Amendment to Loan Agreement between John Burtis and Vuzix Corporation (December 23, 2010)

Summary

This amendment updates the terms of a loan agreement between John Burtis and Vuzix Corporation, originally due November 30, 2010. The repayment deadline is extended to December 31, 2013, with a reduced interest rate of 12% per year starting January 1, 2011. Vuzix will repay the outstanding balance in 36 monthly payments and issue warrants to Burtis to purchase Vuzix shares. The amendment is contingent on Vuzix closing new financing and Burtis entering an intercreditor agreement with the new lender.

EX-10.4 5 v206806_ex10-4.htm

December 23, 2010

BY EMAIL

John Burtis

178 Seymour Road

Rochester, New York 14609

Dear Mr. Burtis,

Reference is made to loan agreements between John Burtis (“Burtis”) and Vuzix Corporation (“Vuzix) dated May 7, 2010 and September 17, 2010 (the “Loan Agreement”). The outstanding principal balance as of the date of this letter is $125,000. The Loan Agreement was payable on November 30, 2010.

Vuzix is entering into certain financing arrangements (the “New Financing”) with Lampe, Conway & Co., LLC to provide a $4,000,000 three year term loan. It is a condition of the closing of such financing arrangements that payment on the Loan Agreement be further deferred.

Burtis believes that it is in its best interest that the New Financing be closed. Therefore, in order to enable Vuzix to close the New Financing, the parties agree that the Loan Agreement shall be, and it hereby is, amended as follows:

1.	The effective date of this amendment (the “Effective Date”) shall be the closing date of the New Financing (the “Closing Date”).

2.	The date of December 31, 2010 in Section 2.01 of the Loan Agreement shall be substituted with December 31, 2013.

3.	The interest rate shall be decreased to twelve (12%) per annum commencing on January 1, 2011.

4.	The outstanding principal and all accrued interest to December 31, 2010, totaling $135,763.01, shall be paid in thirty-six (36) equal monthly blended payments of Eight Thousand Five Hundred and Four Dollars and Twelve Cents ($4,463.60) beginning on January 31, 2011.

As additional compensation, on the Effective Date, Vuzix Corporation will issue to Burtis (or its named nominee) warrants (the “Warrants”) to purchase 543,052 common shares of Vuzix at a exercise price equal to US$0.0992 per share. The Warrants shall be exercisable until December 31, 2013. The final terms and conditions of the Warrants are subject to the approval of the Toronto Venture Stock Exchange.

6.	Burtis herein agrees to execute and enter into a Intercreditor Agreement with Lampe Conway simultaneous with the closing of the New Financing, the form of which is substantially represented in Appendix A herein.

7.	Except as herein provided, the Letter Agreement shall otherwise remain in full force and effect.

Please acknowledge your agreement to the foregoing by signing a copy of this letter in the spaces provided below and returning it to the undersigned.

Yours truly,

VUZIX CORPORATION

By: /s/ Grant Russell

Name: Grant Russell

Title: EVP & CFO

Confirmed and Agreed to as of the date first above written.

John Burtis

By: /s/ John Burtis

Name:

Title: