Document:

REVOLVING
LINE OF TRADE CREDIT AGREEMENT

    

             This
Revolving Line of Trade Credit Agreement (the "Agreement") is made and entered
into on this 21th day of
May, 2010, by and between KOPIN CORPORATION ("Lender"), and VUZIX CORPORATION, a
Delaware corporation ("Borrower").

    

             In
consideration of the mutual covenants and agreements contained herein, the
parties agree as follows:

    

             1.       LINE
OF CREDIT. Lender hereby establishes for a period extending to May 21, 2011 (the
"Maturity Date") a revolving line of credit for purchase of microdisplays from
Kopin (the "Credit Line") for Borrower in the principal amount of Two Hundred
Fifty Thousand Dollars ($250,000.00) (the "Credit Limit"). In connection
herewith, Borrower shall execute and deliver to Lender a promissory note (the
“Promissory Note”), substantially in the form of Exhibit A. All unpaid sums
advanced on the Credit Line or pursuant to the terms of this Agreement (each an
"Advance") shall become part of the principal of said Promissory
Note.

    

             2.       ADVANCES.
Any request for an Advance may be made from time to time prior to May 21, 2011
and in such amounts as Borrower may choose; provided, however, any requested
Advance will not, when added to the outstanding principal balance of all
previous Advances, exceed the Credit Limit. Further Advances will not be made
when any outstanding Advance has been outstanding more than seventy- five (75)
days. Requests for Advances may be made in writing by such officer of Borrower
authorized by it to request such Advances. Until such time as Lender may be
notified otherwise, Borrower hereby authorizes its president or any vice
president to request Advances. Lender will release for delivery microdisplay
purchases having a purchase price equal to the amount so requested (Advances) to
the Borrower under Kopin’s normal terms and conditions. Lender may refuse to
make any requested Advance if (a) an event of default has occurred and is
continuing hereunder or under any purchase order either at the time the request
is given or the date the Advance is to be made, (b) if an event has occurred and
is continuing or condition exists which, with the giving of notice or passing of
time or both, would constitute an event of default hereunder as of such dates,
or (c) if any representations made hereunder shall not have been true when made
or shall not be true and correct at the time of any Advance request or (d) since
the date hereof there shall have been an event or circumstance or change in
condition that has or could reasonably be expected to have a material adverse
effect on the Borrower (financial or otherwise), its operations or its
business.

    

            No
cash advances will be made pursuant to this Agreement. An Advance shall be
deemed to have been made when microdisplay products are shipped by Lender to
Borrower, under Lender’s Standard terms.

    

             3.       INTEREST.
All sums advanced pursuant to this Agreement shall bear interest from 30 days
after each Advance is made until paid in full at the rate of twelve percent
(12%) per annum, simple interest (the "Effective Rate").  Any overdue
amounts shall bear interest at the Effective Rate plus four percent
(4%).

    

             4.       REPAYMENT.
Borrower shall pay each outstanding Advance amount within seventy-five (75)
days, along with any accrued interest as per paragraph 3. The entire unpaid
principal balance of all Advances, together with any accrued interest and other
unpaid charges or fees hereunder, shall be due and payable on the Maturity Date
(as hereinafter defined). All payments shall be made to Lender at the address
for notice set forth below or at such other place as Lender may, from time to
time, designate. All payments received hereunder shall be applied, first, to any
costs or expenses incurred by Lender in collecting such payment or to any other
unpaid charges or expenses due hereunder; second, to accrued interest; and
third, to principal. Borrower may prepay principal at any time without
penalty.

    
      
         

      

      
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    5.           BONUS
WARRANTS. Borrower shall issue to Lender, a bonus of 555,555 non-transferable
warrants (“Warrants”) in consideration of the risks taken by the Lender in
extending this revolving credit line. Each Warrant shall be exercisable to
acquire one share of common stock of Vuzix Corporation (each, a “Share” and
collectively, the “Shares”) at a price of Cdn $0.12 per share for until the
earlier to occur of:

    (i) the
later of (a) the Maturity Date (as such term is defined in the Promissory Note)
and (b) such time as all payments of outstanding principal and interest have
been made to Lender;

    (ii) Five (5) years from the date of
the issuance of the Warrants; or

    (iii)
Five (5) business days after the date when no Advances are outstanding and
either the Lender has declined any further Advances pursuant  to
Section 2(d) of this Agreement or the obligation of the lender to make any
further Advances has terminated or expired.

    

    The
Warrants and the Shares issued upon their exercise shall be subject to standard
TSXV hold periods and US SEC Rule 144 restrictions. Borrower shall have no
obligation to ensure that Rule 144 is available to Lender at any
time.

    

    6.       REPRESENTATIONS
AND WARRANTIES. In order to induce Lender to enter into this Agreement and to
make the advances provided for herein, Borrower represents and warrants to
Lender as follows:

    

                      a.       Borrower
is a duly organized, validly existing, and in good standing under the laws of
the State of Delaware with the power to own its assets and to transact business
in New York, and in such other states where its business is conducted and the
nature of its activities require it to so qualify.

    

                      b.       Borrower
has the authority and power to execute and deliver any document required
hereunder and to perform any condition or obligation imposed under the terms of
such documents.

    

                      c.       The
execution, delivery and performance of this Agreement and each document incident
hereto will not violate any provision of any applicable law, regulation, order,
judgment, decree, article of incorporation, by-law, indenture, contract,
agreement, or other undertaking to which Borrower is a party, or which purports
to be binding on Borrower or its assets and will not result in the creation or
imposition of a lien on any of its assets, except to the extent provided
herein.

    

                      d.       There
is no action, suit, investigation, or proceeding pending or, to the knowledge of
Borrower, threatened, against or affecting Borrower or any of its assets which,
if adversely determined, would have a material adverse effect on the financial
condition of Borrower or the operation of its business.

    

     e.      
 Borrower shall grant Lender a subordinated security interest in all the
assets of Borrower (“Collateral” as listed in Exhibit B), in accordance with
Article 9 of the Uniform Commercial Code as in effect in the State of New York.
Such security interest shall be subordinated to (a) all existing security
interest and (b) all security interests granted to secure the obligation to
repay money borrowed for Borrower’s use in the ordinary course of its business.
The security interest granted to Lender shall be pari passu with all security
interests granted by lender to its suppliers to secure Borrower’s obligation to
pay the cost of goods purchased from them for Borrower’s use in the ordinary
course of its business.

    

             7.       EVENTS
OF DEFAULT. An event of default will occur if any of the following events
occurs:

    

                      a.       Failure
to pay any principal or interest hereunder when due or any failure to issue
Lender the Warrants on or before the date that is ten (10) days after the date
of this Agreement.

    
      
         

      

      
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                      b.       Any
representation or warranty made by Borrower in this Agreement or in connection
with any borrowing or request for an Advance hereunder, or in any certificate,
financial statement, or other statement furnished by Borrower to Lender is
untrue in any material respect at the time when made.

    

                      c.       Default
by Borrower in the observance or performance of any other covenant or agreement
contained in this Agreement or any purchase order, other than a default
constituting a separate and distinct event of default under this Paragraph 7,
provided that such default, if curable, is not cured within thirty (30) days
after notice thereof.

    

                      d.       Filing
by Borrower of a voluntary petition in bankruptcy seeking reorganization,
arrangement or readjustment of debts, or any other relief under the Bankruptcy
Code as amended or under any other insolvency act or law, state or federal, now
or hereafter existing.

    

                      e.       Filing
of an involuntary petition against Borrower in bankruptcy seeking
reorganization, arrangement or readjustment of debts, or any other relief under
the Bankruptcy Code as amended, or under any other insolvency act or law, state
or federal, now or hereafter existing, unless such petition is dismissed within
sixty (60) days after the date that it is filed.

    

    f.          Since
the date hereof there shall have been an event or circumstance or change in
condition that has or could reasonably be expected to have a material adverse
effect on the Borrower (financial or otherwise), its operations or its
business.

    

            8.       REMEDIES.
Upon the occurrence and during the continuance of an event of default as defined
above, Lender may declare the entire unpaid principal balance, together with
accrued interest thereon, to be immediately due and payable without presentment,
demand, protest, or other notice of any kind. Lender may suspend or terminate
any obligation it may have hereunder to make additional Advances. To the extent
permitted by law, Borrower waives any rights to presentment, demand, protest, or
notice of any kind in connection with this Agreement. No failure or delay on the
part of Lender in exercising any right, power, or privilege hereunder will
preclude any other or further exercise thereof or the exercise of any other
right, power, or privilege. The rights and remedies provided herein are
cumulative and not exclusive of any other rights or remedies provided at law or
in equity. Borrower agrees to pay all costs of collection incurred by reason of
the default, including court costs and reasonable attorney's fees.

    

            9.       NOTICE.
Any written notice will be deemed effective on the date such notice is
personally delivered or is placed in the United Sates mail, certified or
registered mail, return receipt requested, postage prepaid, addressed to the
party to which notice is being given as follows:

     

    
      	
              Lender:

            	 
      	
              Kopin
      Corporation

            
	 
      	
              Attn:
      Richard Sneider

            
	 
      	
              200
      John Hancock Road

            
	 
      	
              Taunton,
      MA 02780

            
	 
      	
              Tel:
      508-824-6696 Fax: 508-824-6958

            
	 
      	 
      	 
      
	
              Borrower:

            	 
      	
              Vuzix
      Corporation

            
	 
      	 
      	
              Attn.:
      Paul Travers, President & CEO

            
	 
      	 
      	
              75
      Town Centre Drive

            
	 
      	 
      	
              Rochester,
      NY 14623

            
	 
      	
              Tel:
      585-359-5900 Fax: 585-359-4172

            

    

     

    A party
may change its address for notice by giving the other party notice of such
change in accordance with the provisions of this Paragraph.

    
      
         

      

      
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             10.       GENERAL
PROVISIONS. All representations and warranties made in this Agreement and the
Promissory Note and in any certificate delivered pursuant thereto shall survive
the execution and delivery of this Agreement and the making of any loans
hereunder. This Agreement will be binding upon and inure to the benefit of
Borrower and Lender, their respective successors and assigns, except that
Borrower may not assign or transfer its rights or delegate its duties hereunder
without the prior written consent of Lender. This Agreement, the Promissory
Note, and all documents and instruments associated herewith will be governed by
and construed and interpreted in accordance with the laws of the State of New
York. Any provision of this Agreement and Promissory Note which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions of such Loan Document or affecting the validity or
enforceability of such provision in any other jurisdiction. Article and Section
headings in this Agreement are included for the convenience of reference only
and shall not constitute a part of the applicable Loan Documents for any other
purpose. This Agreement will be deemed to express, embody, and supersede any
previous understanding, agreements, or commitments, whether written or oral,
between the parties with respect to the general subject matter hereof. This
Agreement may not be amended or modified except in writing signed by the
parties.

    

    EXECUTED
on the day and year first written above.

    

    
      
        
          
            
              	
                      Borrower: 

                    	Vuzix
      Corporation
	 
      	 
      	 
      
	 
      	
                      By:

                    	
                      /s/
      Paul Travers

                    
	 
      	
                      Name:  Paul
      Travers

                    
	 
      	
                      Title:  President
      & CEO

                    
	 
      	 
      	 
      
	Lender: 
      	Kopin
      Corporation
	 
      	 
      	 
      
	 
      	
                      By:

                    	
                      /s/
      Richard Sneider

                    
	 
      	
                      Name:  Richard
      Sneider

                    
	 
      	
                      Title:  CFO

                    

            

          

        

      

    

    
      
         

      

      
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    Exhibit
A

     

    Secured
Promissory Note

    

    Rochester,
NY

    

    May 21,
2010

    

             This
Promissory Note (the "Note") is made and executed as of the date referred to
above, by and between VUZIX CORPORATION, a Delaware corporation (the
"Borrower"), and KOPIN CORPORATION ("Lender"). By this Note, the Borrower
promises and agrees to pay to the order of Lender, at 200 John Hancock Road,
Taunton, Massachusetts or at such other place as Lender may designate in
writing, the aggregate unpaid principal sum of all Advances made to the Borrower
by the Lender hereunder and pursuant to the terms of a Revolving Line of Trade
Credit Agreement dated the same date as the date of the Note (the "Loan
Agreement"), together with interest thereon commencing thirty (30) days from the
date each Advance is made until paid in full, at a simple interest rate of
twelve percent (12%) per annum, (the “Effective Rate”).  Any overdue
amounts shall bear interest at the Effective Rate plus four percent
(4%).  Anything contained in this Note to the contrary
notwithstanding, the Lender does not intend to charge and the Borrower shall not
be required to pay interest or other charges in excess of the maximum rate
permitted by applicable law.  Any payments in excess of such maximum
rate shall be refunded to the Borrower or credited against
principal.

    

    Terms that are capitalized in this Note
that are not otherwise defined herein shall, if so defined, have the meanings
given to them in the Loan Agreement.

    

    The Borrower hereby authorizes the
Lender to endorse on the Schedule annexed to this Note all Advances made to the
Borrower and all payments of principal amounts in respect of such Advances,
which endorsements shall, in the absence of manifest error, be conclusive as to
the outstanding principal amount of and unpaid interest on all Loans; provided,
however, that the failure to make such notation with respect to any Loan or
payment shall not limit or otherwise affect the obligations of the Borrower
under the Agreement or this Note. For purposes of this Note, an Advance shall be
deemed to have been made when products are shipped by Lender to Borrower, under
Lender’s standard terms.

    

    The Borrower shall pay each outstanding
Advance amount within seventy-five (75) days from the date of such Advance,
along with any accrued interest as per paragraph 3 of the Loan
Agreement.  The entire unpaid principal balance, together with any
accrued interest, shall be due and payable on May 21, 2011 or such later date as
the Borrower and the Lender shall agree upon in writing (the "Maturity
Date").

    

             Prepayment
in whole or part may occur at any time hereunder without notice or penalty;
provided that any such partial prepayment shall not operate to postpone or
suspend the obligation to make, and shall not have the effect of altering the
time for payment of the remaining balance of the Note as provided for above,
unless and until the entire obligation is paid in full. All payments received
hereunder shall be applied, first, to any costs or expenses incurred by Lender
in collecting such payment or to any other unpaid charges or expenses due
hereunder; second, to accrued interest; and third, to the earliest Advances of
principal made hereunder.

    
      
         

      

      
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             Upon
the occurrence, and at any time during the continuance, of an event of default,
the Lender, at the Lender’s option and without the need for presentment, demand,
protest, or other notice of any kind, may declare all unpaid principal hereof
and interest hereunder to be immediately due and payable and same shall become
immediately due and payable upon such declaration.  An event of
default will occur if any of the following events occurs: (a) failure to pay any
principal or interest hereunder after the same becomes due; (b) if any
representation or warranty made by Borrower in the Loan Agreement or in
connection with any borrowing or request for an advance thereunder, or in any
certificate, financial statement, or other statement furnished by Borrower to
Lender is untrue in any material respect at the time when made; (c) default by
Borrower in the observance or performance of any other covenant or agreement
contained in the Loan Agreement, other than a default constituting a separate
and distinct event of default under Paragraph 7 of the Loan Agreement, provided
that such default, if curable is not cured within thirty (30) days after notice
thereof; (d) filing by Borrower of a voluntary petition in bankruptcy seeking
reorganization, arrangement or readjustment of debts, or any other relief under
the Bankruptcy Code as amended or under any other insolvency act or law, state
or federal, now or hereafter existing; or (e) filing of an involuntary petition
against Borrower in bankruptcy seeking reorganization, arrangement or
readjustment of debts, or any other relief under the Bankruptcy Code as amended,
or under any other insolvency act or law, state or federal, now or hereafter
existing, unless such petition is dismissed within sixty (60) days after the
date that it is filed; (f) since the date hereof there shall have been an event
or circumstance or change in condition that has or could reasonably be expected
to have a material adverse effect on the Borrower (financial or otherwise), its
operations or its business.

    

             Any
notice or demand to be given to the parties hereunder shall be deemed to have
been given to and received by them and shall be effective when personally
delivered or when deposited in the U.S. mail, certified or registered mail,
return receipt requested, postage prepaid, and addressed to the party at his or
its last known address, or at such other address as the one of the parties may
hereafter designate in writing to the other party.

    

             The
Borrower hereby waives presentment for payment, protest, demand, notice of
protest, notice of dishonor, and notice of nonpayment, and expressly agrees that
this Note, or any payment hereunder, may be extended from time to time by the
Lender without in any way affecting its liability hereunder.

    

             In
the event any payment under this Note is not made at the time and in the manner
required, the Borrower agrees to pay any and all costs and expenses which may be
incurred by the Lender hereof in connection with the enforcement of any of its
rights under this Note or under any such other instrument, including court costs
and reasonable attorneys' fees.

    

             This
Note shall be governed by and construed and enforced in accordance with the laws
of the State of New York.

    

    EACH OF
THE LENDER AND BORROWER ACKNOWLEDGES THAT THE TRANSACTION OF WHICH THIS NOTE IS
A PART IS A COMMERCIAL TRANSACTION.  EACH OF THE LENDER AND BORROWER
HEREBY KNOWINGLY AND VOLUNTARILY WAIVES TRIAL BY JURY AND THE RIGHT THERETO IN
ANY ACTION OR PROCEEDING OF ANY KIND, ARISING UNDER OR OUT OF, OR OTHERWISE
RELATED TO OR OTHERWISE CONNECTED WITH, THIS NOTE AND/OR ANY RELATED
DOCUMENT.

    

    
      
        
          
            
              
                
                  	Borrower: 
      	Vuzix
      Corporation
	 
      	 
      	 
      
	 
      	
                          By:

                        	
                               

                        
	 
      	
                          Name:  Paul
      Travers

                        
	 
      	
                          Title:  President
      & CEO

                        
	 
      	 
      	 
      
	Lender: 
      	Kopin
      Corporation
	 
      	 
      	 
      
	 
      	
                          By:

                        	
                                 

                        
	 
      	
                          Name:  Richard
      Sneider

                        
	 
      	
                          Title:  CFO

                        

                

              

            

          

        

      

    

    
      
         

      

      
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    SCHEDULE
TO NOTE

     

    
      
        
          
            
              
                
                  
                    
                      
                        	
                                Date

                              	 
      	
                                Amount

                                of

                                Principal

                                Advance

                              	 
      	
                                Amount

                                of

                                Principal

                                Repaid

                              	 
      	
                                Amount

                                of

                                Interest

                                Accrued

                              	 
      	
                                Amount

                                of

                                Interest

                                Paid

                              	 
      	
                                Unpaid

                                Principal

                                Balance of

                                Note

                              	 
      	
                                Name of Person

                                Making Notation

                              
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      

                      

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
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    EXHIBIT
B

     

    COLLATERAL

     

    All of
the Lender’s personal property of every kind and nature and wherever located,
now owned or hereafter acquired, and the proceeds thereof, as
follows:

     

    
      	
              (a)

            	
              All
      of Lender’s Accounts (as defined in Section 9-106 of the Uniform
      Commercial Code as in effect in the State of New York (the “UCC”)) whether
      secured or unsecured, now owned or hereafter acquired, and the proceeds
      thereof (the "Accounts");

            

    

     

    
      	
              (b)

            	
              All
      of Lender’s Instruments (as defined in Section 9-105(1)(i) of the UCC),
      now owned or hereafter acquired, and the proceeds
  thereof;

            

    

     

    
      	
              (c)

            	
              All
      of Lender’s Chattel Paper (as defined in Section 9-105(1)(b) of the UCC),
      now owned or hereafter acquired, and the proceeds
  thereof;

            

    

     

    
      	
              (d)

            	
              All
      of Lender’s General Intangibles (as defined in Section 9-106 of the UCC),
      now owned or hereafter acquired, and the proceeds thereof (the "General
      Intangibles");

            

    

     

    
      	
              (e)

            	
              All
      of Lender’s Inventory (as defined in Section 9-109(4) of the UCC), now
      owned or hereafter acquired, and the proceeds thereof (the "Inventory");

            

    

     

    
      	
              (f)

            	
              All
      of Lender’s Equipment (as defined in Section 9-109(2) of the UCC) and all
      attachments, accessories, parts or tooling relating thereto and all
      replacements for the foregoing, in each case now owned or hereafter
      acquired, and the proceeds thereof (the "Equipment");

            

    

     

    
      	
              (g)

            	
              All
      of Lender’s Insurance with respect to the Inventory, General Intangibles,
      Fixtures, Equipment and Goods against risks of fire, theft or any other
      physical damage or loss, now owned or hereafter acquired, and the proceeds
      thereof, and all insurance insuring the payment of Accounts, now owned or
      hereafter acquired, and the proceeds
thereof;

            

    

     

    
      	
              (h)

            	
              All
      goodwill, trade names, trademarks, trade secrets, know-how, inventions,
      patents, patent applications, copyrights and other intellectual property,
      now owned or hereafter acquired by Maker, or any rights of Maker with
      respect to any of the foregoing, now owned or hereafter acquired, whether
      or not any of the same are covered in other categories of this Schedule,
      and the proceeds thereof;

            

    

     

    
      	
              (i)

            	
              All
      of Lender’s Documents of Title (as defined in Section 1-201-(15) of the
      UCC), now owned or hereafter acquired, and the proceeds
      thereof;

            

    

    
      
         

      

      
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              (j)

            	
              All
      of Lender’s Goods (as defined in Section 2-105(1) of the UCC), now owned
      or hereafter acquired, whether or not any of the same are covered in other
      categories of this Schedule, and the proceeds thereof (the "Goods");

            

    

     

    
      	
              (k)

            	
              All
      of Lender’s Fixtures (as described in Section 9-313 of the UCC), now owned
      or hereafter acquired, and the proceeds thereof (the "Fixtures");

            

    

     

    
      	
              (l)

            	
              All
      of Lender’s Investment Property (as defined in Section 9-115 of the UCC),
      now owned or hereafter acquired, and all proceeds and General Intangibles
      arising therefrom (the "Investment
      Property");

            

    

     

    
      	
              (m)

            	
              All
      of Lender’s right, title and interest in all of its books, records, ledger
      sheets, files and other data and documents, now owned or hereafter
      existing, relating to any of the items listed in Sections (a) through (k)
      above;

            

    

     

    
      	
              (n)

            	
              All
      of Lender’s rights as a seller of goods under Article 2 of the UCC with
      respect to the Inventory, and as to goods represented by or securing any
      of the Accounts, all of Debtor's rights therein including, without
      limitation, rights of stoppage in transit, replevin and reclamation;
      and

            

    

     

    
      	
              (o)

            	
              All
      guarantees, mortgages and real or personal property leases or other
      written or oral agreements or property securing or relating to any of the
      items referred to above, or acquired for the purpose of securing and
      enforcing any of such items; and

            

    

     

    
      	
              (p)

            	
              All
      sums at any time standing to Lender’s credit on Secured Party's books, and
      all moneys, securities and other property of Maker at any time in Secured
      Party's possession or in which Lender has a lien or security interest, and
      all proceeds thereof.

            

    

    
      
         

      

      
        - 9
-SECURITY
AGREEMENT

    

    This
Security Agreement is entered into this 21th  day
of May , 2010, by and between Vuzix Corporation, a Delaware corporation, with an
address at 75 Town Centre Drive, Rochester, NY 14623 (the "Debtor") and Kopin
Corporation, a Delaware Corporation having an address at 200 John Hancock Road,
Taunton, Massachusetts  02780( the "Secured
Party").

    

    ARTICLE
I

    DEFINITIONS

    

    All words
and terms used in this Agreement shall have the meanings as set forth in the
following Sections; and where not otherwise defined herein, they shall be deemed
to have the meanings accorded to them in the New York Uniform Commercial Code,
as amended from time to time (the "UCC").

    

    Section
1.1           "Agreement"
shall mean this Security Agreement and all documents and instruments executed
and delivered in conjunction herewith.

    

    Section
1.2           "Collateral"
shall mean the property subject to the security interest created by this
Agreement, being all of the Debtor's personal property of every kind and nature
and wherever located, now owned or hereafter acquired, and the proceeds thereof,
as follows:

    

    (a)           All
of Debtor's Accounts (as defined in Section 9-106 of the UCC) whether secured or
unsecured, now existing or hereafter acquired, and the proceeds thereof (the
"Accounts");

    

    (b)           All
of Debtor's Instruments (as defined in Section 9-105(1)(i) of the UCC), now
owned or hereafter acquired and the proceeds thereof;

    

    (c)           All
of Debtor's Chattel Paper (as defined in Section 9-105(1)(b) of the UCC), now
owned or hereafter acquired and the proceeds thereof;

    

    (d)           All
of Debtor's General Intangibles (as defined in Section 9-106 of the UCC), now
owned or hereafter acquired, and the proceeds thereof (the "General
Intangibles");

    

    (e)           All
of Debtor's Inventory (as defined in Section 9-109(4) of the UCC), now existing
or hereafter acquired and the proceeds thereof (the "Inventory");

    

    (f)           All
of Debtor's Equipment (as defined in Section 9-109(2) of the UCC), all
attachments, accessories, parts or tooling related thereto and all replacements
for the foregoing, in each case now existing or hereafter acquired, and the
proceeds thereof (the "Equipment");

    

    (g)           All
of Debtor's Insurance with respect to the Inventory, General Intangibles,
Fixtures, Equipment, Goods and other Collateral against risks of fire, theft or
any other physical damage or loss, now owned or hereafter acquired and the
proceeds thereof, and all insurance insuring the payment of Accounts, now owned
or hereafter acquired, and the proceeds thereof (collectively, the
"Insurance");

    
      
         

      

      
        - 1 -

        
          

        

      

      
         

      

    

     

    (h)           All
goodwill, trade names, trademarks, trade secrets, know-how, inventions, patents,
patent applications, copyrights and other intellectual property now owned or
hereafter acquired by Debtor, or any rights of Debtor with respect to any of the
foregoing, whether or not any of the same are covered in other categories of
this Section 1.2, and the proceeds thereof;

    

    (i)         
  All of Debtor's Documents of Title (as defined in Section 1-201-(15)
of the UCC), now existing or hereafter acquired, and the proceeds
thereof;

    

    (j)         
  All of Debtor's Goods (as defined in Section 2-105(1) of the UCC),
now owned or hereafter acquired, whether or not any of the same are covered in
other categories of this Section 1.2, and the proceeds thereof (the
"Goods");

    

    (k)           All
of Debtor's Fixtures (as described in Section 9-313 of the UCC), now existing or
hereafter acquired and the proceeds thereof (the "Fixtures");

    

    (l)        
   All of Debtor’s Investment Property (as defined in Section
9-115 of the UCC), now owned or hereafter acquired, and all proceeds and General
Intangibles arising therefrom (the "Investment Property");

    

    (m)           All
of Debtor's right, title and interest in all of its books, records, ledger
sheets, files and other data and documents, now owned or hereafter existing,
relating to any of the items listed in Sections (a) through (l)
above;

    

    (n)           All
of Debtor's rights as a seller of goods under Article 2 of the UCC with respect
to the Inventory, and as to goods represented by or securing any of the
Accounts, all Debtor's rights therein including, without limitation, rights of
stoppage in transit, replevin and reclamation;

    

    (o)           All
guarantees, mortgages or real or personal property leases or other agreements or
property securing or relating to any of the items referred to above, or acquired
for the purpose of securing and enforcing any of such items; and

    

    (p)           All
sums at any time standing to Debtor's credit on Secured Party's books, and all
moneys, securities and other property of Debtor at any time in Secured Party's
possession or in which Secured Party has a lien or security interest, and all
proceeds thereof.

    

    Section
1.3          "Obligation"
shall mean any and all liabilities and obligations of the Debtor to the Secured
Party pursuant to or represented by a Secured Promissory Note (the "Note") of
even date herewith, issued to Secured Party pursuant to a Revolving Line of
Credit Trade Agreement between Debtor and Secured Party, also of even date
herewith.

    
      
         

      

      
        - 2 -

        
          

        

      

      
         

      

    

    

    ARTICLE
II

    SECURITY
INTEREST

    

    As
security for the payment of the Obligation, the Debtor hereby grants to Secured
Party a security interest in the Collateral.

    

    ARTICLE
III

    REPRESENTATIONS, WARRANTIES
AND COVENANTS OF THE DEBTOR

    

    The
Debtor represents, warrants and covenants, and shall be deemed to do so
continually as long as this Agreement shall remain in force, that:

    

    Section
3.1          Ownership of
Collateral.  It is the owner of the Collateral, with good,
marketable and indefeasible title thereto, free of all liens, security
interests, claims, liabilities, mortgages, leases, pledges, encumbrances,
restrictions, charges or imperfections of title whatsoever, except for the
security interest of the Secured Party and as otherwise indicated on Schedule
A.

    

    Section
3.2           Authority.  The
Debtor is authorized to enter into and implement this Agreement and has taken
all necessary actions, corporate or otherwise, in relation to such
authorization.

    

    Section
3.3           Maintenance of
Collateral.  The Debtor shall continually take such steps as
may be necessary and prudent to protect the interest of Secured Party in the
Collateral including, but not limited to the following:

    

    (a)           Maintain
and records relating to the Collateral and allow Secured Party or its
representatives access to such records and the Collateral at all reasonable
times for the purpose of examination, verification, copying, extracting and
other reasonable purposes as Secured Party may require;

    

    (b)           Execute
and deliver to Secured Party such financing statements and/or other and further
documentation as Secured Party may deem reasonably necessary or advisable in
order to evidence, effectuate or perfect its security interest in the
Collateral;

    

    (c)           Defend
the Collateral against all claims and demands of third parties at any time
claiming the same or any interest therein, except buyers of Inventory in the
ordinary course of the Debtor's business; provided, however, that the Debtor may
grant security interests in some or all of the Collateral in order to secure the
payment of Senior Debt, as such term is defined in Section 6.1;

    

    (d)           Not
without prior written consent of Secured Party sell, transfer or otherwise
dispose of the Collateral or any interest therein, in bulk or otherwise, except
for (i) the sale of Inventory in the ordinary course of business, (ii) the
granting of security interests to secure the repayment of Senior Debt, as such
term is defined in Section 6.1 and (iii) the factoring of accounts receivable
for the purpose of obtaining funds for use in the ordinary course of Debtor’s
business;

    
      
         

      

      
        - 3 -

        
          

        

      

      
         

      

    

     

    (e)           Notify
Secured Party in the event of material loss or damage to the Collateral or of
any material adverse change in the Debtor's business or the Collateral, or of
any other occurrences which could materially and adversely affect the security
of Secured Party;

    

    (f)        
   Pay all expenses incurred in the manufacture, delivery,
storage or other handling of the Collateral and all taxes which are or may
become a lien on the Collateral, promptly when due, and in any event reimburse
Secured Party, on demand, for any expenses which she might incur in satisfying
such expenses or taxes; and

    

    (g)           Maintain
insurance on the Collateral of such types, coverage, form and amount as is
usually carried on similar property by similar enterprises and shall supply
Secured Party with certificates as to the continuance of such insurance, at its
request.  All such insurance shall be payable to Secured Party and the
Debtor as their interests shall appear.  Insurance proceeds received
by Secured Party shall be applied by its against the Obligations, whether or not
then due.  Debtor shall timely make, file, settle and adjust all
claims under all such insurance, provided, that Secured Party shall have the
right at its election, to do so directly or to direct the Debtor in taking such
action.

    

    Section
3.6           Reimbursement to Secured
Party.  All expenses of Debtor paid by Secured Party pursuant
to paragraphs (f) or (g) of Section 3.5 shall be reimbursed by Debtor on demand,
shall be Obligations secured hereby, and shall bear interest, payable on demand,
from the date of Secured Party's payment of such expenses until payment in full
is made by Debtor, at the highest rate charged from time to time on the
Obligation.

    

    ARTICLE
IV

    EVENTS OF
DEFAULT

    

    Any of
the following events or occurrences shall constitute an "event of default" under
this Agreement:

    

    (a)           The
failure to pay when due any amount due under the Obligation, whether upon
demand, at maturity, by acceleration or otherwise; or the occurrence of an Event
of Default as specified in the Note.

    
      
         

      

      
        - 4 -

        
          

        

      

      
         

      

    

    (b)           The
attachment or restraint of any of the Collateral or the same being subject at
any time to any mandatory court order or other legal process;

    

    (c)           The
failure of the Debtor to perform its duties as specified in, or the breach of
any representation, warranty or covenant contained in or made pursuant to, this
Agreement;

    

    (d)           The
failure in business, dissolution or termination of the existence of the
Debtor;

    

    (e)           Any
petition in bankruptcy being filed by or against the Debtor, or any proceedings
in bankruptcy or under any law relating to the relief of debtors, being
commenced for the relief or readjustment of any indebtedness of the Debtor,
either through reorganization, composition, extension or otherwise; provided
that, in the case of a petition or proceeding being commenced against the
Debtor, it shall not have been dismissed within sixty (60) days of being filed
or commenced.;

    

    (f)           The
making by the Debtor of an assignment for the benefit of creditors, or the
taking advantage by Debtor of any insolvency law;

    

    (g)           The
appointment of any receiver of any property of the Debtor; or

    

    (h)          
The failure of the Debtor to perform its duties as specified in, or the breach
of any representation, warranty or covenant contained in or made pursuant to, or
any default, Event of Default or event which, with notice or lapse of time or
both would constitute a default or Event of Default under, (i) any agreement,
document or instrument evidencing or representing the Obligation, or (ii) any
agreement, document, instrument, mortgage or guaranty executed in connection
with or in any way securing or related to the Obligation.

    

    ARTICLE
V

    RIGHTS OF SECURED
PARTY

    

    Section
5.1           General
Rights.  The rights of Secured Party shall at all times be
those of a secured party under the New York UCC in addition to and not in
limitation of the rights provided under this Security
Agreement.

    
      
         

      

      
        - 5 -

        
          

        

      

      
         

      

    

    ARTICLE
VI

    SUBORDINATION

    

    Section
6.1           (a)           The
security interest granted by this Agreement shall be and hereby is subordinated
to any security interest granted in respect of Senior Debt and in respect of
those obligations listed on Schedule A, until the full and final payment in cash
of all such Senior Debt, whether now or hereafter incurred or owed by Debtor and
all of those obligations listed on Schedule A.  Secured Party will not
take or omit to take any action or assert any claim with respect to the
Collateral which is inconsistent with the provisions of this Section
6.1.  Without limiting the foregoing, Secured Party will not take any
action to foreclose or realize upon the Collateral or any part thereof except in
connection with any action to foreclose or realize upon the Collateral by the
holder of any Senior Debt but subject, in such event, to the payment of or
satisfaction of the Senior Debt, or as may be permitted with the consent of the
holders of all Senior Debt.  "Senior Debt" means all principal,
interest, fees, costs, enforcement expenses (including legal fees and
disbursements), collateral protection expenses and other reimbursement or
indemnity obligations created in favor of any lender to the Debtor in respect of
money borrowed by the Debtor from such lender for use in the ordinary course of
its business.

    

    (b)           The
security interest granted by this Agreement shall be and hereby is declared to
be pari passu with any
security interest granted by the Debtor in all or any part of the Collateral to
any trade creditor of Debtor to secure the payment of the purchase price of
goods or services provided by such trade creditor to the Debtor in the ordinary
course of the Debtor’s business, and the Secured Party agrees to share its
security interest in and the proceeds of any Collateral with any such trade
creditor in proportion to the amount of the obligation of Debtor to Secured
Party and all such trade creditors.

    ARTICLE
VI

    MISCELLANEOUS

    

    Section
7.1          Waivers.  The
Debtor expressly waives notice of nonpayment, demand, presentment, protest or
notice of protest in relation to the Obligations or the
Collateral.  No delay or omission of Secured Party in exercising or
enforcing any of its rights, powers, privileges, options or remedies under this
Agreement shall constitute a waiver thereof, and no waiver by Secured Party of
any default by the Debtor shall operate as a waiver of any other
default.  This Agreement constitutes the entire agreement between the
Debtor and Secured Party with respect to the security interest created and
supersedes all prior written or oral communications or understandings with
respect to the subject matter hereof.  No term or provision of this
Agreement shall be waived, altered or modified except by written amendment
signed by the parties.  All rights and remedies of Secured Party under
this Agreement shall be cumulative and not alternative or exclusive, may be
exercised by Secured Party at such time or times and in such order as Secured
Party, in its sole discretion, may determine, and are for the sole benefit of
Secured Party.  The exercise or failure to exercise such rights and
remedies shall not result in liability to the Debtor or others except in the
event of willful misconduct or bad faith by Secured Party, and in no event shall
Secured Party be liable for more than it actually receives as a result of the
exercise or failure to exercise such rights and remedies.

    

    Section
7.2          Successors and
Survival.  This Agreement shall be binding upon and shall inure
to the benefit of the respective parties, their successors and assigns, and
shall remain in force and effect until terminated by written agreement of the
parties.  All representations, warranties and covenants shall survive
the execution hereof.

    

    Section
7.3          Notices.  Any
notices under or pursuant to this Agreement shall be in writing and shall be
delivered personally, or sent by registered or certified mail to the address of
the parties as set forth above or to such other address as each Party may
designate to the other from time to time.  Notices to the Debtor shall
be effective when received or receipted for or three (3) days following mailing,
whichever is sooner.

    
      
         

      

      
        - 6 -

        
          

        

      

      
         

      

    

     

    Section
7.4         Headings.  The
headings of Articles and Sections in this Agreement are for convenience
only.  They form no part of this Agreement and shall not affect its
interpretation.

    

    Section
7.5          Severability.  If
any provision of this Agreement shall be or become illegal or unenforceable in
whole or in part for any reason whatsoever, the remaining provisions shall
nevertheless be deemed valid, binding and subsisting.

    

    Section
7.6          Governing
Law.  This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed wholly within New York State, without giving effect to
conflict of laws principles.

    

    IN
WITNESS WHEREOF, this Agreement has been executed as of the day and year first
above written.

    

    
      
        
          
            	
                    Vuzix
      Corporation

                  
	 
      	 
      
	
                    By:

                  	
                    /s/ Paul Travers

                  
	
                    Name:
      Paul Travers

                  
	
                    Title:  
      President

                  
	 
      	 
      
	
                    Kopin
      Corporation

                  
	 
      	 
      
	
                    By:

                  	
                    /s/ John C. C. Fan

                  
	
                    Name:
      John C. C. Fan

                  
	
                    Title:  
      Chief Executive
Officer

                  

          

        

      

    

    

    STATE OF
NEW YORK

    COUNTY OF
MONROE       SS.:

    

    On the
_____ day of May, 2010, before me, personally appeared Paul Travers personally
known to me or proved to me on the basis of satisfactory evidence to be the
individuals whose name is subscribed to the within instrument and acknowledged
to me that he executed the same in his capacity, and that by his signature on
the instrument, the individual, or the person upon behalf of which the
individual acted, executed the instrument.

    

    
      
        
          
            	
                       

                  	 
	
                    Notary
      Public

                  	 

          

        

      

    

     

    
      
         

      

      
        - 7 -

        
          

        

      

      
         

      

    

     

    SCHEDULE
A

    

    PRIOR SECURITY
INTERESTS

    

    
      	
              ·

            	
              Loan
      Payable to Bank of America -
$100,000

            

    

    
      	
              ·

            	
              Loan
      Payable to JP Morgan Chase -
$112,500

            

    

    
      	
              ·

            	
              Note
      Payable to Paul Travers - $209,208

            

    

    
      	
              ·

            	
              Note
      Payable to Paul Travers – $215,500

            

    

    
      	
              ·

            	
              Note
      Payable to Grant Russell - $100,000

            

    

    
      	
              ·

            	
              Note
      Payable to John Burtis - $75,000

            

    

    
      	
              ·

            	
              Note
      Payable to Vicente Gavieres -
$50,000

            

    

    
      	
              ·

            	
              Note
      Payable to Sally Burdick - $123,718

            

    

    
      	
              ·

            	
              Note
      Payable to Vast Corporation -
$1,000,000

            

    

    
      	
              ·

            	
              Note
      Payable to Kopin Corporation -
$746,500

            

    

    
      	
              ·

            	
              End

            

    

     

    
      
         

      

      
        - 8 -

        
          

        

      

      
         

      

    

    SCHEDULE A TO UCC-1
FINANCING STATEMENT

    

    All of
the Debtor's personal property of every kind and nature and wherever located,
now owned or hereafter acquired, and the proceeds thereof, as
follows:

    

    
      	
              (a)

            	
              All
      of Debtor's Accounts (as defined in Section 9-106 of the UCC) whether
      secured or unsecured, now owned or hereafter acquired, and the proceeds
      thereof (the "Accounts");

            

    

    

    
      	
              (b)

            	
              All
      of Debtor's Instruments (as defined in Section 9-105(1)(i) of the UCC),
      now owned or hereafter acquired, and the proceeds
  thereof;

            

    

    

    
      	
              (c)

            	
              All
      of Debtor's Chattel Paper (as defined in Section 9-105(1)(b) of the UCC),
      now owned or hereafter acquired, and the proceeds
  thereof;

            

    

    

    
      	
              (d)

            	
              All
      of Debtor's General Intangibles (as defined in Section 9-106 of the UCC),
      now owned or hereafter acquired, and the proceeds thereof (the "General
      Intangibles");

            

    

    

    
      	
              (e)

            	
              All
      of Debtor's Inventory (as defined in Section 9-109(4) of the UCC), now
      owned or hereafter acquired, and the proceeds thereof (the
      "Inventory");

            

    

    

    
      	
              (f)

            	
              All
      of Debtor's Equipment (as defined in Section 9-109(2) of the UCC) and all
      attachments, accessories, parts or tooling relating thereto and all
      replacements for the foregoing, in each case now owned or hereafter
      acquired, and the proceeds thereof (the
  "Equipment");

            

    

    

    
      	
              (g)

            	
              All
      of Debtor's Insurance with respect to the Inventory, General Intangibles,
      Fixtures, Equipment and Goods against risks of fire, theft or any other
      physical damage or loss, now owned or hereafter acquired, and the proceeds
      thereof, and all insurance insuring the payment of Accounts, now owned or
      hereafter acquired, and the proceeds
thereof;

            

    

    

    
      	
              (h)

            	
              All
      goodwill, trade names, trademarks, trade secrets, know-how, inventions,
      patents, patent applications, copyrights and other intellectual property,
      now owned or hereafter acquired by Debtor, or any rights of Debtor with
      respect to any of the foregoing, now owned or hereafter acquired, whether
      or not any of the same are covered in other categories of this Schedule,
      and the proceeds thereof;

            

    

    

    
      	
              (i)

            	
              All
      of Debtor's Documents of Title (as defined in Section 1-201-(15) of the
      UCC), now owned or hereafter acquired, and the proceeds
      thereof;

            

    

    

    
      	
              (j)

            	
              All
      of Debtor's Goods (as defined in Section 2-105(1) of the UCC), now owned
      or hereafter acquired, whether or not any of the same are covered in other
      categories of this Schedule, and the proceeds thereof (the
      "Goods");

            

    

    

    
      	
              (k)

            	
              All
      of Debtor's Fixtures (as described in Section 9-313 of the UCC), now owned
      or hereafter acquired, and the proceeds thereof (the
      "Fixtures");

            

    

    
      
         

      

      
        - 9 -

        
          

        

      

      
         

      

    

     

    
      	
              (l)

            	
              All
      of Debtor’s Investment Property (as defined in Section 9-115 of the UCC),
      now owned or hereafter acquired, and all proceeds and General Intangibles
      arising therefrom (the "Investment
Property");

            

    

    

    
      	
              (m)

            	
              All
      of Debtor's right, title and interest in all of its books, records, ledger
      sheets, files and other data and documents, now owned or hereafter
      existing, relating to any of the items listed in Sections (a) through (k)
      above;

            

    

    

    
      	
              (n)

            	
              All
      of Debtor's rights as a seller of goods under Article 2 of the UCC with
      respect to the Inventory, and as to goods represented by or securing any
      of the Accounts, all of Debtor's rights therein including, without
      limitation, rights of stoppage in transit, replevin and reclamation;
      and

            

    

    

    
      	
              (o)

            	
              All
      guarantees, mortgages and real or personal property leases or other
      written or oral agreements or property securing or relating to any of the
      items referred to above, or acquired for the purpose of securing and
      enforcing any of such items; and

            

    

    

    
      	
              (p)

            	
              All
      sums at any time standing to Debtor's credit on Secured Party's books, and
      all moneys, securities and other property of Debtor at any time in Secured
      Party's possession or in which Secured Party has a lien or security
      interest, and all proceeds thereof.

            

    

     

    
      
         

      

      
        - 10 -

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