Unassociated Document


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

    


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

    


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

    


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

          


    


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

    


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

          


    


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

    


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

          


    


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

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
 

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

          


    


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

    


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

          


    


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

          


    


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

          


    


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

          


    


     

     

     

    [SIGNATURE
      PAGE FOLLOWS]

     

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     

           

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


    

     

     

    
AGREED
      AND ACCEPTED: 

    ALEXANDRA
      GLOBAL MASTER FUND LTD.

    


    By:
      Alexandra Investment Management, LLC,

    as
      Investment Advisor       

    


    


    By:
      /s/
      Mikhail Filimonov

    
      
        

      
Name:
      Mikhail Filimonov

    Title:
      Chairman and Chief Executive Officer 

    


    


    RAINBOW
      GATE CORPORATION

     

    


    By:
      /s/
      Mortimer D.A. Sackler

    
      
        

      
Name:
      Mortimer D.A. Sackler

    Title:
      Investment Manager

    


    


    GINOLA
      LIMITED

     

    


    By:
      /s/
      Joerg Fischer

    
      
        

      
Name:
      Joerg Fischer

    Title:
      Director