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CORRESP
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filename1.htm

CORRESP

November 18, 2009

    Mr. Mark P. Shulman, Branch Chief — Legal

    Via EDGAR and

    Mr. Matthew Crispino

    Federal Express

    Securities and Exchange Commission

    Division of Corporation Finance

    100 F Street, N.E.

    Mail Stop: 4561

    Washington, D.C. 20549

    Re:

    Vuzix Corporation Registration Statement on Form S-1 (File No. 333-160417)

(the “Registration Statement”)

Gentlemen:

     On behalf of Vuzix Corporation (the “Registrant”), in response to the comments conveyed during
our telephone conference of November 17, 2009, attached for your review and comment are:

    1.

    Revised form of escrow agreement among the Registrant, the offering agents and
JPMorgan Chase Bank, National Association, as escrow agent, marked to show changes from
the form of escrow agreement filed as Exhibit 10.21 to the Registration Statement (Exhibit A); and

    2.

    Revised prospectus cover page and individual revised pages from the prospectus
summary, risk factors and underwriting sections of the prospectus, incorporating the
proposed changes that we discussed on our telephone conference, marked to show changes
from the Registration Statement as currently filed (Exhibit B).

     Please do not hesitate to call me at (585) 238-3576, or my colleague, Lawrence A. Kallaur, at
(585) 238-3530, if you have any questions or would like any additional information regarding this
matter.

Very truly yours,

/s/ Robert F. Mechur

Robert F. Mechur

    cc:

    Messrs. Paul J. Travers

             Grant Russell

Exhibit A

ESCROW AGREEMENT

          THIS ESCROW AGREEMENT (as the same may be amended or modified from time to time pursuant
hereto, this “Escrow Agreement”) is made and entered into as of November ___, 2009, by and among
Vuzix Corporation, a Delaware corporation (“Issuer”), Canaccord Capital Corporation (“Canaccord”),
Canaccord Adams Inc., Bolder Investment Partners, Ltd. (“Bolder”) and Lighthouse Financial Group
LLC (collectively, the “Offering Agents”)(the Issuer and the Offering Agents are sometimes referred
to individually as a “Party” or collectively as the “Parties”), and JPMorgan Chase Bank, National
Association (the “Escrow Agent”).

          WHEREAS, the Issuer has filed with the U.S. Securities and Exchange Commission (the “SEC”) a
Registration Statement on Form S-1 (File No. 333-160417) (as amended from time to time, the
“Registration Statement”) registering under the Securities Act of 1933, as amended, the Issuer’s
sale to the public of up to 50,000,000 units (“Units”), each Unit consisting of one share of the
Issuer’s common stock, par value $0.001 per share, and one-half of one common stock purchase
warrant (the “Offering”);

          WHEREAS, the Issuer has also filed a preliminary prospectus relating to the Offering with the
Ontario Securities Commission (the “OSC”);

          WHEREAS, the Offering shall be made on a best-efforts basis through a syndicate co-led by
Canaccord and Bolder and through certain subagents;

          WHEREAS, the closing of the Offering (the “Closing”) is subject to the Issuer’s receipt of
minimum gross proceeds from the Offering of at least Cdn$6,000,000 (the “Minimum Dollar Amount”)
and subject to a maximum of 50,000,000 Units sold (the “Maximum Unit Amount”);

          WHEREAS, in order to purchase Units, a purchaser must deliver the full amount of its purchase
price, in US or Canadian dollars, to the Offering Agents (collectively, the “Payment”);

          WHEREAS, the Parties have agreed that the Payments made by prospective purchasers of Units
will be refunded to such prospective purchasers if the Closing has not occurred within 90 days of
the date on which the Registration Statement is declared effective by the SEC; and

          WHEREAS, in compliance with Rule 15c2-4 under the Securities Exchange Act of 1934, as amended,
(the “Exchange Act”) the Parties desires to establish an escrow in which funds received from purchasers of Units will be
deposited until the Closing, and the Escrow Agent is willing to serve as Escrow Agent upon the
terms and conditions herein set forth.

          NOW THEREFORE, in consideration of the foregoing and of the mutual covenants hereinafter set
forth, the parties hereto agree as follows:

    1.

    Appointment.

          1.1.     The Parties hereby appoint the Escrow Agent as their escrow agent for the
purposes set forth herein, and the Escrow Agent hereby accepts such appointment
under the terms and conditions set forth herein. The Escrow Agent is authorized
and regulated by the Financial Services Authority in the United Kingdom.

          1.2.     Each of the Offering Agents hereby authorizes Canaccord to act on its behalf in
connection with the matters set out herein.

    2.

    Establishment of the Escrow Accounts.

          2.1.     The parties hereto shall establish an escrow account at the London branch of the Escrow
Agent, and bearing the designation “Escrow Account for Vuzix Corporation IPO -Canadian” (the
“Canadian Escrow Account”).

          2.2.     The parties hereto shall establish an escrow account at the New York City branch of the
Escrow Agent, and bearing the designation “Escrow Account for Vuzix Corporation IPO — US” (the “US
Escrow Account”) (the Canadian Escrow Account and the US Escrow Account are each an “Escrow
Account” and collectively the “Escrow Accounts”).

          2.3.     On or before the date of the initial deposit in either Escrow Account pursuant to this
Agreement, Canaccord shall notify the Escrow Agent in writing of the commencement date of the
Offering (the “Commencement Date”). The Commencement Date shall be no earlier than the first date
on which the Registration Statement has been declared effective by the SEC and the OSC has issued a
receipt in accordance with Multilateral Instrument 11-102 — Passport System of the Canadian
Securities Administrators and National Policy 11-202 — Process for Prospectus Reviews in Multiple
Jurisdictions of the Canadian Securities Administrators evidencing that receipts for the final
Canadian prospectus relating to the Offering have been issued for each province of Canada except
Quebec. The Escrow Agent shall not accept any amounts for deposit in either Escrow Account prior to
its receipt of such notification.

          2.4.     The Offering shall continue for a period (the “Offering Period”) from the Commencement
Date through the 90th day after date on which the Registration Statement has been declared
effective by the SEC. The last day of the Offering Period is referred to herein as the “Termination
Date.” Except as provided in Section 4.3 hereof, after the Termination Date, neither the Offering
Agents nor the Issuer shall deposit, and the Escrow Agent shall not accept, any additional amounts
representing payments by prospective purchasers. Canaccord shall provide written notice to the
Escrow Agent as to the Termination Date.

    3.

    Deposits in the Escrow Account.

          3.1.     All Canadian dollars received from prospective purchasers of the Units shall be deposited
in the Canadian Escrow Account, which amounts shall be in the form of wire transfers representing
the payment of money. Wire transfers to the Canadian Escrow Account shall be sent in Canadian
dollars pursuant to the following instructions:

Bank: Royal Bank of Canada, Toronto (ROYCCAT2)

Under direct SWIFT advice to JPMorgan Chase Bank, NA CHASGB2L

For the account of: JPMorgan Chase Bank, NA (CHASGB2L)

Account Number: 095912194132

For Further Credit To: JPM as EA for Vuzix Corp

Account Number: 40625901

          In
compliance with Rule 10b-9 and Rule 15c2-4 of the Exchange
Act, all funds received in payment for the Units shall be forwarded
to the Escrow Agent, by each Offering Agent no later than noon
(Eastern time) the next business day after receipt, to be deposited
into the Escrow Account.

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          3.2.     All US dollars received from prospective purchasers of the Units shall be deposited in
the US Escrow Account, which amounts shall be in the form of wire transfers representing the
payment of money. Wire transfers to the US Escrow Account shall be sent in US dollars pursuant to
the following instructions:

Bank: JPMorgan Chase Bank, NA

ABA# 021 000 021

Account Number: 806032256

Account Name: JPM as EA for Vuzix Corp IPO – US

          3.3.     Simultaneously
with each deposit into an Escrow Account, the Offering Agent making such
deposit (or the Issuer, if such deposit is made by the Issuer) shall inform the Escrow Agent in
writing of the name and address of the prospective purchaser(s), the number of Units subscribed for
by such purchaser(s), and the aggregate dollar amount of such subscription (collectively, the
“Subscription Information”).

          3.4.     The Escrow Agent shall not be required to accept any amounts representing payments by
prospective purchasers except during the Escrow Agent’s regular banking hours, which are 9:00 a.m.
to 5:00 p.m. Eastern Time.

          3.5.     Amounts deposited in an Escrow Account that have cleared the banking system and have been
collected by the Escrow Agent, together with any investment income or proceeds received by the
Escrow Agent from the investment thereof from time to time pursuant to Section 3.6 below, are
herein referred to as the “Fund.” Amounts deposited in an Escrow Account that have not cleared the
banking system are herein referred to as “uncollected amounts”.

          3.6.     The Escrow Agent shall refund any portion of the Fund prior to disbursement of the Fund
in accordance with Section 4 hereof upon the instructions in writing signed by both the Issuer and
Canaccord.

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          3.7.     All Canadian dollar deposits will be held in a non interest bearing account with the
Escrow Agent’s London Branch and all US dollar deposits will be held in a non interest bearing
account with the Escrow Agent’s New York City Branch.

    4.

    Disbursement from the Escrow Account.

          4.1.     Subject to Section 4.3 below, in the event that at 5:00 p.m. Eastern Time on the
Termination Date the amount constituting the Fund shall be less than the Minimum Dollar Amount, as
indicated by the Subscription Information submitted to the Escrow Agent, then the Escrow Agent
shall promptly but in no event later than five (5) business days after the Termination Date refund
to each prospective purchaser the amount of payment received from such purchaser which is then held
in the Fund or which thereafter clears the banking system, together with any investment income
received thereon, and the Escrow Agent shall notify the Issuer and each Offering Agent of its
distribution of the Fund. The Offering Agent and Issuer shall provide wire instructions via
facsimile for each prospective purchaser. For purposes of determining whether the amount
constituting the Fund is less than the Minimum Dollar Amount at 5:00 p.m. Eastern Time on the
Termination Date, the Canadian dollar equivalent of the amount then held in the US Escrow Account
shall be determined by the closing buying rate of the Bank of Canada on the Termination Date.

          4.2.     Subject to Section 4.3 below, in the event that at any time up to 5:00 p.m. Eastern Time
on the Termination Date, the amount constituting the Fund shall be at least equal to the Minimum
Dollar Amount, as indicated by the Subscription Information submitted to the Escrow Agent, the
Escrow Agent shall forthwith notify the Issuer and each Offering Agent of such fact in writing. The
Escrow Agent shall hold the Fund until the Escrow Agent receives, at least one business day prior
to the date on which the Fund is to be disbursed, instructions in writing signed by both the Issuer
and Canaccord as to the disbursement of the Fund. For purposes of determining whether the amount
constituting the Fund is at least equal to the Minimum Dollar Amount at any time up 5:00 p.m.
Eastern Time on the Termination Date, the Canadian dollar equivalent of the amount then held in the
US Escrow Account shall be determined by the closing buying rate of the Bank of Canada on the date
immediately prior to the date of determination.

          4.3.     Subject to Section 4.4 below, in the event that at 5:00 p.m. Eastern Time on the
Termination Date, the amount constituting the Fund (counting all amounts deposited in the Escrow
Account from the Commencement Date) shall be greater than the Minimum Dollar Amount, as indicated
by the Subscription Information submitted to the Escrow Agent, the Escrow Agent shall, on the
Termination Date, notify the Issuer and the Offering Agents of such fact in writing. The Escrow
Agent shall hold any portion of the Fund that has not previously been

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disbursed (in accordance with Section 4.2) until the Escrow Agent receives, at least one
business day prior to the date on which such portion of the Fund is to be disbursed, instructions
in writing signed by both the Issuer and Canaccord as to the
disbursement thereof. For purposes of
determining whether the amount constituting the Fund is greater than the Minimum Dollar Amount at
5:00 p.m. Eastern Time on the Termination Date, the Canadian dollar equivalent of the amount then
held in the US Escrow Account shall be determined by the closing buying rate of the Bank of Canada
on the Termination Date.

          4.4.     In the event that at any time up to 5:00 p.m. Eastern Time on the Termination Date, the
number of units subscribed for shall be at least equal
to the Maximum Unit Amount, as indicated by the Subscription Information submitted to the Escrow Agent, the Escrow Agent shall forthwith notify
the Issuer and the Offering Agents of such fact in writing. The Escrow Agent shall hold the portion
of the Fund that has not yet been disbursed (in accordance with Section 4.2) until the Escrow Agent
receives, at least one business day prior to the date on which such portion of the Fund is to be
disbursed, instructions in writing signed by both the Issuer and Canaccord as to the disbursement
thereof.

          4.5.     In
the event that at 5:00 p.m. Eastern Time on the Termination Date, the
number of units subscribed for shall be greater than
the Maximum Unit Amount, as indicated by the Subscription
Information submitted to the Escrow Agent, the Escrow Agent shall notify in writing the Issuer and
the Offering Agents of such fact forthwith following the Termination Date. The Escrow Agent shall
hold the portion of the Fund that has not previously been disbursed (in accordance with Sections
4.2 and 4.5) until the Escrow Agent receives, at least one business day prior to the date on which
such portion of the Fund is to be disbursed, instructions in writing signed by both the Issuer and
Canaccord as to the disbursement thereof.

          4.6.     Upon disbursement of the Fund pursuant to the terms of this Section 4, the Escrow Agent
shall be relieved of all further obligations and released from all liability under this Agreement.
It is expressly agreed and understood that in no event shall the aggregate amount of payments made
by the Escrow Agent exceed the amount of the Fund.

    5.

    Escrow Agent.

          5.1.     The Escrow Agent shall have only those duties as are specifically and expressly provided
herein, which shall be deemed purely ministerial in nature, and no other duties shall be implied.
The Escrow Agent shall neither be responsible for, nor chargeable with, knowledge of, nor have any
requirements to comply with, the terms and conditions of any other agreement, instrument or
document between the Parties, in connection herewith, if any, including without limitation the
agency agreement contemplated by that engagement letter dated as of June 24, 2009 by and among the
Issuer, Canaccord and Bolder (the “Underlying Agreement”), nor shall the Escrow Agent be required
to determine if any person or entity has complied with any such agreements, nor shal