EMAGIN CORP
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<TYPE>EX-10
<SEQUENCE>2
<FILENAME>aug620048kex101.txt
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EXHIBIT 10.1

FORM OF LETTER  AGREEMENT  BETWEEN THE COMPANY AND THE HOLDERS OF THE CLASS A, B
AND C COMMON STOCK PURCHASE WARRANTS



<PAGE>
EXHIBIT 10.1

                               eMagin Corporation
                                  2070 ROUTE 52
                        Hopewell Junction, New York 12533
                                 (845) 838-7948


To the Purchasers of the  securities  under the  Securities  Purchase  Agreement
Dated  January  9,  2004  set  forth  on the  attached  Distribution  List  (the
"Investors")

Gentlemen:

     As you know,  we have made an offer to you  regarding  the  re-pricing  and
exercise of the  currently  outstanding  Class A, B and C common stock  purchase
warrants of the eMagin  Corporation  that you possess in  consideration  of your
agreeing to limit the right of  participation  that you were granted pursuant to
Section 4.11 of the Securities Purchase  Agreement,  dated January 9, 2004, that
was executed in connection with your investment in common stock and common stock
purchase warrants of eMagin.

     Accordingly,  by way of this  letter,  we are  hereby  requesting  that you
execute  and  return  this  letter  in  order  to  formally   confirm   that  in
consideration of our agreeing to re-price your choice of any of your outstanding
Class A, B and C common stock  purchase  warrants  from $1.74,  $1.74 and $1.90,
respectively,  to $.90  per  share,  you  agree  to:  (i)  limit  your  right of
participation  with respect any proposed  financing  transaction  to the maximum
number  of shares  that  AMEX  will  allow  the  Investors  to  purchase  in any
subsequent  financing  without the Company  being  required to seek  shareholder
approval  (provided,  however,  that in no event will the  participation  of all
investors of the January 2004 financing in any such subsequent  financing exceed
35% of such financing);  and (ii) immediately  exercise the re-priced Class A, B
and C common stock purchase warrants as per the attached signature page.

     In  consultation  with our legal  counsel,  we have  determined  that it is
appropriate for us to file prospectus  supplements disclosing the adjustments to
the exercise price of your warrants.  As a selling stockholder under the related
Registration Statements, you are subject to the prospectus delivery requirements
under  section 5(b) of the  Securities  Act of 1933.  We will provide to you, as
soon as practicable, a copy of the required prospectus supplements necessary for
you to discharge  your  obligations  under section 5(b) of the Securities Act of
1933. In addition, we will file a Form 8-K upon completion of this transaction.

     Please note that this  agreement is subject to review by the American Stock
Exchange.


                                            EMAGIN CORPORATION


                                            By:_________________________________

<PAGE>

               [PURCHASER SIGNATURE PAGES TO EMA LETTER AGREEMENT]

     IN WITNESS WHEREOF, the undersigned have caused this Letter Agreement to be
duly executed by their  respective  authorized  signatories as of the date first
indicated above.


Agreed and Accepted:


Name of Investing Entity: ______________________________________________________
Signature of Authorized Signatory of Investing Entity:

____________________________________________________________________
Name of Authorized Signatory:

____________________________________________________________________
Title of Authorized Signatory:

____________________________________________________________________
Email Address of Authorized
Entity:_____________________________________________________________

Address for Notice of Investing Entity:





Fax Number:________________



I elect to re-price and exercise the following common stock purchase warrants:

Class A common stock purchase warrants:____________________

Class B common stock purchase warrants:____________________

Class C common stock purchase warrants:____________________


By Wire:                                             By Check

HSBC                                                 eMagin Corporation
East Fishkill Office                                 2070 Route 52
1433 Route 52                                        Hopewell Junction, NY 12533
Hopewell Junction, NY 12533                          Tel (845) 838-7948
eMagin corporation
Acct# 085-80567-3
ABA# 021001088

<PAGE>
NOTICE OF EXERCISE FOR CLASS A WARRANTS

To:    eMagin Corporation

          (1) The  undersigned  hereby elects to purchase  _____________ Warrant
Shares of eMagin Corporation pursuant to the terms of the attached Warrant (only
if exercised in full),  and tenders  herewith  payment of the exercise  price in
full, together with all applicable transfer taxes, if any.

          (2)  Payment  shall be in lawful  money of the  United  States  (check
applicable box):

                           [  ] wire; or

                           [  ] check.

          (3) Please  issue a  certificate  or  certificates  representing  said
Warrant  Shares  in the  name of the  undersigned  or in such  other  name as is
specified below:

                           _______________________________


The Warrant Shares shall be delivered to the following:

                           _______________________________

                           _______________________________

                           _______________________________

          (4) Accredited Investor/Qualified Institutional Buyer. The undersigned
is either:  (i) an  "accredited  investor" as defined in  Regulation D under the
Securities Act of 1933, as amended.

                                          __________________________________


                                          By:_______________________________
                                              Name:
                                              Title:

                                          Dated: ___________________________
<PAGE>

                     NOTICE OF EXERCISE FOR CLASS B WARRANTS

To:      eMagin Corporation

          (1) The undersigned hereby elects to purchase  ______________  Warrant
Shares of eMagin Corporation pursuant to the terms of the attached Warrant (only
if exercised in full),  and tenders  herewith  payment of the exercise  price in
full, together with all applicable transfer taxes, if any.

          (2)  Payment  shall be in lawful  money of the  United  States  (check
applicable box):

                           [  ] wire; or

                           [  ] check.

          (3) Please  issue a  certificate  or  certificates  representing  said
Warrant  Shares  in the  name of the  undersigned  or in such  other  name as is
specified below:

                           _______________________________


The Warrant Shares shall be delivered to the following:

                           _______________________________

                           _______________________________

                           _______________________________

          (4) Accredited Investor/Qualified Institutional Buyer. The undersigned
is either:  (i) an  "accredited  investor" as defined in  Regulation D under the
Securities Act of 1933, as amended.

                                          __________________________________


                                          By:_______________________________
                                              Name:
                                              Title:

                                          Dated:____________________________


<PAGE>

                     NOTICE OF EXERCISE FOR CLASS C WARRANTS

To:      eMagin Corporation

          (1) The undersigned  hereby elects to purchase ________ Warrant Shares
of eMagin  Corporation  pursuant to the terms of the attached  Warrant  (only if
exercised in full),  and tenders herewith payment of the exercise price in full,
together with all applicable transfer taxes, if any.

          (2) Payment  shall be in lawful money of the United States (check
applicable box):

                           [  ] wire; or

                           [  ] check.

          (3) Please  issue a  certificate  or  certificates  representing  said
Warrant  Shares  in the  name of the  undersigned  or in such  other  name as is
specified below:

                           _______________________________


The Warrant Shares shall be delivered to the following:

                           _______________________________

                           _______________________________

                           _______________________________

          (4) Accredited Investor/Qualified Institutional Buyer. The undersigned
is either:  (i) an  "accredited  investor" as defined in  Regulation D under the
Securities Act of 1933, as amended.


                                          __________________________________


                                          By:_______________________________
                                              Name:
                                              Title:

                                          Dated:____________________________



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