Document:

ex10-1.htm

    EXHIBIT  10.1

    

    MANUFACTURERS
      AND TRADERS TRUST
      COMPANY

    

    REVOLVING
      LINE OF CREDIT
      NOTE

    AND
      CREDIT AGREEMENT

    

              This
      Note renews, increases, modifies and restates a note originally dated as of
      August 19, 2005 executed by EMERGING VISION, INC. in favor of MANUFACTURERS
      AND
      TRADERS TRUST COMPANY (the “Original Note”) in the amount of $2,000,000.00 (the
“Original Loan”), OF WHICH THERE IS CURRENTLY OUTSTANDINGTHE PRINCIPAL AMOUNT
      OF  $350,000.00, which note is being renewed, increased and modified
      hereby in the amount of $6,000,000.00, of which $350,000.00 is the current
      balance outstanding.

    

    BORROWER:                                EMERGING
      VISION, INC.

    

    PRINCIPAL:                                $6,000,000                                                      Date:
      As of August 7, 2007

    

    PROMISE
      TO PAY:  The undersigned (the "Borrower"), for value received,
      does hereby assume the Original Loan and all obligations under the Original
      Note
      in connection herewith and therewith, and does hereby promise to pay to the
      order of MANUFACTURERS AND TRADERS TRUST COMPANY (the "Bank") at its offices
      at
      One M & T Plaza, Buffalo, New York 14240, or at any of its branches, the sum
      of SIX MILLION ($6,000,000) DOLLARS (the “Maximum Loan Amount”), or so much
      hereof as shall be outstanding, plus interest thereon from the date hereof
      as
      set forth herein.  Borrower hereby warrants, acknowledges and
      represents that as of the date hereof there is currently outstanding under
      the
      terms of the Note the principal sum of Three Hundred Fifty Thousand and
      00/100 ($350,000.00) DOLLARS, without offset, defense or
      counterclaim.

    

    RATE
      AND PAYMENT:  The Borrower shall pay said sum, or such lesser
      amount as may then be the aggregate unpaid principal balance of all loans made
      by the Bank to the Borrower hereunder, (each a "Loan" and collectively the
      "Loans") as set forth herein.

    

    Advances
      to the Borrower hereunder shall be available on a revolving basis from the
      date
      hereof until August 1, 2009 (the “Revolving
      Line Maturity Date”)
      and shall be utilized by the Borrower to finance working capital needs and
      acquisition of 1725758 Ontario Inc. d/b/a The Optical Group and assets of Corowl
      Optical Credit Services, Inc.  This Note shall mature on the Revolving
      Line Maturity date, after which date no further Loans shall be available and
      on
      which date all outstanding principal, interest and/or related charges due to
      the
      Bank hereunder shall be due and payable.

    

    RATE
      AND PAYMENT ON ADVANCES UNDER THE REVOLVING CREDIT LOAN: The Borrower
      promises to pay interest (computed on the basis of a 360 day year for actual
      days elapsed) at said office on the unpaid principal amount hereof from time
      to
      time outstanding from the date hereof until the Revolving Line Maturity Date
      at
      a floating rate equal to two hundred seventy five (275) basis points in excess
      of the “Effective
      LIBOR Rate”.  Each
      change is the Effective LIBOR Rate shall effect a simultaneous and corresponding
      change in the interest rate hereunder without notice to the
      Borrower.  Interest shall be payable monthly on the first day of each
      month, commencing on the first such day to occur after the date hereof, and
      upon
      payment in full of the unpaid principal amount hereof.

    

    The
      Effective LIBOR Rate, as utilized herein, shall mean the rate for deposits
      in
      U.S. Dollars for a period of one month (the “Interest
      Period”)
      which appears on the Telerate page 3750 as of 11:00 a.m. London time on the
      day
      that is two London Banking Days preceding the first business day of each
      calendar month.  If such rate does not appear on the Telerate page
      3750 the rate for that reset date shall be the London Interbank Offered Rate
      for
      one month as published in the "Money Rates" column of the Wall Street
      Journal on the business day preceding the first business day of each
      calendar month.   Additional terms are set forth in the LIBOR
      Rate Addendum attached hereto and made a part hereof.

    

    DEFAULT
      RATE:  The Borrower further agrees that this Note shall bear
      interest at any stated or accelerated maturity hereof at a rate of five (5%)
      percent in excess of the highest rate hereinbefore provided for then in effect,
      payable on demand.  In no event shall the rate either before or after
      the occurrence of any such default exceed the highest rate of interest, if
      any,
      permitted under applicable New York or Federal law.

    

    If
      any
      payment is not made within ten (10) days of its respective due date as set
      forth
      herein, or if the entire balance becomes due and payable and is not paid, all
      or
      part of the amount due may be offset out of any account or other property which
      the Borrower has at the Bank or any affiliate of the Bank without prior notice
      or demand.

    

    LATE
      CHARGES:  The Borrower will pay a charge of five (5%) percent of
      the amount of any payment which is not made within five (5) days of its
      respective due date, or, if applicable, which cannot be debited from its account
      due to insufficient balance on the debit date.

    

    ATTORNEYS
      FEES:  In the event the Bank retains counsel with respect to
      enforcement of this Note or any other document or instrument given to the Bank,
      the Borrower agrees to pay the Bank's reasonable attorneys fees (whether or
      not
      an action is commenced and whether or not in the court of original jurisdiction,
      appellate court, bankruptcy court, or otherwise).

    

    IN
      CONSIDERATION OF THE GRANTING OF THE LOANS EVIDENCED BY THIS NOTE, THE BORROWER
      HEREBY AGREES AS FOLLOWS:

    

    

    REVOLVING
      CREDIT COMMITMENT:  The following shall apply to all loans made
      hereunder:

    

    (a)           The
      Loans evidenced by this Note are available in one or more advances during the
      period which commences on the date hereof and ends on August 1, 2009 (the
      "Credit Period") in an aggregate principal amount up to, but not exceeding
      at
      any time (and inclusive of any sums currently outstanding) the outstanding
      principal sum of Six Million ($6,000,000) Dollars (the
      "Commitment").  During the Credit Period, subject to the advance
      limitations herein, the Borrower may use the Commitment by borrowing, prepaying
      in whole or in part and reborrowing, on a revolving basis, all in accordance
      with the terms and conditions hereof; provided, however, that each Loan or
      prepayment be in a minimum amount of Twenty Five Thousand ($25,000)
      Dollars;

    

    (b)           The
      date and amount of each Loan and of each payment of principal shall be
      maintained by the Bank in its books and records at the time of each Loan or
      payment.  All such notations shall be presumed to be correct and the
      aggregate net unpaid amount of Loans set forth therein shall be presumed to
      be
      the principal balance hereof;

    

    (c)           Each
      request for a Loan shall be subject to the satisfaction of the following
      conditions precedent:

    

    (i)           The
      Borrower shall have given the Bank notice of such request, setting forth the
      amount of the Loan requested and the date thereof.  Such notice may be
      written or oral and shall be sufficient if received by 1 p.m. two Business
      Days
      prior to the date the Loan is requested.  If the request is oral, it
      shall be thereafter confirmed in writing delivered by the Borrower to the Bank
      within twenty-four (24) hours.

    

    (ii)           No
      Event of Default, or event which would be an Event of Default but for the giving
      of notice or the passage of time or both, has occurred and is continuing; and
      all of the representations and warranties made by the Borrower herein shall
      be
      true and correct on and as of the date of such request as if made on and as
      of
      such date.

    

    (d)           The
      outstanding principal balance of the Loans shall at no time exceed the amount
      of
      the Commitment.

    

    CONDITIONS
      PRECEDENT:

    

    (a)           Prior
      to funding the first Loan, the Borrower shall satisfy or shall have satisfied
      the following conditions precedent including delivery to the Bank of the
      following, which shall be acceptable in form and substance to the
      Bank:

    

    (i)           An
      executed copy of this Note;

    

    (ii)           A
      first perfected security interest in all non-realty assets of the BORROWER,
      a
      first/second perfected security interest in all assets of COMBINE BUYING GROUP,
      INC., a wholly owned subsidiary of Borrower (“Combine”), a first perfected
      security interest in all assets of OG ACQUISITION, INC, a wholly owned
      subsidiary of Borrower (“OG”), and 1725758 ONTARIO INC. d/b/a THE OPTICAL GROUP,
      an entity purchased/to be purchased by OG (“Optical”)  (the
      "Collateral") pursuant, in part, to the general security agreements
      (collectively, the "Security Agreement") to be evidenced and delivered in
      connection herewith;

    

    (iii)           An
      Assignment of Trademarks of the Borrower pursuant to the Assignment of
      Trademarks (the "Assignment") to be evidenced and delivered in connection
      herewith;

    

    (iv)           An
      Assignment of Franchisee Notes of Borrower (the “Assignment of Franchisee
      Notes”) to be evidenced and delivered in connection herewith;

    

    (v)           An
      Assignment of Leases and Rents of Borrower (the “Assignment of Leases”) to be
      evidenced and delivered in connection herewith;

    

    (vi)           A
      Stock Pledge Agreement (the “Pledge Agreement”) and Irrevocable Stock Power
      (“Stock Power”) pledging the shares of 1725758 Ontario Inc. (d/b/a The Optical
      Group) acquired by OG Acquisition, Inc. to the Bank;

    

    (vii)           A
      copy of the resolutions passed by the Borrower's and Company Guarantors’ Board
      of Directors, Partners or Members, as the case may be, certified by its
      Secretary or Assistant Secretary as being in full force and effect on the date
      of this Agreement, authorizing the loan herein provided for or guaranty thereof,
      as the case may be, the execution, delivery and performance of this Note and
      any
      other instrument or agreement required hereunder and containing a certificate
      of
      incumbency as to the person or persons authorized to execute and deliver the
      same;

    

    (viii)                      Continuing
      Guaranties of All Liability for the Borrower from Combine, OG and Optical,
      and
      any other existing and future wholly owned subsidiaries of the Borrower
      (collectively referred to as the “Guarantor” or “Guarantors”) on the Bank's
      standard forms of Guaranty (the “Guaranty”);

    

    (ix)           A
      copy of the Purchase Contract for Optical by OG;

    

    (x)           If
      required by Lender, a favorable written opinion, of the

    Borrower's
      counsel (which counsel must be satisfactory to the Bank) with respect to the
      matters set forth in the Representations and Warranties section hereof with
      the
      exceptions of subsections (g) and (h);

    

    (xi)           Establishment
      of total banking relationship including deposit/operating accounts with the
      Bank;

    

    (xii)           Insurance
      Certificates covering all assets of Borrower and Guarantors of Borrower listing
      the Bank as loss payee;

    

    (xiii)                      Commitment
      Fee in the amount of 1.0% of Loan Amount;

    

    (xiv)                      All
      other documents reasonably required by the Bank and/or its counsel in order
      to
      evidence and/or secure the Bank's position as set forth herein.

    

    REPRESENTATIONS
      AND WARRANTIES:  The Borrower hereby represents and warrants to
      the Bank that:

    

    (a)           The
      Borrower and each Guarantor is duly organized, validly existing and in good
      standing under the laws of the State of its formation and is qualified to do
      business and in good standing under the laws of each state where its failure
      to
      so qualify would have a material adverse effect on their business, operations
      or
      properties;

    

    (b)           This
      Note, the Guaranty, the Security Agreement and all other documents executed
      and
      delivered herewith have been duly authorized, executed and delivered and
      constitute the valid and legally binding obligations of the Borrower and the
      Guarantors, enforceable in accordance with their respective terms, to their
      stated dollar amounts, including the granting to the Bank of a first perfected
      security interest in the Collateral;

    

    (c)           The
      execution and delivery of this Note, the Guaranty, the Security Agreement and
      all other documents executed and delivered herewith and performance hereunder
      and thereunder, will not violate any provision of law;

    

    (d)           There
      are no actions or proceedings pending or in process before any
      court or governmental authority, bureau or agency, with respect to or to the
      best of their knowledge threatened against or affecting the Borrower, any
      Guarantor or any Subsidiary, which if determined adversely would have a material
      adverse effect on the business, the assets or the financial condition of the
      Borrower, any Guarantor or any Subsidiary, except as specifically set
      forth and described on Exhibit A annexed hereto.  As used
      herein, the term "Subsidiary" or "Subsidiaries" means any corporation or
      corporations of which the Borrower alone, or the Borrower and/or one or more
      of
      its Subsidiaries, owns, directly or indirectly, at least a majority of the
      securities having ordinary voting power for the election of
      directors;

    

    (e)           The
      Borrower and its subsidiaries and Guarantors are not, to the best of Borrower's
      knowledge, in default under, or in violation of, any term of any agreement,
      ordinance, resolution, decree, bond, note, indenture, order or judgment to
      which
      it is a party or by which it is bound, or by which any of the properties or
      assets owned by or used in the conduct of their business is affected, which
      default or violation may have a material adverse effect on their business,
      assets or financial condition.  The operations of the Borrower and its
      subsidiaries and
      Guarantors comply in all material respects with all laws, ordinances and
      regulations applicable to them;

    

    (f)           The
      Borrower and its subsidiaries and Guarantors are not a party to or bound by,
      nor
      are any of the properties or assets owned by them or used in the conduct of
      their business affected by any agreement, ordinance, resolution, decree, bond,
      note, indenture, order or judgment, or subject to any charter or other corporate
      restriction, which materially and adversely affects their business, assets
      or
      financial condition;

    

    (g)           All
      balance sheets, profit and loss statements and other financial information
      heretofore furnished to the Bank are complete and present fairly the financial
      condition of the Borrower and its Subsidiaries and Guarantors as at the dates
      thereof and for the periods covered thereby, including contingent liabilities
      of
      every kind, which financial conditions has not materially adversely changed
      since the date of the most recently dated balance sheet of the Borrower and/or
      Guarantors heretofore furnished to the Bank;

    

    (h)           No
      part of the proceeds of the loan which is evidenced by this Note will be used
      directly or indirectly for the purpose of purchasing or carrying, or for payment
      in full or in part of indebtedness which was incurred for the purpose of
      purchasing or carrying, any margin stock as such term is defined in Sec. 221.3
      of Regulation U of the Board of Governors of the Federal Reserve
      System;

    

    (i)           The
      Borrower and its Subsidiaries and Guarantors are, to the best of Borrower's
      knowledge, in compliance in all material respects with the Employees Retirement
      Income Security Act of 1974 ("ERISA") and all rules and regulations
      thereunder.  Neither the Borrower nor any of its Subsidiaries nor any
      of its Company Guarantors has any unfunded vested liability under any type
      of
      plan described in Section 4021(a) of ERISA ("Pension Plan") and no reportable
      event, as set forth in Section 4043(b) of ERISA, has occurred or is continuing
      with respect to any Plan.

    

    FINANCIAL
      STATEMENTS:  The Borrower shall deliver to the Bank:

    

    (a)           Annual
      audited signed Financial Statements of the Borrower prepared by a Certified
      Public Accountant (“CPA”) acceptable to the Bank within ninety (90) days after
      the end of each fiscal year;

    

    (b)           Quarterly
      10-Q Statement within sixty (60) of each quarter end;

    

    (c)           Quarterly,
      the Borrower shall submit a Covenant Compliance Certificate in form and
      substance satisfactory to the Lender together with the 10-Q Statements required
      hereinabove;

    

    (d)           Semi-annual
      Accounts Receivable and Franchisee Notes Receivable Aging Reports of the
      Borrower within sixty (60) days of each semi-annual period end;

    

    (e)           Within
      a reasonable time after a written request therefor, such other financial data
      or
      information as the Bank may reasonably request from time to time.

    

    AFFIRMATIVE
      COVENANTS:  The Borrower will, and with respect to the agreements
      set forth in subsections (a) through (f) hereof, will cause each Subsidiary
      to:

    

    (a)           With
      respect to its properties, assets and business, maintain insurance against
      loss
      or damage, to the extent that property, assets and businesses of similar
      character are usually so insured by companies similarly situated and operating
      like properties, assets or businesses with responsible insurance companies
      satisfactory to the Bank, said insurance to be assigned to the Bank at
      closing;

    

    (b)           Duly
      pay and discharge all taxes or other claims which might become a lien upon
      any
      of its properties except to the extent that such items are being in good faith
      appropriately contested;

    

    (c)           Maintain,
      preserve and keep its properties in good repair, working order and condition,
      and make all reasonable repairs, replacements and additions
      thereto;

    

    (d)           Conduct
      its business in substantially the same manner and in substantially the same
      fields as such business is now carried on and conducted;

    

    (e)           Comply
      with all statutes, rules and regulations and maintain its corporate
      existence;

    

    (f)           Permit
      the Bank to make or cause to be made, inspections and audits of any books,
      records and papers of the Borrower and of any parent or subsidiary and each
      endorser or guarantor hereof and to make extracts therefrom at all such
      reasonable times and as often as the Bank may reasonably require;

    

    (g)           Immediately
      give notice to the Bank that an Event of Default has occurred or that an event
      which, with the giving of notice or lapse of time, or both, would constitute
      an
      Event of Default, has occurred and specifying the action which the Borrower
      has
      taken and proposes to take with respect thereto;

    

    (h)           In
      addition to the aforementioned, the Borrower agrees that the following financial
      covenants (“Financial
      Covenants”)
      are covenants upon which the Bank relies in the extension of the Loan which
      Financial Covenants must be evidenced by the combined financial statements
      of
      the Borrower and the Guarantor(s) as required above, and that any violation
      or
      default under same shall constitute an event of default under the terms of
      this
      Note:

    

    (1)           Minimum
      total net worth of $3,000,000 at all times.  This covenant shall be
      tested on a semi-annual basis;

    

    (2)           Minimum
      Debt Service Coverage of 2.0 : 1, to be tested on a trailing four quarter
      basis.  For purposes hereof, Debt Service Coverage shall be defined as
      EBITDA less dividends divided by the Current Portion of Long
      Term Debt plus interest expense;

    

    

    (3)           Maximum
      Funded Debt to EBITDA* as follows:

    4.0
      as of 9/30/07 and
      12/31/07;

    3.75
      as of 3/31/08, 6/30/08 and
      9/30/08;

    3.5
      as of 12/31/08 and all quarters
      thereafter, to be tested quarterly on a trailing 12 month basis..

    

    *Note:  EBITDA
      shall add back any non-cash expense associated

    with
      compensation and/or stock awards.  Funded Debt shall
      include

    outstanding
      balances under the M&T Revolving Line of Credit plus

    related
      party debt including the Combine seller note.

    

    (i)           In
      addition to the aforementioned, the Borrower agrees that all future wholly
      owned
      subsidiaries shall provide a Continuing Guaranty of all Liability of Borrower
      to
      the Bank on the Bank’s standard form;

    

    (j)           In
      addition to the aforementioned, the Borrower agrees that it shall transfer
      its
      entire banking relationship including all deposit/operating accounts to the
      Bank
      within thirty (30) days of closing;

    

    (k)           Immediately
      give notice to the Bank that an Event of Default has occurred or that an event
      which, with the giving of notice or lapse of time, or both, would constitute
      an
      Event of Default, has occurred under any FRANCHISE NOTE RECEIVABLE and
      specifying the action which the Borrower has taken and proposes to take with
      respect thereto.

    

    

    NEGATIVE
      COVENANTS:  The Borrower and its subsidiaries will
      not:

    

    (a)           Create,
      incur, assume or suffer to exist any liability for borrowed money, in excess
      of
      One Hundred Thousand Dollars $100,000 except (i) indebtedness to the Bank;
      (ii)
      existing debt as reflected on the most recent balance sheet provided to the
      Bank
      and further incurred through the date of this Agreement, which further incurred
      debt has been acknowledged by the Borrower to the Bank in writing prior to
      the
      execution hereof.  The Borrower agrees to provide the Bank an
      opportunity to finance any additional borrowing needs during the term of this
      Note;

    

    (b)           make,
      or in any way extend any advances or loans to officers, shareholders, or any
      affiliates of the Borrower;

    

    (c)           make
      or extend investments in other entities in excess of One Hundred Thousand
      ($100,000) Dollars;

    

    (d)           enter
      into any merger or consolidation or liquidate, wind-up or dissolve itself or
      sell, transfer or lease or otherwise dispose of all or any substantial part
      of
      its assets;

    

    (e)           lend
      or advance money, credit or property to or invest in (by capital contribution,
      loan, purchase or otherwise) any firm, corporation, or other person except
      (i)
      as otherwise permitted herein, (ii) investments in United States Government
      obligations and certificates of deposit of any bank institution with combined
      capital and surplus of at least Two Hundred Million ($200,000,000) Dollars,
      (iii) trade credit, and (iv) security deposits;

    

    (f)           create,
      assume or permit to exist, any mortgage, pledge, lien or encumbrance of or
      upon
      or security interest in, any of its property or assets now owned or hereafter
      acquired except (i) mortgages, liens, pledges and security interests in favor
      of
      the Bank; (ii) other liens, charges and encumbrances incidental to the conduct
      of its business or the ownership of its property and assets which were not
      incurred in connection with the borrowing of money or the obtaining of advances
      or credit and which do not materially impair the use thereof in the operation
      of
      its business; (iii) liens for taxes or other governmental charges which are
      not
      delinquent or which are being contested in good faith and for which a reserve
      shall have been established in accordance with generally accepted accounting
      principles; and (iv) liens granted to secure purchase money financing of
      equipment, provided such liens are limited to the equipment financed; (v) liens
      granted to refinance unencumbered equipment provided such liens are limited
      to
      the equipment refinanced and the incurrence of which will not cause a default
      hereunder or in any other loan agreements or notes with the Bank;

    

    (g)           assume,
      endorse, be or become liable for or guarantee the obligations of any person
      to
      any entity other than the Bank except by the endorsement of negotiable
      instruments for deposit or collection in the ordinary course of
      business;

    

    (h)           declare
      or pay any dividends on its capital stock or purchase, redeem retire or
      otherwise acquire any of its capital stock at any time outstanding in default
      hereof; or

    

    (i)           (1)           terminate
      any Pension Plan so as to result in any material liability to The Pension
      Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV
      of
      ERISA (the "PBCG"), (2) engage in or permit any person to engage in any
      "prohibited transaction" (as defined in Section 406 of ERISA or Section 4975
      of
      the Internal Revenue Code of 1954, as amended) involving any Pension Plan which
      would subject the Borrower to any material tax, penalty or other liability,
      (3)
      incur or suffer to exist any material "accumulated funding deficiency" (as
      defined in Section 302 of ERISA), whether or not waived, involving any Pension
      Plan, or (4) allow or suffer to exist any event or condition, which presents
      a
      material risk of incurring a material liability to the PBCG by reason of
      termination of any Pension Plan.

    

    COLLATERAL
      SECURITY:

    

    (a)           As
      collateral security for the payment of any and all sums owing under this Note
      and all other obligations, direct or contingent, joint, several or independent,
      of the Borrower and of any Parent or Subsidiary and each endorser or Guarantor
      hereof now or hereafter existing, due or to become due to, or held, or to be
      held by, the Bank, whether created directly or acquired by assignment or
      otherwise (all of such obligations, including this Note, are hereinafter called
      the "Obligations"), the Borrower hereby grants to the Bank a lien on and
      security interest in any and all deposits or other sums at any time credited
      by
      or due from the Bank to the Borrower, whether in regular or special depository
      accounts or otherwise, and any and all monies, securities and other property
      of
      the Borrower, and the proceeds thereof, now or hereafter held or received by
      or
      in transit to the Bank from or for the Borrower, whether for safekeeping,
      custody, pledge, transmission, collection or otherwise, and any such deposits,
      sums, monies, securities and other property, may at any time after the
      occurrence of any Event of Default be set-off, appropriated and applied by
      the
      Bank against any of the Obligations whether or not such Obligations are then
      due
      or are secured by any collateral, or, if they are so secured, whether or not
      such collateral held by the Bank is considered to be adequate and with respect
      to all collateral security the Bank shall have all the rights and remedies
      available to it under the Uniform Commercial Code of New York and other
      applicable law;

    

    (b)           This
      Note is also secured by the Collateral;

    

    (c)           This
      Note is also secured by the Assignment, the Assignment of Leases,  the
      Assignment of Franchisee Notes and the Pledge Agreement;

    

    (d)           Continuing
      Guaranties of All Liability for the Borrower from Combine, OG and Optical and
      all other existing and future wholly owned subsidiaries of Borrower (the
“Guarantor” or AGuarantors@)
      on the Bank's standard form.

    

    EVENTS
      OF DEFAULT:  If any one or more of the following events ("Events
      of Default") shall occur, the entire unpaid balance of the principal of and
      interest on the Obligations shall immediately become due and
      payable:

    

    (a)           Failure
      to pay any amount required by this Note on its respective due date or any other
      obligation owed to the Bank by Borrower or any Guarantor within ten (10) days
      of
      default, or, if applicable, failure to have sufficient funds in its account
      for
      loan payments to be debited on the due date within ten (10) days after said
      default;

    

    (b)           Failure
      to perform or keep or abide by any term, covenant or condition contained in
      this
      Note, any Guaranty or any other document or instrument given to the Bank in
      connection with this loan within thirty (30) days after written notice of said
      default;

    

    (c)           The
      filing of a bankruptcy proceeding, assignment for the benefit of creditors,
      issuance of any execution, garnishment, or levy against, or the commencement
      of
      any proceeding for relief from indebtedness by or against the Borrower or any
      Guarantor (provided, however, that in the event of an involuntary filing, the
      Debtor shall have a period of sixty (60) days to obtain a dismissal of
      same);

    

    (d)           The
      happening of any event which, in the reasonable judgment of the Bank, materially
      adversely affects the Borrower's ability to repay, the financial condition
      of
      the Guarantor(s), or the value of any collateral;

    

    (e)           If
      any written material representation or statement made to the Bank by the
      Borrower or Guarantor(s) is untrue when made;

    

    (f)           The
      occurrence of a default under the Security Agreement, any Guaranty, or any
      other
      document or instrument given to the Bank in connection with this loan which
      is
      not cured within thirty (30) days after written notice of such
      default;

    

    (g)           Dissolution
      of Borrower or Guarantor;

    

    (h)           Failure
      to provide the Bank with any financial information on reasonable request and
      notice or permit an examination of books and records;

    

    (i)           In
      the event that more than fifty percent (50%) of the shares of stock of the
      Borrower are sold or in any way transferred without the prior written consent
      of
      the Bank;

    

    (j)           Failure
      by Borrower to transfer its entire banking relationship including
      deposit/operating accounts to the Bank within thirty (30) days of the date
      hereof;

    

    (k)           Failure
      of Borrower to deliver a continuing absolute guaranty of its obligations to
      the
      Bank from any future wholly owned subsidiary of Borrower with ten (10) days
      of
      acquisition of such subsidiary;

    

    (l)           Failure
      of Borrower to give notice to the Bank on a timely basis of any default or
      Event
      of Default under a Franchisee Note.

    

    

    MISCELLANEOUS:

    

    (a)           Only
      those agreements, representations and warranties made expressly herein shall
      survive the delivery of this Note.  The Borrower waives trial by jury,
      set-off and counterclaim of any nature or description in any litigation in
      any
      court with respect to, in connection with, or arising out of, this Note or
      any
      instrument or document delivered pursuant hereto or the validity, protection,
      interpretation, collection or enforcement hereof;

    

    (b)           No
      modification or waiver of or with respect to any provision of this Note, or
      consent to any departure by the Borrower from any of the terms or conditions
      hereof, shall in any event be effective unless it shall be in writing and signed
      by the Borrower and the Bank, and then such waiver or consent shall be effective
      only in the specific instance and for the purpose for which given.  No
      notice to or demand on the Borrower in any case shall, of itself, entitle it
      to
      any other or further notice or demand in similar or other
      circumstances;

    

    (c)           Each
      and every right granted to the Bank hereunder or under any other document
      delivered hereunder or in connection herewith, or allowed it by law or equity,
      shall be cumulative and may be exercised from time to time.  No
      failure on the part of the Bank or the holder of this Note to exercise, and
      no
      delay in exercising, any right shall operate as a waiver thereof, nor shall
      any
      single or partial exercise of any right preclude any other or future exercise
      thereof or the exercise of any other right;

    

    (d)           In
      the event that this Note is placed in the hands of an attorney for collection
      by
      reason of any default hereunder, the Borrower agrees to pay reasonable
      attorney's fees so incurred.  The Borrower promises to pay all
      reasonable expenses of any nature as soon as incurred whether in or out of
      court
      and whether incurred before or after this Note shall become due at its maturity
      date or otherwise and reasonable costs which the Bank may reasonably deem
      necessary or proper in connection with the satisfaction of the indebtedness
      or
      the administration, supervision, preservation, protection (including but not
      limited to maintenance of adequate insurance) of or the realization upon the
      collateral;

    

    (e)           The
      Borrower hereby waives presentment, demand for payment, protest, notice of
      protest, notice of dishonor, and any or all other notices or demands except
      as
      otherwise expressly provided for herein;

    

    (f)           All
      accounting terms not otherwise defined in this Note shall have the meanings
      ascribed thereto under generally accepted accounting principles;

    

    (g)           Delay
      or failure of the Bank to exercise any of its rights under this Note shall
      not
      be deemed a waiver thereof.  No waiver of any condition or requirement
      shall operate as a waiver of any other or subsequent condition or
      requirement.  The Bank or any other holder of this Note need not
      present it before requiring payment.  This Note may not be modified or
      terminated orally.  This Note shall be governed by the laws of the
      State of New York without regard to its conflicts of laws rules.  The
      Borrower irrevocably consents to the jurisdiction and venue of the New York
      State Supreme Court, Suffolk County in any action concerning this
      Note.  This Note is binding upon the Borrower, its heirs, successors
      and assigns;

    

    (h)           The
      Borrower expressly acknowledges that no statements, agreements or
      representations, whether oral or written, have been made by the Bank, or by
      any
      employee, agent or broker of the Bank with respect to the obligation or debt
      evidenced by this Note.  The Borrower further expressly warrants and
      represents that (i) no oral commitment has been made by the Bank to extend
      or
      continue any credit to the Borrower or any party other than as expressly stated
      herein or in those certain documents executed in connection herewith, (ii)
      no
      representation or agreement has been made by or with the Bank, or any employee,
      agent or broker of the Bank, to forebear or refrain in any way from exercising
      any right or remedy in its favor hereunder or otherwise unless expressly set
      forth herein, and (iii) the Borrower and Guarantor(s) have not and will not
      rely
      on any commitment to extend or continue any credit, nor on any agreement to
      forebear or refrain from exercising rights or remedies unless such commitment
      or
      agreement shall be in writing and duly executed by an authorized officer of
      the
      Bank;

    

    (i)           Notwithstanding
      anything to the contrary contained in this Note, the rate of interest payable
      on
      this Note shall never exceed the maximum rate of interest permitted under
      applicable law.  If at any time the rate of interest otherwise
      prescribed herein shall exceed such maximum rate, and such prescribed rate
      is
      thereafter below such maximum rate, the prescribed rate shall be increased
      to
      the maximum rate for such period of time as is required so that the total amount
      of interest received by the Bank is that which would have been received by
      the
      Bank, except for the operation of the first sentence of this
      Section.

    

    NOTICES:  All
      notices, requests and other communications pursuant to this Note shall be in
      writing, either by letter (delivered by hand or sent by certified mail, return
      receipt requested) or telegram, addressed as follows:

    

    (a)           if
      to the Borrower:

    

    EMERGING
      VISION,
      INC.

    100
      Quentin Roosevelt Boulevard, Suite
      508

    Garden
      City, New York
      11530

    Attention:
      Christopher G. Payan,
      CEO

    

    (b)           if
      to the Bank:

    

    MANUFACTURERS
      AND TRADERS TRUST COMPANY

    One
      M
& T Plaza

    Buffalo,
      NY  14240

    Attention:
      Office of General Counsel

    

    Any
      notice, request or communication hereunder shall be deemed to have been given
      when deposited in the mails, postage prepaid, or in the case of telegraphic
      notice, when delivered to the telegraph company, addressed as
      aforesaid.  Any party may change the person or address to whom or
      which the notices are to be given hereunder, but any such notice shall be
      effective only when actually received by the party to whom it is
      addressed.

    

    

    

    

    

    

    [BALANCE
      OF THIS PAGE INTENTIONALLY
      LEFT BLANK]IN WITNESS WHEREOF, the Borrower has signed this Note the date and
      year above written.

    

    EMERGING
      VISION,
      INC.

    

    By:           /s/Christopher
      G. Payan

    Christopher
      G. Payan

    CEO

    

    Tax
      ID
      #  11-3096941

    

    

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
      A

    

    Pending/Current
      Litigation:

    

    In
      1999,
      Berenter Greenhouse and Webster, an advertising agency previously utilized
      by
      the Company, commenced an action, against the Company, in the New York State
      Supreme Court, New York County, for amounts alleged to be due for advertising
      and related fees.  The amounts claimed by the plaintiff are in excess
      of $200,000.  In response to this action, the Company filed
      counterclaims of approximately $500,000, based upon estimated overpayments
      allegedly made by the Company pursuant to the agreement previously entered
      into
      between the parties.  As of the date hereof, these proceedings were
      still in the discovery stage.  The Company has not recorded an accrual
      for a loss in this action, as the Company does not believe it is probable that
      the Company will be held liable in respect of plaintiff’s claims.

    

    In
      July
      2001, the Company commenced an arbitration proceeding, in the Ontario Superior
      Court of Justice, against Eye-Site, Inc. and Eye Site (Ontario), Ltd., as the
      makers of two promissory notes (in the aggregate original principal amount
      of
      $600,000) made by one or more of the makers in favor of the Company, as well
      as
      against Mohammed Ali, as the guarantor of the obligations of each maker under
      each note.  The notes were issued, by the makers, in connection with
      the makers’ acquisition of a Master Franchise Agreement for the Province of
      Ontario, Canada, as well as their purchase of the assets of, and a Sterling
      Optical Center Franchise for, four of the Company’s retail optical stores then
      located in Ontario, Canada.  In response, the defendants
      counterclaimed for damages, in the amount of $1,500,000, based upon, among
      other
      items, alleged misrepresentations made by representatives of the Company in
      connection with these transactions.  The Company believes that it has
      a meritorious defense to each counterclaim.  As of the date hereof,
      these proceedings were in the discovery stage.  The Company has not
      recorded an accrual for probable losses in the event that the Company shall
      be
      held liable in respect of defendant’s counterclaims, as the Company does not
      believe that any such loss is reasonably possible.

    

    In
      February 2002, Kaye Scholer, LLP, the law firm previously retained by the
      Company as its outside counsel, commenced an action in the New York State
      Supreme Court seeking unpaid legal fees of approximately
      $122,000.  The Company answered the complaint in such action, and has
      heard nothing since.  The Company believes that it has a meritorious
      defense to such claim.  Although the Company has recorded an accrual
      for probable losses in the event that the Company shall be held liable in
      respect of plaintiff’s claims, the Company does not believe that any such loss
      is reasonably possible, or, if there is a loss, the Company does not believe
      that it is reasonably possible that such loss would exceed the amount
      recorded.

    

    On
      May
      20, 2003, Irondequoit Mall, LLC commenced an action against the Company and
      Sterling Vision of Irondequoit, Inc. (“SVI”) alleging, among other things, that
      the Company had breached its obligations under its guaranty of the lease for
      the
      former Sterling Optical store located in Rochester, New York.  The
      Company and SVI believe that they have a meritorious defense to such
      action.  As of the date hereof, these proceedings were in the
      discovery stage.  Although the Company has recorded an accrual for
      probable losses in the event that the Company shall be held liable in respect
      of
      plaintiff’s claims, the Company does not believe that any such loss is
      reasonably possible, or, if there is a loss, the Company does not believe that
      it is reasonably possible that such loss would exceed the amount
      recorded.

    

    In
      May
      2006, the Company commenced an action against I and A Optical, Inc., Mark Shuff
      and Felicia Shuff, in the Supreme Court of the State of New York, County of
      Nassau, seeking, among other things, monetary damages as a result of the
      defendants' alleged breach of the terms of the Sterling Optical Center Franchise
      Agreement (and related documents) with the Company to which they are
      parties.  The defendants then asserted counterclaims against the
      Company, seeking, among other things, money damages arising under the Franchise
      Agreement with the Company as a result of the Company's alleged violation of
      such Franchise Agreement.  The Company believes that is has a
      meritorious defense to such claims.  As of the date hereof, these
      proceedings were in the discovery stage.  The Company has not recorded
      an accrual for a loss in this action, as the Company does not believe it is
      probable that the Company will be held liable in respect of defendants'
      counterclaims.

    

    In
      August
      2006, Amy Platt, a former employee of the Company, commenced an action against
      the Company, in the United States District Court, Eastern District of New York,
      alleging, among other things, that the Company violated Title VII of the Civil
      Rights Act of 1964, as amended, 42 U.S.C. 2000e, et seq, the Pregnancy
      Discrimination Act of 1978, and the New York Executive Law, Human Rights Law,
      Section 290 et seq., and seeks an unspecified monetary sum as damages
      resulting therefrom.  The Company believes that it has a meritorious
      defense to plaintiff’s claims in this action.  As of the date hereof,
      these proceedings were in the discovery stage.  Although the Company
      has recorded an accrual for probable losses in the event that the Company shall
      be held liable in respect of plaintiff’s claims, the Company does not believe
      that any such loss is reasonably possible, or, if there is a loss, the Company
      does not believe that it is reasonably possible that such loss would exceed
      the
      amount recorded.

    

    In
      January 2007, PR Prince Georges Plaza, LLC commenced an action against the
      Company, in the Circuit Court of the State of Maryland, Prince George’s County,
      alleging, among other things, that the Company had breached its obligations
      under its guaranty of the lease for the former Sterling Optical store located
      at
      The Mall at Prince Georges, 3500 East West Highway, Hyattsville, Prince George’s
      County, Maryland.  The Company believes that it has a meritorious
      defense to this action.  The action is presently in the discovery
      stage.  Although the Company has recorded an accrual for probable
      losses in the event that the Company shall be held liable in respect of the
      plaintiff’s claims, the Company does not believe that any such loss is
      reasonably possible, or, if there is a loss, the Company does not believe that
      it is reasonably possible that such loss would exceed the amount
      recorded.

    

    In
      January 2007, Laurelrising as Owner, LLC commenced an action against the
      Company, in the Circuit Court of the State of Maryland, Prince Georges County,
      alleging, among other things, that the Company had breached its obligations
      under its lease for the former Sterling Optical store located at Laurel Centre
      Mall, Laurel, Maryland.  The Company believes that it has a
      meritorious defense to this action.  The defendant’s time to answer
      the complaint has not expired as of the date hereof.  Although the
      Company has recorded an accrual for probable losses in the event that the
      Company shall be held liable in respect of the plaintiff’s claims, the Company
      does not believe that any such loss is reasonably possible, or, if there is
      a
      loss, the Company does not believe that it is reasonably possible that such
      loss
      would exceed the amount recorded.

    

    In
      January 2007, Leon Simon, d/b/a Simon Properties commenced an action against
      the
      Company, in the District Court of the State of North Dakota, Cass County,
      alleging, among other things, that the Company had breached its obligations
      under its lease for the former Sterling Optical store located at 3301 13th Avenue
      South,
      Fargo, North Dakota.  In May 2007, this action was settled, the terms
      of which included, among other things, the Company’s payment to the plaintiff of
      approximately $85,000.

    

    In
      July,
      2007, Marvin Penn and Josephine Penn commenced an action against the Company,
      among others, in the Supreme Court of the State of New York, County of New
      York,
      Index Number 105637-07.

    

    Although
      the Company, where indicated herein, believes that it has a meritorious defense
      to the claims asserted against it (and its affiliates), given the uncertain
      outcomes generally associated with litigation, there can be no assurance that
      the Company’s (and its affiliates’) defense of such claims will be
      successful.

    

    In
      addition to the foregoing, in the ordinary course of business, the Company
      is a
      defendant in certain lawsuits alleging various claims incurred, certain of
      which
      claims are covered by various insurance policies, subject to certain deductible
      amounts and maximum policy limits.  In the opinion of management, the
      resolution of these claims should not have a material adverse effect,
      individually or in the aggregate, upon the Company’s business or financial
      condition.  Other than as set forth above, management believes that
      there are no other legal proceedings, pending or threatened, to which the
      Company is, or may be, a party, or to which any of its properties are or may
      be
      subject to, which, in the opinion of management, will have a material adverse
      effect on the Company.

    

    

    

    

    

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

    RIDER
      B TO

    NOTE

    (LIBOR
      Rider)

    

    

    Borrower:
      EMERGING VISION, INC.

    

    Note
      Original Principal Amount: $6,000,000.00

    

    Note
      Date: As of August 7, 2007

    

    

    Definitions.  As
      used in this Rider, each capitalized term shall have the meaning specified
      in
      the Note and the following terms shall have the indicated meanings:

    

    

    
      	
              1)

            	
              “Adjustment
                Date” shall be (i) if the one month interest period is selected,
                the first calendar day of each month; (ii) if the two month interest
                period is selected, the first calendar day of the second month following
                the Base Month and the first calendar day of every second month
                thereafter; (iii) if the three month interest period is selected,
                the
                first calendar day of the third month following the Base Month and
                the
                first calendar day of every third month thereafter; and (iv) if the
                six
                month interest period is selected, the first calendar day of the
                sixth
                month following the Base Month and the first calendar day of every
                sixth
                month thereafter.

            

    

    

    
      	
              2)

            	
              “Applicable
                Interest Rate” shall mean either the LIBOR Rate or the Base Rate,
                as the case may be.

            

    

    

    
      	
              3)

            	
              “Base
                Month” shall mean the first month following the month in which
                the Set Date occurs.  For example, if the Set Date is March 10,
                then the “Base Month” would be
                April.

            

    

    

    
      	
              4)

            	
              “Base
                Rate” shall mean the rate of interest announced by the Lender
                as
                its prime rate of interest plus one (1) percentage
                point.

            

    

    

    
      	
              5)

            	
              “Business
                Day” shall mean any day of the year on which banking institutions
                in New York, New York are not authorized or required by law or other
                governmental action to close and, in connection with the LIBOR Rate,
                on
                which dealings are carried on in the London Interbank
                market.

            

    

    

    
      	
              6)

            	
              “LIBOR”
                means the rate obtained by dividing (i) the one, two, three or six
                month
                interest period (as selected by Borrower) London Interbank Offered
                Rate
                for United States dollar deposits in the London Interbank Eurodollar
                Market at approximately 11:00 a.m. London time (or as soon thereafter
                as
                practicable) as determined by the Lender from any broker, quoting
                service
                or commonly available source utilized by the Lender or its agents,
                or, if
                such yield or index is not so published or otherwise determinable,
                a
                comparable index chosen by the Lender or its agents in its sole
                discretion, by (ii) a percentage equal to 100% minus the stated maximum
                rate of all reserves required to be maintained against “Eurocurrency
                Liabilities” as specified in Regulation D (or against any other category
                of liabilities which includes deposits by reference or any category
                of
                extensions of credit or other assets which includes loans by a non-United
                States office of a bank to United States residents) on such date
                to any
                member bank of the Federal Reserve
                System.

            

    

    

    
      	
              7)

            	
              “LIBOR
                Rate” shall mean LIBOR with the applicable interest period as
                set
                forth in the Note (one, two, three or six month) plus the applicable
                percentage points above LIBOR as set forth in the
                Note.

            

    

    

    
      	
              8)

            	
              “Set
                Date” shall mean as
                follows:

            

    

    
      	
               

            	
              (i)

            	
              with
                respect to Lender’s standard form Line of Credit or Mortgage Note, the
                date of the Note.

            

    

    
      	
               

            	
              (ii)

            	
              with
                respect to Lender’s standard form Mortgage Note (Construction to
                Permanent), (x) the date the first advance is made to Borrower in
                connection with the Construction Loan Period and (y) the Amortization
                Commencement Date in connection with the Permanent Loan
                Period.

            

    

    
      	
               

            	
              (iii)

            	
              with
                respect to Lender’s standard form Mortgage Note (Construction), the date
                the first advance is made to
                Borrower.

            

    

    

    LIBOR
      Rate Adjustments.  The LIBOR Rate shall be initially based on
      the selected LIBOR (i.e., one, two, three or six month) in effect two
      (2) Business Days before the Set Date, then adjusted on the first calendar
      day
      of the Base Month using the LIBOR in effect two (2) Business Days prior to
      that
      first calendar day of the Base Month.  Thereafter, the LIBOR rate
      shall be adjusted on the Adjustment Date based on the applicable LIBOR in effect
      two (2) Business Days prior to the relative Adjustment Date. For example,
      assuming a standard M&T Note is being used, a three month interest period is
      selected and the loan closes on January 19, then:  (i) the “Set Date”
would be January 19 and the initial LIBOR Rate would be based on the quote
      for
      the three month interest period LIBOR in effect on January 17 (assuming January
      18 and 17 were Business Days) and would be changed on February 1 based on the
      quote for the three month interest period LIBOR in effect on January 30
      (assuming that January 31 and 30 were Business Days), (ii) February would be
      the
“Base Month” and (iii) the LIBOR Rate would be adjusted on each “Adjustment
      Date” which would start on May 1 using the quote for the three month interest
      period LIBOR in effect on April 29 (assuming that April 30 and 29 were Business
      Days), the next Adjustment Date would be August 1, etc.).

    

    Inability
      to Determine LIBOR Rates.  If the Lender shall determine that
      for any reason adequate and reasonable means do not exist for ascertaining
      LIBOR
      with respect to this Note, the Lender will give notice of such determination
      to
      Borrower.  Thereafter, the Lender may not maintain the Applicable Rate
      at the LIBOR Rate hereunder until the Lender revokes such notice in
      writing.  Upon such determination and notice, the Lender may convert
      the Applicable Interest Rate from the LIBOR Rate to the Base Rate.

    

    Increased
      Cost.  If the Lender shall determine that due to either (a)
      the introduction of any change (other than any change by way of imposition
      of or
      increase in reserve requirements included in the calculation of LIBOR) in or
      in
      the interpretation of any requirement of law or (b) the compliance with any
      guideline or request from any central bank or other governmental authority
      (whether or not having the force of law), there shall be any increase in the
      cost to the Lender of agreeing to make or making, funding or maintaining any
      loan at the LIBOR Rate, Borrower shall be liable for, and shall from time to
      time, upon demand therefor by the Lender and pay to the Lender such additional
      amounts as are sufficient to compensate the Lender for such increased
      costs.

    

    Illegality.  If
      the Lender shall determine that the introduction of any law (statutory or
      common), treaty, rule, regulation, guideline or determination of an arbitrator
      or of a governmental authority or in the interpretation or administration
      thereof, has made it unlawful, or that any central bank or other governmental
      authority has asserted that it is unlawful for the Lender to make a loan at
      the
      LIBOR Rate then, on notice thereof by the Lender to Borrower, the Lender may
      suspend maintaining this loan at the LIBOR Rate until the Lender shall have
      notified Borrower that the circumstances giving rise to such determination
      shall
      no longer exist and the Lender may convert the Applicable Interest Rate from
      the
      LIBOR Rate to the Base Rate.

    

    Conversion.  The
      Lender may, in its sole discretion, convert the Applicable Interest Rate from
      the LIBOR Rate to the Base Rate upon the occurrence of an Event of
      Default.  The Applicable Rate shall automatically convert from the
      LIBOR Rate to the Base Rate on the date Borrower commences, or has commenced
      against it, any proceeding or request for relief under any bankruptcy,
      insolvency or similar laws now or hereafter in effect in the United States
      of
      America or any state or territory thereof or any foreign jurisdiction or any
      formal or informal proceeding for the dissolution or liquidation of, settlement
      of claims against or winding up of affairs of Borrower.

    

    Default
      Rate.  Notwithstanding anything to the contrary in the Note,
      the default rate of interest which the Lender may charge under the Note shall
      be
      three (3) percentage points above the higher of the LIBOR Rate or the Base
      Rate.  Nothing herein shall be construed to be a waiver by the Lender
      to have any Loan accrue interest at the default rate or other rights of the
      Lender set forth in this Note.

    

    Prepayment.  If,
      during the term of this Note, Borrower prepays any principal amount (in whole
      or
      in part) when the Applicable Rate is the LIBOR Rate prior to the end of a
      selected interest period (other than regular installments of principal as set
      forth in the Note), or there is a conversion of the Applicable Rate due to
      an
      Event of Default or otherwise before the end of a selected interest period,
      then
      Borrower shall be liable for and shall pay the Lender, on demand, the higher
      of
      $250.00 or the actual amount of the liabilities, expenses, costs and/or funding
      losses that are a direct or indirect result of such prepayment, failure to
      draw,
      revocation or otherwise.  The determination by the Lender of the
      foregoing amount shall, in the absence of manifest error, be conclusive and
      binding upon Borrower.  Such amount shall be in addition to any
      prepayment premium required under the Note.

    

    EMERGING
      VISION, INC.

    

    By:
      /s/Christopher G. Payan

    

    Christopher
      G. Payan, CEOex10-2.htm

    EXHIBIT  10.2

    

    

    ABSOLUTE
      ASSIGNMENT OF FRANCHISEE NOTES

    and
      PROCEEDS DUE

    

    

    THIS
      ASSIGNMENT is made as of August 7, 2007 by EMERGING VISION, INC.,
a New York corporation, with an office for the transaction
      of business
      located at 100 Quentin Roosevelt Boulevard, Suite 508, Garden City, New York
      11530 (the "Assignor"), to MANUFACTURERS AND TRADERS TRUST
      COMPANY, a   banking association, with offices at One
      M&T Plaza, Buffalo, New York  14240, (the
      "Assignee").

    

    W
      I T N E S S E T H:

    WHEREAS,
      the Assignee has agreed to make certain loans to the Assignor (the "Loans")
      as
      set forth in and evidenced by a Revolving Line of Credit Note and Agreement
      dated the date hereof (the "Revolving Credit Agreement"), but only if, as
      additional security for all of Assignor's now existing and hereafter incurred
      obligations to the Assignee (collectively, the "Obligations") and all
      instruments executed pursuant thereto, Assignor assigns to Assignee all of
      Assignor's right, title, and interest in its contract rights in, all security
      interests granted by, and all monies and proceeds due under (i) all franchisee
      notes receivable of Assignor evidenced by the franchisee notes more particularly
      identified in Schedule “A” annexed hereto, and accompanying loan documents
      therefor, heretofore delivered to Assignee by Assignor as collateral for the
      Loans (collectively, the “Franchisee Documents”), and (ii) any and all
      Franchisee Documents, security interests granted by, and the monies and proceeds
      due thereunder, which are hereafter entered into by Assignor, as long as the
      any
      of the Loans or any other Obligations of the Assignor are
      outstanding.

    

    NOW,
      THEREFORE, in order to induce the Assignee to make the Loans evidenced by the
      Revolving Credit Agreement, and as additional security for the payment of all
      amounts due under the documents evidencing the Loans and Obligations and under
      any other loan documents between the Assignor and Assignee, and for the
      performance and observance of each term and condition contained therein, the
      Assignor hereby assigns and grants to the Assignee all right, title and interest
      that the Assignor has or may hereafter acquire in and to (i) the Franchisee
      Documents and contract rights in, security interests granted by, and monies
      and
      proceeds due under the Franchisee Documents and (ii) any and all Franchisee
      Documents, security interests granted by, and the monies and proceeds due
      thereunder, which are hereafter entered into by Assignor as long as any of
      the
      Loans or other Obligations remain outstanding.

    

    TO
      HAVE
      AND TO HOLD the same unto Assignee as additional and collateral security for
      the
      payment of all amounts due upon the Loans and any other Obligations and for
      the
      performance and observance of all of the agreements contained in the documents
      evidencing same.

    

    Although
      this Assignment constitutes a present, current and absolute assignment of the
      Franchisee Documents and any future Franchisee Documents hereinafter entered
      into, so long as there shall exist no Event of Default as such term is defined
      in the Revolving Credit Agreement, or in any other Loan Documents as such term
      is defined in the Revolving Credit Agreement,  Assignor shall have the
      right to exercise every right, power and authority under the Franchisee
      Documents, and to perform and enforce performance of all obligations under
      the
      Franchisee Documents.

    

    This
      Assignment is made for the purpose of securing (i) the full and prompt
      payment when due, whether by acceleration or otherwise, with such interest
      as
      may accrue thereon, either before or after maturity thereof, of the Revolving
      Credit Agreement, and (ii) the full and prompt payment and performance of
      any and all obligations of Assignor to Assignee hereunder and under the
      Revolving Credit Agreement and any other agreements, documents or instruments
      now or hereafter evidencing, securing or otherwise relating to the indebtedness
      evidenced by the Revolving Credit Agreement (the Revolving Credit Agreement
      and
      said other agreements, documents or instruments, together with all renewals,
      amendments, extensions, consolidations and modifications thereof, are
      hereinafter collectively referred to as the "Loan Documents").

    

    Assignor
      hereby covenants and agrees:

    

    a)           To
      faithfully abide by, perform and discharge each and every obligation, covenant,
      condition and agreement of the Franchisee Documents to be performed by Assignor
      and to enforce performance by each other party thereto of each and every
      obligation, covenant, condition and agreement to be performed by such other
      party.

    

    b)           To
      promptly provide Assignee with copies of any and all notices received or given
      by Assignor which allege, that Assignor is in default in the performance of
      any
      obligation, covenant, condition or agreement of the Franchisee Documents to
      be
      performed by Assignor.

    

    c)           That
      the term "Event of Default", whenever used in this Assignment, shall mean any
      one or more of the following events:

    

    (1)           the
      occurrence of any "Event of Default" under any of the Loan Documents beyond
      any
      applicable grace, notice and/or cure periods; or

    

    (2)           the
      failure by Assignor to observe, perform or discharge any obligation, covenant,
      condition or agreement of this Assignment for thirty (30) days after Assignee
      has provided notice of same provided, however, that if such failure is not
      susceptible of cure during such thirty (30) day period (but is susceptible
      of
      cure) and Assignor promptly commences and diligently pursues cure of such
      failure during such thirty (30) day period, then such thirty (30) day period
      shall be extended for an additional consecutive period of thirty (30) days;
      or;
      or

    

    (3)           any
      representation or warranty made by Assignor herein shall prove to have been
      false or incorrect in any material respect on the date as of which made;
      or

    

    (4)           a
      default by Assignor  under the provisions of the Franchisee Documents
      beyond any applicable grace, notice and/or cure periods.

    

    d)           That
      an Event of Default by Assignor under this Assignment beyond any applicable
      grace, notice and/or cure periods shall constitute an "Event of Default" under
      all of the Loan Documents.

    

    e)           That
      upon the occurrence of any Event of Default and beyond any applicable grace,
      notice and/or cure periods, Assignee may at its option, with or without notice
      or demand of any kind (except as may be provided herein or in any of the Loan
      Documents), and without waiving such Event of Default, (i) exercise any and
      all rights and remedies provided for hereunder or under the Loan Documents
      as
      well as such remedies as may be available at law or in equity and (ii) cure
      any such Event of Default in such manner and to such extent as Assignee may
      deem
      necessary to protect the security hereof, including specifically, without
      limitation, the right (but not the obligation) to appear in and defend any
      action or proceeding purporting to affect the security hereof or the rights
      or
      powers of Assignee, and also the right (but not the obligation) to perform
      and
      discharge each and every obligation, covenant, condition and agreement of
      Assignor under the Franchisee Documents, and, in exercising any such powers,
      to
      pay necessary costs and expenses, employ counsel and incur and pay attorneys'
      fees and expenses.  Assignee shall not be obligated to perform or
      discharge, nor does it hereby undertake to perform or discharge, any obligation,
      duty or liability of Assignor under any of the Franchisee Documents or by reason
      of this Assignment, it being agreed that Assignee shall be treated as agreeing
      to perform or discharge such obligation, duty  or liability if (but
      only if) Assignee shall, by written notice, sent to the other contracting party
      to, or grantor or licensor of, such Franchisee Documents, expressly so
      elect.

    

    f)           That
      at any time after the occurrence of any Event of
      Default  and  beyond any applicable grace, notice and/or
      cure periods , Assignee may, at its option, without notice, and without regard
      to the adequacy of security for the indebtedness hereby secured, either in
      person or by agent, with or without bringing any action or proceeding, or by
      a
      receiver to be appointed by a court at any time hereafter, exercise and enforce
      for its own benefit every right, power and authority under the Franchisee
      Documents, or any of them, as fully as Assignor could itself.

    

    g)           That
      the grantor or licensor of any Franchisee Documents, upon receipt of written
      notice from Assignee of the occurrence of any Event of Default and Assignee's
      election to exercise its rights under this Assignment, shall be and is hereby
      irrevocably directed and authorized by Assignor to recognize and accept Assignee
      as "lender" or Asecured
      party@,
      as the case may be, under the Franchisee Documents or as holder of such other
      document, as the case may be, for any and all purposes as fully as it would
      recognize and accept Assignor and the performance of Assignor thereunder, and
      to
      perform such document for the benefit of Assignee in accordance with the terms
      and conditions thereof inclusive of making payments in accordance with the
      Franchisee Documents directly to Assignee, without any obligation to determine
      whether or not any such Event of Default has in fact occurred.

    

    h)           That
      further, and without limitation of the foregoing remedies, upon the occurrence
      of any Event of Default, Assignee shall have the rights and remedies of a
      secured party under the Uniform Commercial Code as enacted in the State of
      New
      York  with respect to each and every document in which a security
      interest may be obtained, in addition to the rights and remedies otherwise
      provided for by law or in equity or in any of the Loan Documents.

    

    i)           That
      in the exercise of the powers herein granted to Assignee, no liability shall
      be
      asserted or enforced against Assignee, all such liability being hereby expressly
      waived and released by Assignor.  Assignor hereby agrees to indemnify
      and hold Assignee free and harmless from and against any and all claims,
      demands, liability, expense, cost, loss or damage (including all costs, expenses
      and attorneys' fees incurred in the defense thereof) which may be asserted
      against, imposed or incurred by Assignee by reason of any act or omission of
      Assignor under any of the Franchisee Documents or by reason of this Assignment
      or the exercise of Assignee's rights and remedies under this Assignment or
      under
      any of the Franchisee Documents or by reason of any alleged obligation or
      undertaking of Assignee to perform or discharge any obligation, duty or
      liability of Assignor under any of the Franchisee Documents; provided, however,
      that nothing herein shall be construed to obligate Assignor to indemnify and
      hold Assignee free and harmless from and against any claim, demand, liability,
      expense, cost, loss or damage asserted against, imposed on or incurred by
      Assignee by reason of Assignee's willful misconduct or gross
      negligence.  Should Assignee incur any such liability, expense, cost,
      loss or damage, or in the defense of any such claims or demands, for which
      it is
      to be indemnified by Assignor as aforesaid, the amount thereof shall be secured
      by this Assignment, and the other Loan Documents (whether or not such amount,
      when aggregated with other sums secured by the other Loan Documents, exceeds
      the
      principal face amount of the Revolving Credit Agreement), shall bear interest
      at
      the Interest Rate specified in the Revolving Credit Agreement from the date
      incurred until paid, and shall be due and payable immediately upon demand by
      Assignee.

    

    j)           That
      Assignee shall have the right to assign to any subsequent holder of the
      Revolving Credit Agreement, the Franchisee Documents and all the right, title,
      interest, power and authority of the Assignor in, under and by virtue of the
      Franchisee Documents hereby or hereafter assigned.

    

    Assignor
      further hereby covenants and represents to Assignee that (i) Assignor has
      not previously assigned, sold, pledged, transferred, mortgaged, hypothecated
      or
      otherwise encumbered the Franchisee Documents or any of them, or its right,
      title and interest therein, (ii) Assignor shall not assign, sell, pledge,
      transfer, mortgage, hypothecate or otherwise encumber its interests in the
      Franchisee Documents or any of them, (iii) Assignor has not knowingly
      performed any act which might prevent Assignor from performing its undertakings
      hereunder or which might prevent Assignee from operating under or enforcing
      any
      of the terms and conditions hereof or which would limit Assignee in such
      operation or enforcement, (iv) Assignor has not received any notice of or
      knows of no default by Assignor under the Franchisee Documents, or any of them
      and to the best knowledge of Assignor, no acceleration or termination of any
      Franchisee Documents has resulted due to any default thereunder except as
      disclosed in writing to Assignee, and (v) upon execution of any of the
      Franchisee Documents, Assignor will deliver a copy of such Franchisee Documents
      (or the original at Assignee's request) to Assignee.

    

    All
      notices, demands or Franchisee Documents which are required or permitted to
      be
      given or served hereunder shall be in writing and shall be deemed sufficiently
      given when delivered or mailed in the manner set forth in the Revolving Creidt
      Agreement.

    

    Any
      provision in the Revolving Credit Agreement that pertains to this Assignment
      shall be deemed to be incorporated herein as if such provision were fully set
      forth in this Assignment.  In the event of any conflict between the
      terms of this Assignment and the terms of the Revolving Credit Agreement, the
      terms of the Revolving Credit Agreement shall prevail.  A provision in
      this Assignment shall not be deemed to be inconsistent with the Revolving Credit
      Agreement by reason of fact that no provision in the Revolving Credit Agreement
      covers such provision in this Assignment.

    

    This
      Assignment constitutes the granting by Assignor to Assignee of a security
      interest under the Uniform Commercial Code as enacted in the State of New York
      in the right, title and interest of Assignor in, to and under each and every
      document in which a security interest may be obtained.  Assignor
      agrees to execute and deliver to Assignee, at any time or times during which
      this Assignment shall be in effect, such further instruments as Assignee may
      deem necessary to make effective this Assignment and the security interest
      created hereby.  To evidence such security interest, at the request of
      Assignee, Assignor shall, in a form satisfactory to Assignee, join with Assignee
      in executing one or more financing statements or other notices of security
      interest, and any continuation thereof, and shall pay the cost for filing
      thereof.  Assignor also grants Assignee the irrevocable right to file
      financing statements without Assignor joining in the execution
      thereof.

    

    The
      exercise of any rights or remedies under this Assignment shall not be deemed
      to
      cure or waive any default or event of default under any of the Loan Documents,
      or waive, modify or affect any notice of default under any of the Loan
      Documents, or invalidate any act done pursuant to such notice.  The
      rights and remedies of Assignee herein provided shall be in addition to and
      not
      substitution for the rights and remedies vested in Assignee in any of the Loan
      Documents or at law or in equity, all of which rights and remedies are
      specifically reserved by Assignee.  The remedies herein provided or
      otherwise available to Assignee shall be cumulative and may be exercised
      concurrently.  The failure to exercise any of the remedies herein
      provided shall not constitute a waiver thereof, nor shall use any of the
      remedies herein provided prevent the subsequent or concurrent resort to any
      other remedy or remedies.

    

    This
      Assignment shall be interpreted, construed and enforced according to laws of
      the
      State of New York.

    

    It
      is
      expressly intended, understood and agreed that this Assignment and the Loan
      Documents are made and entered into for the sole protection and benefit of
      Assignor and Assignee, and their respective legal representatives, successors
      and assigns (but in the case of assigns of Assignor, only to the extent
      permitted hereunder); that no other person or persons shall have any right
      at
      any time to action hereon or rights to the proceeds of the Loans;  and
      that Assignee shall have a lien upon and right to direct application of any
      such
      undisbursed proceeds of the Loans as provided in the Loan
      Documents.

    

    The
      relationship between Assignee and Assignor is solely that of a lender and
      borrower, and nothing contained herein or in any of the Loan Documents shall
      in
      any manner be construed as making the parties hereto partners, joint venturers
      or any other relationship other than lender and borrower.

    

    Assignor
      and Assignee intend and believe that each provision in this Assignment comports
      with all applicable local, state or federal laws and judicial
      decisions.  However, if any provision or provisions, or if any portion
      of any provision or provisions, in this Assignment if found by a court of law
      to
      be in violation of any applicable local, state or federal ordinance, statute,
      law administrative or judicial decision or public policy, and if such court
      should declare such portion, provision or provisions of this Assignment to
      be
      illegal, invalid, unlawful, void or unenforceable as written, then it is the
      intent of both Assignor and Assignee that such portion, provision or provisions
      shall be given force to the fullest possible extent that they are legal, valid
      and enforceable, that the remainder of this Assignment shall be construed as
      if
      such illegal, invalid, unlawful, void or unenforceable portion, provision or
      provisions were not contained therein and that the rights, obligations and
      interests of Assignor and Assignee under the remainder of this Assignment shall
      continue in full force and effect.

    

    Assignor
      agrees that the Franchisee Documents will not be altered, modified or changed,
      except in the regular course of business of Assignor, without the prior written
      consent of Assignee.

    

    Assignor
      further agrees not to hereafter assign or transfer its interest in the
      Franchisee Documents or the monies and proceeds due thereunder to or for the
      benefit of any other person, firm or corporation.

    

    Assignor
      further agrees to execute any additional documents that may be necessary or
      advisable in order to carry out and effect the full intent of this
      Assignment.

    

    UPON
      payment in full of the Obligations, this Assignment shall be rendered null
      and
      void.

    

    

    

    

    [BALANCE
      OF PAGE INTENTIONALLY LEFT BLANK]

    

    

    

    

    

    IN
      WITNESS WHEREOF, this Assignment is duly executed by Assignor the day and year
      first above written.

    

    

    EMERGING
      VISION, INC.

    

    By:/s/Christopher
      G. Payan

    Christopher
      G. Payan

    CEO

    

    

    

    EXHIBIT
      A

    

    SEE
      ATTACHED LIST OF FRANCHISEE NOTES
      RECEIVABLE

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