder, except for its gross
negligence or willful misconduct, or that of its employees, officers or agents.
If, as a result of such gross negligence or willful misconduct, the Lockbox
Agent is liable for mishandling any item, such liability shall be limited
to the
lesser of the face amount of any check involved or the amount of the Company's
direct loss as a result of such mishandling, and in no event shall the Lockbox
Agent be responsible for any incidental or consequential damages. IN NO EVENT
SHALL THE LOCKBOX AGENT BE LIABLE FOR ANY INDIRECT OR CONSEQUENTIAL DAMAGES
OR
LOSS OF PROFIT, NOTWITHSTANDING NOTICE TO THE LOCKBOX AGENT OF THE POSSIBILITY
OF SUCH DAMAGES OR LOSSES.
11. Indemnification.
The
Company agrees to pay, indemnify, and to save the Lockbox Agent, the Collateral
Agent and each Holder harmless from, any and all liabilities, costs and expenses
(including, without limitation, legal fees and expenses) (i) with respect
to, or
resulting from, any delay in paying any and all excise, sales or other taxes
which may be payable or determined to be payable with respect to the Collateral
Account, (ii) with respect to, or resulting from, any failure or delay by
the
Company in complying with any law or regulation applicable to the Collateral
Account or (iii) in connection with this Agreement, any breach or alleged
breach
hereof, or any action taken by the Lockbox Agent, the Collateral Agent or
any
Holder in exercising its rights hereunder.
12. Security
Agreement.
The
Collateral Account and the Lockbox, and all funds due to the Company and
deposited in the Lockbox and the Collateral Account, are subject to the security
interest of the Collateral Agent pursuant to the Security Agreement in
accordance with the terms thereof.
13. Paragraph
Headings, Captions, Etc.
The
paragraph headings, the captions and the footers used in this Agreement are
for
convenience of reference only and are not to affect the construction hereof
or
be taken into consideration in the interpretation hereof.
14. No
Waiver; Cumulative Remedies.
The
Lockbox Agent shall not by any act, delay, indulgence, omission or otherwise
be
deemed to have waived any right or remedy hereunder or to have acquiesced
in any
default or breach of any of the terms and conditions hereof. No failure to
exercise, nor any delay in exercising, on the part of the Lockbox Agent,
any
right, power or privilege hereunder shall operate as a waiver thereof. No
single
or partial exercise of any right, power or privilege hereunder shall preclude
any other or further exercise thereof or the exercise of any other right,
power
or privilege. A waiver by the Lockbox Agent, the Collateral Agent or the
Holders
of any right or remedy hereunder on any one occasion shall not be construed
as a
bar to any right or remedy which the Lockbox Agent, the Collateral Agent
or the
Holders would otherwise have on any future occasion. The rights and remedies
herein and in the Transaction Documents are cumulative, may be exercised
singly
or concurrently and are not exclusive of any rights or remedies provided
by law
or in equity or by statute.
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15. Waivers
and Amendments; Successors and Assigns.
None of
the terms or provisions of this Agreement may be waived, amended, supplemented
or otherwise modified except by a written instrument executed by the party
to be
charged with enforcement; provided,
however, that
any
provision of this Agreement may be waived, amended, supplemented or otherwise
modified by the Lockbox Agent only with the prior written approval of the
Collateral Agent or the Majority Holders. This Agreement shall be binding
upon
the successors and permitted assigns of the Company and shall inure to the
benefit of the Lockbox Agent and its successors and assigns. The Company
may not
assign its rights or obligations under this Agreement without the prior written
consent of the Lockbox Agent, which the Lockbox Agent may withhold in its
sole
discretion.
16. Effective
Date; Termination.
This
Agreement shall become effective at the time of first issuance of any Note
on
the earliest Issuance Date when executed and delivered by the Company and
the
Collateral Agent. Upon the payment and performance in full by the Company
of its
obligations under the Transaction Documents, the Company's obligations to
the
Lockbox Agent and the Holders pursuant to Sections 2 through 8 shall terminate,
any funds remaining in the Collateral Account shall be paid to the Company,
and
promptly thereafter the parties shall instruct the account debtors on all
Accounts that theretofore constituted Collateral and all parties to Contracts
that theretofore constituted Collateral to make all further payments due
to the
Company directly to the Company.
17. Notices.
Except
as otherwise specifically provided herein, any notice required or permitted
to
be given under the terms of this Agreement shall be given in writing and
shall
be deemed effectively given upon personal delivery to the party to be notified
or five days after deposit with the United States Postal Service, by registered
or certified mail, postage prepaid to the party to be notified at such party’s
address indicated in this Section 17 or at such other address as such party
may
designate by ten days’ advance written notice to the other parties. Notices in
writing shall also be deemed effectively given upon delivery by an overnight
courier, or upon transmission by facsimile, except that the time at which
the
notice is given will be the time at which confirmation of receipt is generated
by the receiving facsimile machine. In the case of any notice to the Company,
such notice shall be addressed to the Company at, 00000 X.X. 0xx
Xxxxxx,
Xxxxx 0000, Xxxxxxxx, XX 00000 Attention: Chief Financial Officer (telephone
line facsimile number (000) 000-0000), with a copy to Sichenzia Xxxx Xxxxxxxx
Xxxxxxx LLP, 1065 Avenue of the Xxxxxxxx, 00xx
Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx X. Xxxxxxxx, Esq. (telephone
line
facsimile number (000) 000-0000), and in the case of any notice to the
Collateral Agent or to the Collateral Agent while it serves as Lockbox Agent,
such notice shall be addressed to the Collateral Agent (or Lockbox Agent,
as
applicable) at Alexandra Global Master Fund Ltd., c/o Alexandra Investment
Management, LLC, 000 Xxxxx Xxxxxx, 00xx
Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000 (telephone line facsimile number (000) 000-0000),
and
if the Collateral Agent is not the Lockbox Agent, in the case of any notice
to
the Lockbox Agent, such notice shall be addressed to the Lockbox Agent at
its
address or telephone line facsimile transmission number provided in writing
to
the Company and the Collateral Agent at the time it becomes the Lockbox
Agent.
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18. Fees
and Expenses. The
Company agrees to pay the fees of the Lockbox Agent in performing its services
under this Agreement and all reasonable expenses (including, but not limited
to,
attorneys' fees and costs for legal services, costs of insurance and payments
of
taxes or other charges) of, incidental to, or in any way relating to the
performance by the Lockbox Agent of its obligations and the enforcement or
protection of the rights of the Lockbox Agent hereunder.
19. Concerning
Lockbox Agent.
The
Company acknowledges that the rights and responsibilities of the Lockbox
Agent
under this Agreement with respect to any action taken by the Lockbox Agent
or
the exercise or nonexercise by the Lockbox Agent of any option, right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Agreement shall, as between the Lockbox Agent and the Holders,
be
governed by Exhibit
A to
this
Agreement and by such other agreements with respect thereto as may exist
from
time to time among them, but, as between the Lockbox Agent and the Company,
except as expressly provided in Section 16, the Lockbox Agent shall be
conclusively presumed to be acting as agent for the Collateral Agent with
full
and valid authority so to act or refrain from acting, and the Company shall
not
be under any obligation to make any inquiry respecting such authority.
20. Concerning
the Collateral Agent.
The
Collateral Agent hereby appoints the Lockbox Agent as its agent upon the
terms
provided in this Agreement, with the Lockbox Agent to act exclusively for
the
benefit of the Collateral Agent. The Collateral Agent is executing and
delivering this Agreement solely for purposes of this Section 20.
21. Integration. This
Agreement represents the entire agreement of the Company and the Lockbox
Agent
with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the parties relative to the
subject matter hereof not expressly set forth or referred to
herein.
22. Governing
Law. This
Agreement and the rights and obligations of the Company under this Agreement
shall be governed by, and construed and interpreted in accordance with, the
law
of the State of New York.
23. Counterparts;
Execution. This
Agreement may be executed in any number of counterparts and all the counterparts
taken together shall be deemed to constitute one and the same instrument.
This
Agreement, once executed by a party, may be delivered to the other party
hereto
by telephone line facsimile transmission of a copy of this Agreement bearing
the
signature of the party so delivering this Agreement.
24. Third
Party Beneficiaries.
The
Collateral Agent and the Holders shall be third party beneficiaries of this
Agreement.
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25. Collateral
Agent as Lockbox Agent.
Whenever
there shall not be a bank or other financial institution serving as Lockbox
Agent, the Collateral Agent shall serve as Lockbox Agent. The Collateral
Agent
may select a bank or financial institution to serve as Lockbox Agent. During
any
period that the Collateral Agent serves as Lockbox Agent any reference to
the
Collateral Agent in this Agreement shall be a nullity. A bank selected by
the
Collateral Agent to serve as Lockbox Agent may, by executing and delivering
to
the Company and the Collateral Agent a counterpart of this Agreement, become
a
party to this Agreement, as Lockbox Agent, whereupon, the Collateral Agent
shall
cease to be the Lockbox Agent, and the Company agrees to all amendments to
the
form of this Agreement as such bank or financial institution so selected
by the
Collateral Agent to serve as Lockbox Agent may require. While the Collateral
Agent serves as Lockbox Agent, it may maintain the Collateral Account at
a bank
selected by the Collateral Agent, notwithstanding any provision of this
Agreement to the contrary.
26. Construction.
The
language used in this Agreement will be deemed to be the language chosen
by the
parties to express their mutual intent, and no rules of strict construction
will
be applied against any party.
[Signature
page follows]
12
IN
WITNESS WHEREOF,
the
Company has caused this Agreement to be duly executed and delivered as of
the
date first above written.
| EMAGIN CORPORATION | ||
| |
|
|
| By: | /s/ Xxxx X. Xxxxx | |
|
Name: Xxxx X. Xxxxx |
||
|
Title:
Chief Executive Officer
|
||
ACKNOWLEDGED
AND AGREED:
ALEXANDRA
GLOBAL MASTER FUND LTD.,
as
Collateral Agent and Lockbox Agent
BY:
Alexandra Investment Management, LLC,
as
Investment Advisor
| /s/ Xxxxxxx Xxxxxxxxx | |||
|
Name Xxxxxxx Xxxxxxxxx Title Chairman and Chief Executive Officer |
|||
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Exhibit
A
The
Lockbox Agent
1. Appointment. The
Holders (all capitalized terms used in this Exhibit A and not otherwise defined
herein shall have the respective meanings provided in the Lockbox Agreement
to
which this Exhibit A is attached (the “Agreement”)), by their acceptance of the
benefits of the Agreement, hereby irrevocably designate Alexandra Global
Master
Fund Ltd. as Lockbox Agent to act as specified herein and in the Agreement.
Each
Investor hereby irrevocably authorizes, and each other Holder of any Note
by the
acceptance of such Note shall be deemed irrevocably to authorize, the Lockbox
Agent to take such action on its behalf under the provisions of the Agreement
and any other instruments and agreements referred to herein or therein and
to
exercise such powers and to perform such duties hereunder and thereunder
as are
specifically delegated to or required of the Lockbox Agent by the terms hereof
and thereof and such other powers as are reasonably incidental thereto. The
Lockbox Agent may perform any of its duties hereunder by or through its agents
or employees.
2. Nature
of Duties.
The
Lockbox Agent shall have no duties or responsibilities except those expressly
set forth in the Agreement. Neither the Lockbox Agent nor any of its officers,
directors, employees or agents shall be liable for any action taken or omitted
by it as such under the Agreement or hereunder or in connection herewith
or
therewith, unless caused by its or their gross negligence or willful misconduct.
The duties of the Lockbox Agent shall be mechanical and administrative in
nature; the Lockbox Agent shall not have by reason of the Agreement or any
other
Transaction Document a fiduciary relationship in respect of the Collateral
Agent
or any Holder; and nothing in the Agreement, expressed or implied, is intended
to or shall be so construed as to impose upon the Lockbox Agent any obligations
in respect of the Agreement except as expressly set forth herein.
The
Lockbox Agent shall not be liable for any act it may do or omit to do while
acting in good faith and in the exercise of its own best judgment. Any act
done
or omitted by the Lockbox Agent on the advice of its own attorneys shall
be
deemed conclusively to have been done or omitted in good faith. The Lockbox
Agent shall have the right at any time to consult with counsel on any question
arising under the Agreement. The Lockbox Agent shall incur no liability for
any
delay reasonably required to obtain the advice of counsel. Nothing herein
shall
constitute a release or waiver of such legal counsel from any liability it
may
have for the advice given to the Lockbox Agent.
3. Lack
of Reliance on the Lockbox Agent.
Independently and without reliance upon the Lockbox Agent, the Collateral
Agent
and each Holder, to the extent it deems appropriate, has made and shall continue
to make (i) its own independent investigation of the financial condition
and
affairs of the Company and its subsidiaries in connection with the making
and
the continuance of the Company's obligations under the Transaction Documents
and
the taking or not taking of any action in connection therewith, and (ii)
its own
appraisal of the creditworthiness of the Company and its subsidiaries, and
the
Lockbox Agent shall have no duty or responsibility, either initially or on
a
continuing basis, to provide the Collateral Agent or any Holder with any
credit
or other information with respect thereto, whether coming into its possession
before any such obligation arises or the purchase of any Note, or at any
time or
times thereafter. The Lockbox Agent shall not be responsible to the Collateral
Agent or any Holder for any recitals, statements, information, representations
or warranties herein or in any document, certificate or other writing delivered
in connection herewith or for the execution, effectiveness, genuineness,
validity, enforceability or sufficiency of the Agreement or the financial
condition of the Company or be required to make any inquiry concerning either
the performance or observance of any of the terms, provisions or conditions
of
the Agreement, or the financial condition of the Company, or the existence
or
possible existence of any Event of Default.
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4. Certain
Rights of the Lockbox Agent. No
Holder
shall have the right to cause the Lockbox Agent to take any action with respect
to the Lockbox or the Collateral Account, with only the Collateral Agent
or the
Majority Holders having the right to direct the Lockbox Agent to take any
such
action. If the Lockbox Agent shall request instructions from the Collateral
Agent or the Majority Holders with respect to any act or action (including
failure to act) in connection with the Agreement, the Lockbox Agent shall
be
entitled to refrain from such act or taking such action unless and until
it
shall have received instructions from the Collateral Agent or the Majority
Holders, and to the extent requested, appropriate indemnification in respect
of
actions to be taken by the Lockbox Agent; and the Lockbox Agent shall not
incur
liability to any Person by reason of so refraining. Without limiting the
foregoing, neither the Collateral Agent nor any Holder shall have any right
of
action whatsoever against the Lockbox Agent as a result of the Lockbox Agent
acting or refraining from acting hereunder in accordance with the instructions
of the Collateral Agent or the Majority Holders or as otherwise specifically
provided in the Agreement.
5. Reliance.
The
Lockbox Agent shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, statement, certificate,
telephone line facsimile transmission, email, telex, teletype or telecopier
message, cablegram, radiogram, order or other document or telephone message
signed, sent or made by the proper Person, and, with respect to all legal
matters pertaining to the Agreement and its duties thereunder, upon advice
of
counsel selected by it.
6. Limitation
of Collateral Agent and Holder Liability.
The
Collateral Agent and the Holders shall not be liable for any liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by or asserted against the Lockbox Agent in performing its duties
hereunder or under the Agreement, or in any way relating to or arising out
of
the Agreement.
7. The
Lockbox Agent in its Individual Capacity.
The
Lockbox Agent and its affiliates may lend money to, purchase, sell and trade
in
securities of and generally engage in any kind of business with the Company
or
any affiliate or subsidiary of the Company as if it were not performing the
duties specified herein, and may accept fees and other consideration from
the
Company for services to the Company in connection with the Transaction Documents
and otherwise without having to account for the same to the Holders;
provided,
however,
that the
Collateral Agent on behalf of itself and such affiliates, hereby waives any
claim, right or Lien against the Collateral Account in any way arising from
or
relating to any such loan, securities transaction or business with the
Company.
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8. Holders.
The
Lockbox Agent may deem and treat the holder of record of any Note as the
owner
thereof for all purposes hereof unless and until a written notice of the
assignment or transfer thereof, as the case may be, shall have been filed
with
the Lockbox Agent. Any request, authority or consent of any Person or entity
who, at the time of making such request or giving such authority or consent,
is
the holder of record of any Note shall be conclusive and binding on any
subsequent holder, transferee or assignee, as the case may be, of such Note
or
of any Note(s) issued in exchange therefor.
9. Resignation
by the Lockbox Agent.
(a) The
Lockbox Agent may resign from the performance of all its functions and duties
under the Agreement at any time by giving 60 Business Days' prior written
notice
(as provided in the Agreement) to the Company, the Collateral Agent and the
Holders. Such resignation shall take effect upon the appointment of a successor
Lockbox Agent pursuant to clauses (b) and (c) below.
(b) Upon
any
such notice of resignation, the Collateral Agent shall appoint a successor
Lockbox Agent hereunder.
(c) If
a
successor Lockbox Agent shall not have been so appointed within said 60 Business
Day period, the Lockbox Agent shall then appoint a successor Lockbox Agent
who
shall serve as Lockbox Agent hereunder or thereunder until such time, if
any, as
the Collateral Agent appoints a successor Lockbox Agent as provided above.
If a
successor Lockbox Agent has not been appointed within such 60-day period,
the
Lockbox Agent may, at the sole cost and expense of the Company, petition
any
court of competent jurisdiction or may interplead the Company, the Collateral
Agent and the Holders in a proceeding for the appointment of a successor
Lockbox
Agent, and all fees, including but not limited to extraordinary fees associated
with the filing of interpleader, and expenses associated therewith shall
be
payable by the Company.
(d) The
fees
of any successor Lockbox Agent for its services as such shall be payable
by the
Company.
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