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Vuzix Announces Agreements For $4.2 Million In Debt Restructuring

ROCHESTER, N.Y., April 1, 2013 /PRNewswire/ -- Vuzix Corporation (TSX-V: VZX, OTC:BB: VUZI, FMB: V7X) ("Vuzix" or, the "Company"), a leading supplier of Video Eyewear and smart glasses products in the consumer, commercial and entertainment markets, reported today that it has entered into definitive agreements with the holders of outstanding secured promissory notes to convert all their debt subject to the closing of the Company's proposed public stock offering.  Pursuant to these agreements, the various holders have agreed to convert their outstanding secured promissory notes, in the total principal amounts of $2,374,692 (as of December 31, 2012), together with accrued interest thereon (equal to $411,572 as of December 31, 2012) into shares of the Company's common stock, subject to the closing of the Company's proposed public stock offering, at a conversion price equal to the public offering price (or in the case of one lender, at its option, the conversion price provided in its notes). That same lender also agreed, subject to the closing of the Company's proposed public stock offering, to exchange its outstanding warrants to purchase 533,333 shares of the Company's common stock into the greater of (a) 200,000 shares of the Company's common stock, or (b) the Black Scholes value of the warrants as of the date of the pricing of the Company's proposed public stock offering based upon the per share offering price. 

(Logo: http://photos.prnewswire.com/prnh/20110518/MM04932LOGO)

The Company also entered into deferred compensation deferral and conversion option agreements with its President, Paul Travers and its CFO, Grant Russell that are subject to and effective upon the closing of the Company's proposed public stock offering.  Under these agreements, unpaid salary owed to them, in the aggregate amount of $1,452,735 (including $442,638 in accrued interest, as of December 31, 2012), will be convertible into shares of the Company's common stock, at their option, at a conversion price equal to the offering price of the Company's proposed public stock offering, subject to approval of the TSX Venture Exchange.  In addition, any remaining unconverted amounts will be due and payable beginning April 1, 2014 in equal monthly payments over a maximum of 12 months.

The closing of all these transactions is subject to approval of the TSX Venture Exchange and satisfaction of customary closing conditions, as well as the closing of the Company's proposed public stock offering by June 30, 2013. 

Paul Travers, Chief Executive Officer of Vuzix, said that, "This debt restructuring where up to a $4,238,998 in liabilities will be converted to equity will dramatically improve our balance sheet and should help make Vuzix more attractive to our current and new investors. Further it shows the continuing support and belief of our senior creditors and management of the exciting future potential for Vuzix." 

Further details of the debt restructurings will be available in the Company's Form 8-K filed with the SEC by the Company and all of the transaction documents will be filed as exhibits to the Form 8-K.

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