Document:

RESTRICTIVE COVENANTS
AGREEMENT

 

THIS RESTRICTIVE
COVENANTS AGREEMENT (this “Agreement”), is made as of June 15, 2012, by and between TDG ACQUISITION COMPANY,
LLC, a Delaware limited liability company (“Buyer”), and PAUL J. TRAVERS, a resident of the State
of New York (“Travers”).

 

WITNESSETH:

 

WHEREAS, Travers
is a shareholder and the CEO of Vuzix Corporation, a Delaware corporation (“Vuzix”);

 

WHEREAS, contemporaneously
with the execution of this Agreement, Buyer is entering into an Asset Purchase Agreement with Vuzix pursuant to which Buyer shall
acquire certain assets of Vuzix (the “Asset Purchase Agreement”);

 

WHEREAS, Buyer
has required that Travers enter into this Agreement as a condition to closing the transactions contemplated by the Asset Purchase
Agreement; and

 

WHEREAS, Vuzix,
of which Travers is a shareholder, will gain substantial benefit from the closing of the transactions contemplated by the Asset
Purchase Agreement.

 

NOW, THEREFORE,
in consideration of the premises and the mutual covenants contained herein and for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, Buyer and Travers, intending to be legally bound, do hereby agree as follows:

 

1.          Certain
Defined Terms. Capitalized terms used in this Agreement and not otherwise defined herein shall have the meanings given to them
in the Asset Purchase Agreement.

 

2.          Non-Competition.
Until the fifth anniversary of this Agreement (the “Restricted Period”), Travers will not, directly or
indirectly, on behalf of any Person, perform services or otherwise participate in, anywhere in the world, in any capacity (whether
as an owner, employee, partner, independent contractor, officer, director, member, joint venturer, investor, advisor or otherwise),
any business or activity that is competitive with the Business. For purposes of clarity and without limiting the generality of
the foregoing, this Section 2 prohibits Travers from selling, distributing, licensing, providing, manufacturing, developing or
otherwise dealing in any products or services to or for Military Organizations or Defense and Security Organizations. Notwithstanding
the foregoing, ownership of less than five percent (5%) of the outstanding stock of any publicly traded company shall not, by itself,
be deemed a violation of the foregoing. Furthermore, activities by Vuzix pursuant to and in accordance with Section 7.04 of the
Asset Purchase Agreement shall not be deemed, in itself, a violation of this Agreement by Travers.

 

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3.          Non-Solicitation.
During the Restricted Period and unless otherwise waived in writing by Buyer, Travers will not, directly or indirectly, and will
not directly or indirectly assist any other Person to, (A) solicit, hire or engage in any capacity any employee of Buyer or any
of its Affiliates (or any Person who was an employee of Buyer or any of its Affiliates within twelve (12) months preceding the
date of such solicitation, hiring, or engagement) or solicit or seek to persuade any employee of Buyer or any of its Affiliates
to discontinue employment with Buyer or any of its Affiliates; provided, that Travers will not be restricted from making any general
solicitation for employment (in whatever form or medium) that is not specifically directed at the employees of Buyer; and provided
further, that Travers will not be restricted from hiring any such employee who (1) responds to any such general solicitation or
(2) contacts Travers on that employee’s own initiative, (B) call on or solicit any customer or supplier of Buyer or any of
its Affiliates or any independent contractor providing services to Buyer or any of its Affiliates, provided that solicitation of
and contact with a Person for the purposes of conducting the Retained Business or the Shared Business in the Ordinary Course of
Business shall be permissible so long as it does not violate any other provision of this Section 3, or induce, influence or encourage
any customer or supplier of Buyer or any of its Affiliates or any independent contractor providing services to Buyer or any of
its Affiliates to terminate or diminish its relationship with Buyer or any of its Affiliates or (C) except with respect to the
Shared Business, seek to persuade any customer or supplier of Buyer or any of its Affiliates to conduct with anyone else any business
or activity that such customer or supplier conducts, conducted or could conduct with Buyer or any of its Affiliates or otherwise
provide services or products to such customers or suppliers.

 

4.          Modification
of Covenant. If a final judgment of a court or tribunal of competent jurisdiction determines that any term or provision contained
in Sections 2 or 3 is invalid or unenforceable, then the parties agree that the court or tribunal will have the power to reduce
the scope, duration or geographic area of the term or provision, to delete specific words or phrases or to replace any invalid
or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing
the intention of the invalid or unenforceable term or provision. Sections 2 and 3 will be enforceable as so modified after the
expiration of the time within which the judgment may be appealed. Sections 2 and 3 are reasonable and necessary to protect and
preserve Buyer’s legitimate business interests and the value of the Acquired Assets and to prevent any unfair advantage conferred
on Travers or Vuzix.

 

5.          Remedies.
In addition to all of the remedies otherwise available to a party, including the recovery of damages, each party shall have the
right to injunctive and equitable relief to restrain and enjoin any actual or threatened breach of any of the provisions of this
Agreement, including temporary restraining orders and/or preliminary or permanent injunctions to restrain or enjoin any such breach
or threatened breach, without the necessity of posting a bond, cash or otherwise. All of a party’s remedies for the breach
or threatened breach of any of the provisions of this Agreement shall be cumulative and the pursuit of one remedy shall not be
deemed to exclude any and all other remedies available to such party.

 

6.          Governing
Law. This Agreement shall be governed by and construed in accordance with the law of the State of New York, without regard
to the conflicts of law rules of such state.

 

7.          WAIVER
OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT.

 

8.          Successors
and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns. No party may assign, delegate or otherwise transfer any of its rights or obligations under this
Agreement without the prior written consent of the other party hereto; provided that, Buyer may assign its rights hereunder to
or for the benefit of its lenders, to any Affiliate of Buyer, or to the purchaser of all or substantially all of the assets of
Buyer.

 

9.          Counterparts;
Effectiveness; Third Party Beneficiaries. This Agreement may be signed in any number of counterparts, each of which shall be
an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become
effective when each party hereto shall have received a counterpart hereof signed by the other party hereto. Until and unless each
party has received a counterpart hereof signed by the other party hereto, this Agreement shall have no effect and no party shall
have any right or obligation hereunder (whether by virtue of any other oral or written agreement or other communication). No provision
of this Agreement is intended to confer any rights, benefits, remedies or Liabilities hereunder upon any Person other than the
parties hereto and their respective successors and assigns.

 

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10.         Entire
Agreement. This Agreement constitutes the entire agreement between the parties with respect to the subject matter of this Agreement
and supersedes all prior agreements and understandings, both oral and written, between the parties with respect to the subject
matter hereof.

 

11.         Amendments
and Waivers. Any provision of this Agreement may be amended or waived if, but only if, such amendment or waiver is in writing
and is signed, in the case of an amendment, by each party to this Agreement, or in the case of a waiver, by the party against whom
the waiver is to be effective. No failure or delay by a party in exercising any right, power or privilege hereunder shall operate
as a waiver thereof nor shall any single or partial exercise of right, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative
and not exclusive of any rights or remedies at Law or in equity including the right to specific performance.

 

Signatures appear on the following page.

 

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IN WITNESS WHEREOF,
each of the Parties has executed or caused this Agreement to be executed, as of the date first above written.

 

	 	TDG Acquisition Company, LLC
	 	 	 
	 	By:	/s/ James P. Balet
	 	Name:	James P. Balet
	 	Title:	Secretary
	 	 	 
	 	 	/s/ Paul J. Travers
	 	Paul J. TraversLOAN
MODIFICATION AND CONSENT AGREEMENT

 

This
Loan Modification and Consent Agreement is entered into as of June 15, 2012 by and among Vuzix Corporation ("Vuzix")
whose address is 75 Town Centre Drive, Rochester, NY 14623, Kopin Corporation ("Lender") whose address is 125 North Drive
Westboro, Massachusetts 01581 and TDG Acquisition Corp., whose address is PO Box 31 Sewickley,
PA 15637 (“TDG Acquisition”)

 

A.
          Among other indebtedness which may be owing by Vuzix to Lender,
Vuzix is indebted to Lender in the amount of $482,547.00 plus accrued interest pursuant to a promissory note from Lender dated
December 21, 2009, (the “Note”) that was issued pursuant to, among other documents, a [Letter of Agreement , dated
December 21, 2009, (as may be amended from time to time, the "Loan Agreement", a copy of which is attached as Schedule
A) [and, in addition, the amount of $176,819.10 in respect of certain accounts payable from Vuzix to Lender (Schedule B) (the (“Accounts
Receivable”)].

 

B.
          Repayment
of the Indebtedness (as hereinafter defined) is secured by a security interest in the Collateral as described in the Loan Agreement.

 

C.           Vuzix and Lender have entered into a License and Escrow Agreement dated October 20, 2010 (the “Escrow Agreement”),
pursuant to which Vuzix has deposited certain documents in escrow with Chu, Ring & Hazel, LLP (the “Escrow Agent”)
and granted Lender a license to use certain intellectual property for the limited purpose describe in the Escrow Agreement.

 

D.           Vuzix
has requested that Lender (i) consent to the sale of certain of its assets by Vuzix to TDG Acquisition pursuant to an Asset Purchase
Agreement to be entered into between Vuzix and TDG Acquisition (which Asset Purchase Agreement, in the form provided to Lender
as of the date hereof, as it may hereafter be modified, is hereinafter referred to as the "Purchase Agreement"), (ii)
release Lender's security interest in all assets being sold by Vuzix to TDG Acquisition pursuant to the Purchase Agreement, (iii)
make such other changes to the Loan Agreement as are more fully set forth herein and (iv) permit the assignment of the Escrow Agreement
to TDG and amend the Escrow Agreement , as so assigned, as set forth herein.

 

E.
Defined terms used but not otherwise defined herein shall have the same meanings as in the Loan Agreement; provided that (i) all
indebtedness owing by Vuzix to Lender, including, without limitation, amounts due pursuant to the Loan Agreement and the Note and
due in respect of the Accounts Receivable are referred to as the "Indebtedness", (ii) the Loan Agreement between Vuzix
and the Lender and the related financing statement, together with all other documents securing repayment of the Indebtedness, shall
be referred to hereinafter as the "Security Documents" and (iii) the Security Documents, together with all other documents
evidencing or securing the Indebtedness shall be referred to as the "Existing Loan Documents".

 

1.
CONSENT TO SALE OF ASSETS. Subject to the terms and conditions contained herein, Lender hereby consents to the sale of the Acquired
Assets (as defined in the Purchase Agreement) to TDG Acquisition Company, LLC pursuant to the Purchase Agreement.

 

2.
RELEASE OF SECURITY INTEREST IN ASSETS TO BE SOLD. Subject to the terms and conditions contained herein, Lender hereby releases
its security interest in the Acquired Assets. Concurrently with the execution and delivery of this Agreement, Lender is delivering
to Vuzix a Form UCC-3, in the form necessary for filing in all applicable jurisdictions to effect the release of such lien.

 

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3.
DESCRIPTION OF CHANGE IN TERMS. Effective as of the date hereof, the Loan Agreement is hereby amended as follows:

 

		-	No further payments of principal and interest on the Note shall be made until July 15, 2013. Payments
of principal and interest on the Note shall re-commence on July 15, 2013 and shall be paid in accordance with the terms of the
Note.

		-	15% of any Earn Out payments Vuzix receives pursuant to the Purchase Agreement will be paid to
the Lender promptly (but in any event within ten (10) business days) after they are received by Vuzix.

		-	The Note (including principal, interest and any other amounts due thereunder) will be payable in
full on July 15, 2015.

 

4. ASSIGNMENT
AND AMENDMENT OF ESCROW AGREEMENT.

 

		a.	Effective as of the date hereof, the Escrow Agreement
is assigned by Vuzix to TDG Acquisition. Kopin and the Escrow Agent consent to such assignment

 

		b.	Effective as of the date hereof, the Escrow Agreement
is amended in the following respects:

 

		i.	All references to Vuzix, both as a separate word and
as one of a set of words (such as “Vuzix Intellectual Property”) shall be deemed to be references to TDG Acquisition

 

		ii.	The address for TDG Acquisition shall be as set forth
above.

 

		iii.	Article VIII, section 1 of the Escrow Agreement is amended
so as to provide that Escrow Agreement shall terminate two (2) years from the date of this Agreement.

 

5. Security
Agreement. Vuzix hereby grants Kopin a security interest in all of the assets of Vuzix, effective immediately after the closing
under the Purchase Agreement. Such security interest shall be subordinate only to the security interests of LC Capital Master Fund,
Ltd. and any commercial bank that is a lender to Vuzix (including but not limited to Bridge Bank) (together, the “Senior
Lenders”). Promptly after the execution hereof, Vuzix shall deliver to Lender (a) a form UCC-1 in form for filing in all
applicable jurisdictions and (2) subordination agreements from the holders of all security interests in the assets of Vuzix other
than Bridge Bank and LC Capital Master Fund, Ltd. The terms of such security interest shall be the same as the terms relating to
the security interest granted in the Loan Agreement, which are incorporated herein by reference as if fully set forth herein. Lender
agrees to execute any subordination agreement tht may be required by the Senior Lenders.

 

6.
NO DEFENSES OF VUZIX. Vuzix agrees that, as of the date hereof, it has no defenses against the obligations to pay any amounts under
the Indebtedness. Vuzix acknowledges and warrants that Lender has acted in good faith and has conducted in a commercially reasonable
manner its relationships with Vuzix in connection with this Agreement and in connection with the Loan Documents, including the
Loan Agreement and the Indebtedness, the Vuzix hereby waives and releases any claims to the contrary.

 

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7.
CONTINUING VALIDITY. Except as expressly modified pursuant to this Agreement, the terms of the Existing Loan Documents remain unchanged
and in full force and effect. Lender's agreement to modifications to the existing Indebtedness pursuant to this Agreement in no
way shall obligate Lender to make any future modifications to the Indebtedness. Nothing in this Agreement shall constitute a satisfaction
of the Indebtedness.

 

8.
INTEGRATION. This Agreement, together with the Existing Loan Documents, constitutes the entire agreement and understanding among
the parties relating to the subject matter hereof, and supersedes all prior and contemporaneous proposals, negotiations, agreements,
and understandings relating to the subject matter. No modification, rescission, waiver, release, or amendment of any provision
of this Agreement shall be made, except by a written agreement signed by Lender and Vuzix.

 

9.
GOVERNING LAW, HEADINGS. This Agreement shall be governed and construed in accordance with the laws of the State of New York without
giving effect to conflicts of laws principles. The headings and captions in this Agreement are for the convenience of the parties
only and are not a part of this Agreement.

 

10.
CONDITIONS. The effectiveness of this Loan Modification Agreement is conditioned upon the (i) closing of the Purchase Agreement
between Vuzix and TDG Acquisition, and (ii) payment by Vuzix of $ 200,000 upon closing of the Purchase Agreement, in reduction
of the Indebtedness.

 

[Signature Page Follows]

 

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This
Agreement is executed as of the date first written above.

 

	VUZIX CORPORATION:	 	LENDER:	 
	 	 	 	 	 
	By:	/s/ Paul Travers	 	By:	/s/ Richard Sneider	 
	 	 	 	 	 
	Name: Paul Travers	 	Name: Richard Sneider	 
	 	 	 	 	 
	Title:  CEO	 	Title: CFO	 
	 	 	 	 	 
	TDG Acquisition Corp	 	For purposes of agreeing to the assignment	 
	 	 	and amendment of the Escrow Agreement:	 
	By: 	/s/ James P. Balet	 	 	 	 
	 	 	 	 	 	 
	Name:  James P. Balet	 	 	 
	 	 	Chu, Ring & Hazel, LLP	 
	Title:  Secretary	 	 	 
	 	 	 	By:	/s/ John H. Chu	 
	 	 	 	 	 	 
	 	 	Name:  John H. Chu	 
	 	 	 	 
	 	 	Title:  Partner	 

 

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Exhibit
A

 

Letter Agreement between
Vuzix Corporation and Lender, along with any amendments

 

Exhibit
B (if applicable)

 

Schedule of Accounts
Payable between Vuzix Corporation and Lender – if any, plus amount unpaid at close.

 

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