Document:

ex10-3.htm

    EXHIBIT  10.3

    

    

    GENERAL
      SECURITY AGREEMENT

    New
      York

    

    

    Debtor
      (Name):  EMERGING VISION, INC.

    (Organizational
      Structure):  CORPORATION

    (State
      Law organized under):  NEW YORK

    (Organizational
      Identification Number, if any; note that this is NOT a request for the Taxpayer
      Identification Number):

    (Address
      of residence/chief executive office):  100 QUENTIN ROOSEVELT
      BOULEVARD, SUITE 508, GARDEN CITY, NEW YORK  11530

    

    Bank:  Manufacturers
      and Traders Trust Company, a New York banking corporation with its
      banking offices at One M&T Plaza, Buffalo, New York 14203 Attention:
      Office of General Counsel.

    

    For
      good
      and valuable consideration, the receipt and sufficiency of which is
      acknowledged, and intending to be legally bound, Debtor agrees with Secured
      Party as follows:

    

    1)        Security
      Interests.

    

    a)        Grant.  As
      security for the prompt and complete payment and performance when due of all
      of
      the Obligations, Debtor does hereby grant to Secured Party a continuing security
      interest (“Security Interest”) in all personal property and fixtures of Debtor,
      wherever located, whether now existing or owned or hereafter arising or
      acquired, whether or not subject to the Uniform Commercial Code, as the same
      may
      be in effect in the State of New York, as amended from time to time (“UCC”), and
      whether or not affixed to any realty, including, without limitation, (i) all
      accounts, chattel paper, investment property, deposit accounts, documents,
      goods, equipment, farm products, general intangibles (including trademarks,
      service marks, trade names, patents, copyrights, licenses and franchises),
      instruments, inventory, money, letter of credit rights, causes of action
      (including tort claims) and other personal property (including agreements and
      instruments not constituting chattel paper or a document, general intangible
      or
      instrument); (ii) all additions to, accessions to, substitutions for,
      replacements of and supporting obligations of the foregoing; (iii) all proceeds
      and products of the foregoing, including, without limitation, insurance
      proceeds; and (iv) all business records and information relating to any of
      the
      foregoing and any software or other programs for accessing and manipulating
      such
      information (collectively, the “Collateral”).  Debtor acknowledges and
      agrees that the foregoing collateral description is intended to cover all assets
      of Debtor.

    

    b)        Obligations.  The
      term “Obligations” means any and all indebtedness or other obligations of Debtor
      to Secured Party in any capacity, now existing or hereafter incurred, however
      created or evidenced, regardless of kind, class or form, whether direct,
      indirect, absolute or contingent (including obligations pursuant to any
      guaranty, endorsement, other assurance of payment or otherwise), whether joint
      or several, whether from time to time reduced and thereafter increased, or
      entirely extinguished and thereafter reincurred, together with all extensions,
      renewals and replacements thereof, and all interest, fees, charges, costs or
      expenses which accrue on or in connection with the foregoing, including, without
      limitation, any indebtedness or obligations (i) not yet outstanding but
      contracted for, or with regard to which any other commitment by Secured Party
      exists; (ii) arising prior to, during or after any pendency of any bankruptcy,
      insolvency, receivership or other similar proceeding, regardless
      of  whether allowed or allowable in such proceeding; (iii) owed by
      Debtor to others and which Secured Party obtained, or may obtain, by
      assign­ment or otherwise; or (iv) payable under this Agreement.

    

    2)        Covenants.  Debtor
      covenants and agrees as follows:

    

    a)        Perfection
      of Security Interest.  Debtor shall execute and deliver to Secured
      Party such financing statements, control agreements or other documents, in
      form
      and content satisfactory to Secured Party, as Secured Party may from time to
      time request to perfect and continue the Security Interest.  Upon the
      request of Secured Party, Debtor shall deliver to Secured Party any and all
      instruments, chattel paper, negotiable documents or other documents evidencing
      or constituting any part of the Collateral properly endorsed or assigned, in
      a
      manner satisfactory to Secured Party.  Until such delivery, Debtor
      shall hold such portion of the Collateral in trust for Secured
      Party.  Debtor shall pay all expenses for the preparation, filing,
      searches and related costs in connection with the grant and perfection of the
      Security Interest.  Debtor authorizes (both prospectively and
      retroactively) Secured Party to file financing statements, and any continuations
      and amendments thereof, with respect to the Collateral without Debtor’s
      signature.  A photocopy or other reproduction of any financing
      statement or this Agreement shall be sufficient as a financing statement for
      filing in any jurisdiction.

    

    b)        Negative
      Pledge; Disposition of Collateral.  Debtor shall not grant or
      allow the imposition of any lien, security interest or encumbrance on, or
      assignment of, the Collateral unless consented to in writing by Secured
      Party.  Debtor shall not make or permit to be made any sale, transfer
      or other disposition of the Collateral; provided, however, prior to the
      occurrence of an Event of Default, Debtor may in the ordinary course of business
      consistent with its past practices and with prudent and standard practices
      used
      in the industry that is the same or similar to that in which Debtor is engaged:
      (i) dispose of any Collateral consisting of equipment that is obsolete or
      worn-out; (ii) sell or exchange any Collateral consisting of equipment in
      connection with the acquisition of other equipment that is at least as valuable
      as such equipment, that Debtor intends to use for substantially the same
      purposes as such equipment and that is not subject to any security interest
      or
      other lien or encumbrance; (iii) collect Collateral consisting of accounts
      or
      assign such Collateral for purposes of collection; or  (iv) sell or
      lease Collateral consisting of inventory.  A sale, lease or other
      transfer of such Collateral consisting of inventory in the ordinary course
      of
      Debtor’s business does not include a transfer in partial or complete
      satisfaction of any liability or obligation or any bulk sale.

     

    c)        Condition
      of Collateral; Impermissible Use.  Debtor shall keep the
      Collateral consisting of goods in good condition and shall not commit or permit
      damage or destruction (other than ordinary wear and tear) to such
      Collateral.  Debtor shall not permit any Collateral consisting of
      goods (i) to be used in such a manner that would violate any insurance policy
      or
      warranty covering the Collateral or that would violate any applicable law of
      any
      governmental authority (including any environmental law) now or hereafter in
      effect; (ii) to become fixtures on any real property on which Secured Party
      does
      not have a first priority mortgage lien (unless Secured Party has been provided
      with an acceptable landlord/mortgagee waiver) or become an accession to any
      goods not included in the Collateral; or (iii) to be placed in any warehouse
      that may issue a negotiable document with regard to such
      Collateral.

    

    d)        Modification
      to Collateral. Debtor shall not, without Secured Party’s prior written
      consent, grant any extension on, compound, settle for less than the full amount
      of, release (in whole or in part), modify, cancel, or allow for any
      substitution, credit or adjustment on Collateral consisting of accounts, chattel
      paper, general intangibles, instruments, documents or investment property,
      except that in the absence of an Event of Default, Debtor may grant to account
      debtors, or other persons obligated with respect to the Collateral, extensions,
      credits, discounts, compromises or settlements in the ordinary course of
      business consistent with its past practices and consistent with prudent and
      standard practices used in the industries that are the same or similar to those
      in which Debtor is engaged.

    

    e)        Titled
      Goods.  Debtor shall cause all goods included in the Collateral to
      be properly titled and registered to the extent required by applicable
      law.  Upon the request of Secured Party, Debtor shall cause the
      interest of Secured Party to be properly indicated on any certificate of title
      relating to such goods and deliver to Secured Party each such certificate,
      and
      any additional evidence of ownership, certificates of origin or other documents
      evidencing any interest in such goods.

    

    f)        Insurance.  Debtor
      shall, at its own expense and at all times, maintain effective insurance
      policies covering damage to persons and against fire, flood, theft and all
      other
      risks to which the Collateral may be subject, all in such amounts, with such
      deductibles and issued by such insurance company as shall be satisfactory to
      Secured Party.  Such insurance policies shall have all endorsements
      that Secured Party may require and shall further (i) name Secured Party,
      exclusively, as the additional insured on the casualty insurance and the
      lender’s loss payee and/or mortgagee on the hazard insurance; (ii) provide that
      Secured Party shall receive a minimum of thirty (30) days prior written notice
      of any amendment or cancellation; and (iii) insure Secured Party notwithstanding
      any act or neglect of Debtor or other owner of the property described in such
      insurance.  If Debtor fails to obtain the required insurance as
      provided herein, Secured Party may, but is not obligated, to obtain such
      insurance as Secured Party may deem appropriate, including, without limitation,
      if Secured Party so chooses, “single interest insurance” which will cover only
      Secured Party’s interest in the Collateral.  Debtor shall pay or
      reimburse to Secured Party the cost of such insurance.  Secured Party
      shall have the option, in its sole discretion, to hold insurance proceeds as
      part of the Collateral, apply any insurance proceeds toward the Obligations
      or
      allow the Debtor to apply the insurance proceeds towards repair or replacement
      of the item of Collateral in respect of which such proceeds were
      received.  Upon the request of Secured Party, Debtor shall from time
      to time deliver to Secured Party such insurance policies, or other evidence
      of
      such policies satisfactory to Secured Party, and such other related information
      Secured Party may request.

    

    g)        Collateral
      Information.  Debtor shall provide all information, in form and
      substance satisfactory to Secured Party, that Secured Party shall from time
      to
      time request to (i) identify the nature, extent, value, age and location of
      any
      of the Collateral, or (ii) identify any account debtor or other party obligated
      with respect to any chattel paper, general intangible, instrument, investment
      property, document or deposit account included in the Collateral.

    

    h)        Financial
      Information.  Debtor shall furnish to Secured Party financial
      statements in such form (e.g., audited, reviewed, compiled) and at such
      intervals as Secured Party shall request from time to time plus any additional
      financial information that Secured Party may request.  All such
      financial statements shall be in conformity with generally accepted accounting
      principles consistently applied.

    

    i)        Taxes;
      Licenses; Compliance with Laws.  Before the end of any applicable
      grace period, Debtor shall pay each tax, assessment, fee and charge imposed
      by
      any governmental authority upon the Collateral, the ownership, disposition
      or
      use of any of the Collateral, this Agreement or any instrument evidencing any
      of
      the Obligations.  Debtor shall maintain in full force and effect each
      license, franchise or other authorization needed for any ownership, disposition
      or use of the Collateral and the conduct of its business, operations or
      affairs.  Debtor shall comply with all applicable law of any
      governmental authority (including any environmental law), now or hereafter
      in
      effect, applicable to the ownership, disposition or use of the Collateral or
      the
      conduct of its business, operations or affairs.

    

    j)        Records;
      Legend.  Debtor shall maintain accurate and complete books and
      records relating to the Collateral in conformity with generally accepted
      accounting principles consistently applied.  At Secured Party’s
      request, Debtor will legend, in form and manner satisfactory to Secured Party,
      its books and records to indicate the Security Interest.

    

    k)        Additional
      Collateral.  If at any time the liquidation value of any of the
      Collateral is unsatisfactory to Secured Party, then, on demand of Secured Party,
      Debtor shall immediately (i) furnish such additional collateral satisfactory
      to
      Secured Party to be held by Secured Party as if originally pledged hereunder
      and
      execute such additional security agreements, financing statements or other
      agreements as requested by Secured Party, or (ii) repay the Obligations to
      bring
      the outstanding amount of the Obligations to within a satisfactory relationship
      to the liquidation value of the Collateral.

    

    l)        Notifications
      of Change.  Immediately upon acquiring knowledge or reason to know
      of any of the following, Debtor shall notify Secured Party of the occurrence
      or
      existence of (i) any Event of Default; (ii) any event or condition that, after
      notice, lapse of time or after both notice and lapse of time, would constitute
      an Event of Default; (iii) any account or general intangible that arises out
      of
      a contract with any governmental authority (including the United States); (iv)
      any event or condition that has or (so far as can be foreseen) will or might
      have any material adverse effect on the Collateral (including a material loss,
      destruction or theft of, or of any damage to, the Collateral, material decline
      in value of the Collateral or a material default by an account debtor or other
      party’s performance of obligations with respect to the Collateral), on Debtor or
      its business, operations, affairs or condition (financial or
      otherwise).

    

    m)        Lien
      Law.  If any account or general intangible included in the
      Collateral represents money owing pursuant to any contract for the improvement
      of real property or for a public improvement for purposes of the Lien Law of
      the
      State of New York (the “Lien Law”), Debtor shall (i) give Secured Party notice
      of such fact; (ii) receive and hold any money advanced by Secured Party with
      respect to such account or general intangible as a trust fund to be first
      applied to the payment of trust claims as such term and/or concept is defined
      in
      the Lien Law (in Section 71 thereof, or otherwise); and (iii) until such trust
      claim is paid, not use or permit the use of any such money for any purpose
      other
      than the payment of such trust claims.

    

    n)        Protection
      of Collateral; Further Assurances.  Debtor shall, at its own cost,
      faithfully preserve, defend and protect the Security Interest as a prior
      perfected security interest in the Collateral under the UCC and other applicable
      law, superior and prior to the rights of all third parties (other than those
      permitted pursuant to Section 3.1) and shall defend the Collateral against
      all
      setoffs, claims, counterclaims, demands and defenses.  At the request
      of Secured Party, Debtor shall do, obtain, make, execute and deliver all such
      additional and further acts, things, deeds, assurances and instruments as
      Secured Party may deem necessary or advisable from time to time in order to
      attach, continue, preserve, perfect or protect the Security Interest and Secured
      Party’s rights hereunder including obtaining waivers (in form and content
      acceptable to Secured Party) from landlords, warehousemen and
      mortgagees.  Debtor hereby irrevocably appoints Secured Party, its
      officers, employees and agents, or any of them, as attorneys-in-fact for Debtor
      with full power and authority in the place and stead of Debtor and in the name
      of Debtor or its own name from time to time in Secured Party’s discretion, to
      perform all acts which Secured Party deems appropriate to attach, continue,
      preserve or perfect and continue the Security Interest, including signing for
      Debtor (to the extent such signature may be required by applicable law) UCC-1
      financing statements, UCC-3 amendment or other instruments and documents to
      accomplish the purposes of this Agreement.  This power of attorney,
      being coupled with an interest, is irrevocable and shall not be affected by
      the
      subsequent disability or incompetence of Debtor.

    

    3)        Representations
      and Warranties.  Debtor represents, warrants and agrees as
      follows:

    

    a)        Title.  Debtor
      holds good and marketable title to the Collateral free and clear from any
      security interest or other lien or encumbrance of any party, other than the
      Security Interest or such liens, security interests or other liens or
      encumbrances specifically permitted by Secured Party and set forth on Exhibit
      A
      hereto (“Permitted Liens”).  Debtor has not made any prior sale,
      pledge, encumbrance, assignment or other disposition of any of the Collateral
      except for the Permitted Liens.

    

    b)        Authority.  If
      Debtor is a business entity, it is duly organized, validly existing and in
      good
      standing under the laws of the above-named state of
      organization.  Debtor has the full power and authority to grant the
      Security Interest and to execute, deliver and perform its obligations in
      accordance with this Agreement.  The execution and delivery of this
      Agreement will not (i) violate any applicable law of any governmental authority
      or any judgment or order of any court, other governmental authority or
      arbitrator; (ii) violate any agreement governing Debtor or to which Debtor
      is a
      party; or (iii) result in a security interest or other lien or encumbrance
      on
      any of its assets.  Debtor’s certificate of incorporation, by-laws or
      other organizational documents do not prohibit any term or condition of this
      Agreement.  Each authorization, approval or consent from, each
      registration and filing with, each declaration and notice to, and each other
      act
      by or relating to, any party required as a condition of Debtor’s execution,
      delivery or performance of this Agreement (including any shareholder or board
      of
      directors or similar approvals) has been duly obtained and is in full force
      and
      effect.  Debtor has the power and authority to transact the business
      in which it is engaged and is duly licensed or qualified and in good standing
      in
      each jurisdiction in which the conduct of its business or ownership of property
      requires such licensing or such qualifications.

    

    c)        Judgments
      and Litigation.  There is no pending or threatened claim, audit,
      investigation, action or other legal proceeding or judgment or order of any
      court, agency or other governmental authority or arbitrator which involves
      Debtor or the Collateral and which might have a material adverse effect upon
      the
      Collateral, the Debtor, its business, operations, affairs or condition
      (financial or otherwise), or threaten the validity of this Agreement or any
      related document or action.  Debtor will immediately notify Secured
      Party upon acquiring knowledge of the foregoing.

    

    d)        Enforceability
      of Collateral.  Instruments, chattel paper, accounts or documents
      which constitute any part of the Collateral are genuine and enforceable in
      accordance with their terms, comply with the applicable law of any governmental
      authority concerning form, content, manner of preparation and execution, and
      all
      persons appearing to be obligated on such Collateral have authority and capacity
      to contract and are in fact obligated as they appear to be on such
      Collateral.  There are no restrictions on any assignment or other
      transfer or grant of the Security Interest by Debtor.  Each sum
      represented by Debtor from time to time as owing on accounts, instruments,
      deposit accounts, chattel paper and general intangibles constituting any part
      of
      the Collateral by account debtors and other parties with respect to such
      Collateral is the sum actually and unconditionally owing by account debtors
      and
      other parties with respect thereto at such time, except for applicable normal
      cash discounts.  None of the Collateral is subject to any defense,
      set-off, claim or counterclaim of a material nature against Debtor except as
      to
      which Debtor has notified Secured Party in writing.

    

    e)        Location
      of Chief Executive Office, Records, Collateral.  The locations of
      the following are listed on page one of this Agreement or, if different or
      additional, on Exhibit A hereto:  (i) Debtor’s residence, principal
      place of business and chief executive office; (ii) the office in which Debtor
      maintains its books or records relating to the Collateral; (iii) the facility
      (including any storage facility) at which now owned or subsequently acquired
      inventory, equipment and fixtures constituting any part of the Collateral shall
      be kept; and (iv) the real property on which any crop included in the Collateral
      is growing or is to be grown, or on which any timber constituting any part
      of
      the Collateral is or is to be standing.  Debtor will not effect or
      permit any change in any of the foregoing locations (or remove or permit the
      removal of the records or Collateral therefrom, except for mobile equipment
      included in the Collateral which may be moved to another location for not more
      than thirty (30) days) without thirty (30) days prior written notice to Secured
      Party and all actions deemed necessary by Secured Party to maintain the Security
      Interest intended to be granted hereby at all times fully perfected and in
      full
      force and effect have been taken.  All of the locations listed on page
      one or Exhibit A are owned by Debtor, of if not, by the party(ies) identified
      on
      Exhibit A.

    
      
              

                  
      
      

                  CLB-107-NY
            (10/06)                                                                               ©
Manufacturers and Traders Trust Company,
            2006      
    

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    f)        Structure;
      Name.  Debtor’s organizational structure, state of registration
      and organizational identification number (if any) are stated accurately on
      page
      one of this Agreement, and its full legal name and any trade name used to
      identify it are stated accurately on page one of this Agreement, or if different
      or additional are listed on Exhibit A hereto. Debtor will not change its name,
      any trade names or its identity, its organizational structure, state of
      registration or organizational identification number without thirty (30) days
      prior written notice to Secured Party.  All actions deemed necessary
      by Secured Party to maintain the Security Interest intended to be granted hereby
      at all times fully perfected and in full force and effect have been
      taken.

    

    4)        Performance
      and Expenditures by Secured Party.  If Debtor fails to
      perform or comply with any of the terms hereof, Secured Party, at its option,
      but without any obligation so to do, may perform or comply, or otherwise cause
      performance or compliance, with such terms including the payment or discharge
      of
      all taxes, fees, security interest or other liens, encumbrances or claims,
      at
      any time levied or placed on the Collateral.  An election to make
      expenditures or to take action or perform an obligation of Debtor under this
      Agreement, after Debtor’s failure to perform, shall not affect Secured Party’s
      right to declare an Event of Default and to exercise its
      remedies.  Nor shall the provisions of this Section relieve Debtor of
      any of its obligations hereunder with respect to the Collateral or impose any
      obligation on Secured Party to proceed in any particular manner with respect
      to
      the Collateral.

    

    5)        Duty
      of Secured Party.  Secured Party’s sole duty with respect to
      the custody, safekeeping and physical preservation of the Collateral in its
      possession shall be to deal with it in the same manner as Secured Party deals
      with similar property for its own account.  Neither Secured Party nor
      its directors, officers, employees or agents shall be liable for failure to
      demand, collect or realize upon the Collateral or for any delay in doing so
      or
      shall be under any obligation to sell or otherwise dispose of the Collateral
      upon the request of Debtor or any other person or to take any other action
      whatsoever with regard to the Collateral.  The powers conferred on
      Secured Party hereunder are solely to protect Secured Party’s interests in the
      Collateral and shall not impose any duty upon any Secured Party to exercise
      any
      such powers.  Secured Party shall be accountable only for amounts that
      it actually receives as a result of the exercise of its powers under this
      Agreement, and neither it nor its officers, directors, employees or agents
      shall
      be responsible to Debtor for any act or failure to act hereunder, except for
      its
      own gross negligence or willful misconduct.

    

    6)        Certain
      Rights and Remedies.

    

    a)        Inspection;
      Verification.  Secured Party, and such persons as it may
      designate, shall have the right from time to time to (i) audit and inspect
      (a)
      the Collateral, (b) all books and records related thereto (and make extracts
      and
      copies from such records), and (c) the premises upon which any of the Collateral
      or books and records may be located; (ii) discuss Debtor’s business, operations,
      affairs or condition (financial or otherwise) with its officers, accountants;
      and (iii) verify the validity, amount, quality, quantity, value, condition
      and
      status of, or any other matter relating to the Collateral in any manner and
      through any medium Secured Party may consider appropriate (including contacting
      account debtors or third party possessing the Collateral for purpose of making
      such verification).  Debtor shall furnish all assistance and
      information and perform any acts Secured Party may require regarding
      thereto.  Debtor shall bear the cost and expense of any such
      inspection and verification.

    

    b)        Notification
      of Security Interest.  Secured Party may notify any or all account
      debtors and other person obligated with respect to the Collateral of the
      Security Interest therein.  Upon the request of Secured Party, Debtor
      agrees to enter into such warehousing, lockbox or other custodial arrangement
      with respect to any of the Collateral that Secured Party shall deem necessary
      or
      desirable.

    

    c)        Application
      of Proceeds.  Secured Party may apply the proceeds from the sale,
      lease or other disposition or realization upon the Collateral to the Obligations
      in such order and manner and at such time as Secured Party shall, in its sole
      discretion, determine.  Debtor shall remain liable for any deficiency
      if the proceeds of any sale, lease or other disposition or realization upon
      the
      Collateral are insufficient to pay the Obligations.  Any proceeds
      received by Debtor from the Collateral after an Event of Default shall (i)
      be
      held by Debtor in trust for Secured Party in the same medium in which received;
      (ii) not be commingled with any assets of Debtor; and (iii) be delivered to
      Secured Party in the form received, properly indorsed to permit
      collection.  After an Event of Default, Debtor shall promptly notify
      Secured Party of the return to or repossession by Debtor of goods constituting
      part of the Collateral, and Debtor shall hold the same in trust for Secured
      Party and shall dispose of the same as Secured Party directs.

    

    d)        Income
      and Proceeds of Instruments and Investment Property.  Until the
      occurrence of an Event of Default, Debtor reserves the right to request to
      receive all cash income or cash distribution (whether in cash or evidenced
      by
      check) payable on account of any instrument or investment property constituting
      part of the Collateral (collectively, “Cash Distribution”).  Until
      actually paid, all rights in the foregoing shall remain subject to the Security
      Interest.  Any other income, dividend, distribution, increase in or
      profits (including any stock issued as a result of any stock split or dividend,
      any capital distributions and the like) on account of any instrument or
      investment property constituting part of the Collateral and, upon the occurrence
      of an Event of Default, all Cash Distributions, shall be delivered to Secured
      Party immediately upon receipt, in the exact form received and without
      commingling with other property which may be received by, paid or delivered
      to
      Debtor or for Debtor’s account, whether as an addition to, in discharge of, in
      substitution of, or in exchange of the Collateral.  Until delivery,
      such Collateral shall be held in trust for Secured Party.

    

    e)        Registered
      Holder of the Collateral.  Secured Party shall have the right to
      transfer to or register (with or without reference to this Agreement) in the
      name of Secured Party or its nominee any investment property, general
      intangible, instrument or deposit account constituting part of the Collateral
      so
      that Secured Party or such nominee shall appear as the sole owner of record
      thereof; provided, however, that so long as no Event of Default has occurred,
      Secured Party shall deliver to Debtor all notices, statements or other
      communications received by it or its nominee as such registered owner, and
      upon
      demand and receipt of payment of necessary expenses thereof, shall give to
      Debtor or its designee a proxy or proxies to vote and take all action with
      respect to such Collateral.  After the occurrence of any Event of
      Default, Debtor waives all rights to be advised of or to receive any notices,
      statements or communications received by Secured Party or its nominee as such
      record owner, and agrees that no proxy or proxies given by Secured Party to
      Debtor or its designee as aforesaid shall thereafter be
      effective.

    
      
              

                  
      
      

                  CLB-107-NY
            (10/06)                                                                               ©
Manufacturers and Traders Trust Company,
            2006      
    

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    7)        Default.

    

    a)        Events
      of Default.  Any of the following events or conditions shall
      constitute an “Event of Default”:  (i) failure by Debtor to pay when
      due (whether at the stated maturity, by acceleration, upon demand or otherwise)
      the Obligations, or any part thereof, or there occurs any event or condition
      which after notice, lapse of time or after both notice and lapse of time will
      permit acceleration of any Obligation; (ii) default by Debtor in the performance
      of any obligation, term or condition of this Agreement or any other agreement
      with Secured Party or any of its affiliates or subsidiaries (collectively,
      “Affiliates”); (iii) failure by Debtor to pay when due (whether at the stated
      maturity, by acceleration, upon demand or otherwise) any indebtedness or
      obligation owing to any third party or any Affiliate, the occurrence of any
      event which could result in acceleration of payment of any such indebtedness
      or
      obligation or the failure to perform any agreement with any third party or
      any
      affiliate; (iv) Debtor is dissolved, becomes insolvent, generally fails to
      pay
      or admits in writing its inability generally to pay its debts as they become
      due; (v) Debtor makes a general assignment, arrangement or composition agreement
      with or for the benefit of its creditors or makes, or sends notice of any
      intended, bulk sale; the sale, assignment, transfer or delivery of all or
      substantially all of the assets of Debtor to a third party; or the cessation
      by
      Debtor as a going business concern; (vi) Debtor files a petition in bankruptcy
      or institutes any action under federal or state law for the relief of debtors
      or
      seeks or consents to the appointment of an administrator, receiver, custodian
      or
      similar official for the wind up of its business (or has such a petition or
      action filed against it and such petition action or appointment is not dismissed
      or stayed within forty-five (45) days); (vii) the reorganization, merger,
      consolidation or dissolution of Debtor (or the making of any agreement
      therefor); (viii) the death or judicial declaration of incompetency of Debtor,
      if an individual; (ix) the entry of any judgment or order of any court, other
      governmental authority or arbitrator against Debtor; (x) falsity, omission
      or
      inaccuracy of facts submitted to Secured Party or any Affiliate (whether in
      a
      financial statement or otherwise); (xi) an adverse change in the Collateral,
      Debtor, its business, operations, affairs or condition (financial or otherwise)
      from the status shown on any financial statement or other document submitted
      to
      Secured Party, and which change Secured Party determines will have a material
      adverse affect on (a) Debtor, its business, operations or condition (financial
      or otherwise), or (b) the ability of Debtor to pay or perform the Obligations;
      (xii) any pension plan of Debtor fails to comply with applicable law or has
      vested unfunded liabilities that, in the opinion of Secured Party, might have
      a
      material adverse effect on Debtor’s ability to repay its debts; (xiii) any
      indication or evidence received by Secured Party that Debtor may have directly
      or indirectly been engaged in any type of activity which, in Secured Party’s
      discretion, might result in the forfeiture of any property of Debtor to any
      governmental authority; (xiv) the occurrence of any event described in Section
      7.1(i) through and including 7.1(xiii) with respect to any endorser, guarantor
      or any other party liable for, or whose assets or any interest therein secures,
      payment of any of the Obligations; or (xv) Secured Party in good faith deems
      itself insecure with respect to payment or performance of the
      Obligations.

    

    b)        Rights
      and Remedies Upon Default.  Upon the occurrence of any Event of
      Default, Secured Party without demand of performance or other demand,
      presentment, protest, advertisement or notice of any kind (except any notice
      required by law) to or upon Debtor or any other person (all and each of which
      demands, presentments, protests, advertisements and notices are hereby waived),
      may exercise all rights and remedies of a secured party under the UCC, under
      other applicable law, in equity or otherwise or available under in this
      Agreement including:

    

    i)        Obligations
      Immediately Due; Termination of Lending.  Secured Party may
      declare all or any part of any Obligations not payable on demand to be
      immediately due and payable without demand or notice of any kind.  All
      or any part of any Obligations whether or not payable on demand, shall be
      immediately due and payable automatically upon the occurrence of an Event of
      Default in Section 7.1 (vi) above.  The provisions hereof are not
      intended in any way to affect any rights of Secured Party with respect to any
      Obligations which may now or hereafter be payable on demand.  Secured
      Party may terminate any obligation it may have to grant any additional loan,
      credit or other financial accommodation to Debtor.

    

    ii)        Access
      to Collateral.  Secured Party, or its agents, may peaceably retake
      possession of the Collateral with or without notice or process of law, and
      for
      that purpose may enter upon any premises where the Collateral is located and
      remove the same.  At Secured Party’s request, Debtor shall assemble
      the Collateral and deliver it to Secured Party or any place designated by
      Secured Party, at Debtor’s expense.

    

    iii)        Sell
      Collateral.  Secured Party shall have the right to sell, lease or
      otherwise dispose of the Collateral in one or more parcels at public or private
      sale or sales upon such terms and conditions as it may deem advisable and at
      such prices as it may deem best, for cash or on credit or for future delivery
      without assumption of any credit risk.  Each purchaser at any such
      sale shall hold the property sold absolutely, free from any claim or right
      on
      the part of Debtor.  Debtor hereby waives (to the extent permitted by
      law) all rights of redemption, stay and appraisal which Debtor now has or may
      at
      any time in the future have under any applicable law now existing or hereafter
      enacted.  Secured Party shall have the right to use Debtor’s premises
      and any materials or rights of Debtor (including any intellectual property
      rights) without charge for such sales or disposition of the Collateral or the
      completion of any work in progress for such times as Secured Party may see
      fit.  Without in any way requiring notice to be given in the following
      time and manner, Debtor agrees that with respect to any notice by Secured Party
      of any sale, lease or other disposition or realization or other intended action
      hereunder or in connection herewith, whether required by the UCC or otherwise,
      such notice shall be deemed reasonable and proper if given at least five (5)
      days before such action in the manner described below in the Section entitled
      “Notices”.

    

    iv)        Collect
      Revenues.  Secured Party may either directly or through a receiver
      (i) demand, collect and sue on any Collateral consisting of accounts or any
      other Collateral including notifying account debtors or any other persons
      obligated on the Collateral to make payment on the Collateral directly to
      Secured Party; (ii) file any claim or to take any other action or proceeding
      in
      any court of law or equity or otherwise deemed appropriate by Secured Party
      with
      respect to the Collateral or to enforce any other right in respect of the
      Collateral; (iii) take control, in any manner, of any payment or proceeds from
      the Collateral; (iv) prosecute or defend any suit, action or proceeding brought
      against Debtor with respect to the Collateral; (v) settle, compromise or adjust
      any and all claims arising under the Collateral or, to give such discharges
      or
      releases as Secured Party may deem appropriate; (vi) receive and collect all
      mail addressed to Debtor, direct the place of delivery thereof to any location
      designated by Secured Party; to open such mail; to remove all contents
      therefrom; to retain all contents thereof constituting or relating to the
      Collateral; (vii) execute, sign or endorse any and all claims, endorsements,
      assignments, checks or other instruments with respect to the Collateral; or
      (viii) generally, use, sell, transfer, pledge and make any agreement with
      respect to or otherwise deal with any of the Collateral; and Debtor hereby
      irrevocably appoints Secured Party, its officers, employees and agents, or
      any
      of them, as attorneys-in-fact for Debtor with full power and authority in the
      place and stead of Debtor and in the name of Debtor or in its own name from
      time
      to time in Secured Party’s discretion, to take any and all appropriate action
      Secured Party deems necessary or desirable to accomplish any of the foregoing
      or
      otherwise to protect, preserve, collect or realize upon the Collateral or to
      accomplish the purposes of this Agreement.  Debtor revokes each power
      of attorney (including any proxy) heretofore granted by Debtor with regard
      to
      the Collateral.  This power of attorney, being coupled with an
      interest, is irrevocable and shall not be affected by the subsequent disability
      or incompetence of Debtor.

    

    v)        Setoff.  Secured
      Party may place an administrative hold on and set off against the Obligations
      any property held in a deposit or other account with Secured Party or any of
      its
      Affiliates or otherwise owing by Secured Party or any of its Affiliates in
      any
      capacity to Debtor. Such set-off shall be deemed to have been exercised
      immediately at the time Secured Party or such Affiliate elects to do
      so.

    

    8)        Expenses.  Debtor
      shall pay to Secured Party on demand all costs and expenses (including all
      reasonable fees and disbursements of all counsel retained for advice, suit,
      appeal or other proceedings or purpose and of any experts or agents it may
      retain), which Secured Party may incur in connection with (i) the administration
      of this Agreement, including any administrative fees Secured Party may impose
      for the preparation of discharges, releases or assignments to third-parties;
      (ii) the custody or preservation of, or the sale, lease or other disposition
      or
      realization on the Collateral; (iii) the enforcement and collection of any
      Obligations or any guaranty thereof; (iv) the exercise, performance ,enforcement
      or protection of any of the rights of Secured Party hereunder; or (v) the
      failure of Debtor to perform or observe any provisions hereof.  After
      such demand for payment of any cost, expense or fee under this Section or
      elsewhere under this Agreement, Debtor shall pay interest at the highest default
      rate specified in any instrument evidencing any of the Obligations from the
      date
      payment is demanded by Secured Party to the date reimbursed by
      Debtor.  All such costs, expenses or fees under this Agreement shall
      be added to the Obligations.

    

    9)        Indemnification.  Debtor
      shall indemnify Secured Party and its Affiliates and each officer, employee,
      accountant, attorney and other agent thereof (each such person being an
“Indemnified Party”) on demand, without any limitation as to amount, against
      each liability, cost and expense (including all reasonable fees and
      disbursements of all counsel retained for advice, suit, appeal or other
      proceedings or purpose, and of any expert or agents an Indemnified Party may
      retain) heretofore or hereafter imposed on, incurred by or asserted against
      any
      Indemnified Party (including any claim involving any allegation of any violation
      of applicable law of any governmental authority (including any environmental
      law
      or criminal law)), however asserted and whether now existing or hereafter
      arising, arising out of any ownership, disposition or use of any of the
      Collateral; provided, however, the foregoing indemnity shall not apply to
      liability, cost or expense solely attributable to an Indemnified Party’s gross
      negligence or willful misconduct.  This indemnity agreement shall
      survive the termination of this Agreement.  Any amounts payable under
      this or any other section of this Agreement shall be additional Obligations
      secured hereby.

    

    10)                Miscellaneous.

    

    a)        Notices.  Any
      demand or notice hereunder or under any applicable law pertaining hereto shall
      be in writing and duly given if delivered to Debtor (at its address on Secured
      Party’s records) or to Secured Party (at the address on page one and separately
      to Secured Party’s officer responsible for Debtor’s relationship with Secured
      Party). Such notice or demand shall be deemed sufficiently given for all
      purposes when delivered (i) by personal delivery and shall be deemed effective
      when delivered, or (ii) by mail or courier and shall be deemed effective three
      (3) business days after deposit in an official depository maintained by the
      United States Post Office for the collection of mail or one (1) business day
      after delivery to a nationally recognized overnight courier service (e.g.,
      Federal Express).  Notice by e-mail is not valid notice under this or
      any other agreement between Debtor and Secured Party.

    

    b)        Governing
      Law; Jurisdiction.  This Agreement has been delivered to and
      accepted by Secured Party and will be deemed to be made in the State of New
      York.  Except as otherwise provided under federal law, this Agreement
      will be interpreted in accordance with the laws of the State of New York
      excluding its conflict of laws rules. DEBTOR HEREBY IRREVOCABLY CONSENTS
      TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT IN THE STATE OF
      NEW
      YORK IN A COUNTY OR JUDICIAL DISTRICT WHERE SECURED PARTY MAINTAINS A BRANCH
      AND
      CONSENTS THAT SECURED PARTY MAY EFFECT ANY SERVICE OF PROCESS IN THE MANNER
      AND
      AT DEBTOR’S ADDRESS SET FORTH ABOVE FOR PROVIDING NOTICE OR DEMAND; PROVIDED
      THAT NOTHING CONTAINED IN THIS AGREEMENT WILL PREVENT SECURED PARTY FROM
      BRINGING ANY ACTION, ENFORCING ANY AWARD OR JUDGMENT OR EXERCISING ANY RIGHTS
      AGAINST DEBTOR INDIVIDUALLY, AGAINST ANY SECURITY OR AGAINST ANY PROPERTY OF
      DEBTOR WITHIN ANY OTHER COUNTY, STATE OR OTHER FOREIGN OR DOMESTIC
      JURISDICTION.  Debtor acknowledges and agrees that the venue
      provided above is the most convenient forum for both Secured Party and
      Debtor.  Debtor waives any objection to venue and any objection based
      on a more convenient forum in any action instituted under this
      Agreement.

    

    c)        Security
      Interest Absolute.  All rights of Secured Party hereunder, the
      Security Interest and all obligations of Debtor hereunder shall be absolute
      and
      unconditional irrespective of (i) any filing by or against Debtor of any
      petition in bankruptcy or any action under federal or state law for the relief
      of debtors or the seeking or consenting to of the appointment of an
      administrator, receiver, custodian or similar officer for the wind up of its
      business; (ii) any lack of validity or enforceability of any agreement with
      respect to any of the Obligations, (iii) any change in the time, manner or
      place
      of payment of, or in any other term of, all or any of the Obligations, or any
      other amendment or waiver of or any consent to any departure from any agreement
      or instrument with respect to the Obligations, (iv)any exchange, release or
      non-perfection of any lien or any release or amendment or waiver of or consent
      under or departure from any guarantee, securing or guaranteeing all or any
      of
      the Obligations, or (v) any other circumstance that might otherwise constitute
      a
      defense available to, or a discharge of, Debtor in respect of the Obligations
      or
      this Agreement.  If, after receipt of any payment of all or any part
      of the Obligations, Secured Party is for any reason compelled to surrender
      such
      payment to any person or entity, because such payment is determined to be void
      or voidable as a preference, impermissible setoff, or a diversion of trust
      funds, or for any other reason, such payment shall be reinstated as part of
      the
      Obligations and this Agreement shall continue in full force notwithstanding
      any
      contrary action which may have been taken by Secured Party in reliance upon
      such
      payment, and any such contrary action so taken shall be without prejudice to
      Secured Party’s rights under this Agreement and shall be deemed to have been
      conditioned upon such payment having become final and irrevocable.

    

    d)        Remedies
      Cumulative; Preservation of Rights.  The rights and remedies
      herein are cumulative, may be exercised singly or concurrently and are not
      exclusive of any other rights or remedies which Secured Party may have under
      other agreements now or hereafter in effect between Debtor and Secured Party,
      at
      law (including under the UCC) or in equity.  No failure or delay of
      Secured Party in exercising any power or right hereunder shall operate as a
      waiver thereof, nor shall any single or partial exercise of any such right
      or
      power, or any abandonment or discontinuance of steps to enforce such a right
      or
      power, preclude any other or further exercise thereof or the exercise of any
      other right or power.  Debtor expressly disclaims any reliance on any
      course of dealing or usage of trade or oral representation of Secured Party
      including representations to make loans to Debtor.  No notice to or
      demand on Debtor in any case shall entitle Debtor to any other or further notice
      or demand in similar or other circumstances.

    

    e)        Joint
      and Several; Successors and Assigns.  If there is more than one
      Debtor, each of them shall be jointly and severally liable for all amounts,
      which become due, and the performance of all obligations under this Agreement
      and the term “Debtor” shall include each as well as all of them.  This
      Agreement shall be binding upon Debtor and upon its heirs and legal
      representatives, its successors and assignees, and shall inure to the benefit
      of, and be enforceable by, Secured Party, its successors and assignees and
      each
      direct or indirect assignee or other transferee of any of the Obligations;
      provided, however, that this Agreement may not be assigned by Debtor without
      the
      prior written consent of Secured Party.

    

    f)        Waivers;
      Changes in Writing.  No course of dealing or other conduct, no
      oral agreement or representation made by Secured Party or usage of trade shall
      operate as a waiver of any right or remedy of Secured Party.  No
      waiver of any provision of this Agreement or consent to any departure by Debtor
      therefrom shall in any event be effective unless made specifically in writing
      by
      Secured Party and then such waiver or consent shall be effective only in the
      specific instance and for the purpose for which given.  No
      modification to any provision of this Agreement shall be effective unless made
      in writing in an agreement signed by Debtor and Secured Party.

    

    g)        Interpretation.  Unless
      the context otherwise clearly requires, references to plural includes the
      singular and references to the singular include the plural; the word “or” has
      the inclusive meaning represented by the phrase “and/or”; the word “including”,
“includes” and “include” shall be deemed to be followed by the words “without
      limitation”; and captions or section headings are solely for convenience and not
      part of the substance of this Agreement.  Any representation,
      warranty, covenant or agreement herein shall survive execution and delivery
      of
      this Agreement and shall be deemed continuous.  Each provision of this
      Agreement shall be interpreted as consistent with existing law and shall be
      deemed amended to the extent necessary to comply with any conflicting
      law.  If any provision nevertheless is held invalid, the other
      provisions shall remain in effect.  Debtor agrees that in any legal
      proceeding, a photocopy of this Agreement kept in Secured Party’s course of
      business may be admitted into evidence as an original.  Terms not
      otherwise defined in this Agreement shall have the meanings attributed to such
      terms in the UCC.

    

    h)        Waiver
      of Jury Trial.  DEBTOR AND SECURED PARTY HEREBY KNOWINGLY,
      VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHT TO TRIAL BY JURY DEBTOR AND
      SECURED PARTY MAY HAVE IN ANY ACTION OR PROCEEDING, IN LAW OR IN EQUITY, IN
      CONNECTION WITH THIS AGREEMENT OR ANY TRANSACTIONS RELATED HERETO. DEBTOR
      REPRESENTS AND WARRANTS THAT NO REPRESENTATIVE OR AGENT OF SECURED PARTY HAS
      REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SECURED PARTY WILL NOT, IN THE EVENT
      OF LITIGATION, SEEK TO ENFORCE THIS JURY TRIAL WAIVER.  DEBTOR
      ACKNOWLEDGES THAT SECURED PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT
      BY, AMONG OTHER THINGS, THE PROVISIONS OF THIS SECTION.

    

    

    Dated
      August 7, 2007

    

    EMERGING
      VISION, INC.

    

    By:/s/Christopher
      G. Payan

    Christopher
      G. Payan, CEO

    

    

    

    

    

    

    

    

    ________________________________________________________________________________________________________________________________________

    FOR
      SECURED PARTY USE ONLY:

    Authorization
      confirmed:                                                                                                                                                                

    If
      Debtor’s Obligations arise under a guaranty in favor of Secured Party, list the
      name whose indebtedness is being guaranteed under such guaranty:

    

    
      
              

                  
      
      

                  CLB-107-NY
            (10/06)                                                                               ©
Manufacturers and Traders Trust Company,
            2006      
    

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Exhibit
      A

    

    

    1.           Permitted
      Liens (§3.1)

    

    NONE

    

    

    2.           Residence,
      principal place of business or chief executive office (§3.5(i))

    

    100
      QUENTIN ROODSEVELT BOULEVARD, SUITE
      508

    GARDEN
      CITY,
      N.Y.  11530

    

    3.           Location
      of Books and Records (§3.5(ii))

    

    SAME
      AS ABOVE

    

    

    4.           Location
      of Inventory, Equipment, Fixtures, Crops or Timber (§3.5(iii) and
§3.5(iv))

    

    SEE
“EXHIBIT
      A”
      ATTACHED - LIST OF OWNER OWNED &
OPERATEDLOCATIONS

    

    

    5.           Locations
      Not Owned by Debtor and Name of Record Owner (§3.5)

    

    SEE
“EXHIBIT
      B 1 AND EXHIBIT B
      2” ATTACHED - LIST OFFRANCHISED LOCATIONS
AND LIST OF OWNERS

    

    6.           Trade
      Name, “Doing Business As” Name or Assumed Name (§3.6)

    

    SEE
“EXHIBIT
      C”
ATTACHED– LIST OF TRADEMARKS

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

       EXHIBIT
      A

    

    OWNER
      OWNED & OPERATED
      LOCATIONS

    

          (See
      Attached List of Owner Owned/Operated Locations)

    

    

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      B

    

    FRANCHISED
      LOCATIONS

    

                                (See
      Attached List of Franchise Stores)

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      C

    

                                               TRADEMARKS

    

    NAME:                                           APPLICATION
      NO.:                                                                REGISTRATION
      NO./DATE:

    

    BEYOND
      20/20                                                      78785771                                           PENDING

    EASYWEAR                                                      78177566                                           2846666
      – 5/25/2004

    OPTI-CASH                                                      77141609                                           PENDING

    OPTIMUM
      EYECARE                                                      78967880                                           PENDING

    OWL
      DESIGN                                           23631
      (CALIF.)                                                      23631
– 7/2/1985

    SAFESITE                                                      75131029                                           2251660
      – 6/8/1999

    SEE
      WHAT
      YOU’RE
      MISSING   78649037                                                                                                           3188848
– 12/26/2006

    SITE
      FOR
      SORE
      EYES                                                      76617813                                           PENDING

    STERLING
      55                                           78410553                                           2948017
– 5/10/2005

    STERLING
      55 &
DESIGN                                                                76591470                                           2963803
– 6/28/2005

    STERLING
      OPTICAL                                                      72360420                                           0948511
– 12/12/1972

    STERLING
      OPTICAL
      EXPRESS  78177561                                                                                                           PENDING

    SURE
      SIGHT                                                      78649094                                           3203489
– 1/30/2007

    SURE
      SIGHT
      (STYLIZED)                                                                78649138                                           3205127
– 2/6/2007

    THE
      VISION
      DOCTOR                                                      78967874                                           PENDING

    VISION
      FOR
      LIFE                                                      78240242                                           3012864
– 11/8/2005ex10-4.htm

    EXHIBIT  10.4

    

    

    GENERAL
      SECURITY AGREEMENT

    New
      York

    

    

    Debtor
      (Name):  COMBINE BUYING GROUP, INC.

    (Organizational
      Structure):  CORPORATION

    (State
      Law organized under):  NEW YORK

    (Organizational
      Identification Number, if any; note that this is NOT a request for the Taxpayer
      Identification Number):

    (Address
      of residence/chief executive office):  100 QUENTIN ROOSEVELT
      BOULEVARD, SUITE 508, GARDEN CITY, NEW YORK  11530

    

    Bank:  Manufacturers
      and Traders Trust Company, a New York banking corporation with its
      banking offices at One M&T Plaza, Buffalo, New York 14203 Attention:
      Office of General Counsel.

    

    For
      good
      and valuable consideration, the receipt and sufficiency of which is
      acknowledged, and intending to be legally bound, Debtor agrees with Secured
      Party as follows:

    

    1)        Security
      Interests.

    

    a)        Grant.  As
      security for the prompt and complete payment and performance when due of all
      of
      the Obligations, Debtor does hereby grant to Secured Party a continuing security
      interest (“Security Interest”) in all personal property and fixtures of Debtor,
      wherever located, whether now existing or owned or hereafter arising or
      acquired, whether or not subject to the Uniform Commercial Code, as the same
      may
      be in effect in the State of New York, as amended from time to time (“UCC”), and
      whether or not affixed to any realty, including, without limitation, (i) all
      accounts, chattel paper, investment property, deposit accounts, documents,
      goods, equipment, farm products, general intangibles (including trademarks,
      service marks, trade names, patents, copyrights, licenses and franchises),
      instruments, inventory, money, letter of credit rights, causes of action
      (including tort claims) and other personal property (including agreements and
      instruments not constituting chattel paper or a document, general intangible
      or
      instrument); (ii) all additions to, accessions to, substitutions for,
      replacements of and supporting obligations of the foregoing; (iii) all proceeds
      and products of the foregoing, including, without limitation, insurance
      proceeds; and (iv) all business records and information relating to any of
      the
      foregoing and any software or other programs for accessing and manipulating
      such
      information (collectively, the “Collateral”).  Debtor acknowledges and
      agrees that the foregoing collateral description is intended to cover all assets
      of Debtor.

    

    b)        Obligations.  The
      term “Obligations” means any and all indebtedness or other obligations of Debtor
      to Secured Party in any capacity, now existing or hereafter incurred, however
      created or evidenced, regardless of kind, class or form, whether direct,
      indirect, absolute or contingent (including obligations pursuant to any
      guaranty, endorsement, other assurance of payment or otherwise), whether joint
      or several, whether from time to time reduced and thereafter increased, or
      entirely extinguished and thereafter reincurred, together with all extensions,
      renewals and replacements thereof, and all interest, fees, charges, costs or
      expenses which accrue on or in connection with the foregoing, including, without
      limitation, any indebtedness or obligations (i) not yet outstanding but
      contracted for, or with regard to which any other commitment by Secured Party
      exists; (ii) arising prior to, during or after any pendency of any bankruptcy,
      insolvency, receivership or other similar proceeding, regardless
      of  whether allowed or allowable in such proceeding; (iii) owed by
      Debtor to others and which Secured Party obtained, or may obtain, by
      assign­ment or otherwise; or (iv) payable under this Agreement.

    

    2)        Covenants.  Debtor
      covenants and agrees as follows:

    

    a)        Perfection
      of Security Interest.  Debtor shall execute and deliver to Secured
      Party such financing statements, control agreements or other documents, in
      form
      and content satisfactory to Secured Party, as Secured Party may from time to
      time request to perfect and continue the Security Interest.  Upon the
      request of Secured Party, Debtor shall deliver to Secured Party any and all
      instruments, chattel paper, negotiable documents or other documents evidencing
      or constituting any part of the Collateral properly endorsed or assigned, in
      a
      manner satisfactory to Secured Party.  Until such delivery, Debtor
      shall hold such portion of the Collateral in trust for Secured
      Party.  Debtor shall pay all expenses for the preparation, filing,
      searches and related costs in connection with the grant and perfection of the
      Security Interest.  Debtor authorizes (both prospectively and
      retroactively) Secured Party to file financing statements, and any continuations
      and amendments thereof, with respect to the Collateral without Debtor’s
      signature.  A photocopy or other reproduction of any financing
      statement or this Agreement shall be sufficient as a financing statement for
      filing in any jurisdiction.

    

    b)        Negative
      Pledge; Disposition of Collateral.  Debtor shall not grant or
      allow the imposition of any lien, security interest or encumbrance on, or
      assignment of, the Collateral unless consented to in writing by Secured
      Party.  Debtor shall not make or permit to be made any sale, transfer
      or other disposition of the Collateral; provided, however, prior to the
      occurrence of an Event of Default, Debtor may in the ordinary course of business
      consistent with its past practices and with prudent and standard practices
      used
      in the industry that is the same or similar to that in which Debtor is engaged:
      (i) dispose of any Collateral consisting of equipment that is obsolete or
      worn-out; (ii) sell or exchange any Collateral consisting of equipment in
      connection with the acquisition of other equipment that is at least as valuable
      as such equipment, that Debtor intends to use for substantially the same
      purposes as such equipment and that is not subject to any security interest
      or
      other lien or encumbrance; (iii) collect Collateral consisting of accounts
      or
      assign such Collateral for purposes of collection; or  (iv) sell or
      lease Collateral consisting of inventory.  A sale, lease or other
      transfer of such Collateral consisting of inventory in the ordinary course
      of
      Debtor’s business does not include a transfer in partial or complete
      satisfaction of any liability or obligation or any bulk sale.

    
      
              

                  
      
      

                  CLB-107-NY
            (10/06)                                                                               ©
Manufacturers and Traders Trust Company, 2006      
    

         

      

      
         

        
          

        

      

      
         

      

    

    

    c)        Condition
      of Collateral; Impermissible Use.  Debtor shall keep the
      Collateral consisting of goods in good condition and shall not commit or permit
      damage or destruction (other than ordinary wear and tear) to such
      Collateral.  Debtor shall not permit any Collateral consisting of
      goods (i) to be used in such a manner that would violate any insurance policy
      or
      warranty covering the Collateral or that would violate any applicable law of
      any
      governmental authority (including any environmental law) now or hereafter in
      effect; (ii) to become fixtures on any real property on which Secured Party
      does
      not have a first priority mortgage lien (unless Secured Party has been provided
      with an acceptable landlord/mortgagee waiver) or become an accession to any
      goods not included in the Collateral; or (iii) to be placed in any warehouse
      that may issue a negotiable document with regard to such
      Collateral.

    

    d)        Modification
      to Collateral. Debtor shall not, without Secured Party’s prior written
      consent, grant any extension on, compound, settle for less than the full amount
      of, release (in whole or in part), modify, cancel, or allow for any
      substitution, credit or adjustment on Collateral consisting of accounts, chattel
      paper, general intangibles, instruments, documents or investment property,
      except that in the absence of an Event of Default, Debtor may grant to account
      debtors, or other persons obligated with respect to the Collateral, extensions,
      credits, discounts, compromises or settlements in the ordinary course of
      business consistent with its past practices and consistent with prudent and
      standard practices used in the industries that are the same or similar to those
      in which Debtor is engaged.

    

    e)        Titled
      Goods.  Debtor shall cause all goods included in the Collateral to
      be properly titled and registered to the extent required by applicable
      law.  Upon the request of Secured Party, Debtor shall cause the
      interest of Secured Party to be properly indicated on any certificate of title
      relating to such goods and deliver to Secured Party each such certificate,
      and
      any additional evidence of ownership, certificates of origin or other documents
      evidencing any interest in such goods.

    

    f)        Insurance.  Debtor
      shall, at its own expense and at all times, maintain effective insurance
      policies covering damage to persons and against fire, flood, theft and all
      other
      risks to which the Collateral may be subject, all in such amounts, with such
      deductibles and issued by such insurance company as shall be satisfactory to
      Secured Party.  Such insurance policies shall have all endorsements
      that Secured Party may require and shall further (i) name Secured Party,
      exclusively, as the additional insured on the casualty insurance and the
      lender’s loss payee and/or mortgagee on the hazard insurance; (ii) provide that
      Secured Party shall receive a minimum of thirty (30) days prior written notice
      of any amendment or cancellation; and (iii) insure Secured Party notwithstanding
      any act or neglect of Debtor or other owner of the property described in such
      insurance.  If Debtor fails to obtain the required insurance as
      provided herein, Secured Party may, but is not obligated, to obtain such
      insurance as Secured Party may deem appropriate, including, without limitation,
      if Secured Party so chooses, “single interest insurance” which will cover only
      Secured Party’s interest in the Collateral.  Debtor shall pay or
      reimburse to Secured Party the cost of such insurance.  Secured Party
      shall have the option, in its sole discretion, to hold insurance proceeds as
      part of the Collateral, apply any insurance proceeds toward the Obligations
      or
      allow the Debtor to apply the insurance proceeds towards repair or replacement
      of the item of Collateral in respect of which such proceeds were
      received.  Upon the request of Secured Party, Debtor shall from time
      to time deliver to Secured Party such insurance policies, or other evidence
      of
      such policies satisfactory to Secured Party, and such other related information
      Secured Party may request.

    

    g)        Collateral
      Information.  Debtor shall provide all information, in form and
      substance satisfactory to Secured Party, that Secured Party shall from time
      to
      time request to (i) identify the nature, extent, value, age and location of
      any
      of the Collateral, or (ii) identify any account debtor or other party obligated
      with respect to any chattel paper, general intangible, instrument, investment
      property, document or deposit account included in the Collateral.

    

    h)        Financial
      Information.  Debtor shall furnish to Secured Party financial
      statements in such form (e.g., audited, reviewed, compiled) and at such
      intervals as Secured Party shall request from time to time plus any additional
      financial information that Secured Party may request.  All such
      financial statements shall be in conformity with generally accepted accounting
      principles consistently applied.

    

    i)        Taxes;
      Licenses; Compliance with Laws.  Before the end of any applicable
      grace period, Debtor shall pay each tax, assessment, fee and charge imposed
      by
      any governmental authority upon the Collateral, the ownership, disposition
      or
      use of any of the Collateral, this Agreement or any instrument evidencing any
      of
      the Obligations.  Debtor shall maintain in full force and effect each
      license, franchise or other authorization needed for any ownership, disposition
      or use of the Collateral and the conduct of its business, operations or
      affairs.  Debtor shall comply with all applicable law of any
      governmental authority (including any environmental law), now or hereafter
      in
      effect, applicable to the ownership, disposition or use of the Collateral or
      the
      conduct of its business, operations or affairs.

    

    j)        Records;
      Legend.  Debtor shall maintain accurate and complete books and
      records relating to the Collateral in conformity with generally accepted
      accounting principles consistently applied.  At Secured Party’s
      request, Debtor will legend, in form and manner satisfactory to Secured Party,
      its books and records to indicate the Security Interest.

    

    k)        Additional
      Collateral.  If at any time the liquidation value of any of the
      Collateral is unsatisfactory to Secured Party, then, on demand of Secured Party,
      Debtor shall immediately (i) furnish such additional collateral satisfactory
      to
      Secured Party to be held by Secured Party as if originally pledged hereunder
      and
      execute such additional security agreements, financing statements or other
      agreements as requested by Secured Party, or (ii) repay the Obligations to
      bring
      the outstanding amount of the Obligations to within a satisfactory relationship
      to the liquidation value of the Collateral.

    

    l)        Notifications
      of Change.  Immediately upon acquiring knowledge or reason to know
      of any of the following, Debtor shall notify Secured Party of the occurrence
      or
      existence of (i) any Event of Default; (ii) any event or condition that, after
      notice, lapse of time or after both notice and lapse of time, would constitute
      an Event of Default; (iii) any account or general intangible that arises out
      of
      a contract with any governmental authority (including the United States); (iv)
      any event or condition that has or (so far as can be foreseen) will or might
      have any material adverse effect on the Collateral (including a material loss,
      destruction or theft of, or of any damage to, the Collateral, material decline
      in value of the Collateral or a material default by an account debtor or other
      party’s performance of obligations with respect to the Collateral), on Debtor or
      its business, operations, affairs or condition (financial or
      otherwise).

    

    m)        Lien
      Law.  If any account or general intangible included in the
      Collateral represents money owing pursuant to any contract for the improvement
      of real property or for a public improvement for purposes of the Lien Law of
      the
      State of New York (the “Lien Law”), Debtor shall (i) give Secured Party notice
      of such fact; (ii) receive and hold any money advanced by Secured Party with
      respect to such account or general intangible as a trust fund to be first
      applied to the payment of trust claims as such term and/or concept is defined
      in
      the Lien Law (in Section 71 thereof, or otherwise); and (iii) until such trust
      claim is paid, not use or permit the use of any such money for any purpose
      other
      than the payment of such trust claims.

    

    n)        Protection
      of Collateral; Further Assurances.  Debtor shall, at its own cost,
      faithfully preserve, defend and protect the Security Interest as a prior
      perfected security interest in the Collateral under the UCC and other applicable
      law, superior and prior to the rights of all third parties (other than those
      permitted pursuant to Section 3.1) and shall defend the Collateral against
      all
      setoffs, claims, counterclaims, demands and defenses.  At the request
      of Secured Party, Debtor shall do, obtain, make, execute and deliver all such
      additional and further acts, things, deeds, assurances and instruments as
      Secured Party may deem necessary or advisable from time to time in order to
      attach, continue, preserve, perfect or protect the Security Interest and Secured
      Party’s rights hereunder including obtaining waivers (in form and content
      acceptable to Secured Party) from landlords, warehousemen and
      mortgagees.  Debtor hereby irrevocably appoints Secured Party, its
      officers, employees and agents, or any of them, as attorneys-in-fact for Debtor
      with full power and authority in the place and stead of Debtor and in the name
      of Debtor or its own name from time to time in Secured Party’s discretion, to
      perform all acts which Secured Party deems appropriate to attach, continue,
      preserve or perfect and continue the Security Interest, including signing for
      Debtor (to the extent such signature may be required by applicable law) UCC-1
      financing statements, UCC-3 amendment or other instruments and documents to
      accomplish the purposes of this Agreement.  This power of attorney,
      being coupled with an interest, is irrevocable and shall not be affected by
      the
      subsequent disability or incompetence of Debtor.

    

    3)        Representations
      and Warranties.  Debtor represents, warrants and agrees as
      follows:

    

    a)        Title.  Debtor
      holds good and marketable title to the Collateral free and clear from any
      security interest or other lien or encumbrance of any party, other than the
      Security Interest or such liens, security interests or other liens or
      encumbrances specifically permitted by Secured Party and set forth on Exhibit
      A
      hereto (“Permitted Liens”).  Debtor has not made any prior sale,
      pledge, encumbrance, assignment or other disposition of any of the Collateral
      except for the Permitted Liens.

    

    b)        Authority.  If
      Debtor is a business entity, it is duly organized, validly existing and in
      good
      standing under the laws of the above-named state of
      organization.  Debtor has the full power and authority to grant the
      Security Interest and to execute, deliver and perform its obligations in
      accordance with this Agreement.  The execution and delivery of this
      Agreement will not (i) violate any applicable law of any governmental authority
      or any judgment or order of any court, other governmental authority or
      arbitrator; (ii) violate any agreement governing Debtor or to which Debtor
      is a
      party; or (iii) result in a security interest or other lien or encumbrance
on
      any of its assets.  Debtor’s certificate of incorporation, by-laws or
      other organizational documents do not prohibit any term or condition of this
      Agreement.  Each authorization, approval or consent from, each
      registration and filing with, each declaration and notice to, and each other
      act
      by or relating to, any party required as a condition of Debtor’s execution,
      delivery or performance of this Agreement (including any shareholder or board
      of
      directors or similar approvals) has been duly obtained and is in full force
      and
      effect.  Debtor has the power and authority to transact the business
      in which it is engaged and is duly licensed or qualified and in good standing
      in
      each jurisdiction in which the conduct of its business or ownership of property
      requires such licensing or such qualifications.

    

    c)        Judgments
      and Litigation.  There is no pending or threatened claim, audit,
      investigation, action or other legal proceeding or judgment or order of any
      court, agency or other governmental authority or arbitrator which involves
      Debtor or the Collateral and which might have a material adverse effect upon
      the
      Collateral, the Debtor, its business, operations, affairs or condition
      (financial or otherwise), or threaten the validity of this Agreement or any
      related document or action.  Debtor will immediately notify Secured
      Party upon acquiring knowledge of the foregoing.

    

    d)        Enforceability
      of Collateral.  Instruments, chattel paper, accounts or documents
      which constitute any part of the Collateral are genuine and enforceable in
      accordance with their terms, comply with the applicable law of any governmental
      authority concerning form, content, manner of preparation and execution, and
      all
      persons appearing to be obligated on such Collateral have authority and capacity
      to contract and are in fact obligated as they appear to be on such
      Collateral.  There are no restrictions on any assignment or other
      transfer or grant of the Security Interest by Debtor.  Each sum
      represented by Debtor from time to time as owing on accounts, instruments,
      deposit accounts, chattel paper and general intangibles constituting any part
      of
      the Collateral by account debtors and other parties with respect to such
      Collateral is the sum actually and unconditionally owing by account debtors
      and
      other parties with respect thereto at such time, except for applicable normal
      cash discounts.  None of the Collateral is subject to any defense,
      set-off, claim or counterclaim of a material nature against Debtor except as
      to
      which Debtor has notified Secured Party in writing.

    

    e)        Location
      of Chief Executive Office, Records, Collateral.  The locations of
      the following are listed on page one of this Agreement or, if different or
      additional, on Exhibit A hereto:  (i) Debtor’s residence, principal
      place of business and chief executive office; (ii) the office in which Debtor
      maintains its books or records relating to the Collateral; (iii) the facility
      (including any storage facility) at which now owned or subsequently acquired
      inventory, equipment and fixtures constituting any part of the Collateral shall
      be kept; and (iv) the real property on which any crop included in the Collateral
      is growing or is to be grown, or on which any timber constituting any part
      of
      the Collateral is or is to be standing.  Debtor will not effect or
      permit any change in any of the foregoing locations (or remove or permit the
      removal of the records or Collateral therefrom, except for mobile equipment
      included in the Collateral which may be moved to another location for not more
      than thirty (30) days) without thirty (30) days prior written notice to Secured
      Party and all actions deemed necessary by Secured Party to maintain the Security
      Interest intended to be granted hereby at all times fully perfected and in
      full
      force and effect have been taken.  All of the locations listed on page
      one or Exhibit A are owned by Debtor, of if not, by the party(ies) identified
      on
      Exhibit A.

    
      
              

                  
      
      

                  CLB-107-NY
            (10/06)                                                                               ©
Manufacturers and Traders Trust Company, 2006      
    

         

      

      
         

        
          

        

      

      
         

      

    

    

    f)        Structure;
      Name.  Debtor’s organizational structure, state of registration
      and organizational identification number (if any) are stated accurately on
      page
      one of this Agreement, and its full legal name and any trade name used to
      identify it are stated accurately on page one of this Agreement, or if different
      or additional are listed on Exhibit A hereto. Debtor will not change its name,
      any trade names or its identity, its organizational structure, state of
      registration or organizational identification number without thirty (30) days
      prior written notice to Secured Party.  All actions deemed necessary
      by Secured Party to maintain the Security Interest intended to be granted hereby
      at all times fully perfected and in full force and effect have been
      taken.

    

    4)        Performance
      and Expenditures by Secured Party.  If Debtor fails to
      perform or comply with any of the terms hereof, Secured Party, at its option,
      but without any obligation so to do, may perform or comply, or otherwise cause
      performance or compliance, with such terms including the payment or discharge
      of
      all taxes, fees, security interest or other liens, encumbrances or claims,
      at
      any time levied or placed on the Collateral.  An election to make
      expenditures or to take action or perform an obligation of Debtor under this
      Agreement, after Debtor’s failure to perform, shall not affect Secured Party’s
      right to declare an Event of Default and to exercise its
      remedies.  Nor shall the provisions of this Section relieve Debtor of
      any of its obligations hereunder with respect to the Collateral or impose any
      obligation on Secured Party to proceed in any particular manner with respect
      to
      the Collateral.

    

    5)        Duty
      of Secured Party.  Secured Party’s sole duty with respect to
      the custody, safekeeping and physical preservation of the Collateral in its
      possession shall be to deal with it in the same manner as Secured Party deals
      with similar property for its own account.  Neither Secured Party nor
      its directors, officers, employees or agents shall be liable for failure to
      demand, collect or realize upon the Collateral or for any delay in doing so
      or
      shall be under any obligation to sell or otherwise dispose of the Collateral
      upon the request of Debtor or any other person or to take any other action
      whatsoever with regard to the Collateral.  The powers conferred on
      Secured Party hereunder are solely to protect Secured Party’s interests in the
      Collateral and shall not impose any duty upon any Secured Party to exercise
      any
      such powers.  Secured Party shall be accountable only for amounts that
      it actually receives as a result of the exercise of its powers under this
      Agreement, and neither it nor its officers, directors, employees or agents
      shall
      be responsible to Debtor for any act or failure to act hereunder, except for
      its
      own gross negligence or willful misconduct.

    

    6)        Certain
      Rights and Remedies.

    

    a)        Inspection;
      Verification.  Secured Party, and such persons as it may
      designate, shall have the right from time to time to (i) audit and inspect
      (a)
      the Collateral, (b) all books and records related thereto (and make extracts
      and
      copies from such records), and (c) the premises upon which any of the Collateral
      or books and records may be located; (ii) discuss Debtor’s business, operations,
      affairs or condition (financial or otherwise) with its officers, accountants;
      and (iii) verify the validity, amount, quality, quantity, value, condition
      and
      status of, or any other matter relating to the Collateral in any manner and
      through any medium Secured Party may consider appropriate (including contacting
      account debtors or third party possessing the Collateral for purpose of making
      such verification).  Debtor shall furnish all assistance and
      information and perform any acts Secured Party may require regarding
      thereto.  Debtor shall bear the cost and expense of any such
      inspection and verification.

    

    b)        Notification
      of Security Interest.  Secured Party may notify any or all account
      debtors and other person obligated with respect to the Collateral of the
      Security Interest therein.  Upon the request of Secured Party, Debtor
      agrees to enter into such warehousing, lockbox or other custodial arrangement
      with respect to any of the Collateral that Secured Party shall deem necessary
      or
      desirable.

    

    c)        Application
      of Proceeds.  Secured Party may apply the proceeds from the sale,
      lease or other disposition or realization upon the Collateral to the Obligations
      in such order and manner and at such time as Secured Party shall, in its sole
      discretion, determine.  Debtor shall remain liable for any deficiency
      if the proceeds of any sale, lease or other disposition or realization upon
      the
      Collateral are insufficient to pay the Obligations.  Any proceeds
      received by Debtor from the Collateral after an Event of Default shall (i)
      be
      held by Debtor in trust for Secured Party in the same medium in which received;
      (ii) not be commingled with any assets of Debtor; and (iii) be delivered to
      Secured Party in the form received, properly indorsed to permit
      collection.  After an Event of Default, Debtor shall promptly notify
      Secured Party of the return to or repossession by Debtor of goods constituting
      part of the Collateral, and Debtor shall hold the same in trust for Secured
      Party and shall dispose of the same as Secured Party directs.

    

    d)        Income
      and Proceeds of Instruments and Investment Property.  Until the
      occurrence of an Event of Default, Debtor reserves the right to request to
      receive all cash income or cash distribution (whether in cash or evidenced
      by
      check) payable on account of any instrument or investment property constituting
      part of the Collateral (collectively, “Cash Distribution”).  Until
      actually paid, all rights in the foregoing shall remain subject to the Security
      Interest.  Any other income, dividend, distribution, increase in or
      profits (including any stock issued as a result of any stock split or dividend,
      any capital distributions and the like) on account of any instrument or
      investment property constituting part of the Collateral and, upon the occurrence
      of an Event of Default, all Cash Distributions, shall be delivered to Secured
      Party immediately upon receipt, in the exact form received and without
      commingling with other property which may be received by, paid or delivered
      to
      Debtor or for Debtor’s account, whether as an addition to, in discharge of, in
      substitution of, or in exchange of the Collateral.  Until delivery,
      such Collateral shall be held in trust for Secured Party.

    

    e)        Registered
      Holder of the Collateral.  Secured Party shall have the right to
      transfer to or register (with or without reference to this Agreement) in the
      name of Secured Party or its nominee any investment property, general
      intangible, instrument or deposit account constituting part of the Collateral
      so
      that Secured Party or such nominee shall appear as the sole owner of record
      thereof; provided, however, that so long as no Event of Default has occurred,
      Secured Party shall deliver to Debtor all notices, statements or other
      communications received by it or its nominee as such registered owner, and
      upon
      demand and receipt of payment of necessary expenses thereof, shall give to
      Debtor or its designee a proxy or proxies to vote and take all action with
      respect to such Collateral.  After the occurrence of any Event of
      Default, Debtor waives all rights to be advised of or to receive any notices,
      statements or communications received by Secured Party or its nominee as such
      record owner, and agrees that no proxy or proxies given by Secured Party to
      Debtor or its designee as aforesaid shall thereafter be
      effective.

    
      
              

                  
      
      

                  CLB-107-NY
            (10/06)                                                                               ©
Manufacturers and Traders Trust Company, 2006      
    

         

      

      
         

        
          

        

      

      
         

      

    

    

    7)        Default.

    

    a)        Events
      of Default.  Any of the following events or conditions shall
      constitute an “Event of Default”:  (i) failure by Debtor to pay when
      due (whether at the stated maturity, by acceleration, upon demand or otherwise)
      the Obligations, or any part thereof, or there occurs any event or condition
      which after notice, lapse of time or after both notice and lapse of time will
      permit acceleration of any Obligation; (ii) default by Debtor in the performance
      of any obligation, term or condition of this Agreement or any other agreement
      with Secured Party or any of its affiliates or subsidiaries (collectively,
      “Affiliates”); (iii) failure by Debtor to pay when due (whether at the stated
      maturity, by acceleration, upon demand or otherwise) any indebtedness or
      obligation owing to any third party or any Affiliate, the occurrence of any
      event which could result in acceleration of payment of any such indebtedness
      or
      obligation or the failure to perform any agreement with any third party or
      any
      affiliate; (iv) Debtor is dissolved, becomes insolvent, generally fails to
      pay
      or admits in writing its inability generally to pay its debts as they become
      due; (v) Debtor makes a general assignment, arrangement or composition agreement
      with or for the benefit of its creditors or makes, or sends notice of any
      intended, bulk sale; the sale, assignment, transfer or delivery of all or
      substantially all of the assets of Debtor to a third party; or the cessation
      by
      Debtor as a going business concern; (vi) Debtor files a petition in bankruptcy
      or institutes any action under federal or state law for the relief of debtors
      or
      seeks or consents to the appointment of an administrator, receiver, custodian
      or
      similar official for the wind up of its business (or has such a petition or
      action filed against it and such petition action or appointment is not dismissed
      or stayed within forty-five (45) days); (vii) the reorganization, merger,
      consolidation or dissolution of Debtor (or the making of any agreement
      therefor); (viii) the death or judicial declaration of incompetency of Debtor,
      if an individual; (ix) the entry of any judgment or order of any court, other
      governmental authority or arbitrator against Debtor; (x) falsity, omission
      or
      inaccuracy of facts submitted to Secured Party or any Affiliate (whether in
      a
      financial statement or otherwise); (xi) an adverse change in the Collateral,
      Debtor, its business, operations, affairs or condition (financial or otherwise)
      from the status shown on any financial statement or other document submitted
      to
      Secured Party, and which change Secured Party determines will have a material
      adverse affect on (a) Debtor, its business, operations or condition (financial
      or otherwise), or (b) the ability of Debtor to pay or perform the Obligations;
      (xii) any pension plan of Debtor fails to comply with applicable law or has
      vested unfunded liabilities that, in the opinion of Secured Party, might have
      a
      material adverse effect on Debtor’s ability to repay its debts; (xiii) any
      indication or evidence received by Secured Party that Debtor may have directly
      or indirectly been engaged in any type of activity which, in Secured Party’s
      discretion, might result in the forfeiture of any property of Debtor to any
      governmental authority; (xiv) the occurrence of any event described in Section
      7.1(i) through and including 7.1(xiii) with respect to any endorser, guarantor
      or any other party liable for, or whose assets or any interest therein secures,
      payment of any of the Obligations; or (xv) Secured Party in good faith deems
      itself insecure with respect to payment or performance of the
      Obligations.

    

    b)        Rights
      and Remedies Upon Default.  Upon the occurrence of any Event of
      Default, Secured Party without demand of performance or other demand,
      presentment, protest, advertisement or notice of any kind (except any notice
      required by law) to or upon Debtor or any other person (all and each of which
      demands, presentments, protests, advertisements and notices are hereby waived),
      may exercise all rights and remedies of a secured party under the UCC, under
      other applicable law, in equity or otherwise or available under in this
      Agreement including:

    

    i)        Obligations
      Immediately Due; Termination of Lending.  Secured Party may
      declare all or any part of any Obligations not payable on demand to be
      immediately due and payable without demand or notice of any kind.  All
      or any part of any Obligations whether or not payable on demand, shall be
      immediately due and payable automatically upon the occurrence of an Event of
      Default in Section 7.1 (vi) above.  The provisions hereof are not
      intended in any way to affect any rights of Secured Party with respect to any
      Obligations which may now or hereafter be payable on demand.  Secured
      Party may terminate any obligation it may have to grant any additional loan,
      credit or other financial accommodation to Debtor.

    

    ii)        Access
      to Collateral.  Secured Party, or its agents, may peaceably retake
      possession of the Collateral with or without notice or process of law, and
      for
      that purpose may enter upon any premises where the Collateral is located and
      remove the same.  At Secured Party’s request, Debtor shall assemble
      the Collateral and deliver it to Secured Party or any place designated by
      Secured Party, at Debtor’s expense.

    

    iii)        Sell
      Collateral.  Secured Party shall have the right to sell, lease or
      otherwise dispose of the Collateral in one or more parcels at public or private
      sale or sales upon such terms and conditions as it may deem advisable and at
      such prices as it may deem best, for cash or on credit or for future delivery
      without assumption of any credit risk.  Each purchaser at any such
      sale shall hold the property sold absolutely, free from any claim or right
      on
      the part of Debtor.  Debtor hereby waives (to the extent permitted by
      law) all rights of redemption, stay and appraisal which Debtor now has or may
      at
      any time in the future have under any applicable law now existing or hereafter
      enacted.  Secured Party shall have the right to use Debtor’s premises
      and any materials or rights of Debtor (including any intellectual property
      rights) without charge for such sales or disposition of the Collateral or the
      completion of any work in progress for such times as Secured Party may see
      fit.  Without in any way requiring notice to be given in the following
      time and manner, Debtor agrees that with respect to any notice by Secured Party
      of any sale, lease or other disposition or realization or other intended action
      hereunder or in connection herewith, whether required by the UCC or otherwise,
      such notice shall be deemed reasonable and proper if given at least five (5)
      days before such action in the manner described below in the Section entitled
      “Notices”.

    

    iv)        Collect
      Revenues.  Secured Party may either directly or through a receiver
      (i) demand, collect and sue on any Collateral consisting of accounts or any
      other Collateral including notifying account debtors or any other persons
      obligated on the Collateral to make payment on the Collateral directly to
      Secured Party; (ii) file any claim or to take any other action or proceeding
      in
      any court of law or equity or otherwise deemed appropriate by Secured Party
      with
      respect to the Collateral or to enforce any other right in respect of the
      Collateral; (iii) take control, in any manner, of any payment or proceeds from
      the Collateral; (iv) prosecute or defend any suit, action or proceeding brought
      against Debtor with respect to the Collateral; (v) settle, compromise or adjust
      any and all claims arising under the Collateral or, to give such discharges
      or
      releases as Secured Party may deem appropriate; (vi) receive and collect all
      mail addressed to Debtor, direct the place of delivery thereof to any location
      designated by Secured Party; to open such mail; to remove all contents
      therefrom; to retain all contents thereof constituting or relating to the
      Collateral; (vii) execute, sign or endorse any and all claims, endorsements,
      assignments, checks or other instruments with respect to the Collateral; or
      (viii) generally, use, sell, transfer, pledge and make any agreement with
      respect to or otherwise deal with any of the Collateral; and Debtor hereby
      irrevocably appoints Secured Party, its officers, employees and agents, or
      any
      of them, as attorneys-in-fact for Debtor with full power and authority in the
      place and stead of Debtor and in the name of Debtor or in its own name from
      time
      to time in Secured Party’s discretion, to take any and all appropriate action
      Secured Party deems necessary or desirable to accomplish any of the foregoing
      or
      otherwise to protect, preserve, collect or realize upon the Collateral or to
      accomplish the purposes of this Agreement.  Debtor revokes each power
      of attorney (including any proxy) heretofore granted by Debtor with regard
      to
      the Collateral.  This power of attorney, being coupled with an
      interest, is irrevocable and shall not be affected by the subsequent disability
      or incompetence of Debtor.

    

    v)        Setoff.  Secured
      Party may place an administrative hold on and set off against the Obligations
      any property held in a deposit or other account with Secured Party or any of
      its
      Affiliates or otherwise owing by Secured Party or any of its Affiliates in
      any
      capacity to Debtor. Such set-off shall be deemed to have been exercised
      immediately at the time Secured Party or such Affiliate elects to do
      so.

    

    8)        Expenses.  Debtor
      shall pay to Secured Party on demand all costs and expenses (including all
      reasonable fees and disbursements of all counsel retained for advice, suit,
      appeal or other proceedings or purpose and of any experts or agents it may
      retain), which Secured Party may incur in connection with (i) the administration
      of this Agreement, including any administrative fees Secured Party may impose
      for the preparation of discharges, releases or assignments to third-parties;
      (ii) the custody or preservation of, or the sale, lease or other disposition
      or
      realization on the Collateral; (iii) the enforcement and collection of any
      Obligations or any guaranty thereof; (iv) the exercise, performance ,enforcement
      or protection of any of the rights of Secured Party hereunder; or (v) the
      failure of Debtor to perform or observe any provisions hereof.  After
      such demand for payment of any cost, expense or fee under this Section or
      elsewhere under this Agreement, Debtor shall pay interest at the highest default
      rate specified in any instrument evidencing any of the Obligations from the
      date
      payment is demanded by Secured Party to the date reimbursed by
      Debtor.  All such costs, expenses or fees under this Agreement shall
      be added to the Obligations.

    

    9)        Indemnification.  Debtor
      shall indemnify Secured Party and its Affiliates and each officer, employee,
      accountant, attorney and other agent thereof (each such person being an
“Indemnified Party”) on demand, without any limitation as to amount, against
      each liability, cost and expense (including all reasonable fees and
      disbursements of all counsel retained for advice, suit, appeal or other
      proceedings or purpose, and of any expert or agents an Indemnified Party may
      retain) heretofore or hereafter imposed on, incurred by or asserted against
      any
      Indemnified Party (including any claim involving any allegation of any violation
      of applicable law of any governmental authority (including any environmental
      law
      or criminal law)), however asserted and whether now existing or hereafter
      arising, arising out of any ownership, disposition or use of any of the
      Collateral; provided, however, the foregoing indemnity shall not apply to
      liability, cost or expense solely attributable to an Indemnified Party’s gross
      negligence or willful misconduct.  This indemnity agreement shall
      survive the termination of this Agreement.  Any amounts payable under
      this or any other section of this Agreement shall be additional Obligations
      secured hereby.

    

    10)                Miscellaneous.

    

    a)        Notices.  Any
      demand or notice hereunder or under any applicable law pertaining hereto shall
      be in writing and duly given if delivered to Debtor (at its address on Secured
      Party’s records) or to Secured Party (at the address on page one and separately
      to Secured Party’s officer responsible for Debtor’s relationship with Secured
      Party). Such notice or demand shall be deemed sufficiently given for all
      purposes when delivered (i) by personal delivery and shall be deemed effective
      when delivered, or (ii) by mail or courier and shall be deemed effective three
      (3) business days after deposit in an official depository maintained by the
      United States Post Office for the collection of mail or one (1) business day
      after delivery to a nationally recognized overnight courier service (e.g.,
      Federal Express).  Notice by e-mail is not valid notice under this or
      any other agreement between Debtor and Secured Party.

    

    b)        Governing
      Law; Jurisdiction.  This Agreement has been delivered to and
      accepted by Secured Party and will be deemed to be made in the State of New
      York.  Except as otherwise provided under federal law, this Agreement
      will be interpreted in accordance with the laws of the State of New York
      excluding its conflict of laws rules. DEBTOR HEREBY IRREVOCABLY CONSENTS
      TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT IN THE STATE OF
      NEW
      YORK IN A COUNTY OR JUDICIAL DISTRICT WHERE SECURED PARTY MAINTAINS A BRANCH
      AND
      CONSENTS THAT SECURED PARTY MAY EFFECT ANY SERVICE OF PROCESS IN THE MANNER
      AND
      AT DEBTOR’S ADDRESS SET FORTH ABOVE FOR PROVIDING NOTICE OR DEMAND; PROVIDED
      THAT NOTHING CONTAINED IN THIS AGREEMENT WILL PREVENT SECURED PARTY FROM
      BRINGING ANY ACTION, ENFORCING ANY AWARD OR JUDGMENT OR EXERCISING ANY RIGHTS
      AGAINST DEBTOR INDIVIDUALLY, AGAINST ANY SECURITY OR AGAINST ANY PROPERTY OF
      DEBTOR WITHIN ANY OTHER COUNTY, STATE OR OTHER FOREIGN OR DOMESTIC
      JURISDICTION.  Debtor acknowledges and agrees that the venue
      provided above is the most convenient forum for both Secured Party and
      Debtor.  Debtor waives any objection to venue and any objection based
      on a more convenient forum in any action instituted under this
      Agreement.

    

    c)        Security
      Interest Absolute.  All rights of Secured Party hereunder, the
      Security Interest and all obligations of Debtor hereunder shall be absolute
      and
      unconditional irrespective of (i) any filing by or against Debtor of any
      petition in bankruptcy or any action under federal or state law for the relief
      of debtors or the seeking or consenting to of the appointment of an
      administrator, receiver, custodian or similar officer for the wind up of its
      business; (ii) any lack of validity or enforceability of any agreement with
      respect to any of the Obligations, (iii) any change in the time, manner or
      place
      of payment of, or in any other term of, all or any of the Obligations, or any
      other amendment or waiver of or any consent to any departure from any agreement
      or instrument with respect to the Obligations, (iv)any exchange, release or
      non-perfection of any lien or any release or amendment or waiver of or consent
      under or departure from any guarantee, securing or guaranteeing all or any
      of
      the Obligations, or (v) any other circumstance that might otherwise constitute
      a
      defense available to, or a discharge of, Debtor in respect of the Obligations
      or
      this Agreement.  If, after receipt of any payment of all or any part
      of the Obligations, Secured Party is for any reason compelled to surrender
      such
      payment to any person or entity, because such payment is determined to be void
      or voidable as a preference, impermissible setoff, or a diversion of trust
      funds, or for any other reason, such payment shall be reinstated as part of
      the
      Obligations and this Agreement shall continue in full force notwithstanding
      any
      contrary action which may have been taken by Secured Party in reliance upon
      such
      payment, and any such contrary action so taken shall be without prejudice to
      Secured Party’s rights under this Agreement and shall be deemed to have been
      conditioned upon such payment having become final and irrevocable.

    

    d)        Remedies
      Cumulative; Preservation of Rights.  The rights and remedies
      herein are cumulative, may be exercised singly or concurrently and are not
      exclusive of any other rights or remedies which Secured Party may have under
      other agreements now or hereafter in effect between Debtor and Secured Party,
      at
      law (including under the UCC) or in equity.  No failure or delay of
      Secured Party in exercising any power or right hereunder shall operate as a
      waiver thereof, nor shall any single or partial exercise of any such right
      or
      power, or any abandonment or discontinuance of steps to enforce such a right
      or
      power, preclude any other or further exercise thereof or the exercise of any
      other right or power.  Debtor expressly disclaims any reliance on any
      course of dealing or usage of trade or oral representation of Secured Party
      including representations to make loans to Debtor.  No notice to or
      demand on Debtor in any case shall entitle Debtor to any other or further notice
      or demand in similar or other circumstances.

    

    e)        Joint
      and Several; Successors and Assigns.  If there is more than one
      Debtor, each of them shall be jointly and severally liable for all amounts,
      which become due, and the performance of all obligations under this Agreement
      and the term “Debtor” shall include each as well as all of them.  This
      Agreement shall be binding upon Debtor and upon its heirs and legal
      representatives, its successors and assignees, and shall inure to the benefit
      of, and be enforceable by, Secured Party, its successors and assignees and
      each
      direct or indirect assignee or other transferee of any of the Obligations;
      provided, however, that this Agreement may not be assigned by Debtor without
      the
      prior written consent of Secured Party.

    

    f)        Waivers;
      Changes in Writing.  No course of dealing or other conduct, no
      oral agreement or representation made by Secured Party or usage of trade shall
      operate as a waiver of any right or remedy of Secured Party.  No
      waiver of any provision of this Agreement or consent to any departure by Debtor
      therefrom shall in any event be effective unless made specifically in writing
      by
      Secured Party and then such waiver or consent shall be effective only in the
      specific instance and for the purpose for which given.  No
      modification to any provision of this Agreement shall be effective unless made
      in writing in an agreement signed by Debtor and Secured Party.

    

    g)        Interpretation.  Unless
      the context otherwise clearly requires, references to plural includes the
      singular and references to the singular include the plural; the word “or” has
      the inclusive meaning represented by the phrase “and/or”; the word “including”,
“includes” and “include” shall be deemed to be followed by the words “without
      limitation”; and captions or section headings are solely for convenience and not
      part of the substance of this Agreement.  Any representation,
      warranty, covenant or agreement herein shall survive execution and delivery
      of
      this Agreement and shall be deemed continuous.  Each provision of this
      Agreement shall be interpreted as consistent with existing law and shall be
      deemed amended to the extent necessary to comply with any conflicting
      law.  If any provision nevertheless is held invalid, the other
      provisions shall remain in effect.  Debtor agrees that in any legal
      proceeding, a photocopy of this Agreement kept in Secured Party’s course of
      business may be admitted into evidence as an original.  Terms not
      otherwise defined in this Agreement shall have the meanings attributed to such
      terms in the UCC.

    

    h)        Waiver
      of Jury Trial.  DEBTOR AND SECURED PARTY HEREBY KNOWINGLY,
      VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHT TO TRIAL BY JURY DEBTOR AND
      SECURED PARTY MAY HAVE IN ANY ACTION OR PROCEEDING, IN LAW OR IN EQUITY, IN
      CONNECTION WITH THIS AGREEMENT OR ANY TRANSACTIONS RELATED HERETO. DEBTOR
      REPRESENTS AND WARRANTS THAT NO REPRESENTATIVE OR AGENT OF SECURED PARTY HAS
      REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SECURED PARTY WILL NOT, IN THE EVENT
      OF LITIGATION, SEEK TO ENFORCE THIS JURY TRIAL WAIVER.  DEBTOR
      ACKNOWLEDGES THAT SECURED PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT
      BY, AMONG OTHER THINGS, THE PROVISIONS OF THIS SECTION.

    

    

    Dated
      August 7, 2007

    

    COMBINE
      BUYING GROUP, INC.

    

    By:/s/Christopher
      G. Payan

         Christopher
      G. Payan, CEO

    

    

    

    

    

    

    

    

    

    ________________________________________________________________________________________________________________________________________

    FOR
      SECURED PARTY USE ONLY:

    Authorization
      confirmed:                                                                                                                                                                

    If
      Debtor’s Obligations arise under a guaranty in favor of Secured Party, list the
      name whose indebtedness is being guaranteed under such guaranty:

    EMERGING
      VISION,
      INC.                                                                                                                                                                

    
      
              

                  
      
      

                  CLB-107-NY
            (10/06)                                                                               ©
Manufacturers and Traders Trust Company, 2006      
    

         

      

      
         

        
          

        

      

      
         

      

    

    Exhibit
      A

    

    

    1.           Permitted
      Liens (§3.1)

    

    SELLER
      FIRST LIEN ON ALL ASSETS UNTIL
      SELLER NOTE PAID

    

    

    2.           Residence,
      principal place of business or chief executive office (§3.5(i))

    

    100
      QUENTIN ROOSEVELT BOULEVARD, SUITE
      508

    GARDEN
      CITY, NEW
      YORK  11530

    

    3.           Location
      of Books and Records (§3.5(ii))

    

    6001
      BROKEN SOUND PARKWAY, SUITE 508,
      BOCA RATON, FL  33487

    

    4.           Location
      of Inventory, Equipment, Fixtures, Crops or Timber (§3.5(iii) and
§3.5(iv))

    

    6001
      BROKEN SOUND PARKWAY, SUITE 508,
      BOCA RATON, FL  33487

    

    5.           Locations
      Not Owned by Debtor and Name of Record Owner (§3.5)

    

    

    6.           Trade
      Name, “Doing Business As” Name or Assumed Name (§3.6)

    

    “COMBINE”

    “COMBINE
      OPTICAL
      MANAGEMENT”

    “NEUTRA
      TEARS”

    
      
              

                  
      
      

                  CLB-107-NY
            (10/06)                                                                               ©
Manufacturers and Traders Trust Company, 2006

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