Document:

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                                      1996
                           INCENTIVE STOCK OPTION PLAN
                                       OF
                             COSI SANDWICH BAR, INC.

                  1. Purpose. The purpose of this Plan is to promote the
interests of COSI SANDWICH BAR, INC. (the "Company") and its stockholders by
providing an incentive to certain key employees of the Company to continue in
their employment and also to afford them the opportunity to acquire or enlarge
their stock ownership in the Company in order that they may have a direct
interest in its success. This Plan is intended to constitute a plan under which
incentive stock options ("Stock Options") may be granted pursuant to Section 422
of the Internal Revenue Code of 1986, as it may be amended from time to time
(the "Code").

                  2. Administration. This Plan shall be administered by the
Board of Directors of the Company (the "Board"). No member of the Company's
Board shall be eligible to participate in this Plan.

                  The interpretation by the Board of any provisions of this Plan
or any Stock Option granted hereunder shall be final. No member of the Board
shall be liable for any action or determination made in good faith.

                  3. Eligibility. The individuals who shall be eligible to
participate in this Plan shall be such key employees (including officers) of the
Company as the Board shall determine from time to time. Directors who are not
regular employees of the Company will not be eligible to participate in this
Plan. Except as provided in Section 6(i) of this Plan, an employee shall be
eligible to participate in this Plan only if such employee, at the time the
Stock Option is granted, does not own stock possessing more than 10% of the
total combined voting power of all classes of stock of the Company or of any
parent or subsidiary corporation. When used herein, the terms "parent" and
"subsidiary" corporations shall have the meanings set forth in paragraphs (e)
and (f), respectively, of Section 424 of the Code.

                  4. Stock. The stock subject to Stock Options shall be shares
of the Company's authorized Common Stock which are unissued or have been
reacquired by the Company (the "Common Stock"). The total number of shares of
Common Stock on which Stock
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Options may be granted shall not exceed in the aggregate 12,000, provided that
such aggregate number of shares shall be subject to adjustment in accordance
with the provisions of Section 6(k) hereof. In the event that any outstanding
Stock Option granted under this Plan shall for any reason expire or terminate
prior to the end of the period during which Stock Options may be granted under
this Plan, the shares of Common Stock allocable to the unexercised portion of
such Stock Option may again be shares on which Stock Options may be granted
under this Plan.

                  5. Term of the Plan. No Stock Option shall be granted under
this Plan after October 1, 2001, but Stock Options theretofore granted may be
exercisable after such date.

                  6. Terms and Conditions of the Stock Options. All Stock
Options granted under this Plan shall be evidenced by agreements in such form as
the Board shall, from time to time, approve, which agreements shall comply with
and be subject to the following terms and conditions:

                  (a) Option Price. Each Stock Option shall state an option
price (the "Option Price") determined by the Board which shall not be less than
100% of the fair market value per share of Common Stock on the date the Stock
Option is granted but in no event shall be less than the par value thereof. The
fair market value per share of Common Stock shall be determined in good faith by
the Board at least annually or at such shorter intervals as may be necessary in
order to comply with Section 422 (b) (4) of the Code. The Board shall have the
power (but shall not be obligated) to retain independent appraisers for the
purpose of determining the fair market value of the Company's Common Stock.

                  (b) Term of Stock Option. Each Stock Option shall state the
date of its expiration which in no event shall be in excess of ten years from
the date of grant.

                  (c) Number of Shares. Each Stock Option shall state the total
number of shares which may be purchased upon exercise thereof.

                  (d) Exercise of Stock Option. To exercise a Stock Option, the
option holder (the "Optionee") shall give written notice to the Company
specifying the number of shares to be purchased. The Board may in its discretion
provide in each Stock Option that such Stock Option may not be exercised in
whole or in part for any period of time. Except as may be so provided

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and subject to the provisions of Section 6(j) hereof, any Stock Option may be
exercised in whole at any time or in part from time to time during its term in
minimum amounts of 100 shares of Common Stock or, in the event that less than
100 shares of Common Stock remain available to be exercised pursuant to the
Stock Option, the balance of shares of Common Stock remaining to be exercised.

                  (e) Payment of Shares. The written notice of exercise
specified in Section 6(d) shall be accompanied by payment of the full purchase
price therefor. The purchase price shall be paid in full in United States
dollars by check made payable to the order of the Company.

                  (f) Governmental Compliance. This Plan, the granting of any
Stock Options and the obligation of the Company to issue and deliver shares of
Common Stock upon exercise of any Stock Option shall be subject to all
applicable laws, regulations, rules, orders and approvals which shall then be in
effect and required by governmental entities.

                  (g) Non-Transferability of Stock Options. During the lifetime
of the Optionee, the Stock Option granted the Optionee shall be exercisable only
by the Optionee. No Stock Option shall be assignable or transferable otherwise
than by will or the laws of descent and distribution.

                  (h) Limitation on Amount of Grant. To the extent that the
aggregate fair market value (determined as of the time the incentive stock
option with respect to such stock is granted) of stock with respect to which
incentive stock options (as defined in Section 422(b) of the Code) are
exercisable for the first time by an Optionee during any calendar year (under
this Plan and all other incentive stock option plans of the Company or any of
its parent and subsidiary corporations) exceeds $100,000, such incentive stock
options shall be treated as Stock Options which are not incentive stock options.
This paragraph shall be applied by taking incentive stock options into account
in the order in which they were granted.

                  (i) Ten Percent Shareholders. If a Stock Option is granted to
an employee owning more than 10% of the total combined voting power of all
classes of stock of the Company or of any parent or subsidiary corporation at
the time of such grant, such Stock Option shall provide that the percentage
specified in Section 6(a) of this Plan be at least 110% and the

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term of the Stock Option specified in Section 6(b) of this Plan be reduced to
not more than five years from the date of grant.

                  (j) Termination of Employment. Unless otherwise agreed to by
the Company, in the event that the Optionee's employment with the Company or any
subsidiary of the Company shall terminate for any reason other than good cause,
his Stock Option shall terminate thirty days thereafter and the Optionee shall
have the right, with respect to any shares available for purchase during such
thirty-day period, subject to the provisions of Sections 6(b) and 6(d) hereof,
to exercise his Stock Option at any time within such thirty-day period;
provided, however, that if the Optionee shall die while in the employ of the
Company, his Stock Option shall terminate six months thereafter and his estate,
personal representative or beneficiary shall have the right, subject to the
provisions of Sections 6(b) and 6(d) hereof, to exercise his Stock Option at any
time within said six-month period and, provided further, that if the Optionee's
employment by the Company is terminated for good cause, all unexercised Stock
Options issued to such Optionee hereunder shall automatically be canceled and
the Company may require such Optionee to sell to the Company at a sales price
equal to the lesser of the Option Price and the fair market value of such shares
as determined by the Board all Shares then owned by the Optionee which were
acquired pursuant to this Plan. Such purchase shall take place at a closing to
be held at the offices of the Company at 12 noon on a date that is no more than
two business days after the termination of Optionee's employment by the Company
for "good cause" as defined below. At such closing the Optionee shall deliver to
the Company certificates representing the Shares subject to such purchase, duly
endorsed or accompanied by a dully executed blank stock power and the Company
shall deliver to Optionee cash or a check in an amount equal to the product of
the Option Price and the number of Shares subject to such purchase. Whether an
authorized leave of absence or absence on military or government service shall
constitute a termination of employment for the purposes of this Plan shall be
determined by the Board, which determination, unless overruled by the Board,
shall be final and conclusive. An Optionee's employment shall be deemed to
terminate immediately if the Optionee is employed by a corporation which ceases
to be a subsidiary of the Company and the Optionee is not thereupon transferred
to and employed by the Company or another subsidiary of the Company. "Good
cause" as used herein shall mean (i) a material breach by the Optionee of a
material obligation of such Optionee to the Company, (ii) any defalcation of the
Company's

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funds, (iii) the Optionee's conviction of a felony, (iv) any action taken by the
Optionee which shall, in the reasonable opinion of the Board, cause the Company
to be held in public disregard, or (v) the Optionee's filing, voluntarily or
involuntarily, in personal bankruptcy.

                  (k) Recapitalization. The total number of shares of Common
Stock on which Stock Options may be granted hereunder as provided in Section 4
hereof, the number of shares which may be purchased upon exercise of each
outstanding Stock Option, and the Option Price of each outstanding Stock Option
shall each be proportionately adjusted for any increase or decrease in the
number of issued shares of Common Stock effected without receipt of
consideration by the Company (for any reason including, without limitation, a
subdivision or consolidation of shares or other capital adjustment or a stock
dividend). The number of shares which may be purchased upon exercise and the
Option Price each outstanding Stock Option shall also be appropriately adjusted
upon the issuance of Common Stock by the Company at less than the fair market
value per share of Common Stock last determined in good faith by the Board prior
to such issuance.

                  (l) Rights as a Stockholder. An Optionee shall have no rights
as a stockholder with respect to shares covered by his Stock Option until the
date of the issuance of shares to such Optionee upon exercise of his or her
Stock Option and only after such shares are fully paid and such Optionee has
entered into the then current Shareholders Agreement, if any.

                  (m) Other Provisions. The Stock Option agreements shall
contain such other provisions as the Board shall deem advisable.

                  7. Discontinuance or Amendment of the Plan. This Plan may be
discontinued or amended by the Board at any time as it shall deem advisable,
including any amendments required to comply with the provisions of Section 422
of the Code or the regulations promulgated thereunder; provided that no
amendment to this Plan shall be made, which would, without approval of
stockholders, (i) increase the total number of shares for which Stock Options
may be granted hereunder, (ii) change the class of persons eligible to receive
Stock Options as set forth in Section 3 hereof, (iii) reduce the minimum Option
Price or (iv) extend the term of this Plan. No amendment or discontinuance of
this Plan may, without the

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consent of the Optionee to whom a Stock Option shall theretofore have been
granted, adversely affect his rights under such Stock Option.

                  8. Application of Proceeds. The proceeds received by the
Company from the sale of Common Stock pursuant to Stock Options shall be
available for general corporate purposes.

                  9. No Obligation to Exercise Stock Option. The granting of a
Stock Option shall impose no obligation upon the Optionee to exercise the same
in whole or in part.

                  10. Effective Date of Plan. This Plan shall be effective
October 1, 1996.

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                                 AMENDMENT No. 1
                                     to the
                                      1996
                           INCENTIVE STOCK OPTION PLAN
                                       OF
                             COSI SANDWICH BAR, INC.

                  This Amendment No. 1 is effective as of this 25th day of
August, 1997.

                  WHEREAS, the Company's 1996 Incentive Stock Option Plan (the
"Plan") provides for the grant of options for certain key employees of the
Company to purchase up to 12,000 shares of Common Stock;

                  WHEREAS, the Company wishes to increase by 25,000 shares the
number of shares of Common Stock with respect to which Stock Options may be
granted so that the total maximum number of shares issuable under the Plan shall
be 37,000 shares of Common Stock;

                  WHEREAS, defined terms used herein but not defined herein are
used as defined in the Plan;

                  NOW, THEREFORE, the second sentence of Section 4 of the Plan
is hereby amended to read as follows:

                  The total number of shares of Common Stock on which Stock
         Options may be granted shall not exceed in the aggregate 37,000,
         provided that such aggregate number of shares shall be subject to
         adjustment in accordance with the provisions of Section 6(k) hereof.

                  Except as herein specifically provided, the Plan shall remain
unchanged.AMENDMENT NO. 1 TO CONVERTIBLE PROMISSORY NOTE

     AMENDMENT NO.1 TO CONVERTIBLE PROMISSORY NOTE (this "Agreement"),  dated as
of May 20, 2002, by and between eMAGIN CORPORATION,  a Delaware corporation (the
"Borrower") and The Travelers Insurance Company (the "Lender"),  each a party to
the Note Purchase Agreement (the "Note Purchase  Agreement")  entered into as of
August 20, 2001 and a Convertible  Promissory Note (the "Note") dated August 20,
2001 issued  thereunder.  All  capitalized  terms used herein and not  otherwise
defined herein shall have the respective  meanings provided to such terms in the
Note.

                              W I T N E S S E T H :
                              - - - - - - - - - -

     WHEREAS,  the Note  provides  in  Section  1 thereof  that the  outstanding
principal  amount of the Note shall be payable  on May 20,  2002 (the  "Maturity
Date");

     WHEREAS,  the  parties  hereto are  currently  engaging  in  discussion  to
renegotiate certain provisions of the Note;

     WHEREAS, in order to allow such discussion to proceed in an orderly manner,
the Borrower has requested and the Lender has agreed to extend the Maturity Date
and amend the Note as set out herein;

     NOW,  THEREFORE,  in consideration of the mutual covenants set forth herein
and other good and valuable consideration,  the receipt and sufficiency of which
are hereby  acknowledged,  the parties  hereto,  intending to be legally  bound,
hereby agree as follows:

                                   ARTICLE ONE

                                AMENDMENT TO NOTE

     SECTION 1.1 Amendment to Note. By executing  this  Agreement,  the Borrower
and the Lender hereby agree and  acknowledge  that:

     (a) Section 1 of the Note is hereby  amended by deleting "May 20, 2002" and
inserting in the place of such deletion "May 31, 2002"; and

     (b)  Section  4 of the  Note is  hereby  deleted  in its  entirety  and the
following text shall be inserted in the place of such deletion:  "[INTENTIONALLY
DELETED]".

                                   ARTICLE TWO

                                  MISCELLANEOUS

     SECTION 2.1  Counterparts.This  Agreement  may be executed in any number of
counterparts and by the different parties hereto on separate counterparts,  each
of which counterparts when executed and delivered  (including delivery by way of
facsimile) shall be an original,  but all of which shall together constitute one
and the same instrument. A complete set of counterparts shall be lodged with the
Borrower.

     SECTION  2.2  GOVERNING  LAW.  THIS  AGREEMENT  SHALL BE  GOVERNED  BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE

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LAWS OF THE STATE OF NEW YORK,  EXCLUDING  CONFLICT OF LAW PRINCIPLES THAT WOULD
CAUSE THE APPLICATION OF LAWS OF ANY OTHER JURISDICTION.

     SECTION 2.3 Effective  Date.  This  Agreement  shall become  effective (the
"Effective Date") as of the date first referenced above.

     SECTION 2.4 Effect of  Amendment.  From and after the Effective  Date,  the
Note and all references to the Note pursuant to the Note Purchase  Agreement and
the other documents  referenced  therein shall be deemed to be references to the
Note as modified  hereby.  This  Agreement is limited as specified and shall not
constitute  a  modification,  amendment,  acceptance  or  waiver  of  any  other
provision  of the  Note,  the Note  Purchase  Agreement  or any  other  document
referenced therein.

     SECTION 2.5 Headings. The article,  section and subsection headings in this
Agreement  are for  convenience  only and  shall not  constitute  a part of this
Agreement  for any other  purpose and shall not be deemed to limit or affect any
of the provisions hereof.

     SECTION 2.6 Further Assurances.  From and after the date of this Agreement,
upon the request of any party hereto,  each party shall execute and deliver such
instruments,  documents  and other  writings as may be  reasonably  necessary or
desirable  to  confirm  and carry out and to  effectuate  fully the  intent  and
purposes of this Agreement.

                                    * * * * *

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     IN WITNESSES WHEREOF,  the parties hereto have caused their duly authorized
officers  to execute  and  deliver  this  Agreement  as of the date first  above
written.

                                   BORROWER:
                                   eMAGIN CORPORATION

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

                                   LENDER:

                                   THE TRAVELERS INSURANCE COMPANY

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

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