Document:

Exhibit 4.1

 

 

[FORM OF WARRANT]

 

COMMON STOCK PURCHASE WARRANT

 

3DICON CORPORATION

 

 

	Warrant Shares : _______	Initial Exercise Date:   ______, 201 [   ]

 

 

THIS COMMON STOCK PURCHASE
WARRANT (the “Warrant”) certifies that, for value received, _____________ (the “Holder”) is entitled, upon
the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time or times on or after
the date hereof (the “Exercisability Date”), but not after 11:59 p.m., New York City time, on ______, 201[  ]
(the “Termination Date”), to subscribe for and purchase from 3DIcon Corporation, an Oklahoma Corporation (the “Company”),
up to ______ shares (the “Warrant Shares”) of Common Stock. 

 

Section 1.    
Definitions.   In addition to the terms defined elsewhere in this Warrant, for all purposes of
this Warrant, the following terms have the meanings set forth in this Section 1. This Warrant is one of a series of warrants issued
by the Company as of the date hereof (individually, a “Warrant,” and collectively, the “Warrants”) pursuant
to (i) the Subscription Agreement dated __________, 2012, by and between the Company and the Holder, and (ii) the Company’s
Registration Statement on Form S-1 (File number 333-_______) (the “Registration Statement”).

 

 “Affiliate” means any
Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person as such terms are used in and construed under Rule 405 under the Securities Act.  With respect to a Purchaser,
any investment fund or managed account that is managed on a discretionary basis by the same investment manager as such Purchaser
will be deemed to be an Affiliate of such Purchaser.

  

 “Business Day” means any
day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking
institutions in the State of New York are authorized or required by law or other governmental action to close.

  

 “Commission” means the
United States Securities and Exchange Commission.

 

 “Common Stock” means the
common stock of the Company, par value $0.0002 per share, and any other class of securities into which such securities may hereafter
be reclassified or changed.

 

“Common Stock Equivalents” means
any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including,
without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into
or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

    

 “Exchange Act” means the
Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

   

 “Person” means an individual
or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity of any kind.

 

 “Securities Act” means
the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

“Subsidiary” means any subsidiary
of the Company, and shall, where applicable, also include any subsidiary of the Company formed or acquired after the date hereof.

 

 “Trading Day” means a
day on which the principal Trading Market is open for trading.

 

“Trading Market” means any of
the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE
AMEX, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange or the
OTC Bulletin Board (or any successors to any of the foregoing).

 

    	 

    	 

    
 

“Transaction Documents” means
this Warrant, the Subscription Agreement and any other documents or agreements executed in connection with the transactions contemplated
hereunder.

 

“Transfer Agent” means Continental
Stock Transfer & Trust Company, the current transfer agent of the Company, with a mailing address of 17 Battery Place, 8th
Floor and a facsimile number of (303) 262-0700, and any successor transfer agent of the Company.

     

Section 2.     Exercise.

 

  a) Exercise of Warrant .  Exercise of
the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Exercisability
Date and on or before the Termination Date by delivery to the Company (or such other office or agency of the Company as it may
designate by notice in writing to the registered Holder at the address of the Holder appearing on the books of the Company) of
a duly executed facsimile copy of the Notice of Exercise annexed hereto; and, within three (3) Trading Days of the date said Notice
of Exercise is delivered to the Company, the Company shall have received payment of the aggregate Exercise Price of the shares
thereby purchased by wire transfer or cashier’s check drawn on a United States bank or, if available, pursuant to the cashless
exercise procedure specified in Section 2(c) below.  Notwithstanding anything herein to the contrary, the Holder shall
not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available
hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for
cancellation within three (3) Trading Days of the date the final Notice of Exercise is delivered to the Company.  Partial
exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have
the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number
of Warrant Shares purchased.  The Holder and the Company shall maintain records showing the number of Warrant Shares
purchased and the date of such purchases.  The Company shall deliver any objection to any Notice of Exercise within two
(2) Business Days of receipt of such notice.  The Holder and any assignee, by acceptance of this Warrant, acknowledge
and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder,
the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face
hereof.

 

  b)  Exercise Price.  The exercise price
per share of the Common Stock under this Warrant shall be $[        ], subject to adjustment
hereunder (the “Exercise Price”).

 

  c)  Cashless Exercise.  If at the time
of exercise hereof there is no effective registration statement registering, or the prospectus contained therein is not available
for the issuance of the Warrant Shares to the Holder or an exemption from registration is not available such that the Holder (unless
the Holder is at the time of exercise is an Affiliate of the Company) could not immediately resell all Warrant Shares without any
filing or limitation on volume, then this Warrant may also be exercised, in whole or in part, at such time by means of a “cashless
exercise” in which the Holder shall be entitled to receive a certificate for the number of Warrant Shares equal to the quotient
obtained by dividing [(A-B) (X)] by (A), where:

 

	 	(A) = the VWAP on the Trading Day immediately preceding the date
on which Holder elects to exercise this Warrant by means of a “cashless exercise,” as set forth in the applicable
Notice of Exercise;

 

	 	(B) = the Exercise Price of this Warrant, as adjusted hereunder; and

 

	 	(X) = the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise.

 

“ VWAP ” means, for any date, the price determined
by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily
volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which
the Common Stock is then listed or quoted as reported by Bloomberg L.P. (“Bloomberg”) (based on a Trading Day from
9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b)  if the OTC Bulletin Board is not a Trading Market,
the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the OTC Bulletin Board,
(c) if the Common Stock is not quoted for trading on the OTC Bulletin Board and if prices for the Common Stock are then reported
by OTC Market Group, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent
bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common
Stock as determined by an independent appraiser selected in good faith by the Company.

 

    	 

    	 

    
 

  d) Mechanics of Exercise.

 

  i) Delivery of Certificates Upon Exercise.  Certificates
for shares purchased hereunder shall be transmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s
prime broker with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the
Company is then a participant in such system and either (A) there is an effective registration statement covering the issuance
of the Warrant Shares to or resale of the Warrant Shares by Holder or (B) this Warrant is being exercised via cashless exercise,
and otherwise by physical delivery to the address specified by the Holder in the Notice of Exercise by the date that is three (3)
Trading Days after the latest of (A) the delivery to the Company of the Notice of Exercise, (B) surrender of this Warrant (if required)
and (C) payment of the aggregate Exercise Price as set forth above (including by cashless exercise, if permitted) (such date, the
“Warrant Share Delivery Date”).  This Warrant shall be deemed to have been properly exercised on the first
date on which all of the foregoing have been delivered to the Company.  The Warrant Shares shall be deemed to have been
issued, and Holder or any other person so designated to be named therein shall be deemed to have become a holder of record of such
shares for all purposes, as of the date the Warrant has been exercised, with payment to the Company of the Exercise Price (or by
cashless exercise, if permitted) and all taxes required to be paid by the Holder, if any, pursuant to Section 2(d)(v) prior to
the issuance of such shares, having been paid.ii) Delivery of New Warrants Upon Exercise.  If this Warrant shall
have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the
time of delivery of the certificate or certificates representing Warrant Shares, deliver to Holder a new Warrant evidencing the
rights of Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects
be identical with this Warrant.

 

  iii) Compensation for Buy-In on Failure to Timely
Deliver Certificates Upon Exercise.  In addition to any other rights available to the Holder, if the Company fails
to cause the Transfer Agent to transmit to the Holder a certificate or the certificates representing the Warrant Shares pursuant
to an exercise on or before the Warrant Share Delivery Date, and if after such Warrant Share Delivery Date, the Holder is required
by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases,
shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving
upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which
(x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased
exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the
Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation
was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant
Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder
the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise and delivery
obligations hereunder.  For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to
cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving rise to such
purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the
Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the
Buy-In and, upon request of the Company, evidence of the amount of such loss.  Nothing herein shall limit a Holder’s
right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific
performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing shares
of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.

 

  iv)   No Fractional Shares or Scrip.  No
fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant.  As to any
fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, pay a cash
adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price.

 

  v)   Charges, Taxes and Expenses.  Issuance
of certificates for Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental
expense in respect of the issuance of such certificate, all of which transfer taxes and expenses shall be paid by the Company,
and such certificates shall be issued in the name of the Holder or in such name or names as may be directed by the Holder;
provided , however , that in the event certificates for Warrant Shares are to be issued in a name other than the
name of the Holder, this Warrant when surrendered for exercise shall be accompanied by a written assignment of this Warrant substantially
in the form attached hereto (the “Assignment Form”) duly executed by the Holder and the Company may require, as a condition
thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto.

 

  vi) Closing of Books.  The Company
will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the
terms hereof.

 

    	 

    	 

    
 

  e) Holder’s Exercise Limitations.  The
Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant,
pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the
applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group
together with the Holder or any of the Holder’s Affiliates), would beneficially own in excess of the Beneficial Ownership
Limitation (as defined below).  For purposes of the foregoing sentence, the number of shares of Common Stock beneficially
owned by the Holder and its Affiliates shall include the number of shares of Common Stock issuable upon exercise of this Warrant
with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable
upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates
and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without
limitation, any other  Common Stock Equivalents) subject to a limitation on conversion or exercise analogous to the limitation
contained herein beneficially owned by the Holder or any of its Affiliates.  Except as set forth in the preceding sentence,
for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act
and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing
to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible
for any schedules required to be filed in accordance therewith.   To the extent that the limitation contained in
this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the
Holder together with any Affiliates) and of which portion of this Warrant is exercisable shall be in the sole discretion of the
Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant
is exercisable (in relation to other securities owned by the Holder together with any Affiliates) and of which portion of this
Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to
verify or confirm the accuracy of such determination and shall have no liability for exercises of the Warrant that are not in compliance
with the Beneficial Ownership Limitation.   In addition, a determination as to any group status as contemplated
above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder.  For
purposes of this Section 2(e), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number
of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report filed with
the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by
the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding.  Upon the written or oral
request of a Holder, the Company shall within one Trading Day confirm orally and in writing to the Holder the number of shares
of Common Stock then outstanding as established by (A), (B), or (C) above, as applicable.  In any case, the number of outstanding
shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including
this Warrant, by the Holder or its Affiliates since the date as of which such number of outstanding shares of Common Stock was
reported.  The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock
outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant.  The
Holder, upon not less than 61 days’ prior notice to the Company, may increase or decrease the Beneficial Ownership Limitation
provisions of this Section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares
of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon exercise of this
Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply.  Any such increase or decrease
will not be effective until the 61st day after such notice is delivered to the Company and shall only be effective with respect
to such Holder.  The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict
conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent
with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to
properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this
Warrant.

 

    	 

    	 

    
 

Section 3.      Certain Adjustments.

 

(a)           
Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or
otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities
payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company
upon exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines
(including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by
reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price
shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares,
if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding
immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted
such that the aggregate Exercise Price of this Warrant shall remain unchanged.  Any adjustment made pursuant to this
Section 3(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive
such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination
or re-classification.

   

 (b)           
Rights Upon Distribution of Assets.  If at any time or from time to time the holders of Common Stock of the Company
(or any shares of stock or other securities at the time receivable upon the exercise of this Warrant) shall have received or become
entitled to receive, without payment therefore:

 

  i)  Common Stock or any shares of stock or other
securities which are at any time directly or indirectly convertible into or exchangeable for Common Stock, or any rights or options
to subscribe for, purchase or otherwise acquire any of the foregoing by way of dividend or other distribution (other than a dividend
or distribution covered in Section 3(a) above);

 

  ii) any cash paid or payable otherwise than as a cash
dividend; or

 

  iii) Common Stock or additional stock or other securities
or property (including cash) by way of spinoff, split-up, reclassification, combination of shares or similar corporate rearrangement
(other than shares of Common Stock pursuant to Section 3(a) above), then and in each such case, the Holder hereof will, upon
the exercise of this Warrant, be entitled to receive, in addition to the number of shares of Common Stock receivable thereupon,
and without payment of any additional consideration therefor, the amount of stock and other securities and property (including
cash in the cases referred to in clauses (ii) and (iii) above) which such Holder would hold on the date of such exercise
had such Holder been the holder of record of such Common Stock as of the date on which holders of Common Stock received or became
entitled to receive such shares or all other additional stock and other securities and property.

 

    	 

    	 

    
 

(c)           
Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in
one or more related transactions effects any merger or consolidation of the Company with or into another Person (but excluding
a migratory merger effected solely for the purpose of changing the jurisdiction of incorporation of the Company), (ii) the Company,
directly or indirectly, effects any sale, assignment, transfer or other disposition of all or substantially all of its assets in
one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether
by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange
their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common
Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization
or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted
into or exchanged for other securities, cash or property, (v) the Company, directly or indirectly, in one or more related transactions
consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization,
recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Person acquires more than 50% of the
outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or
party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other
business combination) (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder
shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the
occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) on the
exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if
it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result
of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately
prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant).  For
purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate
Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental
Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting
the relative value of any different components of the Alternate Consideration.  If holders of Common Stock are given
any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the
same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction.  Notwithstanding
anything to the contrary, in the event of a Fundamental Transaction that is (1) an all cash transaction, (2) a “Rule 13e-3
transaction” as defined in Rule 13e-3 under the Exchange Act, or (3) a Fundamental Transaction involving a person or entity
not traded on a national securities exchange, the Company or any Successor Entity (as defined below) shall, at the Holder’s
option, exercisable at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction, purchase
this Warrant from the Holder by paying to the Holder an amount of cash equal to the Black Scholes Value of the remaining unexercised
portion of this Warrant on the date of the consummation of such Fundamental Transaction.  “Black Scholes Value”
means the value of this Warrant based on the Black and Scholes Option Pricing Model obtained from the “OV” function
on Bloomberg determined as of the day of consummation of the applicable Fundamental Transaction for pricing purposes and reflecting
(A) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the time between the date of the public
announcement of the applicable Fundamental Transaction and the Termination Date, (B) an expected volatility equal to the greater
of 100% and the 100 day volatility obtained from the HVT function on Bloomberg as of the Trading Day immediately following the
public announcement of the applicable Fundamental Transaction, (C) the underlying price per share used in such calculation shall
be the sum of the price per share being offered in cash, if any, plus the value of any non-cash consideration, if any, being offered
in such Fundamental Transaction and (D) a remaining option time equal to the time between the date of the public announcement of
the applicable Fundamental Transaction and the Termination Date. The Company shall cause any successor entity in a Fundamental
Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations
of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 3(c) pursuant
to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable
delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this
Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this
Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity)
equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations
on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price
hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to
such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise
price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental
Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental
Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental
Transaction, the provisions of this Warrant and the other Transaction Documents referring to the “Company” shall refer
instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations
of the Company under this Warrant and the other Transaction Documents with the same effect as if such Successor Entity had been
named as the Company herein.

 

(d)            Calculations. All calculations
under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this
Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the
number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.

 

    	 

    	 

    
 

(e)           
Notice to Holder.

 

(i)           
Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the
Company shall promptly mail to the Holder a notice setting forth the Exercise Price after such adjustment and setting forth a brief
statement of the facts requiring such adjustment.

 

(ii)           
Notice to Allow Exercise by Holder. If during the term in which this Warrant may be exercised by the Holder (A) the Company
shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Company shall declare a special
nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders
of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights,
(D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock,
any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of
the Company, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property, or
(E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company,
then, in each case, the Company shall cause to be mailed to the Holder at its last address as it shall appear upon the Warrant
Register of the Company, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants,
or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend,
distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation,
merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that
holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other
property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure
to mail such notice or any defect therein or in the mailing thereof shall not affect the validity of the corporate action required
to be specified in such notice.  To the extent that any notice provided hereunder constitutes, or contains, material,
non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with
the Commission pursuant to a Current Report on Form 8-K.  The Holder shall remain entitled to exercise this Warrant during
the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise
be expressly set forth herein.

 

Section 4.       
Transfer of Warrant.

 

(a)           
Transferability.  Subject to compliance with applicable securities laws, this Warrant and all rights hereunder
(including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant
at the principal office of the Company or its designated agent, together with the Assignment Form duly executed by the Holder or
its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer.  Upon
such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the
assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and
shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly
be cancelled.  The Warrant, if properly assigned in accordance   herewith, may be exercised by a new holder
for the purchase of Warrant Shares without having a new Warrant issued. 

 

(b)           
New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office
of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed
by the Holder or its agent or attorney.  Notwithstanding anything to the contrary herein, in no event shall this Warrant
be subdivided into units of less than 1,000 Warrant Shares and such new Warrants shall not be further subdivided. Subject to compliance
with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver
a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All
Warrants issued on transfers or exchanges shall include reference to the initial issuance date set forth on the first page of this
Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.

 

(c)           
Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose
(the “Warrant Register”), in the name of the record Holder hereof from time to time.  The Company may deem
and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution
to the Holder, and for all other purposes, absent actual notice to the contrary.

 

(d)           
Understandings or Arrangements.  Such Holder is acquiring this Warrant as principal for its own account and has
no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such
Warrant (this representation and warranty not limiting such Holder’s right to sell the Warrant pursuant to the Registration
Statement or otherwise in compliance with applicable federal and state securities laws.) Such Holder is acquiring this Warrant
hereunder in the ordinary course of its business.

 

Section 5.       
Miscellaneous. 

 

(a)           
No Rights as Stockholder Until Exercise.  Except as otherwise provided herein, this Warrant does not entitle
the Holder to any voting rights, including, without limitation, any right to consent to any corporate action (whether any reorganization,
issue of stock, reclassification of stock, consolidation, merger, conveyance or otherwise) nor any right to receive notice of meetings,
nor does it entitle the Holder to any right to receive dividends or subscription rights, or any other rights as a stockholder of
the Company prior to the exercise hereof as set forth in Section 2(d)(i).

 

(b)           
Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant
Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it, and upon surrender and
cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock  
certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.

 

    	 

    	 

    
 

(c)           
Saturdays, Sundays, Holidays, etc.  If the last or appointed day for the taking of any action or the expiration
of any right required or granted herein shall not be a Business Day, then, such action may be taken or such right may be exercised
on the next succeeding Business Day. 

  

(d)           
Authorized Shares.  The Company covenants that, during the period the Warrant is outstanding, it will reserve from
its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the
exercise of any purchase rights under this Warrant.  The Company further covenants that its issuance of this Warrant
shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue
the necessary certificates for the Warrant Shares upon the exercise of the purchase rights under this Warrant.  The Company
will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without
violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be
listed.  The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented
by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance
herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by
the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such
issue).

 

Except and to the extent as waived or consented to by the Holder,
the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek
to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying
out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder
as set forth in this Warrant against impairment.  Without limiting the generality of the foregoing, the Company will
(i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to
such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly
and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable
efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof,
as may be, necessary to enable the Company to perform its obligations under this Warrant. 

 

Before taking any action which would result in an adjustment
in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall use commercially
reasonable efforts to obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public
regulatory body or bodies having jurisdiction thereof. 

 

(e)          
Jurisdiction. This Warrant shall be governed by, and construed in accordance with, the internal laws of the State of New
York, without reference to the choice of law provisions thereof.  The Company and, by accepting this Warrant, the Holder,
each irrevocably submits to the exclusive jurisdiction of the courts of the State of New York located in New York County and the
United States District Court for the Southern District of New York for the purpose of any suit, action, proceeding or judgment
relating to or arising out of this Warrant and the transactions contemplated hereby.  Service of process in connection
with any such suit, action or proceeding may be served on each party hereto anywhere in the world by the same methods as are specified
for the giving of notices under this Warrant.  The Company and, by accepting this Warrant, the Holder, each irrevocably
consents to the jurisdiction of any such court in any such suit, action or proceeding and to the laying of venue in such court.  The
Company and, by accepting this Warrant, the Holder, each irrevocably waives any objection to the laying of venue of any such suit,
action or proceeding brought in such courts and irrevocably waives any claim that any such suit, action or proceeding brought in
any such court has been brought in an inconvenient forum.  THE COMPANY AND THE HOLDER HEREBY IRREVOCABLY WAIVES ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING RELATING TO OR ARISING OUT OF THIS WARRANT AND THE TRANSACTIONS CONTEMPLATED
HEREBY.

 

    	 

    	 

    
 

(f)           
Restrictions.  The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if
not registered, and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal
securities laws.  

 

(g)           
Nonwaiver and Expenses.  No course of dealing or any delay or failure to exercise any right hereunder on the
part of Holder shall operate as a waiver of such right or otherwise prejudice Holder’s rights, powers or remedies.  Without
limiting any other provision of this Warrant or the Subscription Agreement, if the Company willfully and knowingly fails to comply
with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to Holder such amounts
as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including
those of appellate proceedings, incurred by Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any
of its rights, powers or remedies hereunder. 

 

(h)           
Notices.  Any notice, request or other document required or permitted to be given or delivered to the Holder
by the Company shall be delivered in accordance with the notice provisions of the Subscription Agreement.  

 

(i)           
Limitation of Liability.  No provision hereof, in the absence of any affirmative action by Holder to exercise
this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of Holder, shall give rise to any
liability of Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted
by the Company or by creditors of the Company.  

 

(j)           
Remedies.  The Holder, in addition to being entitled to exercise all rights granted by law, including recovery
of damages, will be entitled to specific performance of its rights under this Warrant.  The Company agrees that monetary
damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant
and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.
 

 

(k)           
Successors and Assigns.  Subject to applicable securities laws, this Warrant and the rights and obligations evidenced
hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors
and permitted assigns of Holder.  The provisions of this Warrant are intended to be for   the benefit of
any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares. 

 

(l)           
Amendment.  This Warrant may be modified or amended or the provisions hereof waived with the written consent
of the Company and Holder. 

 

(m)           
Severability.  Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable
law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of
such provisions or the remaining provisions of this Warrant. 

 

(n)           
Headings.  The headings used in this Warrant are for the convenience of reference only and shall not, for any
purpose, be deemed a part of this Warrant.

 

********************

 

(Signature Pages Follow)

 

    	 

    	 

    
 

IN WITNESS WHEREOF, the Company has caused
this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.

 

	 	3DICON CORPORATION	 
	 	 	 	 
	 	By:	 	 
	 	 	Name: Mark Willner	 
	 	 	
        Title: Chief Executive Officer

         
	 
	 	 	 	 

 

    	 

    	 

    
 

NOTICE OF EXERCISE

 

 

TO:           
3DICON CORPORATION

 

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

 

(2)      Payment
shall take the form of (check applicable box):

 

	 	[  ] in lawful money of the United States; or 

 

	 	[ ] [if permitted] the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).

 

(3)      Please
issue a certificate or certificates representing said Warrant Shares in the name of the undersigned registered holder:

 

____________________________

 

The Warrant Shares shall be delivered to the following DWAC
Account Number or by physical delivery of a certificate to:

 

____________________________

 

____________________________

 

____________________________

 

 

[SIGNATURE OF HOLDER]

 

 

 

Name of Investing Entity: _____________________________________________________

 

Signature of Authorized Signatory of Investing Entity:  _______________________________

 

Name of Authorized Signatory: _________________________________________________

 

Title of Authorized Signatory: __________________________________________________

 

Date: _____________________________________________________________________

 

 

    	 

    	 

    
 

ASSIGNMENT FORM

 

(To assign the foregoing warrant, execute

this form and supply required information.

Do not use this form to exercise the warrant.)

 

FOR VALUE RECEIVED, [____] all of or [_______]
shares of the foregoing Warrant and all rights evidenced thereby are hereby assigned to

 

_______________________________________________ whose address
is

 

_______________________________________________________________.

 

_______________________________________________________________

 

Dated:  ______________, _______

 

 

Holder’s Signature:                              _____________________________

 

Holder’s Address:                                _____________________________

 

Signature Guaranteed:  ___________________________________________

 

 

NOTE:  The signature to this Assignment Form must
correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatsoever,
and must be guaranteed by a bank or trust company.  Officers of corporations and those acting in a fiduciary or other
representative capacity should file proper evidence of authority to assign the foregoing Warrant.VUZIX Corporation

 

LC Capital
Master Fund LTD

 

AMENDED AND RESTATED CONVERTIBLE LOAN AND SECURITY AGREEMENT

 

    	 

    	 

    
 

This Amended
And Restated Loan And Security Agreement is entered into as of
June 15, 2012, by and between LC CAPITAL MASTER FUND LTD, a Cayman Islands Corporation (“LC Capital”) and VUZIX
Corporation, a Delaware
corporation (“Borrower”).

 

Recitals

 

WHEREAS, pursuant
to a Convertible Loan and Security Agreement dated as of December 23, 2010 (the “Original Agreement”), LC Capital
made a loan to the Borrower in the principal amount of $4,000,000 and the Borrower issued and sold to LC Capital and LC Capital
purchased from the Borrower, its promissory note due December 23, 2014 (the “Notes”), upon the terms
and subject to the conditions set forth in the Original Agreement; and

 

WHEREAAS, on May 19,
2012 the Borrower and the Lender entered into a Promissory Note and Security Agreement (the “Second Loan Agreement”)
pursuant to which the Lender extended a line of credit of up to $500,000 (together with the Original Agreement, the “Loan
Agreements” and the amounts borrowed under the Loan Agreements, together with interest thereon, the “Loan”);
and

 

WHEREAS, pursuant
to the Asset Purchase Agreement, dated as of June 15, 2012, between the Borrower and TDG Acquisition Company, LLC (the “Purchaser,”
and such agreement, the “Purchase Agreement”), the Borrower has, with the consent of LC Capital, sold the Acquired
Assets (as defined in the Purchase Agreement) to the Purchaser (such disposition of assets, the “TDG Disposition”)
and paid LC Capital the amount of $4,299,096 in reduction of the Loan; and

 

WHEREAS, the
current outstanding balance of the Loan is $619,122.

 

WHEREAS, on
June 15, 2012, in connection with the Purchase Agreement and as a condition to LC Capital consenting thereto, the Borrower and
the Lenders entered into an Letter Agreement outlining the modifications to the Original Agreement that would be required in order
that LC Capital would be willing to consent to the TDG Disposition, and they now wish to amend and restate the Original Agreement
and Existing Notes in their entirety as set forth herein and therein and the Borrower desires to issue to the Lenders a new note
(the “Notes”) reflecting such modified terms;

 

WHEREAS, the
Borrower acknowledges and agrees that (i) this Agreement represents, among other things, an amendment, restatement, renewal, extension,
and modification of the Loan made under the Original Agreement; and (ii) this Agreement is intended to restructure, restate, renew,
extend, amend and modify the Original Agreement;

 

WHEREAS, the
parties hereto intend that (i) the provisions of the Original Agreement, to the extent restructured, restated, renewed, extended,
amended and modified hereby, are hereby superseded and replaced by the provisions hereof; and (ii) the Note (as hereinafter defined)
amends, renews, extends, modifies, replaces, is substituted for and supersedes in its entirety, but does not extinguish the existing
indebtedness arising under, the promissory note issued pursuant to the Original Agreement (except to the extent paid), nor does
this transaction constitute a novation of the Original Agreement; and

 

WHEREAS, the parties
wish to agree that the Second Loan Agreement is terminated and that all amounts due from Borrower to LC Capital thereunder have
been paid in full;

 

NOW, THEREFORE,
in consideration of the terms and conditions contained herein, and of any extensions of credit now or hereafter made to or for
the benefit of Borrower under this Agreement, the parties hereto, intending to be legally bound hereby, agree that the Original
Agreement is hereby amended and restated in full as set forth below:

 

    	 

    	 

    
 

Agreement

 

The parties agree as
follows:

 

1.         Definitions
and Construction.

 

1.1         Definitions.
As used in this Agreement, the following terms shall have the following definitions:

 

“Accounts”
means all presently existing and hereafter arising accounts, contract rights, payment intangibles, and all other forms of obligations
owing to Borrower arising out of the sale or lease of goods (including, without limitation, the licensing of software and other
technology) or the rendering of services by Borrower, whether or not earned by performance, and any and all credit insurance, guaranties,
and other security therefor, as well as all merchandise returned to or reclaimed by Borrower and Borrower’s Books relating
to any of the foregoing.

 

“Affiliate”
means, with respect to any Person, any Person that owns or controls directly or indirectly such Person, any Person that controls
or is controlled by or is under common control with such Person, and each of such Person’s senior executive officers, directors,
and partners.

 

“Borrower’s
Books” means all of Borrower’s books and records including: ledgers; records concerning Borrower’s assets or
liabilities, the Collateral, business operations or financial condition; and all computer programs, or tape files, and the equipment,
containing such information.

 

“Business Day”
means any day that is not a Saturday, Sunday, or other day on which banks in the State of New York are authorized or required to
close.

 

“Change in Control”
shall mean a transaction in which any “person” or “group” (within the meaning of Section 13(d) and 14(d)(2)
of the Securities Exchange Act of 1934) becomes the “beneficial owner” (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934), directly or indirectly, of a sufficient number of shares of all classes of stock then outstanding of Borrower
ordinarily entitled to vote in the election of directors, empowering such “person” or “group” to elect
a majority of the Board of Directors of Borrower, who did not have such power before such transaction.

 

“Closing Date”
means June 15, 2012.

 

“Code”
means the Uniform Commercial Code as in effect from time to time in the State of New York.

 

“Collateral”
means the property described on Exhibit A attached hereto.

 

“Common Stock”
means the Common Stock, $.001 par value per share, of Borrower.

 

“Contingent Obligation”
means, as applied to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to (i) any
indebtedness, lease, dividend, letter of credit or other obligation of another; (ii) any obligations with respect to undrawn
letters of credit, corporate credit cards, or merchant services issued or provided for the account of that Person; and (iii) all
obligations arising under any agreement or arrangement designed to protect such Person against fluctuation in interest rates, currency
exchange rates or commodity prices; provided, however, that the term “Contingent Obligation” shall not include endorsements
for collection or deposit in the ordinary course of business. The amount of any Contingent Obligation shall be deemed to be an
amount equal to the stated or determined amount of the primary obligation in respect of which such Contingent Obligation is made
or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by Lender in good
faith; provided, however, that such amount shall not in any event exceed the maximum amount of the obligations under the guarantee
or other support arrangement.

 

    	2

    	 

    
 

“Conversion Date”
means the date on which the Lender gives the Borrower a Conversion Notice.

 

“Conversion Notice”
means a notice from the Lender to the Borrower that it wishes to convert all or any part of the outstanding principal balance of
and interest accrued on the Loan in the form attached as Exhibit C to this Agreement.

 

“Copyrights”
means any and all copyright rights, copyright applications, copyright registrations and like protections in each work of authorship
and derivative work thereof.

 

“Daily Balance”
means the amount of the Obligations owed at the end of a given day.

 

“Equipment”
means all present and future machinery, equipment, tenant improvements, furniture, fixtures, vehicles, tools, parts and attachments
in which Borrower has any interest.

 

“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended, and the regulations thereunder.

 

“Event of Default”
has the meaning assigned in Article 8

 

.

“GAAP”
means United States generally accepted accounting principles as in effect from time to time.

 

“Indebtedness”
means (a) all indebtedness for borrowed money or the deferred purchase price of property or services, including without limitation
reimbursement and other obligations with respect to surety bonds and letters of credit, (b) all obligations evidenced by notes,
bonds, debentures or similar instruments, (c) all capital lease obligations and (d) all Contingent Obligations.

 

“Insolvency Proceeding”
means any proceeding commenced by or against any person or entity under any provision of the United States Bankruptcy Code, as
amended, or under any other bankruptcy or insolvency law, including assignments for the benefit of creditors, formal or informal
moratoria, compositions, extension generally with its creditors, or proceedings seeking reorganization, arrangement, or other relief.

 

“Intellectual
Property Collateral” means all of Borrower’s right, title, and interest in and to the following: Copyrights, Trademarks
and Patents; all trade secrets, all design rights, claims for damages by way of past, present and future infringement of any of
the rights included above, all licenses or other rights to use any of the Copyrights, Patents or Trademarks, and all license fees
and royalties arising from such use to the extent permitted by such license or rights; all amendments, renewals and extensions
of any of the Copyrights, Trademarks or Patents; and all proceeds and products of the foregoing, including without limitation all
payments under insurance or any indemnity or warranty payable in respect of any of the foregoing.

 

“Inventory”
means all inventory in which Borrower has or acquires any interest, including work in process and finished products intended for
sale or lease or to be furnished under a contract of service, of every kind and description now or at any time hereafter owned
by or in the custody or possession, actual or constructive, of Borrower, including such inventory as is temporarily out of its
custody or possession or in transit and including any returns upon any accounts or other proceeds, including insurance proceeds,
resulting from the sale or disposition of any of the foregoing and any documents of title representing any of the above, and Borrower’s
Books relating to any of the foregoing. “Inventory” shall not include any inventory that has been consigned to the
Borrower.

 

    	3

    	 

    
 

“Investment”
means any beneficial ownership of (including stock, partnership interest or other securities) any Person, or any loan, advance
or capital contribution to any Person.

 

“IRC” means
the Internal Revenue Code of 1986, as amended, and the regulations thereunder.

 

“Lender Expenses”
means all: reasonable costs or expenses (including reasonable attorneys’ fees and expenses) incurred in connection with the
preparation, negotiation, administration, and enforcement of the Loan Documents; reasonable Collateral audit fees; and Lender’s
reasonable attorneys’ fees and expenses incurred in amending, enforcing or defending the Loan Documents (including fees and
expenses of appeal), incurred before, during and after an Insolvency Proceeding, whether or not suit is brought.

 

“Lien”
means any mortgage, lien, deed of trust, charge, pledge, security interest or other encumbrance.

 

“Loan”
means the term loan made by Lender to Borrower the current outstanding principal amount of which is Six Hundred Nineteen Thousand
One Hundred Twenty Two Dollars ($619,122), or the balance thereof from time to time outstanding.

 

“Loan Documents”
means, collectively, this Agreement, any note or notes executed by Borrower, and any other agreement entered into in connection
with this Agreement, all as amended or extended from time to time.

 

“Market Price”
shall have the meaning ascribed thereto in TSX Venture Exchange Policy 1.1 or, if the shares of the Common Stock are not listed
on the TSX Venture Exchange, the closing price of the shares of Common Stock quoted on the exchange on which such share are listed
on the day preceding the date for which the Market Price is to be determined.

 

“Material Adverse
Effect” means a material adverse effect on (i) the business operations, condition (financial or otherwise) or prospects
of Borrower and its Subsidiaries taken as a whole or (ii) the ability of Borrower to repay the Obligations or otherwise perform
its obligations under the Loan Documents or (iii) the value or priority of Lender’s security interests in the Collateral.

 

“Negotiable Collateral”
means all letters of credit of which Borrower is a beneficiary, notes, drafts, instruments, securities, documents of title, and
chattel paper, and Borrower’s Books relating to any of the foregoing.

 

“Note”
means a Promissory Note in the form of Exhibit B made payable by Borrower to the order of the Lender in the principal amount of
the Loan.

 

“Obligations”
means all debt, principal, interest, Lender Expenses and other amounts owed to Lender by Borrower pursuant to this Agreement or
any other agreement, whether absolute or contingent, due or to become due, now existing or hereafter arising, including any interest
that accrues after the commencement of an Insolvency Proceeding and including any debt, liability, or obligation owing from Borrower
to others that Lender may have obtained by assignment or otherwise.

 

“Patents”
means all patents, patent applications and like protections including without limitation improvements, divisions, continuations,
renewals, reissues, extensions and continuations-in-part of the same.

 

“Periodic Payments”
means all installments or similar recurring payments that Borrower may now or hereafter become obligated to pay to Lender pursuant
to the terms and provisions of any instrument, or agreement now or hereafter in existence between Borrower and Lender.

 

    	4

    	 

    
 

“Permitted Indebtedness”
means:

 

(a)         Indebtedness
of Borrower in favor of Lender arising under this Agreement or any other Loan Document;

 

(b)         Indebtedness
existing on the Closing Date and disclosed in the Schedule;

 

(c)         Indebtedness
secured by a lien described in clause (c) of the defined term “Permitted Liens,” provided (i) such
Indebtedness does not exceed the lesser of the cost or fair market value of the equipment financed with such Indebtedness and
(ii) such Indebtedness does not exceed $100,000 in the aggregate at any given time;

 

(d)         Subordinated
Debt; and

 

(e)         Operating
loans totaling a maximum of $2,000,000 provided by banks and secured by first charges on accounts receivable and inventory.

 

“Permitted Investment”
means:

 

(a)         Investments
existing on the Closing Date disclosed in the Schedule; and

 

(b)         (i) marketable
direct obligations issued or unconditionally guaranteed by the United States of America or any agency or any State thereof maturing
within one (1) year from the date of acquisition thereof, (ii) commercial paper maturing no more than one (1) year from the
date of creation thereof and currently having rating of at least A-2 or P-2 from either Standard & Poor’s Corporation
or Moody’s Investors Service, (iii) certificates of deposit maturing no more than one (1) year from the date of investment
therein issued by Lender and (iv) Lender’s money market accounts.

 

“Permitted Liens”
means the following:

 

(a)         Any
Liens existing on the Closing Date and disclosed in the Schedule or arising under this Agreement or the other Loan Documents;

 

(b)         Liens
for taxes, fees, assessments or other governmental charges or levies, either not delinquent or being contested in good faith by
appropriate proceedings, provided the same have no priority over any of Lender’s security interests;

 

(c)         Liens
(i) upon or in any equipment which was not financed by Lender acquired or held by Borrower or any of its Subsidiaries to secure
the purchase price of such equipment or indebtedness incurred solely for the purpose of financing the acquisition of such equipment,
or (ii) existing on such equipment at the time of its acquisition, provided that the Lien is confined solely to the property
so acquired and improvements thereon, and the proceeds of such equipment;

 

(d)         Any
Liens created after the Closing Date and consented to by the Lender in writing in the Lender’s sole discretion;

 

(e)         Liens
incurred in connection with the extension, renewal or refinancing of the indebtedness secured by Liens of the type described in
clauses (a) through (d) above, provided that any extension, renewal or replacement Lien shall be limited to the property encumbered
by the then-existing Lien and the principal amount of the indebtedness being extended, renewed or refinanced does not increase.

 

    	5

    	 

    
 

“Person”
means any individual, sole proprietorship, partnership, limited liability company, joint venture, trust, unincorporated organization,
association, corporation, institution, public benefit corporation, firm, joint stock company, estate, entity or governmental agency.

 

“Prime Rate”
means the variable rate of interest, per annum, that appears in The Wall Street Journal from time to time, whether or not
such announced rate is the lowest rate available from Lender.

 

“Responsible
Officer” means each of the President, the Chief Executive Officer, the Chief Operating Officer, the Chief Financial Officer
and the Controller of Borrower.

 

“Schedule”
means the schedule of exceptions attached hereto.

 

“Subordinated
Debt” means any debt incurred by Borrower that is subordinated to the debt owing by Borrower to Lender on terms acceptable
to Lender (and identified as being such by Borrower and Lender).

 

“Subsidiary”
means any corporation, company or partnership in which (i) any general partnership interest or (ii) more than 50% of
the stock or other units of ownership which by the terms thereof has the ordinary voting power to elect the Board of Directors,
managers or trustees of the entity, at the time as of which any determination is being made, is owned by Borrower, either directly
or through an Affiliate.

 

“TDG Disposition”
has the meaning assigned in the Recitals of this Agreement.

 

“Trademarks”
means any trademark and servicemark rights, whether registered or not, applications to register and registrations of the same and
like protections, and the entire goodwill of the business of Borrower connected with and symbolized by such trademarks.

 

1.2         Accounting
Terms. All accounting terms not specifically defined herein shall be construed in accordance with GAAP and all calculations
made hereunder shall be made in accordance with GAAP (except that interim financial statements shall not include normally recurring
year-end adjustments or the notes required by GAAP). When used herein, the terms “financial statements,” other than
when used with respect to interim financial statements, shall include the notes and schedules thereto.

 

2.         Loan
and Terms Of Payment/CONVERSION.

 

2.1         The
Loan.

 

(a)         Borrower
promises to pay to the order of Lender, in lawful money of the United States of America, the aggregate unpaid principal amount
of the Loan made available by Lender to Borrower hereunder. Borrower shall also pay interest on the unpaid principal amount of
the Loan at rates in accordance with the terms hereof.

 

(b)         Making
of the Loan.

 

(i)         Lender,
relying upon each of the representations and warranties set out in Section 5, hereby agrees with Borrower that, subject to
and upon the terms of this Agreement, it shall continue to make the Loan available to the Borrower. Borrower may prepay the Loan
without penalty or premium.

 

2.2         Interest
Rates, Payments, and Calculations.

 

(a)         Interest
Rates.  Except as set forth in Section 2.2 (b), the Loan shall bear interest, on the outstanding Daily Balance
thereof, at a rate equal to thirteen and one half of one percent (13.5%) per annum.

 

    	6

    	 

    
 

(b)         Late
Fee; Default Rate. If any payment is not made within ten (10) days after the date such payment is due, Borrower shall pay Lender
a late fee equal to the lesser of (i) five percent (5%) of the amount of such unpaid amount or (ii) the maximum amount
permitted to be charged under applicable law. All Obligations shall bear interest, from and after the occurrence and during the
continuance of an Event of Default, at a rate equal to eighteen and one half of one percent (18.5%) per annum.

 

(c)         Payments.
Interest hereunder shall be due and payable monthly with the first interest payment being due and payable on the one month anniversary
of the Closing Date. Any interest not paid when due shall be compounded by becoming a part of the Obligations, and such interest
shall thereafter accrue interest at the rate then applicable hereunder. All payments shall be free and clear of any taxes, withholdings,
duties, impositions or other charges, to the end that Lender will receive the entire amount of any Obligations payable hereunder,
regardless of source of payment.

 

(d)         Computation.
All interest chargeable under the Loan Documents shall be computed on the basis of a three hundred sixty (360) day year for the
actual number of days elapsed.

 

2.3         Repayment.
Borrower shall repay the Loan in twelve (12) equal monthly installments of Fifty One Thousand Five Hundred Ninety Three Dollars
and Fifty Cents ($51,593.50) beginning on the four (4) month anniversary of the Closing Date, as such payments may be reduced pursuant
to Section 2.4.

 

2.4         Mandatory
Prepayment. Borrower shall prepay the Loan each time it receives an earn-out payment related to the TDG Disposition in an amount
equal to forty percent of any amounts so received. Any prepayments made pursuant to this Section 2.4 shall be applied first to
accrued interest and second to principal and shall reduce the payments due pursuant to Section 2.3 in inverse order of maturity.

 

2.5         Expenses.
Borrower shall pay to Lender on the Closing Date, all Lender Expenses incurred through the Closing Date, including reasonable attorneys’
fees and expenses and, after the Closing Date, all Lender Expenses, including reasonable attorneys’ fees and expenses, as
and when they are incurred by Lender.

 

2.6         Term.
This Agreement shall become effective on the Closing Date and, subject to Section 12.8, shall continue in full force and effect
until the fifteen (15) month anniversary of the Closing Date, (or such earlier date upon which all of the Obligations shall have
been paid in full) or, if longer, for so long as any Obligations remain outstanding under this Agreement. Notwithstanding termination,
Lender’s Lien on the Collateral shall remain in effect for so long as any Obligations are outstanding.

 

2.7         Conversion
at the Option of the Lender. The Lender shall have the following conversion rights.

 

(a)         Lender's
Right to Convert. The outstanding principal balance of and interest then accrued on the Loan shall be convertible at any time,
in whole or in part, at the option of the Lender hereof, into fully paid, validly issued and nonassessable shares of Common Stock.
If the Loan is converted in part, the remaining portion of the Loan not so converted shall remain entitled to the conversion rights
provided herein. Without prior written approval of the TSX Venture Exchange and compliance with all applicable securities legislation,
the securities issued pursuant to this Section 2.6 may not be sold, transferred, hypothecated or otherwise traded on or through
the facilities of the TSX Venture Exchange or otherwise in Canada or to or for the benefit of a Canadian resident until September
15, 2013.

 

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(b)         Conversion
Price for Converted Shares. The outstanding principal balance of the Loan and accrued interest thereon shall be convertible
by the Lender into the number of shares of Common Stock which results from application of the following formula:

 

P + I

______________________________

 

$0.10

 

		P=	Outstanding
principal amount of the Loan submitted for conversion as of
the Conversion Date

		I=	accrued
but unpaid interest as of the Conversion Date

 

 

(c)         Limitation
of Right to Convert. Notwithstanding any other provisions of this Agreement, the maximum number of shares into which the Notes
and the Loan may be converted and for which the purchase rights contained in the Warrant may be exercised, in the aggregate, shall
not exceed 46,517,695.  Any attempted exercise of the conversion right contained herein which, when added to (i) the number
of shares of Common Stock for which the conversion right contained herein has been previously been exercised and (ii) the number
of shares for which the Warrant has previously been exercised shall be void to the extent that it would cause the aggregate of
such amounts to exceed 46,517,695 and shall be deemed to be valid as an exercise for that number of shares that is equal to 46,517,695
less the number of shares acquired upon (x) prior exercises of the conversion rights contained herein and (y) prior exercises of
the Warrant. All share numbers used in the calculations provided for in this Section 2.5(c) shall be adjusted as provided in Section
2.5(e).

 

(d)         Mechanics
of Conversion. In order to convert the Loan (in whole or in part) into full shares of Common Stock, the Lender (i) shall give
written notice in the form of Exhibit C hereto (the "Conversion Notice") by facsimile to the Borrower that
the Lender elects to convert the principal amount (plus accrued but unpaid interest and default payments) specified therein, which
such notice and election shall be irrevocable (other than as described below), and (ii) as soon as practicable after such notice,
shall surrender the Note, duly endorsed, by either overnight courier or 2-day courier, to the principal office of the Borrower;
provided, however, that the Borrower shall not be obligated to issue certificates evidencing the shares of the Common
Stock issuable upon such conversion unless either the Note evidencing the principal amount is delivered to the Borrower as provided
above, or the Lender notifies the Borrower that such Note(s) have been lost, stolen or destroyed and promptly executes an agreement
reasonably satisfactory to the Borrower to indemnify the Borrower from any loss incurred by it in connection with such lost, stolen
or destroyed Notes. If Lender is converting less than the maximum number of shares it may convert hereunder, the Borrower shall
reissue the Note with the appropriate remaining principal amount as soon as practicable after the Borrower shall have received
the Lender's surrendered Note.

 

The Company shall issue and deliver within
three (3) business days of the delivery to the Borrower of such Conversion Notice at the address of the Lender, or to its designee,
a certificate or certificates for the number of shares of Common Stock to which the Lender shall be entitled as aforesaid, together
with a Note or Notes for the principal amount of Notes not submitted for conversion. In the event that Lender or its designee has
not received such certificate or certificates within ten (10) calendar days of the Borrower’s receipt of the Conversion Notice,
the Lender may, in addition to any other rights or remedies it may have, revoke its Conversion Notice.

 

The conversion pursuant to this Sections
2.7 shall be deemed to have been made immediately prior to the close of business on the Conversion Date. The person or persons
entitled to receive the Common Shares issuable upon such conversion shall be treated for all purposes as the record holder of the
Note or Notes being converted at the close of business on the Conversion Date.

 

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(e)         Stock
Splits; Dividends; Adjustments; Reorganizations.

 

(i)         If
the Borrower, at any time while the Notes are outstanding, shall (i) pay a stock dividend or otherwise make a distribution or distributions
on any equity securities (including investments or securities convertible into or exchangeable for such equity securities) in shares
of Common Stock, (ii) subdivide the outstanding shares of Common Stock into a larger number of shares, (iii) combine outstanding
shares of Common Stock into a smaller number of shares, then the Conversion Price shall be multiplied by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding before such event and of which the denominator shall be the
number of shares of Common Stock outstanding after such event. Any adjustment made pursuant to this Section 2.5(e) shall become
effective immediately after the record date for the determination of Lenders entitled to receive such dividend or distribution
and shall become effective immediately after the effective date in the case of an issuance, a subdivision or a combination.

 

(ii)         If
the Borrower, at any time while the Notes are outstanding, shall distribute to all holders of shares of Common Stock evidences
of its indebtedness or assets or rights or warrants to subscribe for or purchase any security, then the Conversion Price shall
be reduced to equal the Conversion Price multiplied by a fraction (i) the numerator of which is equal to (A) the Market Price for
Shares of Common Stock on the record date for the distribution minus (B) the price allocable to one share of Common Stock of the
value (as jointly determined in good faith by the board of directors of the Borrower and the Lender) of any and all such evidences
of indebtedness, shares of capital stock, other securities or property, so distributed and (ii) the denominator of which is equal
to the Market Price for Shares of Common Stock on the record date for the distribution.

 

(iii)         In
the event that at any time or from time to time after the Closing Date, the Common Stock issuable upon the conversion of the Notes
is changed into the same or a different number of shares of any class or classes of stock, whether by merger, consolidation, recapitalization,
reclassification or otherwise (other than a subdivision or combination of shares or stock dividend or reorganization provided for
elsewhere in this Section 8), then and as a condition to each such event provision shall be made in a manner reasonably acceptable
to the Lenders of Notes so that each holder of Notes shall have the right thereafter to convert such Note into the kind of stock
receivable upon such recapitalization, reclassification or other change by Lenders of shares of Common Stock, all subject to further
adjustment as provided herein. In such event, the formula set forth herein for conversion shall be equitably adjusted to reflect
such change in number of shares or, if shares of a new class of stock are issued, to reflect the market price of the class or classes
of stock (applying the same factors used in determining the Conversion Price) issued in connection with the above described transaction.

 

Whenever any element
of the Conversion Price is adjusted pursuant to this Section 2.5(e), the Borrower shall promptly mail to each holder of the Notes,
a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such
adjustment.

 

(iv)         In
the event of any taking by the Borrower of a record date of the holders of any class of securities for the purpose of determining
the holders thereof who are entitled to receive any dividend or other distribution, any security or right convertible or exchangeable
into or entitling the holders thereof to receive additional shares of Common Stock, or any right to subscribe for, purchase or
otherwise acquire any shares of stock of any class or any other securities or property, or to receive any other right, the Borrower
shall deliver to each holder of Notes at least 20 days prior to the date specified therein, a notice specifying the date on which
any such record is to be taken for the purpose of such dividend, distribution, security or right and the amount and character of
such dividend, distribution, security or right.

 

(v)         If
the Borrower, at any time while the Notes are outstanding, shall distribute to all holders of Shares of Common Stock evidences
of its indebtedness or assets or rights or warrants to subscribe for or purchase any security, then such holders shall participate
in such distribution on a pro rata basis with the holders of shares of Common Stock entitled to receive such dividend, distribution,
issuance, subdivision or combination as if the holders held that number of shares of Common Stock that the holders would have been
entitled to receive hereunder upon conversion of the Note immediately prior to the record date fixed for determination of shareholders
entitled to receive such dividend, at the Conversion Price then in existence.

 

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(f)         Fractional
Shares No fractional shares of Common Stock or scrip representing fractional shares of Common Stock shall be issuable hereunder.
The number of shares of Common Stock that are issuable upon any conversion shall be rounded up to the nearest whole share.

 

(g)         Reservation
of Stock Issuable Upon Conversion. The Borrower covenants that it will at all times reserve and keep available out of its authorized
and unissued Common Stock solely for the purpose of issuance upon conversion of the Notes as herein provided, free from preemptive
rights or any other present or contingent purchase rights of persons other than the holders of the Notes, the maximum number of
shares of Common Stock as shall be issuable (taking into account the adjustments and restrictions of Section 2) upon the conversion
of all of the Notes pursuant hereto. The Borrower covenants that all shares of Common Stock that shall be so issuable shall upon
issue, be duly and validly authorized, issued and fully paid and nonassessable.

 

2.8         Limitations
on Lender's Right to Convert.

 

(a)         Notwithstanding
anything to the contrary contained herein, the Note may not be converted to the extent that, after giving effect to shares of Common
Stock to be issued pursuant to a Conversion Notice, the total number of shares of Common Stock deemed beneficially owned by the
Lender (other than by virtue of the ownership of Notes or ownership of other securities that have limitations on a Lender's rights
to exchange, convert or exercise similar to those limitations set forth herein), together with all shares of Common Stock deemed
beneficially owned by the Lender's "affiliates" (as defined in Rule 144 of the Securities Act of 1933, as amended) that
would be aggregated for purposes of determining whether a group (as defined for purposes of Section 13(d) of the Securities Exchange
Act of 1934, as amended), exists (an "aggregation party"), which were obtained through the conversion right contained
herein or the exercise of the Warrant, would exceed 19.9% (the "Restricted Ownership Percentage") of the total issued
and outstanding shares of the Borrower's Common Stock; provided that (w) each holder shall have the right at any time and from
time to time to reduce its ownership below the Restricted Ownership Percentage immediately upon notice to the Borrower.

 

(b)         Notwithstanding
anything to the contrary contained herein, no Notes/Warrants will be convertible into shares of Common Stock to the extent that
such conversion will result in the LC Capital Offshore Fund Ltd. (the "Offshore Feeder") owning, holding or beneficially
owning (directly or indirectly) more that 9.99% of the Common Stock (the “Ownership Limit”), and at any time,
and from time to time, if the Offshore Feeder owns, holds or beneficially owns (directly or indirectly) a percentage
less than the Ownership Limit, then such Notes/Warrant shall then be convertible into shares of Common Stock pursuant to this Section
2.6(b) to the extent that it would not result in the Offshore Feeder owning, holding or beneficially owning (directly or indirectly)
more than the Ownership Limit.

 

3.         Conditions
of Loans.

 

3.1         Conditions
Precedent to the Loan. The obligation of Lender to make the Loan is subject to the condition precedent that Lender shall have
received, in form and substance satisfactory to Lender, the following:

 

(a)         this
Agreement;

 

(b)         one
or more promissory notes which shall be in the form of Exhibit B hereto in the aggregate principal amount of the Loan;

 

    	10

    	 

    
 

(c)         a
certificate of the Secretary of Borrower with respect to incumbency and resolutions authorizing the execution and delivery of this
Agreement;

 

(d)         current
financial statements of Borrower;

 

(e)         an
audit of the Collateral, the results of which shall be satisfactory to Lender;

 

(f)         payment
of the Lender Expenses then due specified in Section 2.5

 

hereof;

(g)         intercreditor
agreement with any subordinated creditor that the Lender reasonably deems necessary; and

 

(h)         such
other documents, and completion of such other matters, as Lender may reasonably deem necessary or appropriate.

 

4.         Creation
of Security Interest.

 

4.1         Grant
of Security Interest. Borrower grants and pledges to Lender a continuing security interest in all presently existing and hereafter
acquired or arising Collateral in order to secure prompt repayment of any and all Obligations and in order to secure prompt performance
by Borrower of each of its covenants and duties under the Loan Documents. Except as set forth in the Schedule, such security interest
constitutes a valid, first priority security interest in the presently existing Collateral, and, except as set forth in the Schedule,
will constitute a valid, first priority security interest in Collateral acquired after the date hereof.

 

4.2         Subordination
of Security Interest. Lender agrees to subordinate, on terms reasonably acceptable to the Lender, the security interest granted
pursuant to Section 4.1 to any security interest in the Collateral granted by Borrower to secure loans (including lines of credit)
made to Borrower and approved by the Lender by any commercial or other bank or other financial institution to provide working capital
to the Borrower, up to $2,000,000 in principal amount of such other secured indebtedness.

 

4.3         Delivery
of Additional Documentation Required. Borrower shall from time to time execute and deliver to Lender, at the request of Lender,
all Negotiable Collateral, all financing statements and other documents that Lender may reasonably request, in form satisfactory
to Lender, to perfect and continue the perfection of Lender’s security interests in the Collateral and in order to fully
consummate all of the transactions contemplated under the Loan Documents.

 

4.4         Right
to Inspect. Lender (through any of its officers, employees, or agents) shall have the right, upon reasonable prior notice,
from time to time during Borrower’s usual business hours but no more than twice a year (unless an Event of Default has occurred
and is continuing), to inspect Borrower’s Books and to make copies thereof and to check, test, and appraise the Collateral
in order to verify Borrower’s financial condition or the amount, condition of, or any other matter relating to, the Collateral.

 

5.         Representations
and Warranties.

 

Borrower represents
and warrants as follows:

 

5.1         Due
Organization and Qualification. Borrower and each Subsidiary is a corporation duly existing under the laws of the jurisdiction
of its organization and qualified and licensed to do business in any jurisdiction in which the conduct of its business or its ownership
of property requires that it be so qualified.

 

5.2         Due
Authorization; No Conflict. The execution, delivery, and performance of the Loan Documents are within Borrower’s powers,
have been duly authorized, and are not in conflict with nor constitute a breach of any provision contained in Borrower’s
Articles of Incorporation or Bylaws, nor will they constitute an event of default under any material agreement to which Borrower
is a party or by which Borrower is bound. Borrower is not in default under any material agreement to which it is a party or by
which it is bound.

 

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5.3         No
Prior Encumbrances. Borrower has good and marketable title to its property, free and clear of Liens, except for Permitted Liens.

 

5.4         Merchantable
Inventory. All Inventory is in all material respects of good and marketable quality, free from all material defects, except
for Inventory for which adequate reserves have been made.

 

5.5         Intellectual
Property Collateral. Except as shown on the Schedule, Borrower is the sole owner of the Intellectual Property Collateral, except
for non-exclusive licenses granted by Borrower to its customers in the ordinary course of business. Each of the Patents is valid
and enforceable, and no part of the Intellectual Property Collateral has been judged invalid or unenforceable, in whole or in part,
and no claim has been made that any part of the Intellectual Property Collateral violates the rights of any third party. Except
as set forth in the Schedule, Borrower’s rights as a licensee of intellectual property do not give rise to more than five
percent (5%) of its gross revenue in any given month, including without limitation revenue derived from the sale, licensing, rendering
or disposition of any product or service. Except as set forth in the Schedule, Borrower is not a party to, or bound by, any agreement
that restricts the grant by Borrower of a security interest in Borrower’s rights under such agreement.

 

5.6         Name;
Location of Chief Executive Office. Except as disclosed in the Schedule, Borrower has not done business under any name other
than that specified on the signature page hereof. The chief executive office of Borrower is located at the address indicated in
Section 10

 

hereof. All Borrower’s Inventory and Equipment is located only at the location set forth in Section
10 hereof and on the Schedule.

5.7         Litigation.
Except as set forth in the Schedule, there are no actions or proceedings pending by or against Borrower or any Subsidiary before
any court or administrative agency.

 

5.8         No
Material Adverse Change in Financial Statements. All consolidated and consolidating financial statements related to Borrower
and any Subsidiary that Lender has received from Borrower fairly present in all material respects Borrower’s financial condition
as of the date thereof and Borrower’s consolidated and consolidating results of operations for the period then ended. Other
than as previously disclosed to Lender and as disclosed in the Schedule of Exceptions, there has not been a material adverse change
in the consolidated or the consolidating financial condition of Borrower since the date of the most recent of such financial statements
submitted to Lender.

 

5.9         Solvency,
Payment of Debts. After the closing of the transactions contemplated by this Agreement and the advancing of the amount of the
Loan by Lender to Borrower pursuant hereto, Borrower will be solvent and able to pay its debts (including trade debts) as they
mature.

 

5.10         Regulatory
Compliance. Borrower and each Subsidiary have met the minimum funding requirements of ERISA with respect to any employee benefit
plans subject to ERISA, and no event has occurred resulting from Borrower’s failure to comply with ERISA that could result
in Borrower’s incurring any material liability. Borrower is not an “investment company” or a company “controlled”
by an “investment company” within the meaning of the Investment Company Act of 1940. Borrower is not engaged principally,
or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying margin stock
(within the meaning of Regulations T and U of the Board of Governors of the Federal Reserve System). Borrower and each Subsidiary
have complied with all the provisions of the Federal Fair Labor Standards Act. Borrower and each Subsidiary have not violated any
material statutes, laws, ordinances or rules applicable to it.

 

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5.11         Environmental
Condition. Except as disclosed in the Schedule, none of Borrower’s or any Subsidiary’s properties or assets has
ever been used by Borrower or any Subsidiary or, to the best of Borrower’s knowledge, by previous owners or operators, in
the disposal of, or to produce, store, handle, treat, release, or transport, any hazardous waste or hazardous substance other than
in accordance with applicable law; to the best of Borrower’s knowledge, none of Borrower’s properties or assets has
ever been designated or identified in any manner pursuant to any environmental protection statute as a hazardous waste or hazardous
substance disposal site, or a candidate for closure pursuant to any environmental protection statute; no lien arising under any
environmental protection statute has attached to any revenues or to any real or personal property owned by Borrower or any Subsidiary;
and neither Borrower nor any Subsidiary has received a summons, citation, notice, or directive from the Environmental Protection
Agency or any other federal, state or other governmental agency concerning any action or omission by Borrower or any Subsidiary
resulting in the releasing, or otherwise disposing of hazardous waste or hazardous substances into the environment.

 

5.12         Taxes.
Borrower and each Subsidiary have filed or caused to be filed all tax returns required to be filed, and have paid, or have made
adequate provision for the payment of, all taxes reflected therein.

 

5.13         Subsidiaries.
Borrower does not own any stock, partnership interest or other equity securities of any Person, except for Permitted Investments.

 

5.14         Government
Consents. Borrower and each Subsidiary have obtained all material consents, approvals and authorizations of, made all declarations
or filings with, and given all notices to, all governmental authorities that are necessary for the continued operation of Borrower’s
business as currently conducted.

 

5.15         Full
Disclosure. No representation, warranty or other statement made by Borrower in any certificate or written statement furnished
to Lender contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements
contained in such certificates or statements not misleading.

 

6.         Affirmative
Covenants.

 

Borrower shall do all
of the following:

 

6.1         Good
Standing. Borrower shall maintain its and each of its Subsidiaries’ corporate existence and good standing in its jurisdiction
of incorporation and maintain qualification in each jurisdiction in which it is required under applicable law. Borrower shall maintain,
and shall cause each of its Subsidiaries to maintain, in force all licenses, approvals and agreements, the loss of which could
have a Material Adverse Effect.

 

6.2         Government
Compliance. Borrower shall meet, and shall cause each Subsidiary to meet, the minimum funding requirements of ERISA with respect
to any employee benefit plans subject to ERISA. Borrower shall comply, and shall cause each Subsidiary to comply, with all statutes,
laws, ordinances and government rules and regulations to which it is subject, noncompliance with which could have a Material Adverse
Effect.

 

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6.3         Financial
Statements, Reports, Certificates. Borrower shall deliver the following to Lender: (a) as soon as available, but in any event
within twenty five (25) days after the last day of each month, a Compliance Certificate signed by a Responsible Officer in substantially
the form of Exhibit D hereto including a comparison of the actual consolidated cash balance at the end of the previous month
to the minimum required cash balance; (b) as soon as available, but in any event within forty five (45) days after the end of each
fiscal quarter, a consolidated balance sheet, income, and cash flow statements covering Borrower’s consolidated operations
during such period, prepared in accordance with GAAP, consistently applied, and prepared or reviewed by an independent certified
public accounting firm reasonably acceptable to Lender, in a form acceptable to Lender, along with a Compliance Certificate signed
by a Responsible Officer in substantially the form of Exhibit D hereto; (e) as soon as available, but in any event
within one hundred twenty (120) days after the end of Borrower’s fiscal year, audited consolidated financial statements of
Borrower prepared in accordance with GAAP, consistently applied, together with an unqualified opinion on such financial statements
of an independent certified public accounting firm reasonably acceptable to Lender; (d) copies of all statements, reports and notices
sent or made available generally by Borrower to its security holders or to any holders of Subordinated Debt and, if applicable,
all reports on Forms 10-K, 10-Q and 8-K filed with the Securities and Exchange Commission; (e) promptly upon receipt
of notice thereof, a report of any legal actions pending or threatened against Borrower or any Subsidiary that could result in
damages or costs to Borrower or any Subsidiary of Fifty Thousand Dollars ($50,000) or more; (f) a 13-week cash flow forecast
within 30 days of the beginning of each fiscal quarter (the “Cash Flow Forecast”) and monthly updates thereto; and
(g) such budgets, sales projections, operating plans, other financial information including information related to the verification
of Borrower’s Accounts as Lender may reasonably request from time to time; provided, however, that Borrower shall not be
required to provide the financial statements referred to in the preceding subsections (b) and (c) for any period with respect to
which it has timely filed its reports on Form 10-Q or 10-K, as applicable, and provided copies of such reports in accordance with
the preceding subsection (d).

 

6.4         Audits.
Lender shall have a right from time to time hereafter to audit Borrower’s Accounts and appraise Collateral at Borrower’s
expense, provided that such audits will be conducted no more often than every six (6) months unless an Event of Default has occurred
and is continuing. Unless Event of Default has occurred and is continuing, such audits shall be conducted upon reasonable advance
notice to Borrower, during Borrower’s normal business hours and without unnecessary disruption to the conduct of Borrower’s
business in the ordinary course.

 

6.5         Inventory;
Returns. Borrower shall keep all Inventory in good and marketable condition, free from all material defects except for Inventory
for which adequate reserves have been made. Returns and allowances, if any, as between Borrower and its account debtors shall be
on the same basis and in accordance with the usual customary practices of Borrower, as they exist at the time of the execution
and delivery of this Agreement. Borrower shall promptly notify Lender of all returns and recoveries and of all disputes and claims,
where the return, recovery, dispute or claim involves more than Fifty Thousand Dollars ($50,000).

 

6.6         Taxes.
Borrower shall make, and shall cause each Subsidiary to make, due and timely payment or deposit of all material federal, state,
and local taxes, assessments, or contributions required of it by law, and will execute and deliver to Lender, on demand, appropriate
certificates attesting to the payment or deposit thereof; and Borrower will make, and will cause each Subsidiary to make, timely
payment or deposit of all material tax payments and withholding taxes required of it by applicable laws, including, but not limited
to, those laws concerning F.I.C.A., F.U.T.A., state disability, and local, state, and federal income taxes, and will, upon request,
furnish Lender with proof satisfactory to Lender indicating that Borrower or a Subsidiary has made such payments or deposits; provided
that Borrower or a Subsidiary need not make any payment if the amount or validity of such payment is contested in good faith by
appropriate proceedings and is reserved against (to the extent required by GAAP) by Borrower.

 

6.7         Insurance.

 

(a)         Borrower,
at its expense, shall keep the Collateral insured against loss or damage by fire, theft, explosion, sprinklers, and all other hazards
and risks, and in such amounts, as ordinarily insured against by other owners in similar businesses conducted in the locations
where Borrower’s business is conducted on the date hereof. Borrower shall also maintain insurance relating to Borrower’s
business, ownership and use of the Collateral in amounts and of a type that are customary to businesses similar to Borrower’s.

 

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(b)         All
such policies of insurance shall be in such form, with such companies, and in such amounts as are reasonably satisfactory to Lender.
All such policies of property insurance shall contain a lender’s loss payable endorsement, in a form satisfactory to Lender,
showing Lender as an additional loss payee thereof, and all liability insurance policies shall show the Lender as an additional
insured and shall specify that the insurer must give at least twenty (20) days notice to Lender before canceling its policy for
any reason. Upon Lender’s request, Borrower shall deliver to Lender certified copies of such policies of insurance and evidence
of the payments of all premiums therefor. All proceeds payable under any such policy shall, at the option of Lender, be payable
to Lender, as its interest may appear, to be applied on account of the Obligations.

 

6.8         Minimum
Cash. Borrower shall maintain at all times a balance of unrestricted cash and cash equivalents (not including any cash held
in any collateral account), together with undrawn availability under its working capital line, of at least 40% of the sum of (i)
the outstanding principal amount the Loan and (ii) accrued interest, measured on a monthly basis on the last day of each month.

 

6.9         Intentionally
Omitted.

 

6.10         Intellectual
Property Rights.

 

(a)         Borrower
shall promptly give Lender written notice of any applications or registrations of intellectual property rights filed with the United
States Patent and Trademark Office, including the date of such filing and the registration or application numbers, if any. Borrower
shall (i) give Lender not less than 30 days prior written notice of the filing of any applications or registrations with the United
States Copyright Office, including the title of such intellectual property rights to be registered, as such title will appear on
such applications or registrations, and the date such applications or registrations will be filed, and (ii) prior to the filing
of any such applications or registrations, shall execute such documents as Lender may reasonably request for Lender to maintain
its perfection in such intellectual property rights to be registered by Borrower, and upon the request of Lender, shall file such
documents simultaneously with the filing of any such applications or registrations. Upon filing any such applications or registrations
with the United States Copyright Office, Borrower shall promptly provide Lender with (i) a copy of such applications or registrations,
without the exhibits, if any, thereto, (ii) evidence of the filing of any documents requested by Lender to be filed for Lender
to maintain the perfection and priority of its security interest in such intellectual property rights, and (iii) the date of such
filing.

 

(b)         Lender
may audit Borrower’s Intellectual Property Collateral to confirm compliance with this Section, provided such audit may not
occur more often than twice per year, unless an Event of Default has occurred and is continuing. Lender shall have the right, but
not the obligation, to take, at Borrower’s sole expense, any actions that Borrower is required under this Section to take
but which Borrower fails to take, after 15 days’ notice to Borrower. Borrower shall reimburse and indemnify Lender for all
reasonable costs and reasonable expenses incurred in the reasonable exercise of its rights under this Section.

 

6.11         Director.
Lender may, but shall not be obligated to, nominate one member to the Borrower’s Board of Directors. Such nominees shall
be subject to the consent of the Borrower’s Board of Directors (not to be unreasonably withheld) and the TSX Venture Exchange.

 

6.12         Further
Assurances. At any time and from time to time Borrower shall execute and deliver such further instruments and take such further
action as may reasonably be requested by Lender to effect the purposes of this Agreement.

 

    	15

    	 

    
 

7.         Negative
Covenants.

 

Borrower will not do
any of the following:

 

7.1         Dispositions.
Convey, sell, lease, transfer or otherwise dispose of (collectively, a “Transfer”), or permit any of its Subsidiaries
to Transfer, all or any part of its business or property, other than: (i) Transfers of Inventory in the ordinary course of
business; (ii) Transfers of non-exclusive licenses and similar arrangements for the use of the property of Borrower or its
Subsidiaries in the ordinary course of business; or (iii) Transfers of worn-out or obsolete Equipment which was not financed
by Lender.

 

7.2         Change
in Business; Change in Control or Executive Office. Engage in any business, or permit any of its Subsidiaries to engage in
any business, other than the businesses currently engaged in by Borrower and any business substantially similar or related thereto
(or incidental thereto); experience a change in a Responsible Officer (other than by reason of the death or disability of such
Responsible Officer), cease to conduct business substantially in the manner conducted by Borrower as of the Closing Date; suffer
or permit a Change in Control; without thirty (30) days prior written notification to Lender, relocate its chief executive office
or state of incorporation; change its legal name; or without Lender’s prior written consent, change the date on which its
fiscal year ends.

 

7.3         Mergers
or Acquisitions. Merge or consolidate, or permit any of its Subsidiaries to merge or consolidate, with or into any other business
organization, or acquire, or permit any of its Subsidiaries to acquire, all or substantially all of the capital stock or property
of another Person.

 

7.4         Indebtedness.
Create, incur, guarantee, assume or be or remain liable with respect to any Indebtedness, or permit any Subsidiary to do so, other
than Permitted Indebtedness.

 

7.5         Encumbrances.
Create, incur, assume or suffer to exist any Lien with respect to any of its property, or assign or otherwise convey any right
to receive income, including the sale of any Accounts, or permit any of its Subsidiaries to do so, except for Permitted Liens,
or enter into any agreement with any Person other than Lender not to grant a security interest in, or otherwise encumber, any of
its property, or permit any Subsidiary to do so; provided that Borrower may grant purchase money security interests on equipment
purchased or lased in the ordinary course of its business.

 

7.6         Distributions.
Pay any dividends or make any other distribution or payment on account of or in redemption, retirement or purchase of any capital
stock, or permit any of its Subsidiaries to do so, except that Borrower may repurchase the stock of former employees pursuant to
stock repurchase agreements as long as an Event of Default does not exist prior to such repurchase or would not exist after giving
effect to such repurchase, and the aggregate amount of such repurchase does not exceed $100,000 in any fiscal year.

 

7.7         Investments.
Directly or indirectly acquire or own, or make any Investment in or to any Person, or permit any of its Subsidiaries so to do,
other than Permitted Investments; or maintain or invest any of its property with a Person other than Lender or permit any of its
Subsidiaries to do so unless such Person has entered into an account control agreement with Lender in form and substance satisfactory
to Lender; or suffer or permit any Subsidiary to be a party to, or be bound by, an agreement that restricts such Subsidiary from
paying dividends or otherwise distributing property to Borrower.

 

7.8         Transactions
with Affiliates. Except as shown on the Schedule, directly or indirectly enter into or permit to exist any material transaction
with any Affiliate of Borrower except for transactions that are in the ordinary course of Borrower’s business, upon fair
and reasonable terms that are no less favorable to Borrower than would be obtained in an arm’s length transaction with a
non-affiliated Person.

 

7.9         Subordinated
Debt. Make any payment in respect of any Subordinated Debt, or permit any of its Subsidiaries to make any such payment, except
in compliance with the terms of such Subordinated Debt, or amend any provision contained in any documentation relating to the Subordinated
Debt without Lender’s prior written consent.

 

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7.10         Inventory
and Equipment. Store the Inventory or the Equipment with a bailee, warehouseman, or other third party unless the third party
has been notified of Lender’s security interest and Lender (a) has received an acknowledgment from the third party that it
is holding or will hold the Inventory or Equipment for Lender’s benefit or (b) is in pledge possession of the warehouse receipt,
where negotiable, covering such Inventory or Equipment. Store or maintain any Equipment or Inventory at a location other than the
location set forth in Section 10 of this Agreement or in the Schedule.

 

7.11         Compliance.
Become an “investment company” or be controlled by an “investment company,” within the meaning of the Investment
Company Act of 1940, or become principally engaged in, or undertake as one of its important activities, the business of extending
credit for the purpose of purchasing or carrying margin stock, or use the proceeds of any Credit Extension for such purpose. Fail
to meet the minimum funding requirements of ERISA, permit a Reportable Event or Prohibited Transaction, as defined in ERISA, to
occur, fail to comply with the Federal Fair Labor Standards Act or violate any law or regulation, which violation could have a
Material Adverse Effect, or a material adverse effect on the Collateral or the priority of Lender’s Lien on the Collateral,
or permit any of its Subsidiaries to do any of the foregoing.

 

8.         Events
of Default.

 

Any one or more of
the following events shall constitute an Event of Default by Borrower under this Agreement:

 

8.1         Payment
Default. If Borrower fails to pay, when due, any of the Obligations;

 

8.2         Covenant
Default.

 

(a)         If
Borrower fails to perform any obligation under Article 6 (other than the covenant contained in Section 6.13) or violates any of
the covenants contained in Article 7 of this Agreement; or

 

(b)         If
Borrower fails or neglects to perform or observe any other material term, provision, condition, covenant contained in this Agreement,
in any of the Loan Documents, or in any other present or future agreement between Borrower and Lender and as to any default under
such other term, provision, condition or covenant that can be cured, has failed to cure such default within ten days after Borrower
receives notice thereof or any officer of Borrower becomes aware thereof; provided, however, that if the default cannot by its
nature be cured within the ten day period or cannot after diligent attempts by Borrower be cured within such ten day period, and
such default is likely to be cured within a reasonable time, then Borrower shall have an additional reasonable period (which shall
not in any case exceed 30 days) to attempt to cure such default, and within such reasonable time period the failure to have cured
such default shall not be deemed an Event of Default.

 

8.3         Material
Adverse Effect. If there occurs any circumstance or circumstances that could have a Material Adverse Effect;

 

8.4         Attachment.
If any portion of Borrower’s assets is attached, seized, subjected to a writ or distress warrant, or is levied upon, or comes
into the possession of any trustee, receiver or person acting in a similar capacity and such attachment, seizure, writ or distress
warrant or levy has not been removed, discharged or rescinded within thirty (30) days, or if Borrower is enjoined, restrained,
or in any way prevented by court order from continuing to conduct all or any part of its business affairs, or if a judgment or
other claim becomes a lien or encumbrance upon any portion of Borrower’s assets, or if a notice of lien, levy, or assessment
is filed of record with respect to any of Borrower’s assets by the United States Government, or any department, agency, or
instrumentality thereof, or by any state, county, municipal, or governmental agency, and the same is not paid within thirty (30)
days after Borrower receives notice thereof, provided that none of the foregoing shall constitute an Event of Default where such
action or event is stayed or an adequate bond has been posted pending a good faith contest by Borrower (provided that no Credit
Extensions will be required to be made during such cure period);

 

    	17

    	 

    
 

8.5         Insolvency.
If Borrower becomes insolvent, or if an Insolvency Proceeding is commenced by Borrower, or if an Insolvency Proceeding is commenced
against Borrower and is not dismissed or stayed within thirty (30) days;

 

8.6         Other
Agreements. If there is a default or other failure to perform in any agreement to which Borrower is a party or by which it
is bound resulting in a right by a third party or parties, whether or not exercised, to accelerate the maturity of any Indebtedness
in an amount in excess of Fifty Thousand Dollars ($50,000) or which could have a Material Adverse Effect;

 

8.7         Subordinated
Debt. If Borrower makes any payment on account of Subordinated Debt, except to the extent the payment is allowed under any
subordination agreement entered into with Lender;

 

8.8         Judgments.
If a judgment or judgments for the payment of money in an amount, individually or in the aggregate, of at least Fifty Thousand
Dollars ($50,000) shall be rendered against Borrower and shall remain unsatisfied and unstayed for a period of thirty (30) days;
or

 

8.9         Misrepresentations.
If any material misrepresentation or material misstatement exists now or hereafter in any warranty or representation set forth
herein or in any certificate delivered to Lender by any Responsible Officer pursuant to this Agreement or to induce Lender to enter
into this Agreement or any other Loan Document.

 

9.         Lender’s
Rights and Remedies.

 

9.1         Rights
and Remedies. Upon the occurrence and during the continuance of an Event of Default, Lender may, at its election, without notice
of its election and without demand, do any one or more of the following, all of which are authorized by Borrower:

 

(a)         Declare
all Obligations, whether evidenced by this Agreement, by any of the other Loan Documents, or otherwise, immediately due and payable
(provided that upon the occurrence of an Event of Default described in Section 8.5

 

, all Obligations shall become immediately due and payable without any action by Lender);

(b)         Cease
advancing money or extending credit to or for the benefit of Borrower under this Agreement or under any other agreement between
Borrower and Lender;

 

(c)         Settle
or adjust disputes and claims directly with account debtors for amounts, upon terms and in whatever order that Lender reasonably
considers advisable;

 

(d)         Make
such payments and do such acts as Lender considers necessary or reasonable to protect its security interest in the Collateral.
Borrower agrees to assemble the Collateral if Lender so requires, and to make the Collateral available to Lender as Lender may
designate. Borrower authorizes Lender to enter the premises where the Collateral is located, to take and maintain possession of
the Collateral, or any part of it, and to pay, purchase, contest, or compromise any encumbrance, charge, or lien which in Lender’s
determination appears to be prior or superior to its security interest and to pay all expenses incurred in connection therewith.
With respect to any of Borrower’s owned premises, Borrower hereby grants Lender a license to enter into possession of such
premises and to occupy the same, without charge, in order to exercise any of Lender’s rights or remedies provided herein,
at law, in equity, or otherwise;

 

(e)         Set
off and apply to the Obligations any and all (i) balances and deposits of Borrower held by Lender, or (ii) indebtedness
at any time owing to or for the credit or the account of Borrower held by Lender;

 

    	18

    	 

    
 

(f)         Ship,
reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for sale, and sell (in the manner provided for herein)
the Collateral. Lender is hereby granted a license or other right, solely pursuant to the provisions of this Section 9.1

 

, to use, without charge, Borrower’s labels, patents, copyrights, rights of use of any name, trade
secrets, trade names, trademarks, service marks, and advertising matter, or any property of a similar nature, as it pertains to
the Collateral, in completing production of, advertising for sale, and selling any Collateral and, in connection with Lender’s
exercise of its rights under this Section 9.1

, Borrower’s rights under all licenses and all franchise agreements shall inure to Lender’s
benefit;

(g)         Dispose
of the Collateral by way of one or more contracts or transactions, for cash or on terms, in such manner and at such places (including
Borrower’s premises) as Lender determines is commercially reasonable, and apply any proceeds to the Obligations in whatever
manner or order Lender deems appropriate;

 

(h)         Lender
may credit bid and purchase at any public sale; and

 

(i)         Any
deficiency that exists after disposition of the Collateral as provided above will be paid immediately by Borrower and any surplus
will be paid immediately to Borrower.

 

9.2         Power
of Attorney. Effective only upon the occurrence and during the continuance of an Event of Default, Borrower hereby irrevocably
appoints Lender (and any of Lender’s designated officers, or employees) as Borrower’s true and lawful attorney to:
(a) send requests for verification of Accounts or notify account debtors of Lender’s security interest in the Accounts; (b)
receive and open all mail addressed to Borrower for the purpose of collecting the Accounts; (c) notify all account debtors with
respect to the Accounts to pay Lender directly; (d) endorse Borrower’s name on any checks or other forms of payment or security
that may come into Lender’s possession; (e) sign Borrower’s name on any invoice or bill of lading relating to any Account,
drafts against account debtors, schedules and assignments of Accounts, verifications of Accounts, and notices to account debtors;
(f) make, settle, and adjust all claims under and decisions with respect to Borrower’s policies of insurance; (g) demand,
collect, receive, sue, and give releases to any account debtor for the monies due or which may become due upon or with respect
to the Accounts and to compromise, prosecute, or defend any action, claim, case or proceeding relating to the Accounts; (h) settle
and adjust disputes and claims respecting the accounts directly with account debtors, for amounts and upon terms which Lender determines
to be reasonable; (i) sell, assign, transfer, pledge, compromise, discharge or otherwise dispose of any Collateral; (j) execute
on behalf of Borrower any and all instruments, documents, financing statements and the like to perfect Lender’s interests
in the Accounts and Collections and file, in its sole discretion, one or more financing or continuation statements and amendments
thereto, relative to any of the Collateral; and (k) do all acts and things necessary or expedient, in furtherance of any such purposes.
The appointment of Lender as Borrower’s attorney in fact, and each and every one of Lender’s rights and powers, being
coupled with an interest, is irrevocable until all of the Obligations have been fully repaid and performed.

 

9.3         Accounts
Collection. In addition to the foregoing, at any time after the occurrence of an Event of Default, Lender may notify any Person
owing funds to Borrower of Lender’s security interest in such funds and verify the amount of such Account. Borrower shall
collect all amounts owing to Borrower for Lender, receive in trust all payments as Lender’s trustee, and immediately deliver
such payments to Lender in their original form as received from the account debtor, with proper endorsements for deposit.

 

9.4         Lender
Expenses. If Borrower fails to pay any amounts or furnish any required proof of payment due to third persons or
entities, as required under the terms of this Agreement, then Lender may do any or all of the following after reasonable
notice to Borrower: (a) make payment of the same or any part thereof; (b) set up such reserves under a loan
facility in Section 2.1 as Lender deems necessary to protect Lender from the exposure created by such failure; or
(c) obtain and maintain insurance policies of the type discussed in Section 6.7 of this Agreement, and take any
action with respect to such policies as Lender deems prudent. Any amounts so paid or deposited by Lender shall constitute
Lender Expenses, shall be immediately due and payable, and shall bear interest at the then applicable rate hereinabove
provided, and shall be secured by the Collateral. Any payments made by Lender shall not constitute an agreement by Lender to
make similar payments in the future or a waiver by Lender of any Event of Default under this Agreement.

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9.5         Lender’s
Liability for Collateral. So long as Lender complies with reasonable practices, Lender shall not in any way or manner be liable
or responsible for: (a) the safekeeping of the Collateral; (b) any loss or damage thereto occurring or arising in any
manner or fashion from any cause; (c) any diminution in the value thereof; or (d) any act or default of any carrier,
warehouseman, bailee, forwarding agency, or other person whomsoever. All risk of loss, damage or destruction of the Collateral
shall be borne by Borrower.

 

9.6         Remedies
Cumulative. Lender’s rights and remedies under this Agreement, the Loan Documents, and all other agreements shall be
cumulative. Lender shall have all other rights and remedies not inconsistent herewith as provided under the Code, by law, or in
equity. No exercise by Lender of one right or remedy shall be deemed an election, and no waiver by Lender of any Event of Default
on Borrower’s part shall be deemed a continuing waiver. No delay by Lender shall constitute a waiver, election, or acquiescence
by it. No waiver by Lender shall be effective unless made in a written document signed on behalf of Lender and then shall be effective
only in the specific instance and for the specific purpose for which it was given.

 

9.7         Demand;
Protest. Borrower waives demand, protest, notice of protest, notice of default or dishonor, notice of payment and nonpayment,
notice of any default, nonpayment at maturity, release, compromise, settlement, extension, or renewal of accounts, documents, instruments,
chattel paper, and guarantees at any time held by Lender on which Borrower may in any way be liable.

 

10.         Notices.

 

Unless otherwise provided
in this Agreement, all notices or demands by any party relating to this Agreement or any other agreement entered into in connection
herewith shall be in writing and (except for financial statements and other informational documents which may be sent by first-class
mail, postage prepaid) shall be personally delivered or sent by a recognized overnight delivery service, certified mail, postage
prepaid, return receipt requested, or by telefacsimile to Borrower or to Lender, as the case may be, at its addresses set forth
below:

 

		If to Borrower:	Vuzix
Corporation

75 Town Centre Drive

Rochester, NY 14623

Attn: Grant Russell, EVP and CFO

FAX: (585) 359-4172

 

If to Lender:         LC
Capital Master Fund Ltd

680 Fifth Avenue 12th Fl

New York, NY 10019

Attn: Michael Venezia

P: 212 581-8989

F: 212 581-8999

 

The parties hereto
may change the address at which they are to receive notices hereunder, by notice in writing in the foregoing manner given to the
other.

 

    	20

    	 

    
 

11.         CHOICE
OF LAW AND VENUE; JURY TRIAL WAIVER.

 

This Agreement shall
be governed by, and construed in accordance with, the internal laws of the State of New York, without regard to principles of conflicts
of law. Each of Borrower and Lender hereby submits to the exclusive jurisdiction of the state and Federal courts located in the
County of New York, State of New York. BORROWER AND LENDER EACH HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM
OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. EACH PARTY RECOGNIZES AND AGREES
THAT THE FOREGOING WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR IT TO ENTER INTO THIS AGREEMENT. EACH PARTY REPRESENTS AND WARRANTS
THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL.

 

12.         General
Provisions.

 

12.1         Successors
and Assigns. This Agreement shall bind and inure to the benefit of the respective successors and permitted assigns of each
of the parties; provided, however, that neither this Agreement nor any rights hereunder may be assigned by Borrower without Lender’s
prior written consent, which consent may be granted or withheld in Lender’s sole discretion. Lender shall have the right
without the consent of or notice to Borrower to sell, transfer, negotiate, or grant participation in all or any part of, or any
interest in, Lender’s obligations, rights and benefits hereunder, such assignment to be made pursuant to an assignment and
assumption agreement substantially in the form of Exhibit E hereto.

 

12.2         Indemnification.
Borrower shall defend, indemnify and hold harmless Lender and its officers, employees, and agents against: (a) all obligations,
demands, claims, and liabilities claimed or asserted by any other party in connection with the transactions contemplated by this
Agreement; and (b) all losses or Lender Expenses in any way suffered, incurred, or paid by Lender as a result of or in any
way arising out of, following, or consequential to transactions between Lender and Borrower whether under this Agreement, or otherwise
(including without limitation reasonable attorneys’ fees and expenses), except for losses caused by Lender’s gross
negligence or willful misconduct.

 

12.3         Time
of Essence. Time is of the essence for the performance of all obligations set forth in this Agreement.

 

12.4         Severability
of Provisions. Each provision of this Agreement shall be severable from every other provision of this Agreement for the purpose
of determining the legal enforceability of any specific provision.

 

12.5         Correction
of Loan Documents. Lender may correct patent errors and fill in any blanks in this Agreement and the other Loan Documents consistent
with the agreement of the parties.

 

12.6         Amendments
in Writing, Integration. Neither this Agreement nor the Loan Documents can be amended or terminated orally. All prior agreements,
understandings, representations, warranties, and negotiations between the parties hereto with respect to the subject matter of
this Agreement and the Loan Documents, if any, are merged into this Agreement and the Loan Documents. This Agreement supersedes
in its entirety the Second Loan Agreement, which is hereby terminated.

 

12.7         Counterparts.
This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which,
when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one
and the same Agreement. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf”
format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature
is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.
Notwithstanding the foregoing, Borrower shall deliver all original signed documents requested by Lender no later than ten (10)
Business Days following the Closing Date.

 

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12.8         Survival.
All covenants, representations and warranties made in this Agreement shall continue in full force and effect so long as any Obligations
remain outstanding or Lender has any obligation to make Credit Extensions to Borrower. The obligations of Borrower to indemnify
Lender with respect to the expenses, damages, losses, costs and liabilities described in Section 12.2 shall survive until
all applicable statute of limitations periods with respect to actions that may be brought against Lender have run.

 

12.9         Confidentiality.
In handling any confidential information Lender and all employees and agents of Lender, including but not limited to accountants,
shall exercise the same degree of care that it exercises with respect to its own proprietary information of the same types to maintain
the confidentiality of any non-public information thereby received or received pursuant to this Agreement except that disclosure
of such information may be made (i) to the subsidiaries or affiliates of Lender in connection with their present or prospective
business relations with Borrower, (ii) to prospective transferees or purchasers of any interest in the Loans, provided that
they have entered into a comparable confidentiality agreement in favor of Borrower and have delivered a copy to Borrower, (iii) as
required by law, regulations, rule or order, subpoena, judicial order or similar order, (iv) as may be required in connection
with the examination, audit or similar investigation of Lender and (v) as Lender may determine in connection with the enforcement
of any remedies hereunder. Confidential information hereunder shall not include information that either: (a) is in the public
domain or in the knowledge or possession of Lender when disclosed to Lender, or becomes part of the public domain after disclosure
to Lender through no fault of Lender; or (b) is disclosed to Lender by a third party, provided Lender does not have actual
knowledge that such third party is prohibited from disclosing such information.

 

12.10         Patriot
Act Notice. Lender hereby notifies Borrower that, pursuant to the requirements of the USA Patriot Act, Title III of Pub. L.
107-56 (signed into law on October 26, 2001) (the “ Patriot Act “), it is required to obtain, verify and record information
that identifies the Borrower, which information includes names and addresses and other information that will allow Lender, as applicable,
to identify the Borrower in accordance with the Patriot Act.

 

    	22

    	 

    
 

IN WITNESS WHEREOF,
the parties hereto have caused this Agreement to be executed as of the date first above written.

 

	 	VUZIX Corporation
	 	 	 
	 	By: 	/s/ Paul Travers
	 	Title: 	President
	 	 	 
	 	LC CAPITAL MASTER FUND LTD
	 	 	 
	 	By: 	/s/ Richard F. Conway
	 	Title: 	Director
	 	 	 
	 	 	 

 

    	23

    	 

    
 

	DEBTOR:	VUZIX CORPORATION
	 	 
	SECURED PARTY:	LC CAPITAL MASTER FUND LTD

 

Exhibit
A

COLLATERAL DESCRIPTION ATTACHMENT

TO LOAN AND SECURITY AGREEMENT

 

All personal property
of Borrower (herein referred to as “Borrower” or “Debtor” or “Grantor”) whether presently existing
or hereafter created or acquired, and wherever located, including, but not limited to:

 

		(a)	all accounts (as defined in the UCC) and payment intangibles, including, without limitation, all contract rights, and all other
forms of monetary obligations owing to the Grantor, and all credit insurance, guaranties, or security therefor, whether or not
they have been earned by performance;

 

		(b)	all chattel paper (as defined in the UCC), including, without limitation, electronic chattel paper and tangible chattel paper
evidencing both a monetary obligation and a security interest in or lease of goods, together with any guarantees, letters of credit,
and other security therefore;

 

		(c)	all commercial tort claims (as defined in the UCC);

 

		(d)	all deposit accounts (as defined in the UCC) maintained by the Grantor with the Security Agent held in the name of the Grantor,
and all of the cash and cash equivalents, deposited therein from time to time, and all securities, rights, interests, shares of
stock, instruments, interests, or other property contained, deposited, held or otherwise added to any deposit account from time
to time;

 

		(e)	all documents (as defined in the UCC), including, without limitation, any paper that is treated in the regular course of business
as adequate evidence that the person in possession of the paper is entitled to receive, hold, and dispose of the goods the paper
covers, including warehouse receipts, bills of lading, certificates of title, and applications for certificates of title;

 

		(f)	all equipment (as defined in the UCC), machinery and all fixtures, and all accessions, additions, attachments, improvements,
substitutions and replacements thereto and thereof and warranties (express and implied) received from the sellers and manufacturers
of the foregoing property, and all related claims, credits, setoffs, and other rights of recovery;

 

		(g)	all general intangibles (as defined in the UCC) of any kind, including, without limitation, all money, contract rights, corporate
or other business records, all intellectual property rights, inventions, designs, formulas, patents, patent applications, service
marks, trademarks, trade names, trade secrets, engineering drawings, goodwill, rights to prepaid expenses, registrations, franchises,
copyrights, licenses, customer lists, computer programs and other software (as defined in the UCC), source code, tax refund claims,
royalty, licensing and product rights, all claims under guarantees, security interests or other security held by or granted to
Grantor, all indemnification rights, and rights to retrieval from third parties of electronically processed and recorded data pertaining
to any Collateral, things in action, items, checks, drafts, and all orders in transit to or from Grantor, credits or deposits of
Grantor (whether general or special) that are held by the Security Agent;

 

    	 

    	 

    
 

		(h)	all goods (as defined in the UCC);

 

		(i)	all inventory (as defined in the UCC), whether in the possession of the Grantor or of a bailee or other person for sale, storage,
transit, processing, use or otherwise and whether consisting of whole goods, spare parts, components, supplies, materials, or consigned,
returned or repossessed goods, which are held for sale or lease, which are to be furnished (or have been furnished) under any contract
of service or which are raw materials, work in process or materials used or consumed in Grantor’s business, and all warranties
and related claims, credits, setoffs, and other rights of recovery with respect to any of the foregoing;

 

		(j)	all instruments (as defined in the UCC) including, without limitation, every promissory note, negotiable instrument, certificated
security, or other writing that evidences a right to payment of money, that is not a lease or security agreement, and that is transferred
in the ordinary course or conduct of business (including worldwide shipment) by delivery with any necessary assignment or endorsement;

 

		(k)	all investment property (as defined in the UCC) pledged to or delivered to Security Agent’s control from time to time,
and any and all other property in which the Grantor at any time has rights and in which at any time a security interest has been
transferred to the Security Agent (and regardless of whether any such property constitutes a certificated or uncertificated security
or is held directly or through one or more financial intermediaries through book entries);

 

		(l)	all letter of credit rights (as defined in the UCC);

 

		(m)	all supporting obligations (as defined in the UCC);

 

		(n)	all books, files, records (as defined in the UCC) relating to the Collateral;

 

		(o)	each policy and contract of insurance owned or maintained by the Grantor, and all the benefits thereof including, without limitation,
all claims of whatsoever nature, as well as return premiums, and in and to all moneys and claims for moneys in connection therewith;

 

		(p)	all certificates and instruments evidencing any securities or other Collateral subject to this Security Agreement from time
to time and all interest, dividends, distributions, cash, investment property, securities, shares of stock, and other amounts and
property from time to time received, receivable, paid or payable or otherwise distributed from time to time in respect of, in exchange
or substitution for, or as an addition to any of the foregoing Collateral;

 

		(q)	all other tangible or intangible personal property of every kind and nature; and

 

		(r)	all accessions and additions to the foregoing, substitutions therefor, and replacements, products and proceeds (as defined
in the UCC) of any of the property of the Grantor described in clauses (a) through (q) above (including any proceeds of insurance
thereon).

 

    	 

    	 

    
 

Exhibit
B

 

CONVERTIBLE
Promissory Note

 

PROMISSORY NOTE

 

	U.S. $619,122	June 15, 2012
	 	New York, New York

  

FOR VALUE RECEIVED,
Vuzix Corporation, a corporation organized and existing under the laws of the State of Delaware, with offices at 75 Town Centre
Drive, Rochester, NY 14623 (the “Borrower”), hereby promises to pay to the order of LC Capital Master Fund Ltd, a corporation
organized and existing under the laws of the Cayman Islands, as lender (the “Lender”) at its office at 680 Fifth Avenue,
12th Floor, New York, New York, 10019, or as it may otherwise direct, the principal sum of Six Hundred Nineteen Thousand
One Hundred and Twenty Two Dollars (U.S. $619,122). The Borrower shall repay the indebtedness represented by this Note as
provided in Section 2 of that certain Amended and Restated Loan and Security Agreement dated as of June 15, 2012 (the “Loan
Agreement”), made by and among the Borrower, as borrower and the Lender, as Lender, pursuant to which the Lender has agreed
to provide to the Borrower a secured loan in the amount of Six Hundred Nineteen Thousand One Hundred and Twenty Two (U.S. $619,122)
(the “Loan”).

 

The principal of and
interest accrued on this note are convertible into shares of the $.001 par value common stock of Borrower as provided in the Agreement.

 

Words and expressions
used herein (including those in the foregoing paragraph) and defined in the Loan Agreement shall have the same meaning herein as
therein defined.

 

This Note may be prepaid
on such terms as provided in the Loan Agreement. Interest shall be paid on the indebtedness represented by this Note at the rate
(the “Applicable Rate”) determined from time to time in accordance with Section 2 of the Loan Agreement and at the
times provided in Section 2 of the Loan Agreement, which provisions are incorporated herein with full force and effect as if they
were more fully set forth herein at length. Any principal payment not paid when due, whether on the maturity date thereof or by
acceleration, shall bear interest thereafter at a rate per annum equal to the Default Rate (as defined in the Loan Agreement).
All interest shall accrue and be calculated on the actual number of days elapsed and on the basis of a 360 day year.

 

Both principal and
interest are payable in United States Dollars to the Lender, for the account of the Lender, as the Lender may direct, in immediately
available same day funds.

 

If this Note or any
payment required to be made hereunder becomes due and payable on a day which is not a Business Day, the due date thereof shall
be extended until the next following Business Day and interest shall be payable during such extension at the rate applicable immediately
prior thereto, unless such next following Business Day falls in the following calendar month, in which case the due date thereof
shall be adjusted to the immediately preceding Business Day.

 

This Note is the Note
referred to in the Loan Agreement and is entitled to the security and benefits therein provided, including, but not limited to,
such security as provided in the Loan Documents. Upon the occurrence of any Event of Default under Section 8 of the Loan Agreement,
the principal hereof and accrued interest hereon may be declared to be (or, with respect to certain Events of Default, automatically
shall become) immediately due and payable.

 

In the event that
any holder of this Note shall institute any action for the enforcement or the collection of this Note, there shall be immediately
due and payable, in addition to the unpaid balance hereof, all late charges and all costs and expenses of such action, including
reasonable attorneys’ fees.

 

    	 

    	 

    
 

The Borrower, for
itself and its successors and assigns and any endorsers of the Note from time to time, hereby waives presentment, protest, demand
for payment, diligence, notice of dishonor and of nonpayment, and any and all other notices or demands in connection with the delivery,
acceptance, performance, default or enforcement of this Note, hereby waives and renounces all rights to the benefits of any statute
of limitations and any moratorium, appraisement, exemption and homestead now provided or which may hereafter be provided by any
federal or state statute, including, without limitation, exemptions provided by any federal or state statute, including, without
limitation, exemptions provided by or allowed under any federal or state bankruptcy or insolvency laws, both as to itself and as
to all of its property, whether real or personal, against the enforcement and collection of the obligations evidenced by this Note
and any and all extensions, renewals and modifications hereof and hereby consents to any extensions of time, renewals, releases
of any party this Note, waiver or modification that may be granted or consented to by the holder of this Note.

 

The Borrower agrees
that its obligations hereunder are absolute and unconditional without regard to the liability of any other party and that no delay
on the part of the holder hereof in exercising any power or right hereunder shall operate as a waiver thereof; nor shall any single
or partial exercise of any power or right hereunder preclude other or further exercise thereof or the exercise of any other power
or right.

 

If at any time this
transaction would be usurious under applicable law, then regardless of any provision contained in the Loan Agreement or this Note
or any other agreement made in connection with this transaction, it is agreed that (a) the total of all consideration which constitutes
interest under applicable law that is contracted for, charged or received upon the Loan Agreement, this Note or any other agreement
shall under no circumstances exceed the maximum rate of interest authorized by applicable law, if any, and any excess shall be
credited to the Borrower and (b) if the Lenders elect to accelerate the maturity of, or if the Borrower prepays the indebtedness
described in this Note, any amounts which because of such action would constitute interest may never include more than the maximum
rate of interest authorized by applicable law and any excess interest, if any, provided for in the Loan Agreement, in this Note
or otherwise, shall be credited to the Borrower automatically as of the date of acceleration or prepayment.

 

THE UNDERSIGNED,
AND THE LENDER BY ITS ACCEPTANCE HEREOF, EACH HEREBY WAIVES TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY
ANY PARTY HERETO OR ANY BENEFICIARY HEREOF ARISING IN RESPECT OF ANY MATTER WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH
THIS NOTE.

 

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

 

IN WITNESS WHEREOF,
the Borrower has executed and delivered this Note on the date and year first above written.

 

	Vuzix Corporation
	 
	 
	 
	By: ______________________
	Name:
	Title:

 

    	 

    	 

    
 

EXHIBIT C

(To be Executed by Holder

in order to Convert Note)

 

CONVERSION NOTICE

FOR

PROMISSORY NOTE DATED June 15, 2012

 

 

The
undersigned, as Holder of the Convertible Secured Promissory Note of Vuzix Corporation (the “Company”) dated June
15, 2012in the outstanding principal amount of U.S. $_____________ (the "Note"),
hereby elects to convert that portion of the outstanding principal amount of the Note shown on the next page into shares of Common
Stock, $0.001 par value per share (the "Common Stock"), of the Company according to the conditions of the Note
and the Convertible Loan and Security Agreement between the holder and the Company, as of the date written below. The undersigned
hereby requests that share certificates for the Common Stock to be issued to the undersigned pursuant to this Conversion Notice
be issued in the name of, and delivered to, the undersigned or its designee as indicated below. If shares are to be issued in the
name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto. No fee will
be charged to the Holder for any conversion, except for transfer taxes, if any.

 

	Conversion Information:	 	NAME OF HOLDER:	  	 
	 	 	 	 	 	 	 
	 	 	By:	 	 
	 	 	 	Print Name:	 	 	 
	 	 	 	Print Title:	 	 	 
	 	 	 	 	 	 	 
	 	 	 	Print Address of Holder:	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	Issue Common Stock to: 	 	 

	 	 	 	at: 	 	 
	 	 	 	 	 	 	 

 

	 	 	 	Electronically transmit and credit Common Stock to:	 
	 	 	 	 	at:	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 
	 	 	 	  Date of Conversion	 
	 	 	 	  	 
	 	 	 	  Applicable Conversion Rate	 

 

THE COMPUTATION OF THE NUMBER OF COMMON
SHARES TO

BE RECEIVED IS SET FORTH ON THE ATTACHED
PAGE

 

    	 

    	 

    
 

	Page 2 to Conversion Notice for:  	 
	 	(Name of Holder)

 

COMPUTATION OF NUMBER OF COMMON SHARES
TO BE RECEIVED

 

	A.           Outstanding Principal Amount converted:	$                
	B.            Accrued, unpaid interest on Outstanding Principal Amount converted:	$                  
	 	 
	Total dollar amount converted (total of A + B)	
        $                 

         

	
         

         

         

         

        Exchange Price
	
         

         

         

         

        $                 

	
         

        Number of Shares of Common Stock = Total dollar amount converted
        =  Conversion Price
	
         

        $                

        $

	
         

        Number of shares of Common Stock =                                                   

         
	 

 

 

Please issue and deliver _____ new Notes(s) in the following
amounts:

 

 

 

 

 

 

 

 

    	 

    	 

    
  

Exhibit
D

Compliance Certificate

 

		TO:	LC CAPITAL MASTER FUND LTD

 

		FROM:	VUZIX CORPORATION

 

The undersigned authorized
officer of VUZIX Corporation hereby certifies that in accordance with the terms and conditions of the Loan and Security Agreement
between Borrower and Lender dated June 15, 2012 (the “Agreement”), (i) Borrower is in complete compliance for
the period ending _______________ with all required covenants except as noted below and (ii) all representations and warranties
of Borrower stated in the Agreement are true and correct as of the date hereof. Attached herewith are the required documents supporting
the above certification. The Officer further certifies that these are prepared in accordance with Generally Accepted Accounting
Principles (GAAP) (except, in the case of interim financial statements, for normally recurring year-end adjustments or the notes
required by GAAP) and are consistently applied from one period to the next except as explained in an accompanying letter or footnotes.

 

Please indicate compliance status by
circling Yes/No under “Complies” column.

 

	 	Reporting Covenant	Required	Complies
	 	 	 	 	 
	 	Monthly Cash Position	Monthly within 25 days	Yes	No
	 	 	 	 	 
	 	Quarterly financial statements + Compliance Cert.	Quarterly within 45 days	Yes	No
	 	Annual (CPA Audited)	FYE within 120 days	Yes	No
	 	10K and 10Q	(as applicable)	Yes	No
	 	A/R Audit	Semi-Annual	Yes	No
	 	IP Notices	As required under Section 6.10	Yes	No
	 	 	 	 	 
	 	Financial Covenant	Required	Actual	Complies
	 	 	 	 	 	 
	 	Minimum Monthly Cash	.4 x [Current Loan Balance]	$_________	Yes	No
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 
	Comments Regarding Exceptions: See Attached.	 
	 	 
	 	 
	Sincerely,	 
	 	 
	 	 
	 	 
	
 

	 
	SIGNATURE	 
	 	 
	 	 
	
 

	 
	TITLE	 
	 	 	 	 
	
 

	 
	DATE	 
	 	 	 	 	 	 	 

 

    	 

    	 

    
 

Schedule of Exceptions

 

Permitted Indebtedness (Section 1.1)

 

		-	Secured Debts continuing after
                                                              closing:

		o	Lampe
                                                                                                                            Conway,
                                                                                                                            LLC.

		o	Paul
                                                                                                                            Travers
                                                                                                                            –
                                                                                                                            convertible
                                                                                                                            note
                                                                                                                            payable
                                                                                                                            of
                                                                                                                            $209,208
                                                                                                                            plus
                                                                                                                            accrued
                                                                                                                            interest.

		o	Paul
                                                                                                                            Travers
                                                                                                                            –
                                                                                                                            note
                                                                                                                            payable
                                                                                                                            of
                                                                                                                            $287,594
                                                                                                                            plus
                                                                                                                            accrued
                                                                                                                            interest.

		o	Vast
                                                                                                                            Corporation
                                                                                                                            -
                                                                                                                            agreement
                                                                                                                            payable
                                                                                                                            of
                                                                                                                            $838,096
                                                                                                                            plus
                                                                                                                            accrued
                                                                                                                            interest.

		o	Kopin
                                                                                                                            Corporation
                                                                                                                            –
                                                                                                                            agreement
                                                                                                                            payable
                                                                                                                            of
                                                                                                                            $482,547
                                                                                                                            plus
                                                                                                                            accrued
                                                                                                                            interest.

		o	John
                                                                                                                            Burtis
                                                                                                                            –
                                                                                                                            notes
                                                                                                                            payable
                                                                                                                            of
                                                                                                                            $101,748
                                                                                                                            plus
                                                                                                                            accrued
                                                                                                                            interest.

		o	Bridge
                                                                                                                            Bank
                                                                                                                            –
                                                                                                                            working
                                                                                                                            capital
                                                                                                                            loan
                                                                                                                            of
                                                                                                                            up
                                                                                                                            to
                                                                                                                            $2,000,000
                                                                                                                            secured
                                                                                                                            by
                                                                                                                            a
                                                                                                                            first
                                                                                                                            charge
                                                                                                                            on
                                                                                                                            accounts
                                                                                                                            receivable
                                                                                                                            and
                                                                                                                            inventory.

		o	Capital
                                                                                                                            leases
                                                                                                                            -
                                                                                                                            see
                                                                                                                            table
                                                                                                                            of
                                                                                                                            18
                                                                                                                            leases
                                                                                                                            under
                                                                                                                            Permitted
                                                                                                                            Liens

		-	Other indebtedness after closing:

		o	Accrued
                                                                                                                            compensation
                                                                                                                            to
                                                                                                                            Paul
                                                                                                                            Travers
                                                                                                                            of
                                                                                                                            $575,958
                                                                                                                            plus
                                                                                                                            accrued
                                                                                                                            interest.
                                                                                                                            Portion
                                                                                                                            convertible
                                                                                                                            at
                                                                                                                            Cdn$0.20.

		o	Accrued
                                                                                                                            compensation
                                                                                                                            to
                                                                                                                            Grant
                                                                                                                            Russell
                                                                                                                            of
                                                                                                                            $413.465
                                                                                                                            plus
                                                                                                                            accrued
                                                                                                                            interest.
                                                                                                                            Portion
                                                                                                                            convertible
                                                                                                                            at
                                                                                                                            Cdn$0.20.

 

Permitted Investments
(Section 1.1)

 

		-	None other than Vuzix (Europe)
                                                              Limited and Vuzix Finland Oy subsidiaries.

 

Permitted Liens (Section 1.1)

 

		o	Lampe
                                                                                                                            Conway
                                                                                                                            –
                                                                                                                            term
                                                                                                                            loan
                                                                                                                            of
                                                                                                                            $4,000,000.

		o	Paul
                                                                                                                            Travers
                                                                                                                            –
                                                                                                                            convertible
                                                                                                                            note
                                                                                                                            payable
                                                                                                                            of
                                                                                                                            $209,208
                                                                                                                            plus
                                                                                                                            accrued
                                                                                                                            interest

		o	Paul
                                                                                                                            Travers
                                                                                                                            –
                                                                                                                            note
                                                                                                                            payable
                                                                                                                            of
                                                                                                                            $287,594
                                                                                                                            plus
                                                                                                                            accrued
                                                                                                                            interest.

		o	Vast
                                                                                                                            Corporation
                                                                                                                            -
                                                                                                                            agreement
                                                                                                                            payable
                                                                                                                            of
                                                                                                                            $838,096
                                                                                                                            plus
                                                                                                                            accrued
                                                                                                                            interest.

		o	Kopin
                                                                                                                            Corporation
                                                                                                                            –
                                                                                                                            agreement
                                                                                                                            payable
                                                                                                                            of
                                                                                                                            $482,547
                                                                                                                            plus
                                                                                                                            accrued
                                                                                                                            interest.

		o	John
                                                                                                                            Burtis
                                                                                                                            –
                                                                                                                            notes
                                                                                                                            payable
                                                                                                                            of
                                                                                                                            $101,748
                                                                                                                            plus
                                                                                                                            accrued
                                                                                                                            interest.

		o	Bridge
                                                                                                                            Bank
                                                                                                                            –
                                                                                                                            working
                                                                                                                            capital
                                                                                                                            loan
                                                                                                                            of
                                                                                                                            up
                                                                                                                            to
                                                                                                                            $2,000,000
                                                                                                                            secured
                                                                                                                            by
                                                                                                                            a
                                                                                                                            first
                                                                                                                            charge
                                                                                                                            on
                                                                                                                            accounts
                                                                                                                            receivable
                                                                                                                            and
                                                                                                                            inventory.

		o	Capital
                                                                                                                            leases
                                                                                                                            –
                                                                                                                            see
                                                                                                                            table
                                                                                                                            below
                                                                                                                            with
                                                                                                                            balances
                                                                                                                            as
                                                                                                                            of
                                                                                                                            June
                                                                                                                            15,
                                                                                                                            2012
                                                                                                                            or
                                                                                                                            May
                                                                                                                            31,
                                                                                                                            2012.

 

    	 

    	 

    
 

	Lessor	Address	Account #	Lease Date	Original Balance	Current Balance – May 31, 2012	Asset Leased
	Dell	P.O. Box 5292 Carol Stream, IL 60197	003-7695903-025	Feb-11	7,543.18	4,855.67	Computers
	Dell	P.O. Box 5292 Carol Stream, IL 60197	003-7695903-022	Sep-09	3,862.79	413.58	Computers
	Dell	P.O. Box 5292 Carol Stream, IL 60197	001-7695903-024	Oct-10	4,405.65	2,367.25	Computers
	Key Bank	11030 Circle Point Rd Westminster, CO 80020	591195883002	Jul-10	25,775.00	8,570.19	SAP Licenses
	Lenovo	
        PO Box 550599

        Jacksonville, FL 32255
	908-0000443-000	Jun 11	$36,712.53	$10,865.40	Dell Server
	Pawnee	700 Centre Ave. Fort Collins, Co 80526	323784	Sep-10	30,275.34	14,716.27	computers and R&D Equipment/Software
	Key Bank	600 Travis St Houston, TX 77002	1330644	Sep-07	121,200.00	10,337.62	SAP Fourth Shift Software
	Financial Pacific	3455 S. 344th Way Federal Way, WA 98001	001-0455669-002	Jun-10	44,267.92	19,450,.25	R & D Equipment
	 	 	GRAND TOTAL	 	 	$85,007.77	 

  

Inbound Licenses (Section 5.5)

 

		-	New Light Industries Ltd. licensing
                                                              agreement entered into in December 2004. Borrower owns the IP but
                                                              is obligated to pay ongoing license fees.

		-	TDG Acquisition Company, LLC licensing
                                                              agreement entered into on June 15, 2012. Borrower received worldwide,
                                                              royalty free to use the IP it sold related to the TDG assets for
                                                              use in its existing and future products outside of the Military,
                                                              Defense and Security Markets.

 

Prior Names (Section 5.6)

 

		-	Borrower was incorporated under
                                                              the Delaware General Corporation Law in 1997 as VR Acquisition Corp.

		-	In 1997 Borrower changed its name
                                                              to Kaotech Corporation.

		-	In 1998 Borrower changed its name
                                                              to Interactive Imaging Systems, Inc.

		-	In 2004 Borrower changed its name
                                                              to Vicuity Corporation and then to Icuiti Corporation.

		-	In September 2007 Borrower changed
                                                              our name to Vuzix Corporation.

 

Inventory Locations (Section 5.6)

 

		-	2166 Brighton Henrietta Townline Road, Rochester, NY 14623.

		-	Intermail plc, Horizon West, Canal View Road, Newbury, Berkshire, RG14 5XF (our bounded 3rd party warehouse for
the European Union).

		-	Japan Vuzix Tokyo Branch, 4-1-1 Shima, Akasaka Bldg #905, Akasaka, Minato-Ku, Tokyo, 1070052 Japan

 

    	 

    	 

    
 

Litigation (Section 5.7)

 

		-	None

 

Material Adverse Change (Section 5.8)

 

		-	Vuzix sold all its TDG assets on June 15, 2012 and as these assets generated a material portion of Vuzix’ revenues, the
sale can be expected to have a material change on our operating results for some time as Vuzix rebalances its business focus.

 

Subsidiaries (Section 5.13)

 

		-	Vuzix (Europe) Limited

		-	Vuzix Finland Oy

 

    	 

    	 

    
 

Corporate
Resolutions to Borrow

 

	Borrower:          VUZIX Corporation

 

I, the undersigned
Secretary or Assistant Secretary of Vuzix Corporation (the “Corporation”), HEREBY CERTIFY that the Corporation is organized
and existing under and by virtue of the laws of the State of Delaware.

 

I FURTHER CERTIFY that
attached hereto as Attachments 1 and 2 are true and complete copies of the Articles of Incorporation, as amended, and the
Bylaws of the Corporation, each of which is in full force and effect on the date hereof.

 

I FURTHER CERTIFY that
at a meeting of the Directors of the Corporation, duly called and held, at which a quorum was present and voting (or by other duly
authorized corporate action in lieu of a meeting), the following resolutions (the “Resolutions”) were adopted.

 

BE IT RESOLVED, that
any one (1) of the following named officers, employees, or agents of this Corporation, whose actual signatures are shown below:

 

	NAMES	POSITION	ACTUAL SIGNATURES
	 	 	 
	
 

	
 

	
 

	 	 	 
	
 

	
 

	
 

	 	 	 
	
 

	
 

	
 

	 	 	 
	
 

	
 

	
 

	 	 	 

acting for and on behalf of this Corporation and as its act
and deed be, and they hereby are, authorized and empowered:

 

Borrow Money.
To borrow from LC Capital Master Fund Ltd (“Lender”), on such terms as may be agreed upon between the officers, employees,
or agents of the Corporation and Lender, such sum or sums of money as in their judgment should be borrowed, without limitation.

 

Execute Loan Documents.
To execute and deliver to Lender that certain Amended and Restated Loan and Security Agreement dated as of June 15, 2012 (the “Loan
Agreement”) and any other agreement entered into between Corporation and Lender in connection with the Loan Agreement, including
any amendments, all as amended or extended from time to time (collectively, with the Loan Agreement, the “Loan Documents”),
and also to execute and deliver to Lender one or more renewals, extensions, modifications, refinancings, consolidations, or substitutions
for the Loan Documents, or any portion thereof.

 

Grant Security.
To grant a security interest to Lender in the Collateral described in the Loan Documents, which security interest shall secure
all of the Corporation’s Obligations, as described in the Loan Documents.

 

Negotiate Items.
To draw, endorse, and discount with Lender all drafts, trade acceptances, promissory notes, or other evidences of indebtedness
payable to or belonging to the Corporation or in which the Corporation may have an interest, and either to receive cash for the
same or to cause such proceeds to be credited to the account of the Corporation with Lender, or to cause such other disposition
of the proceeds derived therefrom as they may deem advisable.

 

    	 

    	 

    
 

Warrants. To
issue Lender warrants to purchase the Corporation’s capital stock.

 

Further Acts.
To do and perform such other acts and things, to pay any and all fees and costs, and to execute and deliver such other documents
and agreements as they may in their discretion deem reasonably necessary or proper in order to carry into effect the provisions
of these Resolutions.

 

BE IT FURTHER RESOLVED,
that any and all acts authorized pursuant to these resolutions and performed prior to the passage of these resolutions are hereby
ratified and approved, that these Resolutions shall remain in full force and effect and Lender may rely on these Resolutions until
written notice of their revocation shall have been delivered to and received by Lender. Any such notice shall not affect any of
the Corporation’s agreements or commitments in effect at the time notice is given.

 

I FURTHER CERTIFY that
the officers, employees, and agents named above are duly elected, appointed, or employed by or for the Corporation, as the case
may be, and occupy the positions set forth opposite their respective names; that the foregoing Resolutions now stand of record
on the books of the Corporation; and that the Resolutions are in full force and effect and have not been modified or revoked in
any manner whatsoever.

 

IN WITNESS WHEREOF,
I have hereunto set my hand on June 15, 2012 and attest that the signatures set opposite the names listed above are their genuine
signatures.

 

	 	 	CERTIFIED AND ATTESTED BY:
	 	 	 
	 	 	 
	 	 	
        X

	 	 	 

 

    	 

    	 

    
 

Exhibit
E

Assignment and assumption Agreement

 

ASSIGNMENT AND ASSUMPTION AGREEMENT

 

THIS ASSIGNMENT AND ASSUMPTION
AGREEMENT (this “Agreement”), dated as of _____________, 20__ among [ASSIGNOR], a [TYPE OF ORGANIZATION] organized
under the laws of [JURISDICTION] (the “Assignor”), and [ASSIGNEE], a [TYPE OF ORGANIZATION] organized under the laws
of [JURISDICTION] (the “Assignee”),

 

W I T N E S S E T H T
H A T :

 

WHEREAS:

 

This Agreement is supplemental
to:

 

(i) that certain Amended
and Restated Loan and Security Agreement dated as of June 15, 2012 (the “Loan Agreement”), by and between Vuzix Corporation,
a corporation organized and existing under the laws of the State of Delaware, with offices at 75 Town Centre Drive, Rochester,
NY 14623 (the “Borrower”), and LC Capital Master Fund Ltd, a corporation organized and existing under the laws of the
Cayman Islands, as lender (the “Lender”) at its office at 680 Fifth Avenue, 12th Floor, New York, New York, 10019,
pursuant to which the Lender has agreed to provide to the Borrower a secured credit facility in the amount of Six Hundred Nineteen
Thousand One Hundred Twenty Two (the “Loan”);

 

(ii) any promissory note
issued in connection with the Loan Agreement; and

 

(iii) the other Loan
Documents (as such term is defined in the Loan Agreement).

 

NOW, THEREFORE, in consideration
of the premises and of other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties
hereto hereby agree as follows:

 

SECTION
1.Defined Terms. Except as otherwise defined herein, terms defined in the Loan Agreement shall have the same meaning
when used herein.

 

SECTION
2.Assignment and Assumption.

 

2.1Assignment.
Prior to the effectiveness of this Agreement, the Assignor’s portion of the Loan is US$____________ or ___% of the Loan,
of which US$____________ is currently outstanding (the “Assignor’s Outstanding Amount”). Pursuant to Section
12, of the Loan Agreement, the Assignor hereby sells, transfers and assigns ·%
(the “Assigned Percentage”) of its portion of the Loan equal to ·%
of the Loan and representing US$______________ (the “Assigned Loan”) under the Loan Agreement and an undivided share
of its right, title and interest in, to and under the Loan Agreement, the Note and the other Loan Documents to the Assignee to
the extent of the Assigned Loan.

 

2.2Assumption.
The Assignee hereby assumes, and shall be fully liable for, the obligations of the Assignor in respect of the Assigned Loan under
the Loan Agreement and undertakes to observe and perform all of the covenants and obligations on the part of the Lenders under
the Loan Agreement and to be bound by all of the covenants, obligations, undertakings and provisions contained in the Loan Agreement
or any Loan Document as are expressed to be binding on the Lenders and shall hereinafter be deemed a “Lender” for all
purposes of the Loan Documents and any other Assignment and Assumption Agreement(s), the Assignee’s portion of the Loan thereunder
being U.S.$· in respect of the Facility.

 

    	 

    	 

    
 

SECTION
3.Payment. Simultaneously herewith, the Assignee shall pay to the Assignor an amount equal to U.S.$·,
which amount constitutes the product derived by multiplying (a) the Assignor’s Outstanding Amount, by (b) the Assigned
Percentage.

 

SECTION
4.Reference to Loan Agreement. All references in the Loan Documents to the Loan Agreement shall be deemed to be references
to the Loan Agreements assigned and assumed pursuant to the terms hereof.

 

SECTION
5.Assignee Representations. The Assignee, by entering into this Agreement, agrees to the terms of Section 5
of the Loan Agreement as if fully incorporated herein.

 

SECTION
6.Appointment of Agent. The Assignee irrevocably designates and appoints the Lender as its agent and trustee and
irrevocably authorizes the Lender to take such action on its behalf and to exercise such powers on its behalf under the Loan Agreement
and under the other Loan Documents, each as supplemented hereby, as are delegated to the Lender by the terms of each thereof.

 

SECTION
7.No Representations as to Security Parties. The Assignor makes no representation or warranty in connection with,
and shall have no responsibility with respect to, the solvency, financial condition or statements of the Borrower, or the validity
and enforceability of the obligations of the Borrower in respect of the Loan Documents. The Assignee acknowledges that it has,
independently and without reliance on the Assignor or the Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this Agreement and will continue to be responsible for making
its own independent appraisal of the business, affairs and financial condition of the Security Parties.

 

SECTION
8.Miscellaneous.

 

8.1Successors and
Assigns. This Assignment and all obligations of the Assignor hereunder shall be binding upon the successors and assigns of
the Assignor and shall, together with the rights and remedies of the Assignee hereunder, inure to the benefit of the Assignee,
its respective successors and assigns.

 

8.2Waiver; Amendment.
None of the terms and conditions of this Assignment may be changed, waived, modified or varied in any manner whatsoever unless
in writing duly signed by the Assignor and the Assignee.

 

8.3Invalidity.
If any provision of this Assignment shall at any time, for any reason, be declared invalid, void or otherwise inoperative by a
court of competent jurisdiction, such declaration or decision shall not affect the validity of any other provision or provisions
of this Assignment, or the validity of this Assignment as a whole and, to the fullest extent permitted by law, the other provisions
hereof shall remain in full force and effect in such jurisdiction and shall be liberally construed in favor of the Assignee in
order to carry out the intentions of the parties hereto as nearly as may be possible. The invalidity and unenforceability of any
provision hereof in any jurisdiction shall not affect the validity or enforceability of such provision in any other jurisdiction.

 

8.4Notices. All
notices, requests, demands and other communications to any party hereunder shall be in writing (including prepaid overnight courier,
facsimile transmission, electronic transmission or similar writing) and shall be given to such party at the address, facsimile
number or email address set forth below or at such other address or facsimile numbers as such party may hereafter specify for the
purpose by notice to each other party hereto. Any notice sent by facsimile or electronic transmission shall be confirmed by letter
dispatched as soon as practicable thereafter.

 

    	 

    	 

    
 

If to the Assignor:

[NAME]

[ADDRESS]

Facsimile No.:

Telephone No.:

Email:

Attention:

 

If to the Assignee:

[NAME]

[ADDRESS]

Facsimile No.:

Telephone No.:

Email:

Attention:

 

 

Every notice or other
communication shall, except so far as otherwise expressly provided by this Assignment, be deemed to have been received (provided
that it is received prior to 2 p.m. local time; otherwise it shall be deemed to have been received on the next following Business
Day) (i) if given by facsimile or electronic transmission, on the date of dispatch thereof (provided further that if the date
of dispatch is not a Business Day in the locality of the party to whom such notice or demand is sent, it shall be deemed to have
been received on the next following Business Day in such locality) or (ii) if given by mail, prepaid overnight courier or
any other means, when received at the address specified in this Section or when delivery at such address is refused.

 

8.5Counterparts; Electronic
Delivery. This Assignment may be executed in any number of counterparts, each of which shall be deemed an original, but all
such counterparts together shall constitute one and the same instrument. Delivery of an executed counterpart of this Assignment
by facsimile or electronic transmission shall be deemed as effective as delivery of an originally executed counterpart. In the
event that either party delivers an executed copy of this Assignment by facsimile or electronic transmission, such party shall
also deliver an originally executed copy as soon as practicable, but the failure of such party to deliver an originally executed
copy of this Assignment shall not affect the validity or effectiveness of this Assignment.

 

8.6Headings. In
this Assignment, Section headings are inserted for convenience of reference only and shall not be taken into account in the interpretation
of this Assignment.

 

SECTION
9.Applicable Law, Jurisdiction and Waivers.

 

9.1Governing Law.
This Assignment shall be governed by and construed in accordance with the laws of the State of New York without regard to principles
of conflicts of laws thereof other than Sections 5-1401 and 5-1402 of the General Obligations Law of the State of New York.

 

9.2Submission to Jurisdiction.
Each party hereby irrevocably submits to the jurisdiction of the courts of the State of New York and of the United States District
Court for the Southern District of New York in any action or proceeding brought against it by the other party under this Assignment
or under any document delivered hereunder and hereby irrevocably agrees that valid service of summons or other legal process on
it may be effected by serving a copy of the summons and other legal process in any such action or proceeding on such party by mailing
or delivering the same by hand to the such party at the address indicated for notices in this Assignment. The service, as herein
provided, of such summons or other legal process in any such action or proceeding shall be deemed personal service and accepted
by the receiving party as such, and shall be legal and binding upon such party for all the purposes of any such action or proceeding.

 

    	 

    	 

    
 

9.3WAIVER OF IMMUNITY.
TO THE EXTENT THAT EITHER PARTY HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM SUIT, JURISDICTION OF ANY COURT OR ANY LEGAL PROCESS
(WHETHER THROUGH ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION, EXECUTION OF A JUDGMENT, OR FROM ANY OTHER LEGAL
PROCESS OR REMEDY) WITH RESPECT TO ITSELF OR ITS PROPERTY, SUCH PARTY HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS
OBLIGATIONS UNDER THIS ASSIGNMENT.

 

9.4WAIVER OF JURY
TRIAL. EACH OF THE ASSIGNOR AND THE ASSIGNEE HEREBY WAIVES TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT
BY ANY PARTY HERETO OR ANY BENEFICIARY HEREOF ON ANY MATTER WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS ASSIGNMENT.

 

[Signature page follows]

 

    	 

    	 

    

 

SECTION
10.

 

IN WITNESS WHEREOF,
the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.

 

	[ASSIGNOR]
	 
	By____________________________
                 Name:
                 Title:
	 
	 
	[ASSIGNEE]
	 
	By____________________________
                 Name:
                 Title:

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