SECURED PROMISSORY NOTE

$200,000                                                          June 20, 2002
                                                    Hopewell Junction, New York

          For value received, eMagin Corporation, a Delaware corporation (the
"Borrower"), hereby unconditionally promises to pay to the order of Mr. MORTIMER
D.A. SACKLER or his assigns (the "Lender"), subject to the provisions set forth
below, in lawful money of the United States of America and in immediately
available funds, the principal sum of $200,000, plus interest, payable on the
dates and in the manner set forth below.

          This Secured Promissory Note (the "Note") is the note (the "Note")
referred to in that certain Secured Note Purchase Agreement, dated as of June
20, 2002 (the "Closing Date"), by and between the Borrower and the Investor
listed therein (as the same may from time to time be amended, modified or
supplemented, the "Note Purchase Agreement"), which is to be issued by the
Borrower pursuant to, and subject to the terms of, the Note Purchase Agreement,
and this Note is entitled to the benefits provided for therein. All capitalized
terms used herein and not otherwise defined herein shall have the respective
meanings given to them in the Security Agreement (as defined below).

          1. PRINCIPAL REPAYMENT. The outstanding principal amount of this Note
shall be payable on August 30, 2002 (the "Maturity Date"), unless this Note has
been redeemed as described in Section 10 below (such event, an "Early
Termination Event").

          2. INTEREST RATE. The Borrower further promises to pay interest on the
sum of the unpaid principal amount of this Note outstanding on each day, from
the date of this Note until all of the principal shall have been repaid in full
or pursuant to an Early Termination Event. Interest shall accrue at the rate of
eleven percent (11%) per annum. Interest shall be payable on the Maturity Date
(or on the effective date of an Early Termination Event) and shall be calculated
on the basis of a 360-day year for the actual number of days elapsed. Any
principal payment or interest payment on the unpaid principal amount of this
Note not paid when due, whether at the Maturity Date, on the effective date of
an Early Termination Event, by acceleration or otherwise, shall bear interest at
thirteen percent (13%) or the maximum rate permissible by law, whichever is
less.

          3. SECURITY. The full amount of the Notes are secured by (i) a general
security interest under a Security Agreement (the "Security Agreement"), dated
as of June 20, 2002, between the Borrower's wholly owned subsidiary, Virtual
Vision, Inc., a Delaware corporation ("Subsidiary"), as Assignor, and Alligator
Holdings, Inc. ("AHI"), as collateral agent for the benefit of the holder of
<PAGE>

the Note, and (ii) a general security interest under a Subordinated Security
Agreement (the "Subordinated Security Agreement"), dated as of June 20, 2002,
between the Borrower, as Assignor, and AHI, as collateral agent for the benefit
of the holder of the Note. Reference is hereby made to the Security Agreement
and the Subordinated Security Agreement for a statement of the rights and
obligations of the holder of, and the nature and extent of the security for,
this Note. Borrower shall not, directly or indirectly create, permit or suffer
to exist, and shall defend the Collateral against and take such further action
as is necessary to remove any Liens (excluding Permitted Liens) on or in the
Subsidiary Collateral or Company Collateral, or in any portion thereof, except
as permitted pursuant to the Security Agreement and the Subordinated Security
Agreement.

          4. PLACE OF PAYMENT. All amounts payable hereunder shall be payable to
the Lender in the manner specified by the Lender to the Borrower in writing. In
the event that payment is to be made by wire transfer, such payment shall be
made on a day that banks are open for business in New York, New York (each, a
"Business Day"). If any payment becomes due on a day that is not a Business Day,
such payment shall be made on the next succeeding Business Day, and such
extension shall be included in computing interest in connection with such
payment.

          5. DEFAULT. It shall be an event of default ("Event of Default") and
the entire unpaid principal of this Note, together with accrued interest, shall
become immediately due and payable, automatically and without presentment,
protest, demand or notice of any kind, all of which are expressly waived by the
undersigned, in the case of those events described in paragraphs (d), (e) and
(f), and in the case of any other such event at the election of Lender, upon the
occurrence of any of the following events:

          (a) Any failure on the part of Borrower to make any payment in respect
of this Note when due, whether by acceleration or otherwise (including without
limitation in connection with any repurchase obligation);

          (b) Borrower or the Subsidiary shall default in the performance or
compliance with any other covenant or agreement of Borrower or the Subsidiary
contained in this Note or the Note Purchase Agreement;

          (c) Any representation or warranty of Borrower or the Subsidiary
contained in the Note Purchase Agreement shall prove to have been untrue in any
material respect as of the date of the Note Purchase Agreement;

          (d) Borrower or the Subsidiary shall default in the payment of
principal, premium or interest on any material indebtedness for borrowed money,
or shall default in the performance of or compliance with the terms of any
related documentation, and in connection with any such default such indebtedness
becomes due and payable prior to its stated maturity;

                                       2

<PAGE>

          (e) Borrower or the Subsidiary shall commence or consent to any
proceeding under any bankruptcy, reorganization, arrangement, readjustment of
debt, moratorium or similar law or statute;

          (f) A proceeding shall be commenced against Borrower or the Subsidiary
under any bankruptcy, reorganization, arrangement, readjustment of debt,
moratorium or similar law or statute, and such proceeding is not stayed or
dismissed within 45 days after the commencement thereof;

          (g) Borrower or the Subsidiary consents to or suffers the appointment
of a guardian, receiver, trustee or custodian to any substantial and material
part of its assets that is not vacated within 45 days;

          (h) Final judgment in excess of $10,000 (excluding insured portions)
is entered against Borrower or the Subsidiary and is not stayed, bonded or
discharged within 30 days;

          (i) The dissolution or termination of existence of Borrower or the
Subsidiary; or

          (j) Any material default by the Subsidiary under the Security
Agreement or the Borrower under the Subordinated Security Agreement.

          So long as an Event of Default exists, the Lender may declare the
entire principal and unpaid accrued interest herein immediately due and payable,
without any cure period thereof, by notice in writing to the Borrower.

          6. CHANGE OF CONTROL OF BORROWER. (a) Upon the occurrence of a Change
of Control, the Borrower will have the right (the "Call Right"), at its sole
option, upon five day's written notice to the Lender delivered not more than 30
days after the effective date of such Change of Control (the "Call Period") to
purchase all (but not less than all) of the aggregate principal amount of this
Note from the Lender at a price equal to 250% of the principal amount hereof,
plus all accrued and unpaid interest thereon through, but not including the date
on which this Note is repurchased (the "Repurchase Price"). If the Borrower
shall not have exercised such right within the Call Period, the Lender shall
have the right (the "Put Right"), at its sole option, for a period of 30 days
commencing on the expiry of such Call Period (the "Put Period"), to require the
Lender purchase all (but not less than all) of the aggregate principal amount of
this Note at the applicable Repurchase Price.

          (b) Immediately upon the occurrence of any Change of Control, the
Borrower shall provide notice to the Lender stating that a Change of Control has
occurred and the applicable expiry dates for the Call Period and the Put Period.

                                       3

<PAGE>

          (c) If the Borrower shall elect to exercise its Call Right, the
Borrower shall provide written notice thereof to the Lender before the expiry of
the Call Period, such notice to include the repurchase date for this Note which
shall be no earlier than 15 days nor later than 30 days from the date such
notice is delivered.

          (d) If the Lender shall elect to exercise its Put Right after the
expiry of the Borrower's Call Right, the Lender shall provide written notice
thereof to the Borrower (the "Put Notice") before the expiry of the Put Period
and upon receipt thereof, the Borrower shall provide notice to the Lender of the
applicable repurchase date for this Note which shall be no earlier than 15 days
nor later than 30 days from the date such Put Notice is delivered to the
Borrower.

          (e) On any purchase date of a redemption of this Note under this
Section 6, the Borrower shall deliver to the Lender the Repurchase Price and the
Lender shall deliver to the Borrower this Note for cancellation.

          (f) As used in this Section 6, the following capitalized terms shall
have the following meanings:

          "Change of Control" shall mean the occurrence of any of the following
events: (i) a majority of the Board of Directors of the Borrower shall consist
of persons who are not Continuing Directors of the Borrower; or (ii) the
acquisition by any person or Group of the power, directly or indirectly, to vote
or direct the voting of Common Stock having a majority of the ordinary voting
power for the election of directors of the Borrower.

          "Continuing Director" means, as of the date of determination, any
person who (i) was a member of the Board of Directors of the Borrower on the
Closing Date or (ii) was nominated for election or elected to the Board of
Directors of the Borrower with the affirmative vote of a majority of the
Continuing Directors of the Borrower who were members of such Board of Directors
at the time of such nomination or election.

          "Group" shall mean any "group" for purposes of Section 13(d) of the
Securities Exchange Act of 1934, as amended, or any successor statute or
statutes thereto.

          7. WAIVER. The Borrower waives presentment and demand for payment,
notice of dishonor, protest and notice of protest of this Note, and shall pay
all costs of collection when incurred, including, without limitation, reasonable
attorney's fees, costs and other expenses.

          8. GOVERNING LAW. This Note shall be governed by, and construed and
enforced in accordance with, the laws of the State of New York, excluding
conflict of law principles that would cause the application of laws of any other
jurisdiction.

                                       4

<PAGE>

          9. SUCCESSORS AND ASSIGNS. The provisions of this Note shall inure to
the benefit of and be binding on any successor to the Borrower and shall extend
to any permitted holder hereof. The Borrower may not assign or transfer this
Note or any of its obligations under this Note without the prior written consent
of the Lender unless such transfer is to an institutional "accredited investor"
within the meaning of Rule 501 under the Securities Act of 1933, as amended and
provided that the transferee of such transfer is not a competitor, directly or
indirectly, of the Borrower.

          10. NOTICES. Any notices required to be delivered under this Note
shall be delivered pursuant to the notice procedures set forth in the Note
Purchase Agreement.

          11. MODIFICATION. This Note may be altered only by prior written
agreement signed by the party against whom enforcement of any waiver, change,
modification, or discharge is sought.

                            [Signature Page Follows]

<PAGE>


          IN WITNESS WHEREOF, the undersigned has executed this Note as of date
first written above.

                                   EMAGIN CORPORATION



                                   By:
                                      ------------------------------------------
                                      Name:
                                      Title: