ex-10.21





Exhibit 10.21




ESCROW AGREEMENT




     THIS ESCROW AGREEMENT (as the same may be amended or modified from time to time pursuant
hereto, this “Escrow Agreement”) is made and entered into as of November ___, 2009, by and among
Vuzix Corporation, a Delaware corporation (“Issuer”), Canaccord Capital Corporation (“Canaccord”),
Canaccord Adams Inc., Bolder Investment Partners, Ltd. (“Bolder”) and Lighthouse Financial Group
LLC (collectively, the “Offering Agents”)(the Issuer and the Offering Agents are sometimes referred
to individually as a “Party” or collectively as the “Parties”), and JPMorgan Chase Bank, National
Association (the “Escrow Agent”).



     WHEREAS, the Issuer has filed with the U.S. Securities and Exchange Commission (the “SEC”) a
Registration Statement on Form S-1 (File No. 333-160417) (as amended from time to time, the
“Registration Statement”) registering under the Securities Act of 1933, as amended, the Issuer’s
sale to the public of up to 50,000,000 units (“Units”), each Unit consisting of one share of the
Issuer’s common stock, par value $0.001 per share, and one-half of one common stock purchase
warrant (the “Offering”);



     WHEREAS, the Issuer has also filed a preliminary prospectus relating to the Offering with the
Ontario Securities Commission (the “OSC”);



     WHEREAS, the Offering shall be made on a best-efforts basis through a syndicate co-led by
Canaccord and Bolder and through certain subagents;



     WHEREAS, the closing of the Offering (the “Closing”) is subject to the Issuer’s receipt of
minimum gross proceeds from the Offering of at least Cdn$6,000,000 (the “Minimum Dollar Amount”)
and is subject to a maximum of Cdn$12,500,000 (the “Maximum Dollar Amount”);



     WHEREAS, in order to purchase Units, a purchaser must deliver the full amount of its purchase
price, in US or Canadian dollars, to the Offering Agents (collectively, the “Payment”);



     WHEREAS, the Parties have agreed that the Payments made by prospective purchasers of Units
will be refunded to such prospective purchasers if the Closing has not occurred within 90 days of
the date on which the Registration Statement is declared effective by the SEC; and



     WHEREAS, in compliance with Rule 15c2-4 under the Securities Exchange Act of 1934, as amended,
the Parties desires to establish an escrow in which funds received from purchasers of Units will be
deposited until the Closing, and the Escrow Agent is willing to serve as Escrow Agent upon the
terms and conditions herein set forth.



     NOW THEREFORE, in consideration of the foregoing and of the mutual covenants hereinafter set
forth, the parties hereto agree as follows:



1. Appointment.





	 	1.1.	 	The Parties hereby appoint the Escrow Agent as their escrow agent for the
purposes set forth herein, and the Escrow Agent hereby accepts such appointment under
the terms and conditions set forth herein.  The Escrow Agent is authorized




 









 






	 	 	 	and regulated by the Financial Services Authority in the United Kingdom.
	 
	 	1.2.	 	Each of the Offering Agents hereby authorizes Canaccord to act on its behalf in
connection with the matters set out herein.





2. Establishment of the Escrow Account.




     2.1. The parties hereto shall establish an escrow account at the London branch of the Escrow
Agent, and bearing the designation “Escrow Account for Vuzix Corporation IPO” (the “Escrow
Account”).



     2.2. On or before the date of the initial deposit in the Escrow Account pursuant to this
Agreement, Canaccord shall notify the Escrow Agent in writing of the commencement date of the
Offering (the “Commencement Date”). The Commencement Date shall be no earlier than the first date
on which the Registration Statement has been declared effective by the SEC and the OSC has issued a
receipt in accordance with Multilateral Instrument 11-102 – Passport System of the Canadian
Securities Administrators and National Policy 11-202 – Process for Prospectus Reviews in Multiple
Jurisdictions of the Canadian Securities Administrators evidencing that receipts for the final
Canadian prospectus relating to the Offering have been issued for each province of Canada except
Quebec. The Escrow Agent shall not accept any amounts for deposit in the Escrow Account prior to
its receipt of such notification.



     2.3. The Offering shall continue for a period (the “Offering Period”) from the Commencement
Date through the 90th day after date on which the Registration Statement has been declared
effective by the SEC. The last day of the Offering Period is referred to herein as the “Termination
Date.” Except as provided in Section 4.3 hereof, after the Termination Date, neither the Offering
Agents nor the Issuer shall deposit, and the Escrow Agent shall not accept, any additional amounts
representing payments by prospective purchasers. Canaccord shall provide written notice to the
Escrow Agent as to the Termination Date.



3. Deposits in the Escrow Account.




     3.1. All amounts received from prospective purchasers of the Units shall be deposited in the
Escrow Account, which amounts shall be in the form of checks or wire transfers representing the
payment of money. Wire transfers to the Escrow Account shall be sent in Canadian dollars pursuant
to the following instructions:


Bank: Royal Bank of Canada, Toronto (ROYCCAT2)

Under direct SWIFT advice to JPMorgan Chase Bank, NA
CHASGB2L

For the account of: JPMorgan Chase Bank, NA (CHASGB2L)

Account Number: 095912194132

For Further Credit To: JPM as EA for Vuzix Corp

Account Number: 40625901




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     3.2. Simultaneously with each deposit into the Escrow Account, the Offering Agent making such
deposit (or the Issuer, if such deposit is made by the Issuer) shall inform the Escrow Agent in
writing of the name and address of the prospective purchaser(s), the number of Units subscribed for
by such purchaser(s), and the aggregate dollar amount of such subscription (collectively, the
“Subscription Information”).



     3.3. The Escrow Agent shall not be required to accept any amounts representing payments by
prospective purchasers except during the Escrow Agent’s regular banking hours, which are 9:00 a.m.
to 5:00 p.m. Eastern Time.



     3.4. Amounts deposited in the Escrow Account that have cleared the banking system and have
been collected by the Escrow Agent, together with any investment income or proceeds received by the
Escrow Agent from the investment thereof from time to time pursuant to Section 3.7 below, are
herein referred to as the “Fund.” Amounts deposited in the Escrow Account that have not cleared the
banking system are herein referred to as “uncollected amounts”.



     3.5. The Escrow Agent shall refund any portion of the Fund prior to disbursement of the Fund
in accordance with Section 4 hereof upon the instructions in writing signed by both the Issuer and
Canaccord.



     3.6. If the Escrow Agent receives a deposit into the Escrow Account from an Offering Agent or
any purchaser, on any business day prior to the later of the Termination Date or the last day of
the Collection Period (consisting of the number of business days set forth on the Information
Sheet), the Escrow Agent shall, upon the receipt of a direction (the “Investment Direction”) of
Canaccord and only upon such direction, invest the deposit in such investments as Canaccord may
direct until the Escrow Agent disburses the Fund in accordance with Section 4 hereof. If the Escrow
Agent receives a deposit into the Escrow Account from an Offering Agent or any purchaser together
with an Investment Direction prior to 12:00 p.m. Eastern Time on any business day prior to the
later of the Termination Date or the last day of the Collection Period, the Escrow Agent shall
invest such amounts as so directed on the same day, and if it receives the deposit and Investment
Direction after 12:00 p.m. Eastern Time it may, but is not obligated to, invest the deposit as so
directed on the same day; provided, however, that the Escrow Agent shall invest the deposit as so
directed no later than the next business day. The Escrow Agent shall have no responsibility to the
purchaser, the Issuer or any Offering Agent for any loss upon any such investment (which losses, if
incurred, shall be debited against the Escrow Account). The Escrow Agent shall have no
responsibility or liability to any purchaser, the Issuer or the Offering Agents for the investment
performance or for any failure of any investments.



     3.7. All
Canadian dollar deposits will be held in a non interest bearing account with the Escrow Agent’s London Branch.



4. Disbursement from the Escrow Account.




     4.1. Subject to Section 4.3 below, in the event that at 5:00 p.m. Eastern Time on the
Termination Date the amount constituting the Fund shall be less than the Minimum Dollar Amount, as
indicated by the Subscription Information submitted to the Escrow Agent, then the Escrow Agent
shall promptly but in no event later than five (5) business days after the Termination Date refund
to each prospective purchaser the amount of payment received from such purchaser which is then held
in the Fund or which thereafter clears the banking system, together with any investment income
received thereon, and the Escrow Agent shall notify the



3









 







Issuer and each Offering Agent of its distribution of the Fund. The Offering Agent and Issuer
shall provide wire instructions via facsimile for each prospective purchaser.



     4.2. Subject to Section 4.3 below, in the event that at any time up to 5:00 p.m. Eastern Time
on the Termination Date, the amount constituting the Fund shall be at least equal to the Minimum
Dollar Amount, as indicated by the Subscription Information submitted to the Escrow Agent, the
Escrow Agent shall forthwith notify the Issuer and each Offering Agent of such fact in writing. The
Escrow Agent shall hold the Fund until the Escrow Agent receives, at least one business day prior
to the date on which the Fund is to be disbursed, instructions in writing signed by both the Issuer
and Canaccord as to the disbursement of the Fund.



     4.3. Subject to Section 4.4 below, in the event that at 5:00 p.m. Eastern Time on the
Termination Date, the amount constituting the Fund (counting all amounts deposited in the Escrow
Account from the Commencement Date) shall be greater than the Minimum Dollar Amount, as indicated
by the Subscription Information submitted to the Escrow Agent, the Escrow Agent shall, on the
Termination Date, notify the Issuer and the Offering Agents of such fact in writing. The Escrow
Agent shall hold any portion of the Fund that has not previously been disbursed (in accordance with
Section 4.2) until the Escrow Agent receives, at least one business day prior to the date on which
such portion of the Fund is to be disbursed, instructions in writing signed by both the Issuer and
Canaccord as to the disbursement thereof.



     4.4. In the event that at any time up to 5:00 p.m. Eastern Time on the Termination Date, the
amount constituting the Fund (counting all amounts deposited in the Escrow Account from the
commencement date of the Offering Period) shall be at least equal to the Maximum Dollar Amount, as
indicated by the Subscription Information submitted to the Escrow Agent, the Escrow Agent shall
forthwith notify the Issuer and the Offering Agents of such fact in writing. The Escrow Agent shall
hold the portion of the Fund that has not yet been disbursed (in accordance with Section 4.2) until
the Escrow Agent receives, at least one business day prior to the date on which such portion of the
Fund is to be disbursed, instructions in writing signed by both the Issuer and Canaccord as to the
disbursement thereof.



     4.5. In the event that at 5:00 p.m. Eastern Time on the Termination Date, the amount
constituting the Fund (counting all amounts deposited in the Escrow Account from the commencement
date of the Offering Period) shall be greater than the Maximum Dollar Amount, as indicated by the
Subscription Information submitted to the Escrow Agent, the Escrow Agent shall notify in writing
the Issuer and the Offering Agents of such fact forthwith following the Termination Date. The
Escrow Agent shall hold the portion of the Fund that has not previously been disbursed (in
accordance with Sections 4.2 and 4.5) until the Escrow Agent receives, at least one business day
prior to the date on which such portion of the Fund is to be disbursed, instructions in writing
signed by both the Issuer and Canaccord as to the disbursement thereof.



     4.6. Upon disbursement of the Fund pursuant to the terms of this Section 4, the Escrow Agent
shall be relieved of all further obligations and released from all liability under this Agreement.
It is expressly agreed and understood that in no event shall the aggregate amount of payments made
by the Escrow Agent exceed the amount of the Fund.




	5.	 	Escrow Agent.  




4









 











     5.1. The Escrow Agent shall have only those duties as are specifically and expressly provided
herein, which shall be deemed purely ministerial in nature, and no other duties shall be
implied.  The Escrow Agent shall neither be responsible for, nor chargeable with, knowledge of, nor
have any requirements to comply with, the terms and conditions of any other agreement, instrument
or document between the Parties, in connection herewith, if any, including without limitation the
agency agreement contemplated by that engagement letter dated as of June 24, 2009 by and among the
Issuer, Canaccord and Bolder (the “Underlying Agreement”), nor shall the Escrow Agent be required
to determine if any person or entity has complied with any such  agreements, nor shall any
additional obligations of the Escrow Agent be inferred from the terms of such agreements, even
though reference thereto may be made in this Escrow Agreement.  In the event of any conflict
between the terms and provisions of this Escrow Agreement and those of the Underlying Agreement or
any other agreement among the Parties, the terms and conditions of this Escrow Agreement shall
control. The Escrow Agent may rely upon and shall not be liable for acting or refraining from
acting upon any written notice, document, instruction or request furnished to it hereunder and
believed by it to be genuine and to have been signed or presented by the proper Party or Parties
without inquiry and without requiring substantiating evidence of any kind.  The Escrow Agent shall
be under no duty to inquire into or investigate the validity, accuracy or content of any such
document, notice, instruction or request.  The Escrow Agent shall have no duty to solicit any
payments which may be due it or the Fund nor shall the Escrow Agent have any duty or obligation to
confirm or verify the accuracy or correctness of any amounts deposited with it hereunder.



     5.2. The Escrow Agent shall not be liable for any action taken, suffered or omitted to be
taken by it in good faith except to the extent that a final adjudication of a court of competent
jurisdiction determines that the Escrow Agent’s gross negligence or willful misconduct was the
primary cause of any loss to any Party.  The Escrow Agent may execute any of its powers and perform
any of its duties hereunder directly or through attorneys and shall be liable only for its gross
negligence or willful misconduct (as finally adjudicated in a court of competent jurisdiction) in
the selection of any such attorney.  The Escrow Agent may consult with counsel, accountants and
other skilled persons to be selected and retained by it.  The Escrow Agent shall not be liable for
any action taken, suffered or omitted to be taken by it in accordance with, or in reliance upon,
the advice or opinion of any such counsel, accountants or other skilled persons.  In the event that
the Escrow Agent shall be uncertain or believe there is some ambiguity as to its duties or rights
hereunder or shall receive instructions, claims or demands from any party hereto which, in its
opinion, conflict with any of the provisions of this Escrow Agreement, it shall be entitled to
refrain from taking any action and its sole obligation shall be to keep safely all property held in
escrow until it shall be given a direction in writing by the Issuer and Canaccord which eliminates
such ambiguity or uncertainty to the satisfaction of Escrow Agent or by a final and non-appealable
order or judgment of a court of competent jurisdiction.  The Parties agree to pursue any redress or
recourse in connection with any dispute without making the Escrow Agent a party to the
same.  Anything in this Escrow Agreement to the contrary notwithstanding, in no event shall the
Escrow Agent be liable for special, incidental, punitive, indirect or consequential loss or damage
of any kind whatsoever (including but not limited to lost profits), even if the Escrow Agent has
been advised of the likelihood of such loss or damage and regardless of the form of action. Any
liability of the Escrow Agent under this Escrow Agreement will be limited to the amount of fees
paid to the Escrow Agent.



5









 





     5.3. All amounts held by the Escrow Agent in the Escrow Account are held by the Escrow Agent
in an account with itself as banker rather than as trustee, and therefore will not be held in
accordance with the client money rules of the FSA (the Financial Services Authority, and any
successor or replacement organisation, following amalgamation, merger or otherwise, recognised
under the Financial Services and Markets Act 2000 (including any statutory modification or
re-enactment thereof or any regulations or orders made thereunder) by which the Escrow Agent is for
the time being regulated or authorised).



     5.4. Any reference in this Agreement to the “FSA Rules” means the rules of the FSA as set out
in the FSA’s Handbook of Rules and Guidance as amended, varied or substituted from time to time.
Where the Escrow Agent is for the time being subject to any FSA Rules in the provision of services
pursuant to this Agreement (including without limitation, in relation to the appointment of agents)
the rights and obligations of the Escrow Agent under the provisions of this Agreement shall be read
and construed as subject to and permitted by such Rules, and the provisions of this Agreement shall
be limited accordingly.



     5.5. The person to whom the Escrow Agent owes the Fund pursuant to clause 2 is the customer of
the Escrow Agent for the purposes of the FSA Rules (the “Customer”). For the purposes of the FSA
Rules, the Escrow Agent shall treat the Customer as a professional client and, notwithstanding that
the Customer may be acting as agent on behalf of another person, the Customer alone shall be
treated as the Escrow Agent’s customer. The Customer is required to notify the Escrow Agent
immediately if at any time it considers that it would no longer fall within the definition of
professional client for the purposes of the FSA Rules.



     5.6. Nothing in the Agreement is intended to exclude or restrict any duty or liability of the
Escrow Agent to the other parties hereto which the Escrow Agent is not permitted to exclude or
restrict by the Financial Services and Markets Act 2000 or the FSA Rules.



6. Succession.




     6.1. The Escrow Agent may resign and be discharged from its duties or obligations hereunder by
giving 30 days advance notice in writing of such resignation to the Parties specifying a date when
such resignation shall take effect.  If the Issuer and Canaccord have failed to appoint a successor
escrow agent prior to the expiration of 30 days following receipt of the notice of resignation, the
Escrow Agent may petition any court of competent jurisdiction for the appointment of a successor
escrow agent or for other appropriate relief, and any such resulting appointment shall be binding
upon all of the parties hereto.  Escrow Agent’s sole responsibility after such 30 day notice period
expires shall be to hold the Fund (without any obligation to reinvest the same) and to deliver the
same to a designated substitute escrow agent, if any, or in accordance with the directions of a
final order or judgment of a court of competent jurisdiction, at which time of delivery Escrow
Agent’s obligations hereunder shall cease and terminate, subject to the provisions of Sections 7
and 8 hereunder.  The Escrow Agent shall have the right to withhold an amount equal to any amount
due and owing to the Escrow Agent, plus any costs and expenses the Escrow Agent shall reasonably
believe may be incurred by the Escrow Agent in connection with the termination of the Escrow
Agreement.



     6.2. Any entity into which the Escrow Agent may be merged or converted or with



6









 







which it may be consolidated, or any entity to which all or substantially all the escrow
business may be transferred, shall be the Escrow Agent under this Escrow Agreement without further
act.


7. Compensation and Reimbursement. Issuer agrees to (a) pay the Escrow Agent for the
services to be rendered hereunder, which unless otherwise agreed in writing shall be as described
in Schedule 2 attached hereto, and (b) pay or reimburse the Escrow Agent upon request for all
expenses, disbursements and advances, including, without limitation reasonable attorney’s fees and
expenses, incurred or made by it in connection with the performance of this Escrow Agreement.



8. Indemnity. The Parties shall jointly and severally indemnify, defend and save harmless
the Escrow Agent and its affiliates and their respective successors, assigns, directors, agents and
employees (the “indemnitees”) from and against any and all losses, damages, claims, liabilities,
penalties, judgments, settlements, litigation, investigations, costs or expenses (including,
without limitation, the fees and expenses of outside counsel)(collectively “Losses”) arising out of
or in connection with (a) the Escrow Agent’s execution and performance of this Escrow Agreement,
tax reporting or withholding, the enforcement of any rights or remedies under or in connection with
this Escrow Agreement, or as may arise by reason of any act, omission or error of the indemnitee,
except in the case of any indemnitee to the extent that such Losses are finally adjudicated by a
court of competent jurisdiction to have been primarily caused by the gross negligence or willful
misconduct of such indemnitee, or (b) its following any instructions or other directions, whether
joint or singular, from the Parties as contemplated in this Agreement, except to the extent that
its following any such instruction or direction is expressly forbidden by the terms hereof. The
Parties hereto acknowledge that the foregoing indemnities shall survive the resignation,
replacement or removal of the Escrow Agent or the termination of this Escrow Agreement.




9. Patriot Act Disclosure/Taxpayer Identification Numbers/Tax.




     9.1. Patriot Act Disclosure.  Section 326 of the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (“USA PATRIOT
Act”) requires the Escrow Agent to implement reasonable procedures to verify the identity of any
person that opens a new account with it.  Accordingly, the Parties acknowledge that Section 326 of
the USA PATRIOT Act and the Escrow Agent’s identity verification procedures require the Escrow
Agent to obtain information which may be used to confirm the Parties identity including without
limitation name, address and organizational documents (“identifying information”). The Parties
agree to provide the Escrow Agent with and consent to the Escrow Agent obtaining from third parties
any such identifying information required as a condition of opening an account with or using any
service provided by the Escrow Agent.



     9.2. Taxpayer Identification Numbers (“TINs”).



          (i) The Parties have provided the Escrow Agent with their respective fully executed Internal
Revenue Service (“IRS”) Form W-8, or W-9 and/or other required documentation.  The Parties each
represent that its correct TIN assigned by the IRS, or any other taxing authority, is set forth in
the delivered forms.




7









 









          (ii) In addition, all interest or other income earned under the Escrow Agreement shall be
allocated to Issuer and reported, as and to the extent required by law, by the Escrow Agent to the
IRS, or any other taxing authority, on IRS Form 1099 or 1042S (or other appropriate form) as income
earned from the Fund by Issuer whether or not said income has been distributed during such
year.  Any other tax returns required to be filed will be prepared and filed by Issuer and/or
Offering Agents with the IRS and any other taxing authority as required by law.  The Parties
acknowledge and agree that Escrow Agent shall have no responsibility for the preparation and/or
filing of any income, franchise or any other tax return with respect to the Fund or any income
earned by the Fund.  The Parties further acknowledge and agree that any taxes payable from the
income earned on the investment of any sums held in the Escrow Account shall be paid by Issuer. In
the absence of joint written direction from the Issuer and Canaccord, all proceeds of the Fund
shall be retained in the Fund and reinvested from time to time by the Escrow Agent as provided in
this Agreement.  Escrow Agent shall withhold any taxes it deems necessary, including but not
limited to required withholding in the absence of proper tax documentation, and shall remit such
taxes to the appropriate authorities.



10. Notices. All communications hereunder shall be in writing and shall be deemed to be
duly given and received: (a) upon delivery, if delivered personally, or upon confirmed transmittal,
if by facsimile; (b) on the next Business Day (as hereinafter defined) if sent by overnight
courier; or (c) four Business Days after mailing if mailed by prepaid registered mail, return
receipt requested, to the appropriate notice address set forth below or at such other address as
any party hereto may have furnished to the other parties in writing by registered mail, return
receipt requested.




	 	 	 
	If to the Issuer:

	 	Vuzix Corporation
	 

	 	75 Town Centre Drive
	 

	 	Rochester, NY 14623
	 

	 	Attn: Paul J. Travers, President and Chief Executive Officer
	 

	 	Fax: (585) 359-4172
	 
	 	 
	with copies to:

	 	Wildeboer Dellelce LLP
	 

	 	Suite 800, Wildeboer Dellelce Place
	 

	 	365 Bay Street
	 

	 	Toronto, Ontario M5H 2V1
	 

	 	Attn: Robert Fonn
	 

	 	Fax: (416) 361-1790
	 
	 	 
	 

	 	Boylan, Brown, Code, Vigdor & Wilson, LLP
	 

	 	2400 Chase Square
	 

	 	Rochester, New York 14604
	 

	 	Attn: Robert F. Mechur
	 

	 	Fax: (585) 232-3528
	 
	 	 
	If to the Offering Agents:

	 	Canaccord Capital Corporation
	 

	 	Suite 2200 – 609 Granville Street
	 

	 	P.O. BOX 10337, Pacific Centre






8









 







	 	 	 
	 

	 	Vancouver, British Columbia V7Y 1H2
	 

	 	Attn: David Rentz
	 

	 	Fax: (604) 643-7733
	 
	 	 
	 

	 	Bolder Investment Partners, Ltd.
	 

	 	Suite 800 – 1450 Creekside Drive
	 

	 	Vancouver, British Columbia V6J 5B3
	 

	 	Attn: Paul Woodward
	 

	 	Fax: (604) 714-2326
	 
	 	 
	 

	 	Lighthouse Financial Group LLC
	 

	 	Suite 1430 – 420 Lexington Avenue
	 

	 	New York, New York 10170 4001
	 

	 	Attn: Jeff Morfit
	 

	 	Fax:    u
	 
	 	 
	with copies to:

	 	McCullough O’Connor Irwin LLP
	 

	 	1100 – 888 Dunsmuir Street
	 

	 	Vancouver, British Columbia V6C 3K4
	 

	 	Attn: James Beeby
	 

	 	Fax: (604) 687-7099
	 
	 	 
	 

	 	Dorsey & Whitney LLP
	 

	 	370 – 17th St., Suite 4700
	 

	 	Denver, Colorado 80202
	 

	 	Attn: Kenneth G. Sam
	 

	 	Fax: (303) 629-3450
	 
	 	 
	If to the Escrow Agent:

	 	JPMorgan Chase Bank, National Association
	 

	 	4 New York Plaza, 21st Floor
	 

	 	NY, NY 10004
	 

	 	Attn: Greg Kupchynsky/Rola Tseng
	 

	 	Fax: (212) 623-6168





Notwithstanding the above, in the case of communications delivered to the Escrow Agent pursuant to
(i), (ii) and (iii) of this Section 10, such communications shall be deemed to have been given on
the date received by an officer of the Escrow Agent or any employee of the Escrow Agent who reports
directly to any such officer at the above-referenced office.  In the event that the Escrow Agent,
in its sole discretion, shall determine that an emergency exists, the Escrow Agent may use such
other means of communication as the Escrow Agent deems appropriate.  Any communications received
after 5:00 pm Eastern Time shall be deemed to have been received on the next Business Day.
“Business Day” shall mean any day other than a Saturday, Sunday or any other day on which the
Escrow Agent located at the notice address set forth above is authorized or required by law or
executive order to remain closed.



11. Security Procedures.




9









 








     11.1. In the event funds transfer instructions are given (other than in writing at the time of
execution of this Escrow Agreement), whether in writing, by facsimile or otherwise, the Escrow
Agent is authorized to seek confirmation of such instructions by telephone call-back to the person
or persons designated on schedule 1 hereto (“Schedule 1”), and the Escrow Agent may rely upon the
confirmation of anyone purporting to be the person or persons so designated.  Each funds transfer
instruction shall be executed by an authorized signatory, a list of such authorized signatories is
set forth on Schedule 1.  The persons and telephone numbers for call-backs may be changed only in a
writing actually received and acknowledged by the Escrow Agent. If the Escrow Agent is unable to
contact any of the authorized representatives identified in Schedule 1, the Escrow Agent is hereby
authorized to seek confirmation of such instructions by telephone call-back to any one or more of
Issuer or the applicable Offering Agent’s executive officers, (“Executive Officers”), as the case
may be, which shall include the titles of Chief Executive Officer, President and Executive Vice
President, as the Escrow Agent may select. Such “Executive Officer” shall deliver to the Escrow
Agent a fully executed incumbency certificate, and the Escrow Agent may rely upon the confirmation
of anyone purporting to be any such officer. The Escrow Agent and the beneficiary’s bank in any
funds transfer may rely solely upon any account numbers or similar identifying numbers provided by
Issuer or Offering Agent to identify (a) the beneficiary, (b) the beneficiary’s bank, or (c) an
intermediary bank.  The Escrow Agent may apply any of the escrowed funds for any payment order it
executes using any such identifying number, even when its use may result in a person other than the
beneficiary being paid, or the transfer of funds to a bank other than the beneficiary’s bank or an
intermediary bank designated. The Parties acknowledge that these security procedures are
commercially reasonable.



     11.2. Issuer acknowledges that repetitive funds transfer instructions may be given to the
Escrow Agent for one or more beneficiaries where only the date of the requested transfer, the
amount of funds to be transferred, and/or the description of the payment shall change within the
repetitive instructions (“Standing Settlement Instructions”).  Accordingly, Issuer shall deliver to
Escrow Agent such specific Standing Settlement Instructions only for each respective beneficiary as
set forth in Exhibit A to this Escrow Agreement, by facsimile or other written instruction.  Escrow
Agent may rely solely upon such Standing Settlement Instructions and all identifying information
set forth therein for each beneficiary.  Escrow Agent and the Offering Agents agree that such
Standing Settlement Instructions shall be effective as the funds transfer instructions of Issuer,
without requiring a verifying callback, whether or not authorized, if such Standing Settlement
Instructions are consistent with previously authenticated Standing Settlement Instructions for that
beneficiary.  The Parties and Escrow Agent acknowledge that such Standing Settlement Instructions
are a security procedure and are commercially reasonable.


12. Compliance with Court Orders.  In the event that any escrow property shall be attached,
garnished or levied upon by any court order, or the delivery thereof shall be stayed or enjoined by
an order of a court, or any order, judgment or decree shall be made or entered by any court order
affecting the property deposited under this Escrow Agreement, the Escrow Agent is hereby expressly
authorized, in its sole discretion, to obey and comply with all writs, orders or decrees so entered
or issued, which it is advised by legal counsel of its own choosing is binding upon it, whether
with or without jurisdiction, and in the event that the Escrow Agent obeys or complies with any
such writ, order or decree it shall not be liable to any of the parties hereto or to any other
person, entity, firm or corporation, by reason of such compliance notwithstanding such


10









 






writ, order or decree be subsequently reversed, modified, annulled, set aside or vacated.



13. Miscellaneous. The provisions of this Escrow Agreement may be waived, altered, amended
or supplemented, in whole or in part, only by a writing signed by the Escrow Agent and the
Parties.  Neither this Escrow Agreement nor any right or interest hereunder may be assigned in
whole or in part by the Escrow Agent or any Party, except as provided in Section 6, without the
prior consent of the Escrow Agent and the other parties.  This Escrow Agreement shall be governed
by and construed under the laws of the State of New York. Each Party irrevocably waives any
objection on the grounds of venue, forum non-conveniens or any similar grounds and irrevocably
consents to service of process by mail or in any other manner permitted by applicable law and
consents to the jurisdiction of the courts located in the State of New York. The Parties further
hereby waive any right to a trial by jury with respect to any lawsuit or judicial proceeding
arising or relating to this Escrow Agreement.  No party to this Escrow Agreement is liable to any
other party for losses due to, or if it is unable to perform its obligations under the terms of
this Escrow Agreement because of, acts of God, fire, war, terrorism, floods, strikes, electrical
outages, equipment or transmission failure, or other causes reasonably beyond its control.  This
Escrow Agreement may be executed in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same instrument. All signatures of
the parties to this Escrow Agreement may be transmitted by facsimile, and such facsimile will, for
all purposes, be deemed to be the original signature of such party whose signature it reproduces,
and will be binding upon such party.  If any provision of this Escrow Agreement is determined to be
prohibited or unenforceable by reason of any applicable law of a jurisdiction, then such provision
shall, as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions thereof, and any such prohibition or
unenforceability in such jurisdiction shall not invalidate or render unenforceable such provisions
in any other jurisdiction. A person who is not a party to this Agreement shall have no right to
enforce any term of this Agreement. The Parties represent, warrant and covenant that each document,
notice, instruction or request provided by such Party to Escrow Agent shall comply with applicable
laws and regulations.  Where, however, the conflicting provisions of any such applicable law may be
waived, they are hereby irrevocably waived by the parties hereto to the fullest extent permitted by
law, to the end that this Escrow Agreement shall be enforced as written.  Except as expressly
provided in Section 8 above, nothing in this Escrow Agreement, whether express or implied, shall be
construed to give to any person or entity other than the Escrow Agent and the Parties any legal or
equitable right, remedy, interest or claim under or in respect of this Escrow Agreement or any
funds escrowed hereunder.




[remainder of this page intentionally left blank]




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     IN WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement as of the date set
forth above.



	 	 	 	 	 	 	 	 	 	 	 
	VUZIX CORPORATION	 	 	 	BOLDER INVESTMENT PARTNERS, LTD.
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Name:

	 	 	 	 	 	Name:	 	 	 	 
	Title:

	 	 	 	 	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	CANACCORD CAPITAL CORPORATION	 	 	 	LIGHTHOUSE FINANCIAL GROUP LLC
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Name:

	 	 	 	 	 	Name:	 	 	 	 
	Title:

	 	 	 	 	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	CANACCORD ADAMS INC.	 	 	 	JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
	 	 	 	 	 	 	as Escrow Agent
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Name:

	 	 	 	 	 	Name:	 	 	 	 
	Title:

	 	 	 	 	 	Title:
	 	 	 	 







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SCHEDULE 1




Telephone Number(s) and authorized signature(s) for

Person(s) Designated to give Funds Transfer Instructions




Offering Agent:



	 	 	 	 	 	 	 	 	 
	Name 	 	 	 	Telephone Number	 	Signature
	 
	 	 	 	 	 	 	 	 
	1.

	 	Glenda Chin
	 	 	 	604-643-7408	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	2.
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 	 	 
	 	 
	 
	 	 	 	 	 	 	 	 
	3.
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 	 	 
	 	 
	 
	If to Issuer:
	 	 	 	 	 	 	 	 	 
	Name 	 	 	 	Telephone Number	 	Signature
	 
	 	 	 	 	 	 	 	 
	1.
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 	 	 
	 	 
	 
	 	 	 	 	 	 	 	 
	2.
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 	 	 
	 	 
	 
	 	 	 	 	 	 	 	 
	3.
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 	 	 
	 	 
	 
	Telephone Number(s) for Call-Backs and

Person(s) Designated to Confirm Funds Transfer Instructions
	 
	Offering Agent:
	 	 	 	 	 	 	 	 	 
	Name	 	 	 	Telephone Number	 	 
	 
	 	 	 	 	 	 	 	 
	1.

	 	Glenda Chin
	 	 	 	604-643-7408	 	 
	 
	 	 	 	 	 	 	 	 
	2.
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	3.
	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 

	 	 
	 
	Issuer:
	 	 	 	 	 	 	 	 	 
	Name 	 	 	 	Telephone Number	 	 
	 
	 	 	 	 	 	 	 	 
	1.
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	2.
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 





13









 






	 	 	 	 	 	 	 	 	 
	Name 	 	 	 	Telephone Number	 	 
	 
	 	 	 	 	 	 	 	 
	3.
	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 	 

	 	 





Telephone call backs shall be made to both Parties if joint instructions are required pursuant to
the agreement. All funds transfer instructions must include the signature of the person(s)
authorizing said funds transfer and must not be the same person confirming said transfer.




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SCHEDULE 2




Escrow Agent’s Compensation:




$[TBD] per annum without pro-ration for partial years



The fees quoted are based on a review of the transaction documents provided and an internal due
diligence review. JPMorgan reserves the right to revise, modify, change and supplement the fees
quoted herein if the assumptions underlying the activity in the account, level of balances, market
volatility or conditions or other factors change from those used to set our fees.



Extraordinary Services and Out-of Pocket Expenses



Any additional services beyond our standard services as specified above, and all reasonable
out-of-pocket expenses including attorney’s or accountant’s fees and expenses will be considered
extraordinary services for which related costs, transaction charges, and additional fees will be
billed at the Bank’s then standard rate. Disbursements, receipts, investments or tax reporting
exceeding 25 items per year may be treated as extraordinary services thereby incurring additional
charges.




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EXHIBIT A




Standing Settlement Instructions





16