exv10w24












 




    Ex 10.24








 




    ESCROW
    AGREEMENT



 



    THIS AGREEMENT is made as of the •  day of
    December, 2009.



 



    AMONG:



 



    VUZIX CORPORATION




    (the “Issuer”)



 



    AND:



 



    COMPUTERSHARE INVESTOR SERVICES INC.




    (the “Escrow Agent”)



 



    AND:



 



    EACH OF THE UNDERSIGNED SECURITYHOLDERS OF THE ISSUER




    (a “Securityholder” or “you”)



 



    (collectively, the “Parties”)



 



    This Agreement is being entered into by the Parties under
    National Policy
    46-201 —
    Escrow for Initial Public Offerings (the
    “National Policy”) and TSX Venture Exchange
    (the “Exchange”) Policy 5.4 —
    Escrow, Vendor Consideration and Resale Restrictions (the
    “Policy”) in connection with the Issuer’s
    proposed initial public offering of securities by prospectus.



 



    The Issuer is a [Tier 1/Tier 2 Issuer] as
    described in Exchange Policy 2.1 — Minimum Listing
    Requirements.



 



    For good and valuable consideration, the Parties agree as
    follows:



 




    PART 1  ESCROW



 




    1.1  Appointment
    of Escrow Agent



 



    The Issuer and the Securityholders appoint the Escrow Agent to
    act as escrow agent under this Agreement. The Escrow Agent
    accepts the appointment.



 




    1.2  Deposit
    of Escrow Securities in Escrow



 



    (1) You are depositing the securities (“escrow
    securities”) listed opposite your name in Schedule
    “A” with the Escrow Agent to be held in escrow under
    this Agreement. You will immediately deliver or cause to be
    delivered to the Escrow Agent any share certificates or other
    evidence of these securities which you have or which you may
    later receive.



 



    (2) If you receive any other securities
    (“additional escrow securities”):



 



    (a) as a dividend or other distribution on escrow
    securities;



 



    (b) on the exercise of a right of purchase, conversion or
    exchange attaching to escrow securities, including securities
    received on conversion of special warrants;



 



    (c) on a subdivision, or compulsory or automatic conversion
    or exchange of escrow securities; or



 



    (d) from a successor issuer in a business combination, if
    Part 6 of this Agreement applies,



 



    you will deposit them in escrow with the Escrow Agent. You will
    deliver or cause to be delivered to the Escrow Agent any share
    certificates or other evidence of those additional escrow
    securities. When this Agreement refers to escrow securities,
    it includes additional escrow securities.





    

    1








 







    (3) You will immediately deliver to the Escrow Agent any
    replacement share certificates or other evidence of additional
    escrow securities issued to you.



 




    1.3  Direction
    to Escrow Agent



 



    The Issuer and the Securityholders direct the Escrow Agent to
    hold the escrow securities in escrow until they are released
    from escrow under this Agreement.



 




    PART 2  RELEASE
    OF ESCROW SECURITIES



 




    2.1  Release
    Provisions



 



    The provisions of Schedules [B(1)/B(2)] are incorporated
    into and form part of this Agreement.



 




    2.2  Additional
    Escrow Securities



 



    If you acquire additional escrow securities in connection with
    the transaction to which this agreement relates, those
    securities will be added to the securities already in escrow, to
    increase the number of remaining escrow securities. After that,
    all of the escrow securities will be released in accordance with
    the applicable release schedule.



 




    2.3  Delivery
    of Share Certificates for Escrow Securities



 



    The Escrow Agent will send to each Securityholder any share
    certificates or other evidence of that Securityholder’s
    escrow securities in the possession of the Escrow Agent released
    from escrow as soon as reasonably practicable after the release.
    [The share certificates or other evidence of the escrow
    securities will be sent to the Securityholder’s address on
    the Issuer’s share register unless the Securityholder has
    advised the Escrow Agent in writing otherwise before the escrow
    securities are released from escrow.]



 




    2.4  Replacement
    Certificates



 



    If, on the date a Securityholder’s escrow securities are to
    be released, the Escrow Agent holds a share certificate or other
    evidence representing more escrow securities than are to be
    released, the Escrow Agent will deliver the share certificate or
    other evidence to the Issuer or its transfer agent and request
    replacement share certificates or other evidence. The Issuer
    will cause replacement share certificates or other evidence to
    be prepared and delivered to the Escrow Agent. After the Escrow
    Agent receives the replacement share certificates or other
    evidence, the Escrow Agent will send to the Securityholder or at
    the Securityholder’s direction, the replacement share
    certificate or other evidence of the escrow securities released.
    The Escrow Agent and Issuer will act as soon as reasonably
    practicable.



 




    2.5  Release
    upon Death



 



    (1) If a Securityholder dies, the Securityholder’s
    escrow securities will be released from escrow. The Escrow Agent
    will deliver any share certificates or other evidence of the
    escrow securities in the possession of the Escrow Agent to the
    Securityholder’s legal representative provided that:



 



    (a) the legal representative of the deceased Securityholder
    provides written notice to the Exchange of the intent to release
    the escrow securities as at a specified date which is at least
    10 business days and not more than 30 business days prior to the
    proposed release; and



 



    (b) the Exchange does not provide notice of its objection
    to the Escrow Agent prior to 10:00 a.m. (Vancouver time) or
    11:00 a.m. (Calgary time) on such specified date.



 



    (2) Prior to delivery the Escrow Agent must receive:



 



    (a) a certified copy of the death certificate; and



 



    (b) any evidence of the legal representative’s status
    that the Escrow Agent may reasonably require.





    

    2








 








    2.6  Exchange
    Discretion to Terminate



 



    If the Escrow Agent receives a request from the Exchange to halt
    or terminate the release of escrow securities from escrow, then
    the Escrow Agent will comply with that request, and will not
    release any escrow securities from escrow until it receives the
    written consent of the Exchange.



 




    2.7  Discretionary
    Applications



 



    The Exchange may consent to the release from escrow of escrow
    securities in other circumstances and on terms and on conditions
    it deems appropriate. Securities may be released from escrow
    provided that the Escrow Agent receives written notice from the
    Exchange.



 




    PART 3  EARLY
    RELEASE ON CHANGE OF ISSUER STATUS



 




    3.1  Early
    Release — Graduation to Tier 1



 



    (1) When a Tier 2 Issuer becomes a Tier 1 Issuer,
    the release schedule for its escrow securities changes.



 



    (2) If the Issuer reasonably believes that it meets the
    Minimum Listing Requirements of a Tier 1 Issuer as
    described in Exchange Policy 2.1 — Minimum Listing
    Requirements, the Issuer may make application to the
    Exchange to be listed as a Tier 1 Issuer. The Issuer must
    also concurrently provide notice to the Escrow Agent that it is
    making such an application.



 



    (3) If the graduation to Tier 1 is accepted by the
    Exchange, the Exchange will issue an Exchange Bulletin
    confirming final acceptance for listing of the Issuer on
    Tier 1. Upon issuance of this Bulletin the Issuer must
    immediately:



 



    (a) issue a news release:



 



    (i) disclosing that it has been accepted for graduation to
    Tier 1; and



 



    (ii) disclosing the number of escrow securities to be
    released and the dates of release under the new
    schedule; and



 



    (b) provide the news release, together with a copy of the
    Exchange Bulletin, to the Escrow Agent.



 



    (4) Upon completion of the steps in section 3.1(3)
    above, the Issuer’s release schedule will be replaced as
    follows:



 


	 	 	 
	

    Applicable
    Schedule Pre-Graduation


	
 
	
    Applicable Schedule Post-Graduation

	

    Schedule B(2)


	
 
	
    Schedule B(1)









 



    (5) Within 10 days of the Exchange Bulletin confirming
    the Issuer’s listing on Tier 1, the Escrow Agent must
    release any escrow securities from escrow securities which under
    the new release schedule would have been releasable at a date
    prior to the Exchange Bulletin.



 




    PART 4  DEALING
    WITH ESCROW SECURITIES



 




    4.1  Restriction
    on Transfer, etc.



 



    Unless it is expressly permitted in this Agreement, you will not
    sell, transfer, assign, mortgage, enter into a derivative
    transaction concerning, or otherwise deal in any way with your
    escrow securities or any related share certificates or other
    evidence of the escrow securities. If a Securityholder is a
    private company controlled by one or more Principals of the
    Issuer, the Securityholder may not participate in a transaction
    that results in a change of its control or a change in the
    economic exposure of the Principals to the risks of holding
    escrow securities.



 




    4.2  Pledge,
    Mortgage or Charge as Collateral for a Loan



 



    Subject to Exchange acceptance, you may pledge, mortgage or
    charge your escrow securities to a financial institution as
    collateral for a loan, provided that no escrow securities or any
    share certificates or other evidence of escrow securities will
    be transferred or delivered by the Escrow Agent to the financial
    institution for this purpose.






    

    3








 







    The loan agreement must provide that the escrow securities will
    remain in escrow if the lender realizes on the escrow securities
    to satisfy the loan.



 




    4.3  Voting
    of Escrow Securities



 



    Although you may exercise voting rights attached to your escrow
    securities, you may not, while your securities are held in
    escrow, exercise voting rights attached to any securities
    (whether in escrow or not) in support of one or more
    arrangements that would result in the repayment of capital being
    made on the escrow securities prior to a winding up of the
    Issuer.



 




    4.4  Dividends
    on Escrow Securities



 



    You may receive a dividend or other distribution on your escrow
    securities, and elect the manner of payment from the standard
    options offered by the Issuer. If the Escrow Agent receives a
    dividend or other distribution on your escrow securities, other
    than additional escrow securities, the Escrow Agent will pay the
    dividend or other distribution to you on receipt.



 




    4.5  Exercise
    of Other Rights Attaching to Escrow Securities



 



    You may exercise your rights to exchange or convert your escrow
    securities in accordance with this agreement.



 




    PART 5  PERMITTED
    TRANSFERS WITHIN ESCROW



 




    5.1  Transfer
    to Directors and Senior Officers



 



    (1) You may transfer escrow securities within escrow to
    existing or, upon their appointment, incoming directors or
    senior officers of the Issuer or any of its material operating
    subsidiaries, if the Issuer’s board of directors has
    approved the transfer and provided that:



 



    (a) you make application to transfer under the Policy at
    least 10 business days and not more than 30 business days
    prior to the date of the proposed transfer; and



 



    (b) the Exchange does not provide notice of its objection
    to the Escrow Agent prior to 10:00 a.m. (Vancouver time) or
    11:00 a.m. (Calgary time) on such specified date.



 



    (2) Prior to the transfer the Escrow Agent must receive:



 



    (a) a certified copy of the resolution of the board of
    directors of the Issuer approving the transfer;



 



    (b) a certificate signed by a director or officer of the
    Issuer authorized to sign, stating that the transfer is to a
    director or senior officer of the Issuer or a material operating
    subsidiary and that any required acceptance from the Exchange
    the Issuer is listed on has been received;



 



    (c) an acknowledgment in the form of Form 5E signed by
    the transferee; and



 



    (d) a transfer power of attorney, completed and executed by
    the transferor in accordance with the requirements of the
    Issuer’s transfer agent.



 




    5.2  Transfer
    to Other Principals



 



    (1) You may transfer escrow securities within escrow:



 



    (a) to a person or company that before the proposed
    transfer holds more than 20% of the voting rights attached to
    the Issuer’s outstanding securities; or



 



    (b) to a person or company that after the proposed transfer



 



    (i) will hold more than 10% of the voting rights attached
    to the Issuer’s outstanding securities, and



 



    (ii) has the right to elect or appoint one or more
    directors or senior officers of the Issuer or any of its
    material operating subsidiaries,





    

    4








 







    provided that:



 



    (c) you make an application to transfer under the Policy at
    least 10 business days and not more than 30 business days prior
    to the date of the proposed transfer; and



 



    (d) the Exchange does not provide notice of its objection
    to the Escrow Agent prior to 10:00 a.m. (Vancouver time) or
    11:00 a.m. (Calgary time) on such specified date.



 



    (2) Prior to the transfer the Escrow Agent must receive:



 



    (a) a certificate signed by a director or officer of the
    Issuer authorized to sign, stating that:



 



    (i) the transfer is to a person or company that the officer
    believes, after reasonable investigation, holds more than 20% of
    the voting rights attached to the Issuer’s outstanding
    securities before the proposed transfer; or



 



    (ii) the transfer is to a person or company that:



 



    (A) the officer believes, after reasonable investigation,
    will hold more than 10% of the voting rights attached to the
    Issuer’s outstanding securities; and



 



    (B) has the right to elect or appoint one or more directors
    or senior officers of the Issuer or any of its material
    operating subsidiaries



 



    after the proposed transfer; and



 



    (iii) any required approval from the Exchange or any other
    exchange on which the Issuer is listed has been received;



 



    (b) an acknowledgment in the form of Form 5E signed by
    the transferee; and



 



    (c) a transfer power of attorney, completed and executed by
    the transferor in accordance with the requirements of the
    Issuer’s transfer agent.



 




    5.3  Transfer
    upon Bankruptcy



 



    (1) You may transfer escrow securities within escrow to a
    trustee in bankruptcy or another person or company entitled to
    escrow securities on bankruptcy provided that:



 



    (a) you make application to transfer under the Policy at
    least 10 business days and not more than 30 business days
    prior to the date of the proposed transfer; and



 



    (b) the Exchange does not provide notice of its objection
    to the Escrow Agent prior to 10:00 a.m. (Vancouver time) or
    11:00 a.m. (Calgary time) on such specified date.



 



    (2) Prior to the transfer, the Escrow Agent must receive:



 



    (a) a certified copy of either



 



    (i) the assignment in bankruptcy filed with the
    Superintendent of Bankruptcy, or



 



    (ii) the receiving order adjudging the Securityholder
    bankrupt;



 



    (b) a certified copy of a certificate of appointment of the
    trustee in bankruptcy;



 



    (c) a transfer power of attorney, duly completed and
    executed by the transferor in accordance with the requirements
    of the Issuer’s transfer agent; and



 



    (d) an acknowledgment in the form of Form 5E signed by



 



    (i) the trustee in bankruptcy or



 



    (ii) on direction from the trustee, with evidence of that
    direction attached to the acknowledgement form, another person
    or company legally entitled to the escrow securities.





    

    5








 








    5.4  Transfer
    Upon Realization of Pledged, Mortgaged or Charged Escrow
    Securities



 



    (1) You may transfer escrow securities you have pledged,
    mortgaged or charged under section 4.2 to a financial
    institution as collateral for a loan within escrow to the lender
    on realization provided that:



 



    (a) you make application to transfer under the Policy at
    least 10 business days and not more than 30 business days
    prior to the date of the proposed transfer; and



 



    (b) the Exchange does not provide notice of its objection
    to the Escrow Agent prior to 10:00 a.m. (Vancouver time) or
    11:00 a.m. (Calgary time) on such specified date.



 



    (2) Prior to the transfer the Escrow Agent must receive:



 



    (a) a statutory declaration of an officer of the financial
    institution that the financial institution is legally entitled
    to the escrow securities;



 



    (b) evidence that the Exchange has accepted the pledge,
    mortgage or charge of escrow securities to the financial
    institution;



 



    (c) a transfer power of attorney, executed by the
    transferor in accordance with the requirements of the
    Issuer’s transfer agent; and



 



    (d) an acknowledgement in the form of Form 5E signed
    by the financial institution.



 




    5.5  Transfer
    to Certain Plans and Funds



 



    (1) You may transfer escrow securities within escrow to or
    between a registered retirement savings plan (RRSP), registered
    retirement income fund (RRIF) or other similar registered plan
    or fund with a trustee, where the beneficiaries of the plan or
    fund are limited to you and your spouse, children and parents
    provided that:



 



    (a) you make application to transfer under the Policy at
    least 10 business days and not more than 30 business days
    prior to the date of the proposed transfer; and



 



    (b) the Exchange does not provide notice of its objection
    to the Escrow Agent prior to 10:00 a.m. (Vancouver time) or
    11:00 a.m. (Calgary time) on such specified date.



 



    (2) Prior to the transfer the Escrow Agent must receive:



 



    (a) evidence from the trustee of the transferee plan or
    fund, or the trustee’s agent, stating that, to the best of
    the trustee’s knowledge, the annuitant of the RRSP or RRIF
    or the beneficiaries of the other registered plan or fund do not
    include any person or company other than you and your spouse,
    children and parents;



 



    (b) a transfer power of attorney, executed by the
    transferor in accordance with the requirements of the
    Issuer’s transfer agent; and



 



    (c) an acknowledgement in the form of Exchange Form 5E
    signed by the trustee of the plan or fund.



 




    5.6  Effect
    of Transfer Within Escrow



 



    After the transfer of escrow securities within escrow, the
    escrow securities will remain in escrow and released from escrow
    under this Agreement as if no transfer has occurred, on the same
    terms that applied before the transfer. The Escrow Agent will
    not deliver any share certificates or other evidence of the
    escrow securities to transferees under this Part 5.



 




    5.7  Discretionary
    Applications



 



    The Exchange may consent to the transfer within escrow of escrow
    securities in other circumstances and on such terms and
    conditions as it deems appropriate.





    

    6








 








    PART 6  BUSINESS
    COMBINATIONS



 




    6.1  Business
    Combinations



 



    This Part applies to the following (“business
    combinations”):



 



    (a) a formal take-over bid for all outstanding securities
    of the Issuer or which, if successful, would result in a change
    of control of the Issuer;



 



    (b) a formal issuer bid for all outstanding equity
    securities of the Issuer;



 



    (c) a statutory arrangement;



 



    (d) an amalgamation;



 



    (e) a merger; and



 



    (f) a reorganization that has an effect similar to an
    amalgamation or merger.



 




    6.2  Delivery
    to Escrow Agent



 



    (1) You may tender your escrow securities to a person or
    company in a business combination. At least five business
    days prior to the date the escrow securities must be tendered
    under the business combination, you must deliver to the Escrow
    Agent:



 



    (a) a written direction signed by you that directs the
    Escrow Agent to deliver to the depositary under the business
    combination any share certificates or other evidence of the
    escrow securities and a completed and executed cover letter or
    similar document and, where required, transfer power of attorney
    completed and executed for transfer in accordance with the
    requirements of the Issuer’s depository, and any other
    documentation specified or provided by you and required to be
    delivered to the depositary under the business combination;



 



    (b) written consent of the Exchange; and



 



    (c) any other information concerning the business
    combination as the Escrow Agent may reasonably require.



 




    6.3  Delivery
    to Depositary



 



    (1) As soon as reasonably practicable, and in any event no
    later than three business days after the Escrow Agent receives
    the documents and information required under section 6.2,
    the Escrow Agent will deliver to the depositary, in accordance
    with the direction, any share certificates or other evidence of
    the escrow securities, and a letter addressed to the depositary
    that



 



    (a) identifies the escrow securities that are being
    tendered;



 



    (b) states that the escrow securities are held in escrow;



 



    (c) states that the escrow securities are delivered only
    for the purposes of the business combination and that they will
    be released from escrow only after the Escrow Agent receives the
    information described in section 6.4;



 



    (d) if any share certificates or other evidence of the
    escrow securities have been delivered to the depositary,
    requires the depositary to return to the Escrow Agent, as soon
    as practicable, the share certificates or other evidence of
    escrow securities that are not released from escrow into the
    business combination; and



 



    (e) where applicable, requires the depositary to deliver or
    cause to be delivered to the Escrow Agent, as soon as
    practicable, share certificates or other evidence of additional
    escrow securities that you acquire under the business
    combination.





    

    7








 








    6.4  Release
    of Escrow Securities to Depositary



 



    (1) The Escrow Agent will release from escrow the tendered
    escrow securities provided that:



 



    (a) you or the Issuer make application to release the
    tendered securities under the Policy on a date at least 10
    business days and not more than 30 business days prior to the
    date of the proposed release date; and



 



    (b) the Exchange does not provide notice of its objection
    to the Escrow Agent prior to 10:00 a.m. (Vancouver time) or
    11:00 a.m. (Calgary time) on such specified date;



 



    (c) the Escrow Agent receives a declaration signed by the
    depositary or, if the direction identifies the depositary as
    acting on behalf of another person or company in respect of the
    business combination, by that other person or company, that



 



    (i) the terms and conditions of the business combination
    have been met or waived; and



 



    (ii) the escrow securities have either been taken up and
    paid for or are subject to an unconditional obligation to be
    taken up and paid for under the business combination.



 




    6.5  Escrow
    of New Securities



 



    (1) If you receive securities (“new
    securities”) of another issuer (“successor
    issuer”) in exchange for your escrow securities, the
    new securities will be subject to escrow in substitution for the
    tendered escrow securities, unless, immediately after completion
    of the business combination,



 



    (a) the successor issuer is an exempt issuer as defined in
    the National Policy;



 



    (b) the escrow holder was subject to a Value Security
    Escrow Agreement and is not a Principal of the successor
    issuer; and



 



    (c) the escrow holder holds less than 1% of the voting
    rights attached to the successor issuer’s outstanding
    securities. (In calculating this percentage, include securities
    that may be issued to the escrow holder under outstanding
    convertible securities in both the escrow holder’s
    securities and the total securities outstanding.)



 




    6.6  Release
    from Escrow of New Securities



 



    (1) The Escrow Agent will send to a Securityholder share
    certificates or other evidence of the Securityholder’s new
    securities as soon as reasonably practicable after the Escrow
    Agent receives:



 



    (a) a certificate from the successor issuer signed by a
    director or officer of the successor issuer authorized to sign



 



    (i) stating that it is a successor issuer to the Issuer as
    a result of a business combination;



 



    (ii) containing a list of the securityholders whose new
    securities are subject to escrow under section 6.5;



 



    (iii) containing a list of the securityholders whose new
    securities are not subject to escrow under section 6.5;



 



    (b) written confirmation from the Exchange that it has
    accepted the list of Securityholders whose new securities are
    not subject to escrow under section 6.5.



 



    (2) The escrow securities of the Securityholders, whose
    securities are not subject to escrow under section 6.5,
    will be released, and the Escrow Agent will send any share
    certificates or other evidence of the escrow securities in the
    possession of the Escrow Agent in accordance with
    section 2.4.



 



    (3) If your new securities are subject to escrow, unless
    subsection (4) applies, the Escrow Agent will hold your new
    securities in escrow on the same terms and conditions, including
    release dates, as applied to the escrow securities that you
    exchanged.





    

    8








 







    (4) If the Issuer is a Tier 2 Issuer and the successor
    issuer is a Tier 1 Issuer, the release provisions in
    section 3.1(4) relating to graduation will apply.



 




    PART 7  RESIGNATION
    OF ESCROW AGENT



 




    7.1  Resignation
    of Escrow Agent



 



    (1) If the Escrow Agent wishes to resign as escrow agent,
    the Escrow Agent will give written notice to the Issuer and the
    Exchange.



 



    (2) If the Issuer wishes to terminate the Escrow Agent as
    escrow agent, the Issuer will give written notice to the Escrow
    Agent and the Exchange.



 



    (3) If the Escrow Agent resigns or is terminated, the
    Issuer will be responsible for ensuring that the Escrow Agent is
    replaced not later than the resignation or termination date by
    another escrow agent that is acceptable to the Exchange and that
    has accepted such appointment, which appointment will be binding
    on the Issuer and the Securityholders.



 



    (4) The resignation or termination of the Escrow Agent will
    be effective, and the Escrow Agent will cease to be bound by
    this Agreement, on the date that is 60 days after the date
    of receipt of the notices referred to above by the Escrow Agent
    or Issuer, as applicable, or on such other date as the Escrow
    Agent and the Issuer may agree upon (the “resignation or
    termination date”), provided that the resignation or
    termination date will not be less than 10 business days
    before a release date.



 



    (5) If the Issuer has not appointed a successor escrow
    agent within 60 days of the resignation or termination
    date, the Escrow Agent will apply, at the Issuer’s expense,
    to a court of competent jurisdiction for the appointment of a
    successor escrow agent, and the duties and responsibilities of
    the Escrow Agent will cease immediately upon such appointment.



 



    (6) On any new appointment under this section, the
    successor Escrow Agent will be vested with the same powers,
    rights, duties and obligations as if it had been originally
    named herein as Escrow Agent, without any further assurance,
    conveyance, act or deed. The predecessor Escrow Agent, upon
    receipt of payment for any outstanding account for its services
    and expenses then unpaid, will transfer, deliver and pay over to
    the successor Escrow Agent, who will be entitled to receive, all
    securities, records or other property on deposit with the
    predecessor Escrow Agent in relation to this Agreement and the
    predecessor Escrow Agent will thereupon be discharged as Escrow
    Agent.



 



    (7) If any changes are made to Part 8 of this
    Agreement as a result of the appointment of the successor Escrow
    Agent, those changes must not be inconsistent with the Policy
    and the terms of this Agreement and the Issuer to this Agreement
    will fie a copy of the new Agreement with the Exchange.



 




    PART 8  OTHER
    CONTRACTUAL ARRANGEMENTS



 




    8.1  Escrow
    Agent Not a Trustee



 



    The Escrow Agent accepts duties and responsibilities under this
    Agreement, and the escrow securities and any share certificates
    or other evidence of these securities, solely as a custodian,
    bailee and agent. No trust is intended to be, or is or will be,
    created hereby and the Escrow Agent shall owe no duties
    hereunder as a trustee.



 




    8.2  Escrow
    Agent Not Responsible for Genuineness



 



    The Escrow Agent will not be responsible or liable in any manner
    whatever for the sufficiency, correctness, genuineness or
    validity of any escrow security deposited with it.



 




    8.3  Escrow
    Agent Not Responsible for Furnished Information



 



    The Escrow Agent will have no responsibility for seeking,
    obtaining, compiling, preparing or determining the accuracy of
    any information or document, including the representative
    capacity in which a party purports to act, that






    

    9








 







    the Escrow Agent receives as a condition to a release from
    escrow or a transfer of escrow securities within escrow under
    this Agreement.



 




    8.4  Escrow
    Agent Not Responsible after Release



 



    The Escrow Agent will have no responsibility for escrow
    securities that it has released to a Securityholder or at a
    Securityholder’s direction according to this Agreement.



 




    8.5  Indemnification
    of Escrow Agent



 



    The Issuer and each Securityholder hereby jointly and severally
    agree to indemnify and hold harmless the Escrow Agent, its
    affiliates, and their current and former directors, officers,
    employees and agents from and against any and all claims,
    demands, losses, penalties, costs, expenses, fees and
    liabilities, including, without limitation, legal fees and
    expenses, directly or indirectly arising out of, in connection
    with, or in respect of, this Agreement, except where same result
    directly and principally from negligence, willful misconduct or
    bad faith on the part of the Escrow Agent. This indemnity
    survives the release of the escrow securities, the resignation
    or termination of the Escrow Agent and the termination of this
    Agreement.



 




    8.6  Additional
    Provisions



 



    (1) The Escrow Agent will be protected in acting and
    relying reasonably upon any notice, direction, instruction,
    order, certificate, confirmation, request, waiver, consent,
    receipt, statutory declaration or other paper or document
    (collectively referred to as “Documents”)
    furnished to it and purportedly signed by any officer or person
    required to or entitled to execute and deliver to the Escrow
    Agent any such Document in connection with this Agreement, not
    only as to its due execution and the validity and effectiveness
    of its provisions, but also as to the truth or accuracy of any
    information therein contained, which it in good faith believes
    to be genuine.



 



    (2) The Escrow Agent will not be bound by any notice of a
    claim or demand with respect thereto, or any waiver,
    modification, amendment, termination or rescission of this
    Agreement unless received by it in writing, and signed by the
    other Parties and approved by the Exchange, and, if the duties
    or indemnification of the Escrow Agent in this Agreement are
    affected, unless it has given its prior written consent.



 



    (3) The Escrow Agent may consult with or retain such legal
    counsel and advisors as it may reasonably require for the
    purpose of discharging its duties or determining its rights
    under this Agreement and may rely and act upon the advice of
    such counsel or advisor. Provided that the Escrow Agent has
    obtained the prior written consent of the Issuer, the Issuer
    will pay or reimburse the Escrow Agent for any reasonable fees,
    expenses and disbursements of such counsel or advisors.



 



    (4) In the event of any disagreement arising under the
    terms of this Agreement, the Escrow Agent will be entitled, at
    its option, to refuse to comply with any and all demands
    whatsoever until the dispute is settled either by a written
    agreement among the Parties or by a court of competent
    jurisdiction.



 



    (5) The Escrow Agent will have no duties or
    responsibilities except as expressly provided in this Agreement
    and will have no duty or responsibility under the National
    Policy or arising under any other agreement, including any
    agreement referred to in this Agreement, to which the Escrow
    Agent is not a party.



 



    (6) The Escrow Agent will have the right not to act and
    will not be liable for refusing to act unless it has received
    clear and reasonable documentation that complies with the terms
    of this Agreement. Such documentation must not require the
    exercise of any discretion or independent judgment.



 



    (7) The Escrow Agent is authorized to cancel any share
    certificate delivered to it and hold such Securityholder’s
    escrow securities in electronic or uncertificated form only,
    pending release of such securities from escrow.



 



    (8) The Escrow Agent will have no responsibility with
    respect to any escrow securities in respect of which no share
    certificate or other evidence or electronic or uncertificated
    form of these securities has been delivered to it, or otherwise
    received by it.





    

    10








 








    8.7  Limitation
    of Liability of Escrow Agent



 



    The Escrow Agent will not be liable to any of the Parties
    hereunder for any action taken or omitted to be taken by it
    under or in connection with this Agreement, except for losses
    directly, principally and immediately caused by its bad faith,
    willful misconduct or negligence. Under no circumstances will
    the Escrow Agent be liable for any special, indirect,
    incidental, consequential, exemplary, aggravated or punitive
    losses or damages hereunder, including any loss of profits,
    whether foreseeable or unforeseeable.



 




    8.8  Remuneration
    of Escrow Agent



 



    The Issuer will pay the Escrow Agent reasonable remuneration for
    its services under this Agreement, which fees are subject to
    revision from time to time on 30 days’ written notice.
    The Issuer will reimburse the Escrow Agent for its reasonable
    expenses and disbursements. Any amount due under this Section
    and unpaid 30 days after request for such payment, will
    bear interest from the expiration of such period at a rate per
    annum equal to the then current rate charged by the Escrow
    Agent, payable on demand.



 




    PART 9  INDEMNIFICATION
    OF THE EXCHANGE



 




    9.1  Indemnification



 



    (1) The Issuer and each Securityholder jointly and
    severally:



 



    (a) release, indemnify and save harmless the Exchange from
    all costs (including legal cost, expenses and disbursements),
    charges, claims, demands, damages, liabilities, losses and
    expenses incurred by the Exchange;



 



    (b) agree not to make or bring a claim or demand, or
    commence any action, against the Exchange; and



 



    (c) agree to indemnify and save harmless the Exchange from
    all costs (including legal costs) and damages that the Exchange
    incurs or is required by law to pay as a result of any
    person’s claim, demand or action,



 



    arising from any and every act or omission committed or omitted
    by the Exchange, in connection with this Agreement, even if said
    act or omission was negligent, or constituted a breach of the
    terms of this Agreement.



 



    (2) This indemnity survives the release of the escrow
    securities and the termination of this Agreement.



 




    PART 10  NOTICES



 




    10.1  Notice
    to Escrow Agent



 



    Documents will be considered to have been delivered to the
    Escrow Agent on the next business day following the date of
    transmission, if delivered by fax, the date of delivery, if
    delivered by hand during normal business hours or by prepaid
    courier, or 5 business days after the date of mailing, if
    delivered by mail, to the following:



 


	 	 	 
	

    Name and Address:


	
 
	
    Computershare Investor Services Inc.

    100 University Avenue, 8th Floor

    Toronto, Ontario, Canada, M5J 2Y1

	
    Attention:

    Fax:
	
 
	
    Manager, Corporate Trust

    •











    

    11








 








    10.2  Notice
    to Issuer



 



    Documents will be considered to have been delivered to the
    Issuer on the next business day following the date of
    transmission, if delivered by fax, the date of delivery, if
    delivered by hand or by prepaid courier, or 5 business days
    after the date of mailing, if delivered by mail, to the
    following:



 


	 	 	 
	

    Name and Address:


	
 
	
    Vuzix Corporation

    75 Town Centre Drive

    Rochester, New York, 14623

	
    Attention:

    Fax:
	
 
	
    Paul Travers

    (585) 240-8003









 




    10.3  Deliveries
    to Securityholders



 



    Documents will be considered to have been delivered to a
    Securityholder on the date of delivery, if delivered by hand or
    by prepaid courier, or 5 business days after the date of
    mailing, if delivered by mail, to the address on the
    Issuer’s share register.



 



    Any share certificates or other evidence of a
    Securityholder’s escrow securities will be sent to the
    Securityholder’s address on the Issuer’s share
    register unless the Securityholder has advised the Escrow Agent
    in writing otherwise at least ten business days before the
    escrow securities are released from escrow. The Issuer will
    provide the Escrow Agent with each Securityholder’s address
    as listed on the Issuer’s share register.



 




    10.4  Change
    of Address



 



    (1) The Escrow Agent may change its address for delivery by
    delivering notice of the change of address to the Issuer and to
    each Securityholder.



 



    (2) The Issuer may change its address for delivery by
    delivering notice of the change of address to the Escrow Agent
    and to each Securityholder.



 



    (3) A Securityholder may change that Securityholder’s
    address for delivery by delivering notice of the change of
    address to the Issuer and to the Escrow Agent.



 




    10.5  Postal
    Interruption



 



    A party to this Agreement will not mail a Document if the party
    is aware of an actual or impending disruption of postal service.



 




    PART 11  GENERAL



 




    11.1  Interpretation —
    “holding securities”



 



    Unless the context otherwise requires, all capitalized terms
    that are not otherwise defined in this Agreement, shall have the
    meanings as defined in Policy 1.1 — Interpretation
    or in Policy 5.4 — Escrow, Vendor Consideration
    and Resale Restrictions.



 



    When this Agreement refers to securities that a Securityholder
    “holds”, it means that the Securityholder has direct
    or indirect beneficial ownership of or control or direction over
    the securities.



 




    11.2  Enforcement
    by Third Parties



 



    The Issuer enters this Agreement both on its own behalf and as
    trustee for the Exchange and the Securityholders of the Issuer,
    and this Agreement may be enforced by either the Exchange, or
    the Securityholders of the Issuer, or both.





    

    12








 








    11.3  Termination,
    Amendment, and Waiver of Agreement



 



    (1) Subject to subsection 11.3(3), this Agreement shall
    only terminate:



 



    (a) with respect to all the Parties:



 



    (i) as specifically provided in this Agreement;



 



    (ii) subject to subsection 11.3(2), upon the agreement of
    all Parties; or



 



    (iii) when the Securities of all Securityholders have been
    released from escrow pursuant to this Agreement; and



 



    (b) with respect to a Party:



 



    (i) as specifically provided in this Agreement; or



 



    (ii) if the Party is a Securityholder, when all of the
    Securityholder’s Securities have been released from escrow
    pursuant to this Agreement.



 



    (2) An agreement to terminate this Agreement pursuant to
    section 11.3(1)(a)(ii) shall not be effective unless and until
    the agreement to terminate



 



    (a) is evidenced by a memorandum in writing signed by all
    Parties;



 



    (b) if the Issuer is listed on the Exchange, the
    termination of this Agreement has been consented to in writing
    by the Exchange; and



 



    (c) has been approved by a majority vote of securityholders
    of the Issuer excluding in each case, Securityholders.



 



    (3) Notwithstanding any other provision in this Agreement,
    the obligations set forth in section 9.1 shall survive the
    termination of this Agreement and the resignation or removal of
    the Escrow Agent.



 



    (4) No amendment or waiver of this Agreement or any part of
    this Agreement shall be effective unless the amendment or waiver:



 



    (a) is evidenced by a memorandum in writing signed by all
    Parties;



 



    (b) if the Issuer is listed on the Exchange, the amendment
    or waiver of this Agreement has been approved in writing by the
    Exchange; and



 



    (c) has been approved by a majority vote of securityholders
    of the Issuer excluding in each case, Securityholders.



 



    (5) No waiver of any of the provisions of this Agreement
    shall be deemed or shall constitute a waiver of any other
    provision (whether similar or not), nor shall any waiver
    constitute a continuing waiver, unless expressly provided.



 




    11.4  Severance
    of Illegal Provision



 



    Any provision or part of a provision of this Agreement
    determined by a court of competent jurisdiction to be invalid,
    illegal or unenforceable shall be deemed stricken to the extent
    necessary to eliminate any invalidity, illegality or
    unenforceability, and the rest of the Agreement and all other
    provisions and parts thereof shall remain in full force and
    effect and be binding upon the parties hereto as though the said
    illegal
    and/or
    unenforceable provision or part thereof had never been included
    in this Agreement.



 




    11.5  Further
    Assurances



 



    The Parties will execute and deliver any further documents and
    perform any further acts reasonably requested by any of the
    Parties to this agreement which are necessary to carry out the
    intent of this Agreement.





    

    13








 








    11.6  Time



 



    Time is of the essence of this Agreement.



 




    11.7  Consent
    of Exchange to Amendment



 



    The Exchange must approve any amendment to this Agreement if the
    Issuer is listed on the Exchange at the time of the proposed
    amendment.



 




    11.8  Additional
    Escrow Requirements



 



    A Canadian exchange may impose escrow terms or conditions in
    addition to those set out in this Agreement.



 




    11.9  Governing
    Laws



 



    The laws of {insert principal jurisdiction} and the applicable
    laws of Canada will govern this Agreement.



 




    11.10  Counterparts



 



    The Parties may execute this Agreement by fax and in
    counterparts, each of which will be considered an original and
    all of which will be one agreement.



 




    11.11  Singular
    and Plural



 



    Wherever a singular expression is used in this Agreement, that
    expression is considered as including the plural or the body
    corporate where required by the context.



 




    11.12  Language



 



    This Agreement has been drawn up in the
    [English/French] language at the request of all parties.
    Cet acte a été rédigé en
    [anglais/français] à la demande de toutes les parties.



 




    11.13  Benefit
    and Binding Effect



 



    This Agreement will benefit and bind the Parties and their
    heirs, executors, administrators, successors and permitted
    assigns and all persons claiming through them as if they had
    been a Party to this Agreement.



 




    11.14  Entire
    Agreement



 



    This is the entire agreement among the Parties concerning the
    subject matter set out in this Agreement and supersedes any and
    all prior understandings and agreements.



 




    11.15  Successor
    to Escrow Agent



 



    Any corporation with which the Escrow Agent may be amalgamated,
    merged or consolidated, or any corporation succeeding to the
    business of the Escrow Agent will be the successor of the Escrow
    Agent under this Agreement without any further act on its part
    or on the part or any of the Parties, provided that the
    successor is recognized by the Exchange.



 



    The Parties have executed and delivered this Agreement as of the
    date set out above.



 


	 	 	 	 	 
	

    COMPUTERSHARE INVESTOR SERVICES INC.


	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
    

	
 
	
 
	
 
	
 

	

    Authorized signatory


	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
    

	
 
	
 
	
 
	
 

	

    Authorized signatory


	
 
	
 
	
 
	
 






    

    14








 







	 	 	 	 	 
	

    VUZIX CORPORATION


	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
    

	
 
	
 
	
 
	
 

	

    Authorized signatory


	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
    

	
 
	
 
	
 
	
 

	

    Authorized signatory


	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	

    Signed, sealed and delivered by


	
 
	
    )
	
 
	
 

	

    Paul Travers in the presence of:


	
 
	
    )
	
 
	
 

	
 
	
 
	
    )
	
 
	
 

	

              


	
 
	
    )
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
    

	
 
	
 
	
 
	
 

	

    Signature of Witness


	
 
	
    )
	
 
	
 

	
 
	
 
	
    )
	
 
	
 

	

              


	
 
	
    )
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
    

	
 
	
 
	
 
	
    


	

    Name


	
 
	
    )
	
 
	
    Paul Travers

	
 
	
 
	
 
	
 
	
 

	

    Signed, sealed and delivered by


	
 
	
    )
	
 
	
 

	

    Grant Russell in the presence of:


	
 
	
    )
	
 
	
 

	
 
	
 
	
    )
	
 
	
 

	

              


	
 
	
    )
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
    

	
 
	
 
	
 
	
 

	

    Signature of Witness


	
 
	
    )
	
 
	
 

	
 
	
 
	
    )
	
 
	
 

	

              


	
 
	
    )
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
    

	
 
	
 
	
 
	
    


	

    Name


	
 
	
    )
	
 
	
    Grant Russell

	
 
	
 
	
 
	
 
	
 

	

    Signed, sealed and delivered by


	
 
	
    )
	
 
	
 

	

    Paul Churnetski in the presence of:


	
 
	
    )
	
 
	
 

	
 
	
 
	
    )
	
 
	
 

	

              


	
 
	
    )
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
    

	
 
	
 
	
 
	
 

	

    Signature of Witness


	
 
	
    )
	
 
	
 

	
 
	
 
	
    )
	
 
	
 

	

              


	
 
	
    )
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
    

	
 
	
 
	
 
	
    


	

    Name


	
 
	
    )
	
 
	
    Paul Churnetski






    15








 







	 	 	 	 	 
	

    Signed, sealed and delivered by


	
 
	
    )
	
 
	
 

	

    Steven Ward in the presence of:


	
 
	
    )
	
 
	
 

	
 
	
 
	
    )
	
 
	
 

	

              


	
 
	
    )
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
    

	
 
	
 
	
 
	
 

	

    Signature of Witness


	
 
	
    )
	
 
	
 

	
 
	
 
	
    )
	
 
	
 

	

              


	
 
	
    )
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
    

	
 
	
 
	
 
	
    


	

    Name


	
 
	
    )
	
 
	
    Steven Ward

	
 
	
 
	
 
	
 
	
 

	

    Signed, sealed and delivered by


	
 
	
    )
	
 
	
 

	

    Adam Travers in the presence of:


	
 
	
    )
	
 
	
 

	
 
	
 
	
    )
	
 
	
 

	

              


	
 
	
    )
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
    

	
 
	
 
	
 
	
 

	

    Signature of Witness


	
 
	
    )
	
 
	
 

	
 
	
 
	
    )
	
 
	
 

	

              


	
 
	
    )
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
    

	
 
	
 
	
 
	
    


	

    Name


	
 
	
    )
	
 
	
    Adam Travers

	
 
	
 
	
 
	
 
	
 

	

    TRAVERS FAMILY LLC


	
 
	
 
	
 
	
 

	

              


	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
    

	
 
	
 
	
 
	
 

	

    Paul Travers


	
 
	
 
	
 
	
 

	

    Authorized Signatory


	
 
	
 
	
 
	
 











    16








 








    SCHEDULE
    “A” TO ESCROW AGREEMENT



 




    Securityholder




    Name: Paul Travers




    Signature:




    Address for Notice:




     • 




    Securities:



 


	 	 	 	 	 	 	 	 	 
	
    Class and Type

    
	
 
	
 
	
 
	
 

	
    (i.e. Value Securities or

    
	
 
	
 
	
 
	
 

	

    Surplus Securities)


	
 
	
    Number
	
 
	
    Certificate(s) (if Applicable)

	 

	

    Shares of Common Stock


	
 
	
 
	
    70,239,611
	
 
	
 
	
 
	
 
	
 

	

    Stock Options


	
 
	
 
	
    1,673,808
	
 
	
 
	
 
	
 
	
 











    

    17








 








    SCHEDULE
    “A” TO ESCROW AGREEMENT



 




    Securityholder




    Name: Grant Russell




    Signature:




    Address for Notice:




     • 




    Securities:



 


	 	 	 	 	 	 	 	 	 
	
    Class and Type

    
	
 
	
 
	
 
	
 

	
    (i.e. Value Securities or

    
	
 
	
 
	
 
	
 

	

    Surplus Securities)


	
 
	
    Number
	
 
	
    Certificate(s) (if Applicable)

	 

	

    Shares of Common Stock


	
 
	
 
	
    11,913,777
	
 
	
 
	
 
	
 
	
 

	

    Stock Options


	
 
	
 
	
    374,256
	
 
	
 
	
 
	
 
	
 











    

    18








 








    SCHEDULE
    “A” TO ESCROW AGREEMENT



 




    Securityholder




    Name: Paul Churnetski




    Signature:




    Address for Notice:




     • 




    Securities:



 


	 	 	 	 	 	 	 	 	 
	
    Class and Type

    
	
 
	
 
	
 
	
 

	
    (i.e. Value Securities or

    
	
 
	
 
	
 
	
 

	

    Surplus Securities)


	
 
	
    Number
	
 
	
    Certificate(s) (if Applicable)

	 

	

    Shares of Common Stock


	
 
	
 
	
    20,278,453
	
 
	
 
	
 
	
 
	
 

	

    Stock Options


	
 
	
 
	
    174,256
	
 
	
 
	
 
	
 
	
 











    

    19








 








    SCHEDULE
    “A” TO ESCROW AGREEMENT



 




    Securityholder




    Name: Steven Ward




    Signature:




    Address for Notice:




     • 




    Securities:



 


	 	 	 	 	 	 	 	 	 
	
    Class and Type

    
	
 
	
 
	
 
	
 

	
    (i.e. Value Securities or

    
	
 
	
 
	
 
	
 

	

    Surplus Securities)


	
 
	
    Number
	
 
	
    Certificate(s) (if Applicable)

	 

	

    Shares of Common Stock


	
 
	
 
	
    3,209,011
	
 
	
 
	
 
	
 
	
 

	

    Stock Options


	
 
	
 
	
    268,120
	
 
	
 
	
 
	
 
	
 











    

    20








 








    SCHEDULE
    “A” TO ESCROW AGREEMENT



 




    Securityholder




    Name: Adam Travers




    Signature:




    Address for Notice:




     • 




    Securities:



 


	 	 	 	 	 	 	 	 	 
	
    Class and Type

    
	
 
	
 
	
 
	
 

	
    (i.e. Value Securities or

    
	
 
	
 
	
 
	
 

	

    Surplus Securities)


	
 
	
    Number
	
 
	
    Certificate(s) (if Applicable)

	 

	

    Stock Options


	
 
	
 
	
    60,000
	
 
	
 
	
 
	
 
	
 











    

    21








 








    SCHEDULE
    “A” TO ESCROW AGREEMENT



 




    Securityholder




    Name: Travers Family LLC




    Signature:




    Address for Notice:




     • 




    Securities:



 


	 	 	 	 	 	 	 	 	 
	
    Class and Type

    
	
 
	
 
	
 
	
 

	
    (i.e. Value Securities or

    
	
 
	
 
	
 
	
 

	

    Surplus Securities)


	
 
	
    Number
	
 
	
    Certificate(s) (if Applicable)

	 

	

    Shares of Common Stock


	
 
	
 
	
    834,285
	
 
	
 
	
 
	
 
	
 











    

    22








 








    SCHEDULE B(1) —
    TIER 1 VALUE SECURITY ESCROW AGREEMENT



 




    RELEASE
    OF SECURITIES



 




    Timed
    Release



 


	 	 	 	 	 	 	 	 	 
	
 
	
 
	
    Percentage of Total

    
	
 
	
    Total Number of

    

	
 
	
 
	
    Escrowed Securities

    
	
 
	
    Escrowed Securities

    

	

    Release Dates


	
 
	
    to be Released
	
 
	
    to be Released

	 

	

    [Insert date of Exchange Bulletin]


	
 
	
 
	
    25
	
    %
	
 
	
 
	
 
	
 

	

    [Insert date 6 months following Exchange Bulletin]


	
 
	
 
	
    25
	
    %
	
 
	
 
	
 
	
 

	

    [Insert date 12 months following Exchange Bulletin]


	
 
	
 
	
    25
	
    %
	
 
	
 
	
 
	
 

	

    [Insert date 18 months following Exchange Bulletin]


	
 
	
 
	
    25
	
    %
	
 
	
 
	
         
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	

    TOTAL


	
 
	
 
	
    100
	
    %
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 









 





 




			
	
    * 		
    In the simplest case where there are no changes to the escrow
    securities initially deposited and no additional escrow
    securities, then the release schedule outlined above results in
    the escrow securities being released in equal tranches of 25%.





    

    23








 








    SCHEDULE B(2) —
    TIER 2 VALUE SECURITY ESCROW AGREEMENT



 




    RELEASE
    OF SECURITIES



 




    Timed
    Release



 


	 	 	 	 	 	 	 	 	 
	
 
	
 
	
    Percentage of Total

    
	
 
	
    Total Number of

    

	
 
	
 
	
    Escrowed Securities

    
	
 
	
    Escrowed Securities

    

	

    Release Dates


	
 
	
    to be Released
	
 
	
    to be Released

	 

	

    [Insert date of Exchange Bulletin]


	
 
	
 
	
    10
	
    %
	
 
	
 
	
 
	
 

	

    [Insert date 6 months following Exchange Bulletin]


	
 
	
 
	
    15
	
    %
	
 
	
 
	
 
	
 

	

    [Insert date 12 months following Exchange Bulletin]


	
 
	
 
	
    15
	
    %
	
 
	
 
	
 
	
 

	

    [Insert date 18 months following Exchange Bulletin]


	
 
	
 
	
    15
	
    %
	
 
	
 
	
 
	
 

	

    [Insert date 24 months following Exchange Bulletin]


	
 
	
 
	
    15
	
    %
	
 
	
 
	
 
	
 

	

    [Insert date 30 months following Exchange Bulletin]


	
 
	
 
	
    15
	
    %
	
 
	
 
	
 
	
 

	

    [Insert date 36 months following Exchange Bulletin]


	
 
	
 
	
    15
	
    %
	
 
	
 
	
         
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 

	

    TOTAL


	
 
	
 
	
    100
	
    %
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 









 





 




			
	
    * 		
    In the simplest case where there are no changes to the escrow
    securities initially deposited and no additional escrow
    securities, the release schedule outlined above results in the
    escrow securities being released in equal tranches of 15% after
    completion of the release on the date of the Exchange Bulletin.





    

    24








 








    SCHEDULE B(3)

    UNDERTAKING OF HOLDING COMPANY



 


		
	
    TO:  
	
    THE TSX
    VENTURE EXCHANGE




 



    • (the “Securityholder”) has subscribed for
    and agreed to purchase, as principal, • shares of
    common stock of • (the “Escrowed
    Securities”). The Escrowed Securities will be held in
    escrow as detailed in the escrow agreement entered into between
    Vuzix Corporation (the “Issuer”), Computershare
    Investor Services Inc. and the Securityholder.



 



    The undersigned Securityholder undertakes that, to the extent
    reasonably possible, it will not permit or authorize its
    securities to be issued or transferred, nor will it otherwise
    authorize any transaction involving any of its securities that
    could reasonably result in a change of its control without the
    prior consent of the TSX Venture Exchange, as long as the Issuer
    remains listed on the TSX Venture Exchange.



 



    DATED this • day of December, 2009.



 











    (Name of Securityholder — please print)



 











    (Authorized Signature)



 











    (Official Capacity — please print)



 











    (Please print here name of individual whose signature appears
    above)





    

    25








 







    The Securityholder is directly controlled by the undersigned who
    undertakes that, to the extent reasonably possible, he will not
    permit or authorize securities of the Securityholder to be
    issued or transferred, nor otherwise carry out any transaction
    that could reasonably result in a change of control of the
    Securityholder without the prior consent of the TSX Venture
    Exchange, as long as the Issuer remains listed on the TSX
    Venture Exchange.



 



    DATED this • day of December, 2009.



 











    (Signature)



 











    (Name of Controlling Securityholder — please print)



 











    (Signature)



 











    (Name of Controlling Securityholder — please print)





    

    26