UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 2, 2014

eMagin Corporation
(Exact name of registrant as specified in its charter)
 
  Delaware
 
  001-15751
 
  56-1764501
(State or other jurisdiction of incorporation)
 
  (Commission File Number)
 
  (IRS Employer Identification No.)
         
 
3006 Northup Way, Suite 103, Bellevue WA 98004
(Address of principal executive offices and Zip Code)

Registrant's telephone number, including area code (425)-284-5200

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 
1
 

Item 1.01 Entry Into a Material Definitive Agreement.

Hopewell Junction, New York Lease

On May 2, 2014, eMagin Corporation (“eMagin” or the “Company”) entered into a Seventh Lease Amendment (the “Lease Amendment”) with International Business Machines Corporation (the “Landlord”) covering the premises located at the Hudson Valley Research Park, 2070 Route 52, Hopewell Junction, New York 12533.  The Lease Amendment, which is effective as of June 1, 2014 and further amends the Agreement of Lease dated May 28, 1999 (as previously amended by the First Lease Amendment dated July 9, 1999, the Second Lease Amendment dated January 29, 2001, the Third Lease Amendment dated May 28, 2002, the Fourth Lease Amendment dated November 29, 2004, the Fifth Lease Amendment dated September 1, 2006, and the Sixth Lease Amendment dated May 27, 2009), covers approximately 37,000 square feet of manufacturing, assembly, storage and office space.  The Lease Amendment covers a five-year term expiring May 31, 2019 and carries an average monthly base rent of $74,190.87 plus expenses.

Pursuant to the Lease Amendment, the Company was granted a rent credit for June and July, 2014 equivalent to the monthly base rent of two consecutive months.  In the case of an event of default as defined in the Lease Amendment, the Company shall forfeit its rights to the two month rent credit and shall reimburse the Landlord to the extent any credit was received.  Additionally, the Company was granted a one-time option to lease 3,529 square feet of additional office space, which option expires on November 30, 2014, as well as a $15,000 rent credit for use towards the rent of the added office space.

The rent payable pursuant to the Lease Amendment is as follows:

Lease Year
        $ 
Base Monthly Rent
 
             
06/01/14 – 05/31/15 1
        $ 73,275.18  
06/01/15 – 05/31/16
        $ 73,275.18  
06/01/16 – 05/31/17
        $ 73,275.18  
06/01/17 – 05/31/18
        $ 74,740.68  
06/01/18 – 05/31/19
        $ 76,235.50  
               
1 Due to the rent credit set forth in the Lease Amendment, there will be no rent due to the Landlord for the months of June and July, 2014.

Item 2.03.  Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

See Item 1.01.

The foregoing information is a summary of the Lease Amendment, is not complete, and is qualified in its entirety by reference to the full text of the Lease Amendment which is attached as exhibit 99.1 to this Current Report on Form 8-K.  
 
Item 9.01 Financial Statements and Exhibits.

(d)           Exhibits.

Exhibit Number
 
Description
     
99.1
 
7th Lease Amendment between International Business Machines Corporation and eMagin Corporation, dated as of May 2, 2014.


 
2
 
 
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
eMagin Corporation
 
       
Date: May 8, 2014
By:
/s/ Paul Campbell
 
   
Name: Paul Campbell
 
   
Title: Chief Financial Officer
 
       


Exhibit Index

     
Exhibit Number
 
Description
     
99.1
 
7th Lease Amendment between International Business Machines Corporation and eMagin Corporation, dated as of May 2, 2014.


 
 
 
3
Exhibit 99.1
 
 
 
 
SEVENTH LEASE AMENDMENT
 
THIS AGREEMENT made as of the 2 nd  day of May, 2014, between International Business Machines Corporation, a New York corporation, having its principal office at 1 New Orchard Road, Armonk, New York 10504 (the "Landlord") and eMagin Corporation a Delaware corporation, having an office at 2070 Route 52, Hopewell Junction, NY 12533 (the "Tenant").
 
WITNESSETH
 
(Capitalized terms used and not defined herein shall have the meanings ascribed to them in the Lease).
 
WHEREAS, the Landlord and the Tenant entered into a written Agreement of Lease dated May 28,1999, as amended by First Amendment dated July 9, 1999, Second Amendment dated January 29, 2001, Third Amendment dated May 8, 2002, Fourth Amendment dated November 29, 2004, Fifth Amendment dated September 1, 2006 and Sixth Amendment dated May 27 th , 2009 (collectively, the "Lease").
 
WHEREAS, the Tenant desires to further extend the Term of the Lease and make other modifications to the Lease related thereto.
 
NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration and of the mutual agreements hereinafter set forth, it is hereby mutually agreed to amend the Lease as follows.
 
1.
The Term of the Lease is hereby extended for a period of five (5) years (7th Amendment Extended Term"), commencing on June 1, 2014 and expiring on May 31, 2019("Expiration Date"), (unless sooner terminated as hereinafter provided) upon the same covenants, agreements, provisions and conditions that are then contained in the Lease, except with respect to Base Rent and as may be specifically provided herein. Tenant shall pay Base Rent for the Premises during the 7 th Amendment Extended Term in accordance with Schedule B dated 6/1/2014 attached hereto and made a part hereof ("Schedule B") which shall serve to replace all prior Schedule Bs. Provided that there is not an Event of Default by Tenant anytime during the 7 th Amendment Extended Term, Tenant shall be granted a rent credit which shall apply to Base Rent due for the Premises (excluding however, any Base Rent applicable - to the Added Office Space, as defined below, if any) for the following two (2) consecutive months, i.e., June and July, 2014 (collectively, "Two Month Rent Credit")as shown on Schedule B, The Two Month Rent Credit shall in no event include Base Rent payable for the Additional Office Space. If, however, an Event of Default shall occur at any time during the 7 th Amendment Extended Term, Tenant shall forfeit its rights to the Two Month Credit and shall be required to reimburse Landlord the total amount of the Two Month Rent Credit to the extent Tenant has already actually received the Two Month Rent Credit. Notwithstanding the foregoing, the parties acknowledge that Landlord has granted Tenant a separate Added Office Space Rent Credit (as defined below) which shall apply only to the Added Office Space.
 
 
 
 
 
1
 
 
 
a.
Tenant shall have the one time option ("Office Option") to lease the additional office space comprised of 3,529 square feet, located in Building B330C as shown on Exhibit A-1 and A-2 attached hereto ("Added Office Space"), under all of the terms and then contained in the Lease except for Base Rent) and any of Landlord's then current Building B330C Rules and Regulations. The Office Option shall be exercised by Tenant, if at all, by written notice to Landlord ("Additional Space Notice") delivered prior to 11: 59PM on November 30, 2014 (the "Office Option Expiration Date"), TIME BEING OF THE ESSENCE WITH NO EXTENSION OF THE EXERCISE DATE FOR ANY REASON.
 
b.
If Tenant shall have timely exercised the Office Space Option, Landlord shall deliver the Added Office Space to Tenant vacant and free of all occupants no later than the date which is ninety (90) days after the date Landlord shall have received Tenant's Additional Space Notice. Tenant shall accept possession of the Added Office Space in its then "AS IS condition "WITH ALL FAULTS" and Landlord shall not be required to perform any work or furnish any materials in connection with the Added Office Space prior to or during the Term. Upon delivery to Tenant, the Added Office Space shall be added to, and become a part of, the Premises upon the same covenants, agreements, provisions and conditions (other than Base Rent) that are then contained in this Lease, and the parties shall execute an amendment confirming such delivery date (the "Added Space Commencement Date"), containing revised Schedules A and B noting the Added Office Space and the Base Rent, and any other relevant details. Tenant shall pay Base Rent for the Added Office Space beginning on the Added Office Space Commencement Date as shown in Schedule E.Landlord shall provide Tenant with a Base Rent credit for the Added Office Space in the amount of Fifteen Thousand Dollars ($15,000) (the "Added Office Space Rent Credit") which Tenant may apply against Base Rent due for the period beginning on the Added Space Commencement Date until such credit is expended.
 
c.
If Tenant does not timely exercise the Office Space option, any right of Tenant to lease the Added Office Space shall be void, and of no force and effect.
 
 
3. As a clarification, the Landlord has and shall throughout the Term, shall continue to have the unrestricted right to sell, transfer, lease, license, charge or otherwise dispose of all or any part of its interest in the Building or any interest of the Landlord in this Lease. In the event of any sale, transfer, lease or other disposition the Landlord shall thereupon, and without further agreement, be released of all liability under this Lease arising from and after such disposition. If required by the Landlord in connection with any sale, transfer, charge or other disposition the Tenant shall, within five(5) Business Days of request, provide to the Landlord, prospective purchasers and mortgagees and their respective agents and consultants, access to the current financial statements of the Tenant. If the Tenant is listed on a recognized stock exchange the United States, the Tenant agrees to provide instead copies of the Tenant's annual reports, quarterly reports and all other publicly distributed reporting materials.
   
4. Any notice, request or demand under this Lease shall be in writing (except where oral notice is specifically provided for in this Lease) and shall be considered properly delivered when addressed as hereinafter provided, and (a) served personally, (b) sent by registered or certified (return receipt requested) and deposited in a United States general or branch post office, or (c) sent by a private overnight mail carrier. Any notice, request or demand by Tenant to Landlord shall be addressed to:
   
  International Business Machines Corporation
Hudson Valley Research Park
Mail Drop 85X
2070 Route 52
 
 
 
 
 
2
 
 
 
 Hopewell Junction, New York 12533
 
 Attn: Mr. Patrick Ortland
 Program Manager, Real Estate Operations
 
with copies addressed and simultaneously given to:
 
 International Business Machines Corporation
 Hudson Valley Research Park
 Mail Drop 87S
 2070 Route 52
 
 Hopewell Junction, New York 12533
 
 Attn: Mark Cronk
 Real Estate Site Operations
 
and an additional copy to:
 
 International Business Machines Corporation
 1 New Orchard Road
 Armonk New York 10504
 Attn: Senior Counsel -Legal Services
 Global Real Estate Operations
 
and an additional copy to:
 
 International Business Machines Corporation
 Hudson Valley Research Park
 Mail Drop 82X
 2070 Route 52
 Hopewell Junction, New York 12533
 Attn: Site Counsel;
 
and, if requested in writing by Landlord, similarly and simultaneously given to such other parties as Landlord may request. Any notice, request or demand by Landlord to Tenant shall be addressed to:
 
 eMagin Corporation
 10500 NE 8 th Street
 Suite 1400
 Bellevue, Washington 98004
 Attn: Paul Campbell, CFO ( ncambell@emagin.com ; 425-749-3622)
 
 
 
3
 
 
with a copy addressed and simultaneously given to:
 
 eMagin Corporation
 Hudson Valley Research Park
 2070 Route 52
 Hopewell Junction, New York 12533
 Attn: Chief Executive Officer
 
until otherwise directed in writing by Tenant; and, if requested in writing by Tenant, similarly and simultaneously given to such other parties as Tenant may request. All notices shall be deemed given on the date of actual receipt by the party to whom the notice is addressed. Rejection or other refusal to accept a notice, request or demand, or the inability to deliver the same because of a changed address of which no notice was given, shall be deemed to be receipt of the notice, request or demand sent.
 
5. 
Each party will be familiar with and will strictly comply with all Laws related to bribery, corruption, and prohibited business practices. The parties and their affiliates have not and will not, for the purpose of unlawfully influencing or inducing anyone to influence decisions in favor of Landlord, Tenant or any of either part's Affiliates, offer, promise or make or agree to make, directly or indirectly (a) any political contributions of any kind or any payment to or for the benefit of any public official, whether elected or appointed, (b) any payment for gifts, meals, travel or other value for a government employee or his/her family members or (c) any payments or gifts (of money or anything of value) to anyone. The parties shall not, under any circumstances, reimburse on another for any such political contributions, payments or gifts.
 
6.
Schedule A dated 6/1/2009 is replaced with Schedule A dated 6/1/2014 attached hereto.
 
7.
Schedule B dated 6/1/2009 is replaced with Schedule B dated 6/1/2014 attached hereto.
 
8.
Schedule D dated 6/1/2009 is replaced with Schedule D dated 6/1/2014 attached hereto.
 
 
Except as herein modified, the Lease shall continue in full force and effect without change.
 
 
 
4
 
 
IN WITNESS WHEREOF, this instrument has been executed by the duly authorized representatives of the parties hereto as of the day and year first above written.
 
 
INTERNATIONAL BUSINESS MACHINESCORPORATION
 
       
 
By:
/s/ Patrick 0. Ortland  
    Patrick 0. Ortland  
    Title: Program Manager, Real Estate  
       
 
 
eMagin Corporation
 
       
 
By:
/s/  Andrew Sculley  
    Title: President & CEO  
       
       
 
 
 
5
 
 
 
SCHEDULE A      Effective 6/1/2014
 
eMagin Corporation
 
COMPUTATION SCHEDULE
 
 
 
 
 
Net Productive
   
Rate
   
Annual Base
   
Monthly Base
 
Building   Space Type  
Square Feet
   
($/NPSF)
   
Rent
   
Rent
 
  B/334  
Office
    6,554     $ 14.55     $ 95,360.70     $ 7,946.73  
  B/330C  
Office
    1,606     $ 14.55     $ 23,367.30     $ 1,947.28  
     
Dry
    5,850     $ 20.26     $ 118,521.00     $ 9,876.75  
     
Clean
    16,316     $ 37.00     $ 603,692.00     $ 50,307.67  
     
Storage
    6,524     $ 5.88     $ 38,361.12     $ 3,196.76  
Totals
        36,850             $ 879,302.12     $ 73,275.18  
 
 
Deriving Net Rentable Square Footage
 
     
Net Productive
   
NP to NR
   
Net Rentable
 
Building
   
Square Feet
   
Factor
   
Square Feet
 
  B/334       6,554       1.47       9,634  
  B/330C       30,296       1.26       38,173  
totals
      36,850               47,807  
 
 
 
6
 
 
SCHEDULE B    Effective 6/1/2014
eMagin Corporation
 
 
 
 
 
Base Payment Schedule
   
5 year Term 6/1/14-5/31/19
 
   
2014
   
2016
   
2016
   
2017
   
2018
   
2019
 
January
        $ 73,275.18     $ 73,275.18     $ 73,275.18     $ 74,740.68     $ 76,235.50  
February
        $ 73,275.18     $ 73,275.18     $ 73,275.18     $ 74,740.68     $ 76,235.50  
March
        $ 73,275.18     $ 73,275.18     $ 73,275.18     $ 74,740.68     $ 76,235.50  
April
        $ 73,275.18     $ 73,275.18     $ 73,275.18     $ 74,740.68     $ 76,235.50  
May
        $ 73,275.18     $ 73,275.18     $ 73,275.18     $ 74,740.68     $ 76,235.50  
June
 
free
    $ 73,275.18     $ 73,275.18     $ 74,740.68     $ 76,235.50          
July
 
free
    $ 73,275.18     $ 73,275.18     $ 74,740.68     $ 76,235.50          
August
  $ 73,275.18     $ 73,275.18     $ 73,275.18     $ 74,740.68     $ 76,235.50          
September
  $ 73,275.18     $ 73,275.18     $ 73,275.18     $ 74,740.68     $ 76,235.50          
October
  $ 73,275.18     $ 73,275.18     $ 73,275.18     $ 74,740.68     $ 76,236.50          
November
  $ 73,275.18     $ 73,275.18     $ 73,275.18     $ 74,740.68     $ 76,235.50          
December
  $ 73,275.18     $ 73,275.18     $ 73,275.18     $ 74,740.68     $ 76,235.50          
                                                 
Total/Year
  $ 366,375.90     $ 879,302.16     $ 879,302.16     $ 889,580.69     $ 907,351.90     $ 381,177.49  
                                                 
                                      Total 5 years      $ 4,303,070.29  
                                                 
 
Notes:
 
1.  
Rent stays Flat years 1, 2 and 3 (6/1/14-5/31/17)
2.  
Rent inceases 2%/year in years 4 and 5 (6/1/18-5/31/19)
3.  
Provide 2 Months of Rent Abatement as follows:
June 2014
July 2014
 
 
7
 
 
Schedule D                                    Effective 6/1/2014
eMagln Corporation
 
Computed Utilities Schedule
 
Maximum Available Capacities
 
 
 
Peak Allowable
   
Total Annual
   
Actual
 
 
Utilities
 
Useage
   
Allowable
   
Usage Month
 
Units
Electricity - Metered                   kWH
Electricity - Non Metered
  N/A       N/A       292,382.9  
kWH
Chilled Water
 
350 Tons
      1,401,600.0       95,243.4  
Ton-Hrs
Low Temp Chilled Water
 
130 Tons
      569,400.0       30,688.8  
Ton-Hrs
High Temp Chilled Water
 
5 NISH
      19,251.0       1,367.1  
MMBTU
DeIonized Water - Non Metered
 
30 gpm
      13,220.0       21.9  
1K Gal
Delonized Water - Monthly Average
 
30 gpm
      13,220.0       30.6  
1K Gal
Compressed Air
 
10 scfm
      550,000.0       35,581.2  
SCF
UHP Nitrogen
 
100 scfm
      6,000,000.0       266,554.0  
SCF
Std. Oxygen
 
5 scfm
      100,000.0       1,145.0  
SCF
Std. Argon
 
5 scfm
      100,000.0       8,236.0  
SCF
Std. Forming Gas
 
15 scfm
      150,000.0       2,667.0  
SCF
 
                         
 
Notes:
Wastewater - The sum of industrial and Fluoride waste stream equals DI water usage.
The percent of industrial=95%, Fluoride = 5%
 
 
 
8
 
 
 
 
SCHEDULE E                                  Office Option Space and Rent
eMagin Corporation
 
COMPUTATION SCHEDULE
 
 
 
            Net Productive     Rate     Annual Base     Monthly Base  
Building     Space Type     Square Feet     ($/NPSF)     Rent     Rent  
                                 
B1330C     Office       2,801     $ 14.55     $ 40,754.55     $ 3,396.21  
                                           
Totals       2,801                                  
                                             
                                     
Deriving Net Rentable Square Footage
 
 
      Net Productive     NP to NR     Net Rentable  
Building     Square Feet     Factor     Square Feet  
B/330C         2,801       1.26       3,529  
                             
totals       2,801               3,529  
                                                            
 
                                                                                          
Note: Monthly Base Rent for Office Option Space will be added to Rent outlined in Schedule B upon Commeeement Date of Office Option Space and will escalate at same timeframes as denoted on Schedule B
 
 
 
 
9
 
 
 
Exhibit A-1
eMagin Corporation
 
Added Office Space
 
Office Number
   
NPSF
   
N P->
NR
   
NRSF
 
  1       96     1.26     121  
  2       96     1.26     121  
  3       96     1.26     121  
  4       96     1.26     121  
  5       96     1.26     121  
  6       96     1.26     121  
  7       96     1.26     121  
  8       96     1.26     121  
  9       96     1.26     121  
  10       97     1.26     122  
  11       183     1.26     231  
  12       154     1.26     194  
  13       149     1.26     188  
  14       148     1.26     186  
  15       100     1.26     125  
  16       99     1.26     125  
  17       99     1.26     125  
  18       99     1.26     125  
  19       99     1.26     125  
  20       99     1.26     125  
  21       298     1.26     375  
  22       96     1.26     121  
  22A    
included
   
NA
   
NA
 
  23       108     1.26     136  
  24       108     1.26     136  
AISLE
   
included
   
NA
   
NA
 
                     
Totals
      2801           3529  
 
 
 
10
 
 
Exhibit A-2
 
 
 
 
GRAPHIC
 
 
 
11